Business Owners: Do You Have a Plan for 2009? - Five ways the business may benefit

by Will

Before you know it, another year will be here. If you are like many small-business owners, you have had to take your lumps in 2008. Revenues have been down and outstanding debts have been up. What can you do to improve your situation next year in this uncertain economy?
Start with a plan. Specifically, we are referring to a comprehensive business plan. The plan may serve as a blueprint for the coming year. Here are five good reasons for putting such a plan in place.
1. The plan charts a path. It can help tell you where you are, where you are going and how to get there. Of course, the plan does not have to be permanent (nor should it be). For instance, certain new developments may require some slight deviations from your original plan.
However, your business decisions probably will be more solid if they are made within the context of the original plan. If something is way off base, it should raise suspicions.
2. The plan enables you to be proactive. Instead of addressing problems as they arise, a business plan is a proactive step. Committing yourself in a document requires a great deal of discipline, but going through the process is worth it.
For example, a hastily conceived plan of action will not look as appealing when you see it in writing. One might even argue that the experience of assembling the plan is more worthwhile than having the plan itself.
3. The plan can improve communication. First, it forces you to crystallize your vision of the company. Second, it encourages feedback from key players who become involved with the planning. This kind of dialogue may be particularly vital in small firms. Reason: Employees have a chance for give and take with the top business managers.
4. The plan gives you credibility. It can be especially impressive to creditors and the lending officers of the banks that you deal with. And it may satisfy a psychological need for you and your company to be taken seriously.
5. The plan can help you raise capital for the company. For instance, by focusing on accounts receivables in your business plan, you may be able to free up additional funds. Also, it is likely that a lender will require you to present a business plan plus cash projections to obtain a loan.
How do you put together a business plan? In general, most plans include the following: a statement of objectives, strengths and weaknesses; position in the marketplace; future direction; critical issues; and so forth. It certainly cannot hurt to obtain input from your professional advisers with regards to the specifics.
However, be aware that there is no "magic formula" for creating a successful business plan. It's your plan, so you can shape it into a format that seems best suited for your situation.
Final point: In the usual situation, you will want to make changes in the plan's format from year to year. The important thing is to touch all the bases that are essential to your particular industry.

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