A business plan is essential for going forward with your company and especially getting some sort of funding. As true as that may be, a big mistake many entrepreneurs make is to create an extremely detailed plan even in the first stages of their start-ups. Most of the time a small company like that does not need such a high level of detail, which requires a lot of time and could use instead a simpler plan that can be elaborated when the entrepreneur is ready to approach more keen investors.
The first plan you create as an entrepreneur should help you define what you want from the business, understand the customers and decide what are the next steps you need to take. A detailed cash flow, a balance sheet and business ratios might not be necessary in the beginning. A starter business plan can contain elements like the Mission Statement, some essential keys to success, a market analysis and a break-even analysis, which are probably the most important in this first stage.
If your start-up is a little more complicated and needs more details laid down on paper, do so, but realize what is important and what is not. A good idea is to create the business plan in stages in concordance with the real life situation. For the first part when you are looking for partners or team members some key topics and a general direction can be enough. Later on think about a more detailed forecast that includes sales, expenses and profit or loss.
Focus on the Executive and Company summary, describe the product or service, think about the strategy and implementation and lay out a simple financial plan.
Each business has a plan, even if it is in the head of the developer. If you have not laid out your plan on paper do so, even if it seems incredible simple or stupid. It will help you clear your mind and have a solid starting point.
Even in the early stages you should know something about the size of the market, its type and have an idea about how the sales could go and how big the expenses would be. The numbers you have in your head may not look so good on paper or presented to other people.
Don`t expect this simple sketch of a business plan to serve you for very long. If your company grows, you gain visibility and start chasing banks and investors you will need to tell the full story.
Having a plan is extremely important but realize that a large percentage of the people with an idea do not start their business or delay the actual work too much because they are to obsessed on creating a perfect business plan even before starting to do something.