An Essential Ingredient
So you see, virtually every successful business starts with a business plan.
     Among startup essentials: having (1) a great idea, (2) energy and motivation, (3) Warren Buffett on your board of directors — or lacking Warren Buffett, a great business plan.
     Inadequate planning is the No. 1 reason for the failure not only of children’s birthday parties, but — you guessed it — new business ventures.
     Why is a business plan important?
     Well, what would you do if your 13-year-old daughter, Lilac, breathless with excitement, said, “Mom or Dad, I need to borrow $500 for software to develop small-business Web sites.”
     Lilac is an expert at trolling the Web and drawing horses. But how will she market those skills? Has she tried raising money herself? Does she have clients? Where will she get clients? Has she considered promotion? How much will she earn, who are her competitors and what are they charging, what are her fixed and variable costs, does she need insurance or permits?

Discipline Now, Success Later
If you have a new venture in mind, you need to ask yourself those very same questions — and record your answers in writing.
     Lilac may be prepared for every question, dazzle you with cash-flow predictions and market-penetration studies, display income-and-expense projections that include lease payments for her bedroom and hand you a loan-repayment schedule with notes on favorable tax treatment for the interest you’ll be earning.
     But if she’s like most first-time entrepreneurs, it’s more likely her projected revenue consists of $5 from a friend who said, sure, he wouldn’t mind having a home page with Mr. Ed on it.

Eat Your Vegetables
Developing a business plan is good for you. One participant in a Kansas City, Mo., entrepreneurs’ seminar put it this way: If every Monday morning you had to fill out a form intricately detailing your plan for a productive, satisfying week — when you'd eat your leafy green vegetables, exercise, spend quality time with your family, meditate, go to work, prepare status reports on all your projects, finish most of them, invest volunteer time, take a class and play cello in the Silly String Orchestra — you would soon go back to bed hopeless and exhausted. (Did I forget to mention that you’d receive a paycheck only when every item had been accomplished?)
     But in the morning you’d rise, shine and develop a more realistic schedule with a much broader horizon — combining some activities, delegating others and putting still others on next year’s planning list.
     Similarly, a business plan is your start-up’s blueprint for long-term health and happiness.

The Big Picture
It is a giant first step in the transformation of your idea into reality. It motivates you and your associates. It imposes structure on the free-ranging busy-ness of constructing an enterprise. It forces you to develop concrete goals, strategies, and alternative strategies (a.k.a. “Plan B”).
     A business plan focuses your time and energy, letting you highlight the most rewarding objectives and discard the foolish ones.
     Or look at it this way: A business plan lets you play the “Chutes and Ladders” start-up game, but board up the chutes and level the ladders. Taking the time to develop one is a commitment that will draw you down the road to your dreams — a road you hoped for but never really believed in until you saw it in your business plan with that big, bright rainbow at the end.

Next: Great business plans start with great resumes.

An editor since the age of six, when she returned a love letter with corrections marked in red, Mary Campbell writes and edits for The University of Arizona College of Business and Public Administration and for dozens of entrepreneurs, publishers, and authors. She is editor of the midsized-business journal The FINOVA Quarterly.