Q. I’m ready to open my own business. I’ve always heard that I should have a business plan for financial reasons, but I have capital for start-up costs and won’t need investors or a loan. Do I really need a business plan? A. The short answer is “Yes.” I’ll use one of my favorite analogies in describing why: A business plan is like a road map. When you determine a road trip to an unknown location, even with the common usage of GPS audio, you’ll most likely take a look at a map before embarking on your trip. You’ll also check the map or rely on the anonymous voice of your GPS throughout your trip. These specify your roadways and note landmarks along the most direct route. A business plan functions in the same manner as a map or GPS A business plan doesn’t have to be a complex document. It does need to specify the basics of how your business will be structured, who your customers will be, how you’ll connect with them, and the fundamentals of how you’ll handle income and expenses. How will your business be structured? Who will assist you with the daily responsibilities of operating your business? These responsibilities include invoicing, paying bills, connecting with vendors and customers, sales, marketing, tax planning and form preparations, answering phones and emails, and the list goes on. Have you formed your advisory team? Your advisory team will be comprised of mentors in the traditional areas of business such as attorneys and accountants, as well as leaders in your industry. Who is your target market? With a defined target market, you’re better able to communicate with them effectively and in a cost efficient manner. Some questions that help you define your target market include: Who will use my product/service? This includes demographic information such as gender, age, source and amount of income, geographic location, and level of education. Where do they get information? What information, tangential to your business, are they interested in? How will you market your business? Once you’ve identified your target market you’re better able to determine how best to communicate with them. Which marketing methods will reach them most effectively? Do they utilize social media on a regular basis? Will impulse buying triggers snag them? Do they regularly use coupons or does a ‘gift with purchase’ hold more appeal? What’s your budget? Planning for expenditures and forecasting income helps you maintain positive cash flow. Preparing a budget requires research. Don’t hesitate to ask utility companies for previous averages for your business address. Shop vendors for maintenance and lease contracts, service arrangements and insurance that will be most beneficial and cost effective for your business. The uses of a business plan are varied, but the need for one is definite. With a business plan you know what your business is, where it’s going, and how it’s going to get there.