.One of the most common questions of startup entrepreneurs is: Do I need to write a business plan?
Seth Godin, in his book “If You’re Clueless About Starting Your Own Business and Want to Know More,” suggested that those interested in starting a business first need to decide whether they want to be an entrepreneur or freelancer. He made this distinction between the two:
An entrepreneur works to build a business bigger than herself, with significant business risks and numerous employees. A freelancer, on the other hand, is looking for the freedom and profit that come from being on your own, without the headaches that come from building a significant venture …. This is an important distinction when it comes to a business plan. Perhaps one business out of 1,000 gets external financing from a venture capitalist or a bank. The rest are self-funded by friends, family, and cash flow. If you’re self-funded, you don’t need a formal business plan.
But even if you’re a freelancer and still wants to write a business plan, Godin advises:
If all you’re trying to do is create a plan for your personal use, you may need no more than the back of an envelope to jot down key points to jog your memory. That’s especially true if you are still a good ways from actually starting your business, and if you plan a small, perhaps one-person enterprise requiring no outside funding.