Is a business plan necessary for small business formation?

The simple answer to this question is yes. Essentially, a business plan is an outline or blueprint for a company. It is typically created during small business formation and gives an Illinois entrepreneur a road map not only for himself or herself, but also for anyone who may become involved in the company.

A business plan outlines the product or service that the company will provide, along with what type of customers will purchase it. A marketing strategy is essential. Information regarding funding options, how the finances will be handled and financial projections are also a necessary part of the plan. A well thought out and detailed plan can be used as a tool to persuade potential investors, obtain funding and encourage others to join your new venture. People want to feel confident that you have considered as many eventualities as possible and have a plan to deal with them should they arise.

As time goes on, the plan can be reviewed and adjusted to meet the reality of the business's growth. It provides a way to determine whether goals are being met and, if not, how to make the appropriate changes to get back on track. In some cases, the business may exceed the expectations in the plan.

This broad overview is simply the beginning of what is included in a comprehensive business plan and what it can do for small business formation. If you are considering starting your own company in Illinois, it may be beneficial to consult with someone familiar with both the legal and business decisions you will need to consider. Once all of the issues have been identified and discussed, a business plan can be drafted to reflect your vision of the company and how you will get there.

Source: FindLaw, "Business Plan Overview", , Aug. 30, 2014

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