Ask Michael

SurePayroll President Michael Alter answers your small business questions.

Read his responses to questions submitted by other business owners or submit your own.

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This Month's Featured Question

Should I Have a Business Plan?

Q. Dear Michael,

My brother and I plan on opening a business together. Do you think we need to write a business plan or can we just get started?

A. Dear Mark,

You don’t need to write a business plan to start a new business, but it’s a good idea.

For businesses that will need loans from banks or that will raise funds from investors, it’s imperative to have a business plan. Even if you won't need loans or investors, you should still write one.

Here’s why. They say "If you fail to plan, you plan to fail" and I tend to agree. Writing a business plan can be a tedious exercise, but it forces you to think through the details of how your business will work.

You’ve probably got a lot of great ideas on how you will start and grow your business. When you put those down on paper, you’ll start an iterative process that will make your plan better. As you write and read what you’ve written, new ideas will come to mind and your plans will change. After you think them through, some ideas that seemed great initially will turn out to be bad ideas. Better to figure this out while writing a business plan than to spend money in real life and make a big mistake.

Beyond simply forcing you to flesh out exactly how your business will work, a business plan gives you a means to assess your progress in the future. What goals did you define in your business plan and are you hitting them? In fact, the business plan should never be a static document. You can update it every year and use it as a way to plan for growth and check the health of your business.

By the way, a business plan doesn’t need to be perfect and it shouldn’t be a Herculean task. Try to write your business plan in one week. You can always make note of areas that need further work and add to those sections later.

There are plenty of good resources to get you started. To get started, visit the Small Business Advice & Tips section of our website and click on Business Plans. You might also want to acquire some books on the topic. To my mind, one of the best books is Business Plans That Win $$$: Lessons from the MIT Enterprise Forum, and most public libraries will have a copy. It’s also worthwhile going to the local computer store and looking at the business planning software that’s available. The software walks you through the planning process and provides you with templates to complete. It can really streamline the process for you, and these packages are not that expensive.

Good luck with your new business. Since you are starting the business with your brother, don't forget to work out your partnership agreement before you start the company. Many businesses started by partners run into problems later because they didn't think through how the partnership would work.

As final words of wisdom, I’ve got three tips I tell every new business owner: hire good people, spend as little money as you can, and sell products and services that you know your customers will really want. If you do these three things, you’ll end up doing fine.

Please Note: While Michael tries to answer as many questions as possible, he may be unable to respond to all of them. SurePayroll will post one Q&A each month. If your question is chosen as a monthly feature, we'll email the answer to you, as well as post it online for other small business owners to read. Thank you for your submission.

Small Business Tools & Resources: Advice & Tips - Ask Michael - Small Business Matters