Why Business Plans For Online Business ?

The new blogger has a problem thinking of his blog, web site, forum, community etc as a real business. I am an advocate of starting to do something even before you do a business plan. Everyone wants to start their own business but only a handful ever start. A business plan before you  get your feet wet can actually be a lazy man’s option of never starting a business. The best Venture Capitalists actually never want to see a business plan before they finance you. They would rather hear or read about your idea, then they will hire a professional to work out the business plan after you have started implementing your idea.

So even though you need a business plan, by all means let it come after you have started something. An example is a friend of mine who wished to start making Joomla templates to sell. He had great ideas for the templates and I actually used a few of them.However, when he decided to start writing a business plan ,he went for 2 months without producing a single Joomla template. Suffice it to say  he had to convince me to continue using his services. So do not take too long coming up with your own business plan then forget to do your online business.

Having said that, a business plan for your online business is essential for your online success.Every online business will benefit from having a well written business plan.You will need an online business plan for the following reasons

1. Business Plans Serve As Guides For Your Business

A good online Business Plan will serve as a blueprint for your online business and will provide you with the tools to analyze and gauge the performance of your business over time.One of the biggest mistakes most online entrepreneurs make is assume that a business plan is static. Once they present the plan to the bank or financiers, they forget all about it. However, business plans are meant to change and evolve over time. It is hard to predict what will happen in 5 years even with the best of plans.

I keep my business plans in loose leaf folders and add and remove pages as the business evolves. Saving the older business plans for references to see what wrong assumptions I have made over time ,the successes and the failures in the business. The bank may keep the hard copy but I need the continuously changing business plan.

2.Business Plans for Financing Documentation

You can rest assured that you will not be getting any financing from banks and serious investors if you do not have a business plan. Most savvy investors require documentation for all financial assumptions backed up by market estimates, industry norms and even competitor comparisons. For the small blogger, it may not be necessary to do all this before you set up your blog or web site. However, if you really wish to go to the big leagues and have partners in your online business, you should be taking a few minutes off entrecard and site hoppin and instead add analysis to your business plan.

There is a current spate of selling blogs. I would not buy a blog with no business plan and I am positive that those selling such a blog, would command more sale price if they had a business plan. Otherwise, it is a simple gamble and not an online business you are buying/selling.

I write business plans for fun when I am bored. It is not a tedious exercise especially considering that I have made very good deals in my offline business based just on my business plans.My view is that most blogs and online businesses fail principally because of lack of a well written online business plan. Have you written your own online business plan and how difficult or easy was it to write one? Did it make a difference in your online business practices ?

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