You have three sales calls to make, a budget meeting to lead, a conference call with a dissatisfied customer and two potential new office sites to tour. Your afternoon schedule looks even worse.
The typical day of a business owner is filled with such a multitude of tasks to perform and crises to manage that it's difficult to plan ahead to the end of the week. That's why you smile at the idea of three-year projections and long-range goals.
And yet, it's critical that you plot your course and commit your long-term plans to paper, according to Paul Christensen, president of the Shorebank Enterprise Group, a nonprofit community and economic development agency providing capital and incubator resources in Cleveland neighborhoods.
"A business plan encourages discipline," he says. "Otherwise, you can spend your days tied up in the details and take your eye off the ball. A lot of people come to us knowing all about the widgets they want to make or the services they can provide. But they're much less knowledgeable about successfully running and marketing a company."
But beyond being a logical first step for a start-up, a business plan will prove critical for owners of smaller businesses who have dodged the process until seeking sources of growth capital. Commercial lenders generally won't even consider financing until a business is at least two or three years old, and they first want to see what the long-term goals and strategies are and how they're being met.
"All investors -- except perhaps your family -- expect to see a business plan," says Laura Larson, a small business counselor at COSE, the Council of Smaller Enterprises. "Even landlords like to read one before entrusting their property to a new or young and relatively unproven business."
The document's importance doesn't mean that it has to be complicated.
"You're writing it as much for yourself as you are for outside audiences," says Larson, adding that many business owners examine their business plan monthly or even weekly, "just to make sure they're still on track."
And, it should not be written in stone. Says Steve Millard, executive director of COSE, "It should be a living, breathing document that's as flexible as your changing business environment."
While effective business plans vary in content and complexity, they should include the following basic information:
* Market research -- Is there a viable market for your products or services? Who are your competitors and how will you fit in?
* Marketing plan -- How will you get the word out about your company? How do you plan to use advertising, public relations and sales promotion, and how much will it cost?
* Financial section -- How do the numbers add up? Lenders want to see income statements, cash flow statements and balance sheets, as well as long-term projections of at least three years and possibly as long as five years.
* Executive profiles -- Who are the people who are or will be helping you run your company? You'll want to establish their credibility for your own benefit as well as for lenders.
* Executive summary -- This is your concise, two- to three-page overview of your business plan. If your audience reads nothing else, it should be able to make sense of the operation from your summary.
Christensen recalls one prospective business owner who approached Shorebank Enterprise Group with the idea of buying, rehabilitating and selling homes in the Glenville neighborhood.
"He was a small contractor who knew all about nailing up boards, but he hadn't developed his start-up concept in much depth," he says. "We encouraged him to draw up a business plan that would help both him and us better understand his goals, challenges and opportunities."
The owner came back with a carefully thought-out document and is now one of the agency's more successful customers.
Even if it doesn't always pave the way to a Bill Gates happy ending, a well-conceived business plan can guard against a lot of anguish.
"Sometimes, its greatest value is all the time and money it keeps you from spending on an idea that isn't going anywhere," says COSE's Larson.
COSE is the nation's largest chamber of commerce and the region's largest small business organization. It provides such small-business advantages as health insurance, workers' compensation coverage, education, networking opportunities and government advocacy. It will also serve as an educator and aggregator of energy buyers for increased savings. Executive Director Steve Millard can be reached at (216) 592-2436 or online at www.cose.org.