Why Bother with a Business Plan?

Whether you've just started your business or have been doing it for a while, you have it in your head what you want to do with your business and your business goals. Of course, you want to grow your business. If you don't have a business plan, it's time to make one. They don't have to be pages long—in fact; one-page business plans work very well.

Business plans help you check your business. Has it moved away from its original goals? Or maybe you have one already, but the business plan may not be on target. Business plans aren't just for trying to get investments, loans, working capital. Also, a business plan is a living document, meaning it's never permanent or set in stone. It will change as your business changes. Many businesses have seen change especially with the economy forcing them to move in a different direction or drop something from the product or service line.

Mike "Toilet Paper Entrepreneur" Michalowicz offers several plans for downloading that acts as a business plan with a different style.

What a Business Plan Does for Your Business

Captures your business goals and direction on paper. Anyone who reads this will be on the same page as you. Sometimes what we have in our heads doesn't translate well. So putting your thoughts into written word ensures everything is clearly defined.

Forces you to understand your target market. Some businesses don't truly understand who can benefit from their product or service. If your target market is broad or undefined, it's time to do the research and figure it out.

Makes a good resource for financing and other business ventures. If you need a loan, line of credit or whatever to boost your cash flow, a business plan can support your efforts in getting what your business needs.  Maybe you need to hire a contractor or consider teaming with another business. The business plan shows exactly what's happening in your business. If you keep it all in your head, you can't be sure you communicate the same thing every time when you meet with others.

Evaluate what makes your business unique. As you write your business plan, you'll be studying your competitors and figuring out what you offer that your competitors don't.

Identify cash flow needs. It's critical to know how you will make your money and where you will spend it to ensure you always have cash flow or else go out of business.

The key is to keep your business plan simple. It doesn't need to be more than a page or two. If it's too long, you won't maintain it as your business will continuously change to reflect times and customer needs.