As a member of the Portland Business Alliance (Portland's
Chamber of Commerce), I have the opportunity to meet a lot of
interesting people. At a recent meeting, I exchanged business cards
with a banker who loans money to businesses. On the back of her
card was a "Business Loan Application Checklist", a brief reminder
for how to prepare when applying for a loan. Putting such
information on a business card is a great way to get small business
owners thinking about their goals in the context of a longer time
frame.
It's easy to find similar checklists; they're all over the Web.
Nearly every one contains the item, "Business Plan". A business
plan, including a complete set of projected financial statements,
is certainly essential for getting a loan. But I believe the
planning process is equally, if not more important. Such
an exercise brings the hopeful business owner face-to-face with one
of the central realities of running a business: that "flying by the
seat of your pants" is a very poor substitute for forecasting
likely outcomes based on reasonable assumptions.
I've heard business people say that creating a business plan is
difficult. Thinking through the various aspects of a business
operation can seem daunting, especially
the first time. But it pales in comparison to being caught off
guard by events that would have been predictable had one gone
through the exercise of writing a plan. Maybe it would help to
think of it this way: business plans are for bankers, business
planning is for owners.