I’m going to be extremely blunt with you right now.  If you are, in any way, in the process of making money for yourself in which you don’t answer to a boss, then you are running a business, and you need to have a business plan.  Without a business plan, you are doing yourself and your business a great disservice and you are essentially walking through dangerous territory with a blind fold.

Are You Running A Business?

A lot of my readers are bloggers, and if you’re a blogger who is trying to make money through your blog, you run a business.  Likewise, a lot of my readers are also musicians and such, and if you’re trying to make money with your music, then you are running a business.  It’s as simple as that.  Whatever it is that you do, if you’re trying to make money with it, then you are running a business.

Hopefully, I made that point pretty clear.  So why am I so insistent upon you writing a business plan anyway?  And what is a business plan anyway?  Certainly, not everyone who runs a small business needs a plan, right?  It’s not like you’re running some multi-million dollar corporation where every penny needs to be accounted for, right?  Wrong!

What Is A Business Plan?

A business plan can be any number of things, and will be different for every business.  This is okay, as each business has different needs.  Essentially though, a business plan is the future lifeline of your business, put onto paper.  It plans out how your business will live and grow.  It will show how you will allocate funds, and how you plan on making a profit, and exactly how you will expand.  It’s also a good idea to include why this business exists, and what your goals are for the business.

I’m going to go through a few reasons why you should stop what you’re doing right now and get to work on a business plan.  Please note, however, that this is only the tip of the iceberg, and there’s literally dozens of good reasons why you should have a plan for your business.

To Stay Focused

If you’re flying by the seat of your pants in any endeavor, it is super easy to get sidetracked.  Especially if what you are doing is revolutionary or different, the temptation to fall into a routine and become like everyone else will be staggering.  Once you get into a pattern where you are working on a regular basis, you will most likely start to forget why you’re doing what you’re doing.  By having your goals on paper for you to review will help to remind you why you went into business for yourself.

To Remain Goal Oriented

Likewise, any good business has goals in mind.  Maybe you want to branch out to new prospects?  Maybe you want to try new things?  Or perhaps all of your goals are in the form of monetary amounts?  Whatever the case may be, it helps to know what your goals are, so that you can actively work towards completing those goals, and not get sidetracked with unrelated things.

To Know What The Next Step Is

Once you have a hypothetical future lifeline of your business plotted out, you will be able to look at each step in the process, and break it down into smaller, more manageable steps.  That way, you can always know what the next step in your journey is, and when it is time to move on to the step after that!  Without knowing precisely where you are in your journey, it’s going to be difficult for you to know whether you are moving forward or moving backward.

To Keep Track Of Progress

Speaking of moving forward, it is essential that you have a set plan so that you can track how your business is growing.  This is especially important if your growth is time sensitive, and you want to be a certain size or making a certain amount of money by a certain date.  Without a business plan, it is easy to get lost in the day to day details.  By having your progress charted out, you can make a daily, weekly, monthly, quarterly, and yearly analysis on whether or not you are making appropriate progress in your business endeavor.

To Plan Accordingly For Expenses

Every business will have to spend money in order to make money.  There’s just no getting around this.  And without a business plan of how you’re going to allocate funds, then you’re basically swimming without a life jacket.  It is essential for you to know where your business capital is going to go and where it is going to come from.  It is not enough just to know whether or not you are making a profit, because many profitable businesses have gone under simply because they didn’t plan their funds very well.

To Help People Understand What You’re Doing

Likewise, every successful business owner will eventually need partners, allies, and/or other people to do business with.  It is important that people you are working with are on the same page as you.  There is no better way to get people up to speed with your business than with a plan.  They can read your plan and understand everything they need to know about the business, and if the plan is written well, they will be hard pressed to find a reason not to work with you!

To Apply For Sponsorship

This is a big one.  A lot of businesses get going due to help from a sponsor.  For example, you could apply for a loan at a bank to expand your business or even to start it if you have a lot of startup costs.  Anyone who is willing to invest money into your business is going to want to be convinced that they will see a return on their investment, and a business plan is the best way to do this.  You can talk to them until you’re blue in the face, but there’s something about seeing a plan on paper that makes it more realistic and obtainable.

Hopefully I’ve convinced you to get to work on a business plan.  Personally, I DO have a business plan for Swollen Thumb Entertainment, but it needs to be revised and updated, so during the course of this article, I’ve actually convinced myself to get back to work on my plan, as I have huge plans for 2010, and by this time next year, I’m going to be MANY steps ahead of where I am right now.  Like I said, if you are in business for yourself, I really think that you should have some sort of business plan written out.  Don’t do it for me though, do it for yourself.  And do it for your business.  It deserves it.