If I suggested that you drive to a place you have not visited before, without a map or a clear set of directions, you would probably tell me it was a bad idea. Why? Because without one of those tools it is likely you would get lost, arrive late, or perhaps never arrive at all.

It seems obvious, if you are not sure how to get to your destination, you need a map, and yet, every day I meet business owners who drive their businesses with no map nor a clear set of directions. The result - they get lost, fail to meet their objectives, or fail completely. As a small business owner, you need a business plan. Without it, you are traveling blind.


Do not put off writing your plan for someday when you have the time. You will never have enough time, unless you make it. The busier you are, the more you need a plan to streamline your decision-making process and automate your day-to-day operations.

Building a plan does not have to be overwhelming or incredibly time consuming. Take the simplest approach to get started; you can always refine it along the way.

Get your thoughts on paper, and then revise them. Too often people get stuck trying to make the first sentence perfect and never get to the second page. Do not let that happen to you. Do not get hung up on grammar or spelling. This first draft is for you. It does not have to be a Pulitzer Prize-winning novel or a doctoral thesis.

There is a story about an impatient young man who went to visit an old Bible scholar. He demanded the old man tell him everything he needed to know about the Bible while standing on one foot. The old man smiled, stood on one foot and said, "Do unto others as you would have them do unto you. All the rest is commentary."

Why do I include this story in an article about business planning? It is not because I think business owners require divine intervention (although maybe sometimes they do). I include the story because it contains a wonderful lesson for business owners.

Regardless of what you believe about the origin of the Bible, most people agree it is a complex work with multiple themes and messages contained in its pages. And yet in a few words, the old man summarized the content and presenting it in a form many people would agree captured the essence of the document.

The lesson is simple; as you write your business plan, imagine you are writing for an impatient young man and try to meet his challenge. Boil down the description of your business to a simple message, deliverable while standing on one foot. Too often, particularly in the product description, owners get bogged down in the detail, providing way too much information for the reader.

Limit the product description section of the plan to a simple overview of your product, the problem it solves and its unique features. Information regarding variations or new features to be added should be included in the product strategy. Product specifications, charts and graphs regarding product performance, and detailed sketches and descriptions belong in the appendix.

The same is true for the management section, summarize your career highlights and put the detailed resume in the appendix.

Research is important, but don't get bogged down in the details. As you review your research, select the most relevant facts that support your plan of attack. Also include references to your sources (so the reader can check your facts).


Everyone is not your customer. Too often small business owners, afraid to walk away from even one potential customer, try to define their market so broadly that they include everyone. The danger? Without a focus you end up spreading yourself so thin that you don't effectively reach any particular customer.

The chiropractor who defines his target as anyone with a spine may think he is indicating to potential readers that he has unlimited potential. In reality, he is showing a lack of understanding of the buying characteristics, beliefs, and bias of consumers in his market. There are large groups of people who do not believe chiropractic treatment is real medicine. It is not prudent to spend money trying to convert nonbelievers. Selecting a narrower market would allow him to concentrate his marketing efforts on those customers most likely to buy.

Once you truly embrace the idea of focus as the key to a successful business, you are ready to start developing the rest of your plan. With a clear definition of your customer, it is easier to answer the questions that follow.

The operating plan for a chiropractor, hoping to work primarily with athletes suffering from sports-related injuries, will be dramatically different from one developed for his associate who is focusing on individuals dealing with pain as a result of a car accident. Location, hours of operation and types of advertising and promotion will all be driven by the choice of a target audience.


Does anyone really want your product? Anyone other than your mom, wife, or best friend? Too often innovative entrepreneurs become enamored with their technology, product or idea and fail to look at the larger community. How many individuals or businesses have a need for your product or service? And more importantly, how many are likely to buy?

A good starting point for your research is census data and information from your local chamber of commerce or commerce department. These broad studies will help you get a feel for the overall size of a community. Surveys, focus groups, and informal conversations with potential customers, even on a limited scope, will help you evaluate the market.

Everyone has a competitor. Even the most unique and innovative products must deal with competing products or service items that may or may not solve the same problem, but will compete for the end customer's available resources. Failing to take the time to understand how potential customers are solving their problems today will make it harder for you to convince them to switch to your solution in the future.


Often the road to achieving your goals is a series of small steps. Outlining a time frame for these interim steps or milestones will help you track progress toward the goal. Every small business faces challenges and obstacles on the road to success. A good business plan outlines the possible obstacles, critical risks, and alternative approaches a company can take to achieve its goals.

Your goals should be challenging, but attainable. Goals should be specific and measurable. These quantifiable targets give you something to work towards and measure your progress against. Finally, goals need to be time based. Do you expect to double your sales in one year or five?

As you construct your goals, leave out the vague and the meaningless babble of business phrases (such as "being the best") because they are simply hype. The objective of a plan is its results, and to create results, you will need measurable goals and deadlines. This will lead to the creation of a timeline for your action plans, definition of management responsibilities, and framework for your budget.

Your goals, once established, form the basis of other decisions. If your goal is to double sales in three years, your plan must include an explanation of the resources required to support the additional volume and the marketing activities needed to generate the additional sales.

If your goal is the destination, the action plan is your roadmap. Which route will you take? How much fuel will you need? How many hours will it take to arrive? What landmarks will you use to tell you if you are heading in the right direction?


As a rule, we entrepreneurs are optimists. We start businesses, not because we have a high tolerance for risk, but because we believe in our idea, product or service. We also believe in our ability to make the venture successful.

This optimism, however, is often not supported by the facts. Unrealistic financial projects, with a hockey stick-shaped growth curve, can set a business up for failure as owners spend too much too soon without enough cash reserves to help the business through the start-up phase. As you develop your financial projections, consider two scenarios, a best and worst case. Can you handle the volume and capacity demands of a best case scenario? And is the idea still viable in a worst case?

Stuff happens. Things go wrong. When they do, will you be prepared? Having an adequate assessment of risks is not being negative, it is being prepared. Create a list of the pitfalls, regulatory issues, competitive challenges, and changing marketplace conditions that might adversely affect your business. Once you identify the challenges, then you must develop action plans, safety measures, and insurance policies to protect the lender, investor or you.


As you write the plan, involve anyone who will be affected by the plan. Seek advice from people you respect. Talk to employees, family members, business partners, and advisors such as your accountant and lawyer. Ask their opinions and communicate your goals. It is easier to steer a boat if everyone is rowing in the same direction.

As you develop your plan, remember, it doesn't matter how simple or complex it is; the process, not the finished product is important. Your plan does not have to be perfect. It can be as elaborate as an MBA thesis or as simple as a few double-spaced pages. What is important is that the plan exists because you took the time to answer tough questions about your business.

Actually, a good business plan is never finished. The best business plans are not beautifully bound documents gathering dust on a shelf. They are tattered and smudgy from frequent use as a road map, showing where a business is going and how it plans to get there.

Publication date: 10/09/2006