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Do You Actually Need a Business Plan?

Updated on January 23rd, 2022
Business Planning

I was recently at a CollabMiami meetup where I was interviewing the founder for my podcast. During the podcast, we took live questions from people who were watching via Instagram Live.

The question that kept coming up over and over again was “How do I create a business plan?” or “Do I need a business plan?”

The short answer is it depends on what you’re trying to do. If you’re trying to get a line of credit from the bank, then you’ll definitely need a more traditional business plan. However, good luck trying to get one of those if you’re a freelancer or really just starting out.

That being said, here’s what I’ve come to notice about the notion of a business plan over the years. This is based on my own experience and watching many of my friends and colleagues create some great brands for themselves.

None of us had a formal business plan when we started.

Many colleagues and I started our businesses in much the same way: our backs were up against the wall and we needed to figure out a way to make money.

Many of us also don’t have any formal training like an MBA. In some ways, this is a huge advantage because you just do stuff. You don’t necessarily think about financial forecasts when you’re just trying to hustle to make enough money to pay rent. You just hustle. That’s it.

Another thing I noticed is that we just did a whole lot of experimenting – especially in the beginning stages. If something worked we kept it, if it didn’t then we dropped it. We kept this going until we had more experience and could better strategize.

For many of us, our formal business training came from old jobs, coaches, colleagues, reading business books and taking as many classes as we could. I’ve done a lot of this, and no where has anyone mentioned creating a formal business plan – they simply tell you to go out there and do it.

Do we have a business plan now?

I don’t know about my colleagues so I won’t speak for them. Speaking from my own experience, I still don’t write up a business plan. At least not in the formal sense.

  • I do create a basic plan for the next few months to a year.
  • I do sit down with my accountant and talk numbers.
  • I do forecast and assess what could possibly go wrong with my plans.
  • I do seek counsel in the form of coaches and consultants to see where things can improve.
  • I do (now) have a team manager with whom I discuss what needs to get done and who needs to do it.
  • I do plan out my marketing, promotions and sales processes.

So yes, I have gotten much more strategic in running my business, but I have yet to create a really formal business plan. And unless I feel like I need to get a line of credit from the bank, I probably won’t waste my time trying to write one.

Amanda Abella

Amanda Abella

Amanda Abella is a Millennial Finance Expert that helps people understand their finances and eliminate all bad debt. She wrote a book, Make Money Your Honey. It is a powerful guide on how to have a better relationship with work and money. You can actually start building an extremely profitable business around the things you're passionate about.

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