Every business needs a plan. This should be obvious, but surprisingly, many business owners overlook or just flat out ignore this basic requirement. Some may even operate successfully for years with a business plan, but when they least expect it, they discover that this omission may be keeping their business from reaching its potential. This discovery may come about when the business needs more funding, perhaps to cover increasing operating costs or for expansion. The business owner then approaches a bank, lender or investor, whose first response is to ask for the business plan. If there is none, then the business may be seen as being too risky, despite its history, which means no money.

Admittedly, getting funding for your business and building business credit is one main reason to develop a thorough business plan, but many business owners have the misconception that this is only reason. Let’s take a quick look at some of the other benefits. A plan can help you:

• Determine the best structure for your business.
• Establish a clear sense of direction for your business through a well-crafted and well-thought-out mission statement.
• Determine the overall profitability of your products and services.
• Evaluate your competition to see how you can outrank them.
• Identify your customer base to make sure your business is meeting their wants and needs.
• Develop marketing strategies to keep existing customers and to acquire new ones.
• Estimate start-up and ongoing operating costs.
• Develop short and long term goals that will keep your business growing.

From this list of benefits, it’s easy to see that a business plan can be invaluable, so why have so many small business owners not developed one? Perhaps one main reason is that they are unsure about how or where to start. The best way to get started is by asking questions about your business: What do you do or want to do? Why is this important? What are your short term and long term goals? How will your business change over time? Who are your customers, now and in the future? You get the idea. Begin brainstorming to explore every possible aspect of your business. Don’t limit your ideas to business’s current level of operation, but think about where you want it to be in the future. Be exhaustive in your examination of your business.

After you have given sufficient thought to your business and its future, you are ready to begin crafting your plan. To help organize it, break it into these main part, then tackle each one by one:

• Basic description, including mission statement, products and services.
• Financial profile, including credit needs, cash flow and profit versus expense analysis.
• Organizational structure, including incorporation, if applicable, board of directors and responsibilities of key individual within the business structure.
• Market analysis, including customer profile and strategies to attract them.
• Competitor analysis, including how your business will differ from theirs.
• Plans for growth, including both short and long term objectives and goals.

If the whole thought of writing a business plan is still too overwhelming, you can get help by going to the U. S. Small Business Administration’s web site at http://www.sba.gov where you will find a wealth of information, including a business plan outline and samples of actual business plans. You might also find it helpful to check out their related workshops. Another choice might be to hire someone to write it for you. These days outsourcing is quite popular, but you want to make sure the person or agency you hire is qualified to do the work, so verify credentials and ask for references

If you do decide to have someone write the business plan for you, you most likely will want them to sign a nondisclosure agreement.  Since your business plan contains all the details about your business, you will want to take all necessary steps to keep it confidential. And don’t forget to update it regularly as your business evolves.  This will help keep your business moving forward and will only add to its overall credibility.

As we have seen, some business owners may think that they can do business without a plan, and maybe so, at least for a while. But why limit your success before you even get started by not being prepared? Smart business owners know how to make the best use of their business plans to attract funding as they build business credit and watch their businesses grow.