Writing a Small Business Plan is a Necessity for Your Business Success

Definition of a Business Plan

What is a business plan? Why do you need a small business plan? Understand the definition of a business plan to learn how to write business plan. Focus your business plan layout on the direction you want to go.

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Telling business owners that they must write their small business plan to enable their success is usually met with as much enthusiasm as announcing it's time to go for that annual dental check-up (my apologies to all the dentists reading this).

In other words, planning is probably on most small business owners' least favorite things to-do list. This is likely because most small business owners are do-ers, not planners.

However, planning – in all its forms – is an integral part of small business success and it must be done.

But it can be done in smaller pieces. A thorough plan will include many elements of the overall business and the strategies to run it.

What is a Business Plan? Definition of a Business Plan.

Some parts of the business plan need to be done first: the operations, sales, marketing, financial, and human resources sections must be done before others such as succession or exit planning.

The plan is a summary of operations and financials; it contains plans and strategies (for example, marketing plan, workforce plan, market research plan, etc.) for achieving the business objectives and goals.

Planning includes Writing: How to Write Business Plan

• a small business plan (and perhaps growing that plan into a strategic business plan);
• a strategic marketing plan;
• a new business plan – for small business startup (which is different than writing a business plan for an existing business);
• a new product development plan;
• a marketing research plan;
• a customer service and/or customer-centric plan;
• a human resources plan;
• a business continuity plan, using business continuity resources;
• a scenario plan and scenario analysis; including disaster recovery scenarios;
• a risk management plan;
• a safety checklist plan;
• an environmental plan;
• a business exit strategy or succession plan;
• a sales plan;
• a business operations plan;
• a capital expenditures plan;
• use a financial plan sample to help build your business financial plan (including income statements, project budgets, cash flow projections, analysis of financial ratios );
• and more.

This long list of plans to write can be overwhelming. So, use a business plan outline to start with a small and reasonable approach.

How to Write Business Plan:

Write your small business plan as an expandable document. Ensure that your plan includes clear goals and objectives and how you will achieve them. Add other sections as you have time and/or as you need to (to manage your business).

If you asked business owners for a definition of a business plan, you would likely get a variety of responses. There really is no one answer; however from a small business perspective think about your small business plan as a road map that directs you and your business in the direction you plan to go.

Following a simple business plan outline will result in a plan of about 12 pages. Creating a more comprehensive plan that focuses on strategic marketing plan elements or strategic consideration of a small business startup, or a new product introduction, or a merger will take more time and effort but will help you to focus on managing your business.

The common reaction once your business plan is written is to congratulate yourself on a job well done and completed and file the plan away!

However, a plan is most effective when you build measurement into the forecasts or budgets. To do that you can use software programs that are easy to manage and that provide solid analysis functions. For example, rely on Prophix performance management software to help you forecast your business budget, goals, and more. When you track your results to your forecast in a timely manner, you will be better able to plan the actions you need to take to reach, and surpass, your goals.

What is a Business Plan? Why You Must Use It Once It's Completed?

• Do not let your small business plan become a dust collector.

• Use it. Build your key performance indicators (to measure business performance) and then assess your progress against your plan or plans.

• Share it with employees. Build the goals and objectives into their performance evaluations.

• Share a limited amount of information from your plan with your customers (like how your business is being designed and developed to become customer centric – only do this if you are truly committed and have begun to make some progress that you can point to).

• Share a limited amount of information from your plan with your suppliers (like how you’re looking for the most environmentally friendly supplies available and how you’re willing to reduce your number of suppliers if you can increase the amount of environmental supplies from one source).

Once you’ve developed your small business plan, ensure that you update it at least once a year (more often if you working in a quickly changing environment). Then begin to add some of the other plans listed above to fold into your overall business plan.

Planning is important to your business because what you plan, you can manage. Unplanned events, or surprises, are often not happy occurrences and will require you to shift your focus from running your small business, to putting out fires.

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