8 | HOW TO WRITE A BUSINESS PLAN
Helps You Keep on Track
Many business owners spend countless
hours handling emergencies, simply
because they haven’t learned how to plan
ahead. This book helps you anticipate
problems and solve them before they
become disasters.
A written business plan gives you a clear
course toward the future and makes your
decision making easier. Some problems
and opportunities may represent a change
of direction worth following, while others
may be distractions that referring to your
business plan will enable you to avoid. The
black and white of your written business
plan will help you face facts if things don’t
work out as expected. For example, if
you planned to be making a living three
months after start-up, and six months later
you’re going into the hole at the rate of
$100 per day, your business plan should
help you see that changes are necessary.
It’s all too easy to delude yourself into
keeping a business going that will never
meet its goals if you approach things with
a “just another month or two and I’ll be
there” attitude, rather than comparing your
results to your goals.
Issues Beyond the Plan
Issues Beyond the Plan
I have written this book to provide
you with an overview of the issues that
determine success or failure in a small
business. Experienced lenders, investors,
and entre preneurs want a plan that takes
these issues into account. Of course, this
book can’t cover everything. Here are
some of the key business components that
are left out of this initial planning process.Bookkeeping and Accounting
This book discusses the numbers and
concepts you as the business owner need
in order to open and manage your small
business. You have the responsibility
to create bookkeeping and accounting
systems and make sure they function
adequately. (Some suggestions for setting
up a system are contained in Chapter 6.)
One of the items generated by your
accounting system will be a balance
sheet. A balance sheet is a snapshot at a
particular moment in time that lists the
money value of everything you own and
everything you owe to someone else.Taxes
While there are a few mentions of tax
issues throughout the book, most of the
planning information doesn’t discuss how
taxes will be calculated or paid. The book
focuses its efforts on making a profit and
a positive cash flow. If you make a profit,
you’ll pay taxes and if you don’t make a
profit, you’ll pay fewer taxes. A CPA or tax
advisor can help you with tax strategies.