s an entrepreneur, if you do not have a business plan, your enterprise is not reaching its full potential. You might be successful, but without an up-to-date business plan, you are forfeiting income. That is a sweeping generalization, but it's the honest truth.

If you are like the majority of small-business owners, you don't have a business plan. You may have conjured up rationalizations to justify this glaring lack. You may think, "My business is too small to justify a business plan." The fact is every business, no matter how small, should have one.

You may think, "I've got a business plan. It's just all in my head." The truth is if you don't have a business plan in writing, you really don't have a plan.

Or, you may think, "I don't have time to do a business plan." Maybe the reason you don't have time is because you don't have a business plan. These are all just excuses and poor ones at that.

I am willing to bet that more than half of all companies, especially smaller ones, do not have any business plan. And, of those that do, more than half have outdated, obsolete plans. Creating a business plan is not fun, but it is a necessity.

The business world changes rapidly; plans become outdated quickly. This is exactly why business planning is so valuable. If you have thought through your business objectives, strategies and tactics, you can respond to changes more rapidly. In planning, you become more familiar with your business and its environment; you consider alternatives and contingencies.

Bells and whistles not required

Entrepreneurs often do not write business plans because they are overwhelmed by the task. Either they don't have a clue what a business plan should look like, or they think a business plan has to be an elaborate document an inch thick. For most entrepreneurs a fancy business plan is not needed. However, if you are looking for capital or a loan, you will need a more comprehensive plan.

There are thousands of books and dozens of software products designed to help build a business plan to support financing efforts. Most entrepreneurs, especially merchant level salespeople (MLSs), will not need such elaborate plans. The basics will suffice.

If you truly can't stomach the idea of creating a business plan, The One Page Business Plan for Creative Entrepreneurs by Jim Horan will guide you in creating a rudimentary one. I don't think this type of plan, and the effort it takes to create it, are sufficient. But if that's all you can muster, it's better than nothing. Another option for those intimidated by this subject is Business Plans for Dummies by Paul Tiffany, Steven D. Peterson and John B. Schulze.

A basic business plan

Alternatively, a sufficient business plan can be devised by just answering a series of questions. If you respond in writing to the following nine questions succinctly enough to convey your thoughts to an uninvolved third party, you'll have your initial plan in hand.

1. What do you want your business to be? This will, in effect, be your mission statement. At the very highest level, this should define your longer-term business focus.
2. Who are your customers? You can't be all things to all people. Know who your customers are today and who they will be in the future. This will define your target markets, because if you don't know who your customers are, how can you target your program to reach them?
3. How will you find prospects and market to them? This will define your marketing message and marketing programs, as well as your networking and public relations efforts. Think about new ways to reach your target markets in a more efficient, cost-effective manner. Don't just write down what you have been doing; open up the possibilities by thinking outside the box.
4. Who are your main competitors? This should be the people with whom you go head-to-head, not the processors they represent. You may be contending with processors' programs, but the MLSs representing them are your competition. How do they market their services? What are their strengths and weaknesses?
5. Why should a merchant choose your products and services over your competitors'? Give careful thought to this question. If you are not giving merchants reasons why they should do business with you over your competitors, you are behind before you start. If you aren't putting yourself in your prospects' shoes, you are not as successful as you could be.
6. What are your main products and services? The main point in this section is to ensure that your product offering maps well to your target markets. If you don't have the right products, it will be a lot harder to close business. But if you match your product offering to your target markets better than your competitors do, you will create market differentiation.
7. What are the main threats to success in your business? Business plans should assess not only present roadblocks, but also potential future competition and developments that could be detrimental to your livelihood. If you are not looking forward, today's potential threats could be devastating to your business tomorrow.
8. What opportunities may result from developing trends? Again, a business plan must look forward. If you see a trend emerging, you may be able to jump on it before your competitors do so. This is another way to differentiate yourself. Also, it will help you take your business into expanding markets.
9. What are your business goals for each of the next five years? How will you know when you've reached your destination if you don't have measurable goals? The ideal measurable goal is a financial plan, such as a five-year, pro-forma profit and loss statement. Set monthly milestones for the first 12 months. After that, quarterly is sufficient. This practice can point out weaknesses in your business plan. It once saved me from launching a venture that could not meet my financial goals.

Plan the work and work the plan

Now that you have a beautiful business plan, what do you do with it? If you are like most business people, you put it on a shelf and forget about it until you come across it one day while cleaning the office.

You crack it open and chuckle at how naive you were and how different your business is today from what you planned.

How could you be so far off the mark? Three reasons:

1. The world changes rapidly. Plans need to be adjusted to cope with changing markets and environments to stay relevant and current.
2. Emerging business and societal conditions aren't under your control. You can't predict the future; you can only guess at it.
3. You are deviating from your plan. Plans need to be reviewed frequently to see if you are meeting your stated goals or if you are straying from your objectives.

It's really OK to adjust a plan. PayPal initially set out to enable person-to-person payments via personal digital assistants. If it had stuck to that business plan, it would have either remained a small, insignificant company or, more likely, gone out of business.

Instead, it evolved its business plan and became a major success as the e-commerce market developed. The key is that it had a plan and kept it current.

If you do not have a business plan, why not make creating one a New Year's resolution for 2007? If you have a business plan, work it. Don't stow it away like so many other people do. Finally, update your business plan as market conditions evolve. Those who plan know their businesses better. Those who work their plans, succeed more often. Plan to win and work the plan.

Ken Boekhaus is Vice President, Marketing and Business Development for Electronic Exchange Systems, a national provider of merchant processing solutions. Founded in 1991, EXS offers ISO partner programs, innovative pricing, a complete product line, monthly phone/Web-based training and quarterly seminars. For more information, visit EXS' Web site at www.exsprocessing.com or e-mail Boekhaus at kenb@exsprocessing.com . EXS is a registered ISO/MSP for HSBC Bank USA, N.A.