Why You Need a Business Plan

Okay. You've thought through what you want to sell and the amount of work involved, and you're convinced that it's doable. Why not just get started now?

There are several good reasons to put your planning down on paper. First, by formally writing down your plan, you're guaranteeing that you'll actually think through what you're going to do; you won't slide by without doing the critical thinking. Second, by committing your plan to paper, you have a real plansomething you can follow in the future and use as a benchmark when evaluating your success. And third, if you need to obtain any funding for your businessto purchase inventory, for examplepotential lenders or investors will want to see the plan you've put together.

This last point can't be ignored. Most potential lenders and investors require that you present a detailed business plan before they will even consider giving you money. Since your business plan contains information about your potential market, your business, your strategy, and your planned operation, any investor or lender can read the plan to get a quick snapshot of you and your business.

Note

Need to borrow money to start your eBay business? Check out Chapter 4, "Evaluating and Arranging Funding."

For that reason, a business plan should not only reflect how you plan to run your eBay business, it should also contain everything a potential lender or investor needs to make an informed decision about whether to give you money. Without a business plan, you won't even get in the door.