How a good business plan can keep your money in your pocket (and out of your lawyer’s…)

Business plans are tedious, time-consuming, and ever-evolving. And sadly, they are rarely read…even by the creator. When we meet with a new client, no matter what the reason for their visit, we will ask if they have a business plan. More often than we’d like to mention, we are met with puzzled looks and dismissive answers. Basically – ‘what does that have to do with anything? I’m in here for x, y, or z lawsuit.’ Well, here’s the reason we ask – if you had planned better to start, you probably wouldn’t be sitting in our office.

It seems the planning problem largely comes down to the perception of a business plan. It seems that if a business owner doesn’t need to chase down capital investments, they see no need to go out and do hours of industry and market research and meet with accountants and financial professionals to develop years’ worth of financial pro-formas. Why spend 200+ hours developing and writing a business plan when you could spend that time ‘doing’? Sure, that sounds like a valid argument… until you see what you’re missing and what headaches you will save down the road.

The business plan is more than just a tool to attract investors. This is your roadmap. This is your opportunity to research and understand the nooks and crannies of your industry and your market. You shouldn’t be in our office showing us a lawsuit against you for running your business without the proper permits and licenses. You should have researched this before you opened. You shouldn’t be in our office with a lawsuit against you violating environmental regulations. You should have researched this before you opened. And I could go on and on.

Here’s the deal – when you do your research early, you are able to see if there are legal hurdles to overcome. And that is when you should be showing up at our office. When you come into the office during the planning stages, we can explain what needs done and the costs involved. You can then budget time and money appropriately. As a note – we’ll be able to charge you a heck of a lot less during this phase because getting the proper permits before you break any regulations is a whole lot easier and a whole lot less time consuming.

So, what should you do if you’re already in business and don’t have a plan? DRAFT ONE! Never throw your hands up and say ‘well, too late for us.’ Business plans are fluid by nature – they change and evolve. If you haven’t drafted one, take that extra time to do the research and run the analytics. This will help you see both opportunities and potential dangers. Consult with an attorney to discuss your business and see if there’s something you’re missing. If you already have a plan, don’t just put it on a bookshelf. At least once a year you should be updating the plan. This will help you keep your business going down the road to success. It will help you stay focused on maximizing what works and leveraging your opportunities while minimizing your risks and dangers.

As a final note – if you need help, there are plenty of professionals that dedicate their careers to helping with this very thing. Additionally, there are many wonderful free resources online and in the community to help small businesses grow and succeed.