THE BUSINESS PLAN

THE BUSINESS PLAN
As illustrated in the basic model of the entrepreneurial process shown in Chapter 1, the time to write a business plan is midway through the step of the entrepreneurial process titled “Developing Successful Business Ideas.” It is a mistake to write a business plan too early. The business plan must be substantive enough and have sufficient details about the merits of the new venture to convince the reader that the new business is exciting and should receive support. Much of this detail is accumulated in the feasibility analysis stage of investigating the merits of a potential new venture.
                    A large percentage of entrepreneurs do not write business plans for their new ventures. In fact, only 31 percent of the 600 entrepreneurs who participated in a Wells Fargo/Gallup Small Business Study indicated that they had started their venture with a business plan.3 This statistic should not deter an entrepreneur from writing a business plan, however. Consider that we do not know how many of the entrepreneurs participating in the Wells Fargo/Gallup Small Business study who did not write a business plan wish they had done so. We’re also not sure how many aspiring entrepreneurs never got their businesses off the ground because they didn’t have a business plan. One academic study found that potential entrepreneurs who completed a business plan were six times more likely to start a business than individuals who did not complete a business plan.