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The Small Business Plan

A small business plan for an offline business is really three plans - an Action Plan, a Management Plan, and a Financial Plan. Portions of these plans are then combined with appropriate boilerplate to form a funding solicitation package or proposal to be submitted to the desired source of capital. This article addresses the Action Plan.

 The Action Plan

Creating a new business is a project, and you, as the founder of the business, are the initial project manager. You decide what is to happen, when it is to happen, and how these events will occur. The action plan is not written for anyone else but you, and as such it is private. The portions that go into the funding proposal are to be carefully edited for that purpose, but you should keep the original version confidential.

Professional project managers the world over almost always make diagrams to document their small business plans. You would be well advised to do so too. To do this, start with a written outline. From the outline construct a flow chart that diagrams all the events and processes that are included in your outline. Be sure to include the dates that you have assigned to the various milestones.

 Work Backwards

A good way to begin this process is to work backwards. Start with the date you hope to cross the break-even line, the point at which revenues first exceed expenses. Then list the event that must immediately precede this goal event. Then the one before that, and so forth until you reach the point where you are today.

Professionals usually take this small business planning process a step further by charting the "critical path", the series of co-dependent events that are anticipated, laid out in the proper order and annotated to show the inter-dependencies between the events on the chart. Each event is the cause of the next event or is necessary for the next event to take place. Action events that are not part of the critical path are either charted separately or are coded in some way to identify them as non-critical.

Keep your small business plans flexible. Establish a procedure for changing and updating them at frequent intervals as your knowledge evolves.


There are a variety of tools available to help you do this. Some of them are free. Some are easily affordable. And some are very expensive - intended for the use of large corporations that are often required to submit critical path analyses when bidding for big government contracts. Those big companies spend many thousands of dollars on critical path software. Believe me they take their "small" business planning activities very seriously. You need to do so is even more than they, because you cannot afford to make mistakes as easily as they can.

 Meet the Requirements

Most business funding sources have specific requirements that your proposal must meet in order to be considered. Be sure you know what these requirements are and be prepared to meet them precisely. Failure to meet even one such requirement could cause your proposal to be rejected out of hand, without being judged on it merits. So be sure to include in your action plan the events that assure compliance with each and every requirement of every candidate funding source under consideration. Every successful small business plan includes this essential step.

 What Actions to Include

The list below is intended only to give you an idea of the kind of events that should be included in your small business plan of action. The list is not comprehensive, only suggestive. Use it to stimulate your own creative thinking.

  • Acquisition of all critical dates and deadlines that will affect your funding efforts,
  • Acquisition of machinery and equipment required,
  • Acquisition of raw materials, as needed,
  • Acquisition of names and contact info for all funding sources,
  • Completion of all required written documents, including corporate documents and contracts,
  • Completion of banking arrangements,
  • Completion of competition analysis,
  • Completion of critical path definition,
  • Completion of initial plans for marketing, promotion, and sales,
  • Completion of market research to determine pricing, marketing, and sales methods to be used,
  • Completion of present asset analysis,
  • Completion of pro forma (predicted) revenues and expenses for the first 24 months doing business,
  • Completion of the Action Plan,
  • Completion of the Financial Plan,
  • Completion of the Funding Proposal,
  • Completion of the Management Plan,
  • Determination of corporate structure,
  • Identification of all funding sources to be solicited,
  • Identification of all products and services that your business will sell initially,
  • Recruitment of key personnel,
  • Setting of dates for the start of all items to be completed, and undoubtedly, Many more.

 The Next Step

When you have finished this step, the next step is to augment your small business plan with a proper management plan


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