Life can be chaotic when you are starting or running a business and the day-to-day management issues can often force long-term planning on to the back burner. But allowing short-term problems to distract you from long-term goals will not help your business to grow.

Having a business plan and sticking to it is one way to ensure the business stays on track. It is not, however, merely something which satisfies the bank. A business plan is a tool for measuring performance on an ongoing basis, and it’s good business practice.

A good business plan should be ambitious but realistic. It’s pointless setting targets for sales or expenses that cannot be met. It should include a summary of the business and its marketplace, the past (if the business has one), management details including experience, description of the product or service and how it will be marketed and sold, financial analysis – which should include profit and loss accounts, cashflow forecasts and balance sheets. Remember that a business plan is also a selling tool. You will need to get across to readers just what is interesting about your business and exactly why anyone would want to invest in it. An ideal format would be between three and ten pages drawing out all the important points. It’s also worth having the plan looked at by an independent expert before showing it to potential financiers.

When the plan for your business or project is written it should enable you to compare targets against actual performance. This will help you to monitor the progress of the business on a regular basis. It may also give early indications of the need to reassess the situation and even rewrite the plan to take account of new issues.