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To decide how much money you need now and in the future, you have to do some planning, and that entails writing a business plan. You probably don’t want to do this work because you’re raring to get moving. As well, you may believe you already have a plan in your head, but that is not enough. I can’t overemphasize the importance of having a written business plan. Too many would-be entrepreneurs overlook this step.

Having a business plan is particularly important if you plan to get outside financing for any part of your business. Your business plan will answer questions such as:

• How much money do you need and what do you intend to spend it on?

• When do you expect to start making a profit in your company?

• Will the company be able to afford loan payments?

Even if you do not require outside financing, the business plan will provide much-needed direction and focus. It will force you to think objectively and critically about the future of your company. For example, you should answer questions such as:

• What services will I choose to offer?

• How big do I want to grow my company?

• What are the keys to the success of my business?

By stating clear goals in a business plan, you will be able to measure your success and make changes as necessary. Without the goals, you will have no way to measure how your business is progressing or determine when to make changes. Many businesses fail due to poor planning; don’t let yours be one of them.

Writing out your plan will provide a stimulus for further creativity. You’ll likely discover areas of your business that you have not thought about yet. Developing your plan will compel you to think ahead, think deeper, imagine different scenarios, and visualize your dream. The end result will be a sharper focus, a clearer sense of direction, and increased determination.

Find some sample business plans to review. Then put pen to paper and start on your own plan, making sure you include the sections described below.