Small Business Start-Up

[elus2]

Without a business plan how is OP supposed to know what kind of capital requirements he'll need for initial start up costs as well as whether or not his idea can even succeed? A few hours a week for a couple months seems like a comparatively small investment to minimize risks that are within their control.

The only times I won't bother spending too much time on a business plan are

- if the margins are just ridiculously high and i'd have to be dumb not to make money off of it

- the capital costs are extremely low

- i'm not really sure about my market but i think developing the product/idea/service asap will still be profitable enough to take on the gamble

[spex x]

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The only times I won't bother spending too much time on a business plan are

- if the margins are just ridiculously high and i'd have to be dumb not to make money off of it

- the capital costs are extremely low

- i'm not really sure about my market but i think developing the product/idea/service asap will still be profitable enough to take on the gamble

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I totally agree. And I'll add that these opportunities are few and far between, and generally not sustainable in the long term. In any case, a pool hall certainly does not fit into any of the above categories.

[Frinkenstein]

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I think that detailed business plans are highly overrated.

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Obviously it depends what you want it for... If you need funding from banks, VC or angel investors, you're probably going to need a detailed business plan. If you have the start up capital already, clearly the requirements are less.

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I totally disagree. The business plan interjects reality into the romance of owning your own business. How does the OP know if there is any demand for a pool hall? Who are his competitors and how will he beat them? Who are his customers? How much can he expect to charge these customers? What is the best location? How will he get financing? How much is marketing going to cost? How do you get a liquor liscence? Is he going to serve food? What is the menu? What about health inspections? Insurance? How is the partnership among owners and investors going to work? Should you incorporate, LLC, or some other arrangement?

The business plan answers all these questions and more. Opening a business is incredibly complex. Why would you sink a lot of money into a business without a plan for profitability? I read A LOT of books on entrepreneurship and small business. And I have NEVER EVER heard a small business author or expert suggest that a business plan is not necessary. In fact, almost all of them clearly state that the business plan is the very first step toward a successful business. Many owners, including me, rewrite their company's BP once a year to reflect new market conditions.

From my own experience I can think of at least 5 times where I had what I thought was a great idea for a business, but it all fell apart when I started the business plan. Yes, you can be successful without writing a BP. But when just about every successful entrepreneur that I know or have read about says to write a BP, why would you ignore that advice? Laziness is the only reason I can think of.

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I guess I didn't get across what I was trying to say... If you need funding, obviously a top notch business plan is required. If you do not need funding, a business plan is not required, HOWEVER, obviously it is in the business owner's best interests to have one anyway and to be sure that it's a good one - especially considering how many new businesses fail within the first 3 years.

I just meant, that technically, the requirements are less. If you have the money, you are free to waste it as you see fit.

[spex x]

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I think that detailed business plans are highly overrated.

[/ QUOTE ]

Obviously it depends what you want it for... If you need funding from banks, VC or angel investors, you're probably going to need a detailed business plan. If you have the start up capital already, clearly the requirements are less.

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I totally disagree. The business plan interjects reality into the romance of owning your own business. How does the OP know if there is any demand for a pool hall? Who are his competitors and how will he beat them? Who are his customers? How much can he expect to charge these customers? What is the best location? How will he get financing? How much is marketing going to cost? How do you get a liquor liscence? Is he going to serve food? What is the menu? What about health inspections? Insurance? How is the partnership among owners and investors going to work? Should you incorporate, LLC, or some other arrangement?

The business plan answers all these questions and more. Opening a business is incredibly complex. Why would you sink a lot of money into a business without a plan for profitability? I read A LOT of books on entrepreneurship and small business. And I have NEVER EVER heard a small business author or expert suggest that a business plan is not necessary. In fact, almost all of them clearly state that the business plan is the very first step toward a successful business. Many owners, including me, rewrite their company's BP once a year to reflect new market conditions.

From my own experience I can think of at least 5 times where I had what I thought was a great idea for a business, but it all fell apart when I started the business plan. Yes, you can be successful without writing a BP. But when just about every successful entrepreneur that I know or have read about says to write a BP, why would you ignore that advice? Laziness is the only reason I can think of.

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I guess I didn't get across what I was trying to say... If you need funding, obviously a top notch business plan is required. If you do not need funding, a business plan is not required, HOWEVER, obviously it is in the business owner's best interests to have one anyway and to be sure that it's a good one - especially considering how many new businesses fail within the first 3 years.

I just meant, that technically, the requirements are less. If you have the money, you are free to waste it as you see fit.

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Yeah, I think that everyone is basically in agreement. It is better for OP to write the business plan than not. There is a big potential upside and no downside. While it is not an absolute necessity, clearly it can be a huge help. So why not?