To Plan or Not to Plan, That is the Question.

A business plan defines your business, identifies your objectives and goals and serves as a blueprint or framework for your company's management. For an established business it shows that thoughtful consideration has gone into the development of the business. For the startup, it shows that the new business owner has done his homework. The plan is a window to the future, showing a view of where you want to be in 1, 3 or 5 years.

A business plan will be necessary if you are looking to secure a loan. The well thought out plan will show whether a business has the potential to be profitable. Since it requires a realistic view of your business, the plan will show that you have looked at potential problems you may encounter and have given thought to solutions and alternatives to overcome or avoid them.

A well developed business plan will help you monitor and evaluate your progress in the development of your business. By establishing your objectives, goals and the timelines to reach them, you will be able to measure and compare your expectations with your actual progress. It can help you identify new potential problems and solutions to avoid these setbacks. Thus it becomes a viable document, not something you create and then forget about.

The process of developing a business plan forces the business owner to focus more clearly on what they want to achieve, how they can do it and when they can reasonably expect to meet their goals. While many future and present business owners feel they don't need a business plan, they should consider this - if a builder would not begin construction without a blueprint, why would you build your business without a plan.

For more information and detail on Business Plans check out the Small Business Administration web page (which provided the basis for this short article) and Center for Business Planning.