WHAT IS A BUSINESS PLAN?
A business plan is a document you create when you take an idea for a commercial endeavor and work through all the factors that will have an impact on the successful startup, operation and management of the business.

• Smart entrepreneurs plan, not because their advisors tell them to, but because they know it will increase their chances for success.

WHY IS A PLAN NECESSARY?
A business plan is needed to be able to convincingly demonstrate that your business can sell enough of its product or service to make a satisfactory profit and be attractive to investors. A business plan is a selling document.

The first person that must be sold is the entrepreneur himself / herself. It is in doing the business plan that the entrepreneur will examine the business in the detail necessary to determine that his idea is worth the investment of time and money that is required to establish a business. The discipline of doing this evaluation in a business plan will take the planner into all of the details necessary to develop a depth of knowledge of the businesses and how it operates

• The entrepreneur will have the responsibility of "executing" the plan. The knowledge derived from the planning process will equip him / her for the task.
• Knowing the details of the business will help to sense the threat of changes in the business climate and take corrective action.
• The knowledge of the intricate details of the business will allow one to recognize and take advantage of opportunities as they arise.

BENEFITS OF A WRITTEN PLAN
The discipline of putting your plan into writing forces you to be more precise, to consider and validate all the elements that will effect your business, and to have a document allow others to fully understand your venture. More specifically a plan can be:

• Realities check to examine the feasibility of your idea. Sell yourself on the business.
• A tool to help manage risk. Be proactive instead of reactive.
• A clear focus for your business. What you want to do and how you will do it.
• A communication document that will tell your story in a consistent, clear and complete manner.
• Your businesses resume, which will be vital in dealing with lenders, investors, employees, strategic alliance partners, etc.
• An operating timetable helping you coordinate the activities that go into starting and running your own business.
• A modeling tool that helps evaluates the variable factors affecting your business so you may better deal with changing conditions.
• An operating control to track the progress of your business against your goals.

BACKGROUND RESEARCH
It is important that up front you develop some idea and feel for business plans and the elements that go into process of writing a business plan.

• Review different business plan outlines. Look for differences, similarities and get a feel for the issues that are addressed in business plans. Start developing the format for the plan that is best for your business (best, not easiest).
• Take a look at the aids that are available such as Business Plan software or "how to" books with plan formats.
• Use Internet sources for model plans and plan outlines.

WRITING A PLAN
1. Prepare an outline for your plan. What will the subject segments be? You are not locked into this outline and may change items as your plan develops. (Note - the following list is for illustration. You should develop a list that most closely fits your needs). An outline example:

• Executive Summary
  
• Business Description
  
• Market Analysis
  
• Product or Service
• Manufacturing
  
• Selling and Promotion
  
• Management
  
• Financial Data
  
• Investment
  
• Appendices

The above is an example of the major subject segments of the plan. Your actual outline will be more expansive by having sub-issues within each of the above segments.

2. Gather information, data, questions, observations related to the Subject / Issues identified in the plan outline.

• Sort collected information by outline topics.
  
• Involve stakeholders. Use potential investors, customers, employees, advisors and others as source of information where applicable.

3. Write a draft of plan segments.

• Do a draft of each segment, as sufficient data becomes available.
  
• Segment drafts do not have to be done in sequence. Begin with the ones you feel the most comfortable with, or that have the best information collected.
• Pay more attention to content than format at this point.
  
• Edit drafts and arrange in outline format

4. Review plan.

• Have associates or interested parties' review your draft and feed back comments on your plan.
  
• Validate all data used in plan. Must be accurate and current.
• Check plan for internal consistency. A point made in one area should not be contradicted somewhere else.

5. Rewrite! Rewrite! Rewrite!

• Review feedback from plan review and incorporate into plan where applicable.
  
• Have others review updated plan (prior reviewers, SCORE) for content, presentation and communication of your message.
• You must review the plan or have it reviewed a number of times from the point of view of the intended audience until you have a document that will communicate your message.

6. Dress up your plan

• Plan document should look professional.
  
• Use report folder. Don't go overboard and detract from content.

DISTRIBUTING THE PLAN
This is the point at which the plan becomes a tool for your business. It is possible that you may want to have different versions of the plan for different people.

• Distribute to stakeholders and interested parties.
  • Investors
    
  • Bankers
    
  • Potential employees
• Study the plan document
  
  • Be prepared to discuss plan and answer any questions
    
  • If you have used help on some parts of the plan due to technical or specialized nature of the material say so. Defer discussion to expert who assisted you.

INTERNAL USE OF THE PLAN
Remember the plan is a "road map" for your business. You will have put a lot of time, effort and thought into the plan and should use it to help manage your business.

• Plan should be reviewed at least quarterly to monitor your progress
  
• If you are not meeting your goals you must review the plan to determine the reason and take action.
  
• Plan can be adjusted if external conditions have changed or if your initiatives are not working. Don't give up easily on reasonable goals.
  
• Plan should be basis for your operating budget. Budget must be consistent with plan.
  
• Plan should get a major update annually
  
  • Are strategies still valid?
    
  • What has been accomplished in relation to plan
    
  • Roll goals and financial projections forward for a year

For more assistance in creating your business plan, register for our seminar "How to Really Start Your Business" . Click here for more information.

ONLINE RESOURCES FOR BUSINESS PLANNING
Here are some resources that we have found useful for finding more information. NOTE: Some of these sites recommend a software program or other products and services you can buy. SCORE does not endorse any vendor. Use your best judgment in deciding whether the purchase of software or other offer meets your own business needs and budget.

SCORE - the national website has a variety of templates, including some financial templates, which can assist you.

The US Small Business Administration

My Own Business - Provides "free" internet course on starting a business and other business resources.

American Express Small Business Advisor - American Express has put together a number of articles, templates, and other information for you to use.

Bplans.com - a website with a variety of small business resources and some sample plans.

INC Magazine - another resource of tools; perhaps your business will make the INC 100 one day.

Morebusiness.com - another website focused on the small business; has interesting articles and some additional templates.