A business plan is an indispensable management and operating tool for using your time, capital and energy the most effectively. This plan of action for building a successful small business examines the environment in which you expect your business to operate, including potential problems, cyclical trends and opportunities.

If you plan to seek financing, it is all but certain that a lender will require a business plan as part of the loan application. Putting your objectives in writing as you build a business plan also forces you to think realistically about sales, expenses and short- and long-term goals. (The more specific and measurable they are the better.) A complete business plan should identify target customers and how you will attract them; timelines for adding staff and infrastructure; approaches to differentiating your products and services from competitors'; and a host of other considerations. Ideally, it will show anyone who sees it that you have done your industry research, too.

Every business plan starts with a cover page containing your contact information (vital to loan officers and any other financial backers) and a warning that the document contains private information. The sections that follow include:

• table of contents
• executive summary
• description of the company and its strategy
• overview of the market
• specifics of the product or service
• plan for sales and promotion
• financial issues and projections
• appendix

A business plan benefits start-up businesses as well as established enterprises that need to reassess their goals and strategies. A free workbook, How to Really Start Your Own Business, is available from SCORE "Counselors to America's Small Business". This workbook provides a helpful framework for developing a business plan, plus key questions that will influence how your business operates. SCORE counselors provide free, confidential counseling to help you develop, prepare and improve a winning business plan.