The short answer according to Rachel Lawley: yes. (See previous post for more details on Lawley.)
A good business plan will help you identify in detail the goals, purpose and strategies for your company.
“A business plan is the medium that forces current and prospective business owners to truly question their business, what and who will affect it, and what and who it will have an effect on,” she said.
As for the freelancer, consultant and contract employee, Lawley said you don’t necessarily need a complete business plan, but they are useful.
“Consider this, would you work for a company where they didn’t provide you with a description of your job, or offer you regular performance reviews?” she said.
Lawley added that creating a solid business plan early on will give you a solid foundation, so you can have confidence in your goals and in yourself.
“You can continue to adjust your plan, based on how your services or clients develop,” she said. “But it’s important to have that plan, to have a mission to stay focused on. Otherwise, you might find yourself accepting clients who need work that you know how to do, but hate doing, just for the money. That works short-term, but it diverts your attention away from your real goals.”
A business plan is necessary if you need investors or a business partner. This eliminates confusion and ensures you and your team are working in unison.
“When the company is still fresh and ideas are flying around, sit down with your partner (maybe with a mediator sometimes) and put ‘pen to paper’ about what your goals are, who you want your clients to be, where you want to be in a year, two years, five years,” Lawley said.
But the bottom line is, there is no best time to create a business plan.
“If you can draft it while the company is still in the idea stages, that’s perfect,” Lawley said. “But it isn’t always that simple. Maybe you start out casual, either solo or with a business partner. But by the end of the first six months to a year, you should write your plan, before you have any misunderstandings, and especially before you miss out on any great opportunities.”
For freelancers, the best time might just be when your business develops and takes on a new purpose.