Do I really need a business plan? It's a question I hear from many of my clients some of whom are lawyers just starting their practices. It's a question that is especially relevant for those who are not relying on a bank for funding.
Their reasoning is that they really know what they have to do. Why waste time writing about it? "Let's just do it!" they say to me. Sounds logical but in my experience for most it just doesn't work.
There is a reason banks require a plan. They are concerned that the money the customer borrowed will not be returned because the business owner will not have earned enough money to pay them back.
If your business is self funding then it is you who are investing in your business. You'll need the basic business supplies, telephone/internet connections, office space, and a computer at least. Of course the biggest investment is your time! All this equates to your money invested. Surely you don't want to put that investment at risk.
It is actually possible for a lawyer to have lots of clients and still not make a profit. Writing a business plan allows you to plan the business on paper without spending a dime. It helps you to get really clear about your practice, your specialty, and profitability. After all you, just like the bank, want to make sure you don't lose money.
So what goes into the plan? The first part of the business plan is usually a business description. This is the place to write down your vision of the business when it is operating at peak performance. What will you be doing? Who are your clients? What makes your practice so successful? Here is an opportunity to put the dream on paper. Make it live! Get excited about it! It is this vision that will keep you energized when things get challenging.
Writing that business description will help give you more clarity about your practice and the value you bring to it. It will help you to answer the question that everyone will ask, "What do you do?" Saying "I am a lawyer." may satisfy the questioner but doesn't help them to distinguish you from all other lawyers. Knowing what it is that makes your practice unique can make the difference between getting a referral or client and not.
It may be that before you can describe your practice you will need to do some research to find your specialty or niche. That market research will be part of the marketing section of the plan and can involve talking to other attorney's working in that specialty, researching the market on the web, visiting a business library to access data and/or doing a survey of target clients. The idea here is to be certain there is a market for the service you offer at the fee you want to charge and enough potential clients to ensure that the practice will be profitable.