1 Article 22 Outline for a Business Plan A proven approach for entrepreneurs only … a written representation of where a company is going, how it will get there, and what it will look like once it arrives Ernst & Young LLP Business plans are the preferred mode of com- munication between entrepreneurs and poten- tial investors. Experienced owners and managers of closely held businesses know that business plans can also be an indispensable management tool. Many have found that just completing the steps required to develop a business plan forces them to introduce discipline and a logical thought process into all of their planning activi- ties. They have found that a properly prepared business plan can greatly improve their com- pany’s ability to consistently establish and meet goals and objectives in a way that best serves the company’s owners, employees, and investors. A business plan can take many forms, from a glossy, professionally produced document to a handwritten manuscript in a three-ring binder that serves as the documentation for the goals, objectives, strategies, and tactics of a company. In any form, a business plan is simply a written representation of where a company is going, how it will get there, and what it will look like once it arrives. Uses of a Business Plan A business plan is a valuable management tool that can be utilized in a wide variety of situations. In most companies, business plans are used at a minimum to: • Set the goals and objectives for the company’s perfor- mance. • Provide a basis for evaluating and controlling the company’s performance. • Communicate a company’s message to middle managers, outside directors, lenders, and potential investors. When utilized most efficiently, the same business plan, with slight modification, can be used for all three actions. Setting Goals and Objectives The business plan for an early-stage company is, in many ways, a first attempt at strategic planning. An entre- preneur should use a business plan as a tool for setting the direction of a company over the next several years, and a plan should set the action steps and processes to guide the company through this period. Many entre- preneurs say that the pressures of the day-to-day management of a company leave them little time for planning, and this is unfortunate because, without it, an owner runs the risks of proceeding blindly through the rapidly changing business environment. Of course, writing a business plan is not a guarantee that problems will not arise. But, with a thoroughly thought-out plan, a business owner can better anticipate a crisis situation and deal with it up front. Further, a well-constructed plan can help avoid certain problems altogether. All in all, business planning is probably more important to the survival of a small and growing company than a larger, more mature one.