According to recent government research, nearly 75% of businesses in the U.S. today are small businesses with five or fewer employees.  Many of these businesses are being operated by first-time owners who are playing a trial-and-error game without the skills and resources to escape an entrepreneurial trap.

According to recent government research, nearly 75% of businesses in the U.S. today are small businesses with five or fewer employees.  Many of these businesses are being operated by first-time owners who are playing a trial-and-error game without the skills and resources to escape an entrepreneurial trap.

Most small business owners in a one-person shop or with a few employees, follow a repetitive pattern.  They decide to take a risk and start a business; they have a small amount of cash and few business skills; then, after 12-to-18 months, they are stuck in the doorway of startling awareness.  At this point, entrepreneurs awaken to the fact they are the most overworked, under-appreciated and under-paid employee in the company.  For their business to grow, more money and time are needed – money to expand the business and time to plan.

To reach the next level, business owners must commit to work on their business, not just work in their business.  Time spent on planning calls for a measure of commitment to analyze where growth patterns have produced revenues in the past; how these profitable key business drivers can be maintained and increased; the amount of capital needed and sources for such funds; and creatively open new streams of revenue in the future.  Some hard work and several pages of notes will be required to get the plan right and to understand clearly the objectives to be achieved, and how and when to do it.

Concentration should be on the essentials of planning the business rather than becoming too absorbed in the detailed drafting of the plan.  With a basic outline for the business plan, an extended structure can be created to include all the salient elements and that it has a logical flow.   Once the plan’s structure has been defined, it can be used as a checklist and basis for a work program and timetable to complete the plan.  Market research may be needed before sales volumes can be projected or professional advice may be required to evaluate capital expenditures in relation to the purchase of additional equipment and so on.

If the time needed to prepare the plan is lengthy, set the start date for financial projection close to the business plan’s launch date.  If writing a plan begins in January and hopes are to secure funds by October, the start date for financial projections could be set for September. Expenses incurred before this date could be rolled up into the opening balance sheet for the projections.

A key point to keep in mind: Seek outside assistance sooner rather than later. Tremendous amounts of time and effort can be saved by getting software tools, expert advice on specific areas, or mentoring and counseling as needed.

A business plan can play a vital role in helping to avoid future mistakes or recognize hidden opportunities.  Even if a detailed plan is not produced now, consider going through the basic planning process anyway.  It could be extremely beneficial to your business.

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