"Business Plan" is a two-word phrase that can quickly strike fear in the hearts of small business owners. Intuitively we know it is not smart to operate a business without a plan. However, when we come face to face with the prospect of writing one, our immediate response is often "What is a business plan?" and "How do I learn how to write one?"

So, what is a business plan?
Your business plan is the guide you follow during the life of your business. It is the blue print that provides the tools to analyze your operation, to make decisions and to implement changes to increase your profitability. Furthermore, it is the document required by lenders and investors. It also provides a standard means to evaluate business potential in a foreign marketplace.

A business plan is a comprehensive overview of the total operation — present and future. Fortunately, there is a logical process you can use to develop the plan. Every business has three distinct areas that a good business plan needs to address: organization, marketing, and finance.

The organizational and marketing sections are the qualitative parts of your plan, meaning they are the concepts you think will work best. The financial plan is merely an extension of those ideas. It is the quantitative part of your business plan in which you express everything you mentioned in the organizational and marketing sections in terms of numbers that can be analyzed. Valid business plans have complete continuity between the text and the numbers.

How do you learn to write a business plan?
The nice part is that there are lots of sources of information — books, articles, software, Internet research sites, etc.

The problem is sorting the good from the bad. Most libraries have an assortment of books on business planning (including my own, Anatomy of a Business Plan). When you find the book you are comfortable with, check it out, adopt its process and dig in.

There also is software, but you must determine whether it merely provides a quick fix or helps easily create a credible and defensible business plan.

Linda Pinson, is the author of the best-selling book Anatomy of a Business Plan and developer of its companion software Automate Your Business Plan for Windows.

lpinson@business-plan.com
www.business-plan.com