Joe's Enterprises for Fast Food, Inc. operates a chain of indoor/outdoor food service carts, primarily in the downtown Chicago area. Its customers are the people who work in the city's many high-rise office buildings. The carts are operated under the name Joe's Redhots. Joe's has been in business since late 1992, when it began as a single cart operation. All of the stock of Joe's is held by its founder, Joe Hirasawa, and members of his family.

Computing Development Strategies is a startup business that hopes to become a major supplier of certain types of computer training to the owners and employees of small businesses in the greater Chicago area. Its founder is a highly qualified computer trainer with extensive experience in providing training, developing training tools, and managing training and maintenance operations for a large computer corporation. He plans to build on his expertise by developing a group of courses designed specifically to help small businesses effectively use the most popular business software packages.

Breakaway Bicycle Company is a small manufacturer of high-end bicycle frames. It builds both mountain bike and racing bike frames for sale primarily to professional bicycle racers. However, increasing interest in mountain biking as a competitive sport and the exposure that bike racing received as a result of the Olympics have provided BBC with an opportunity to expand its business. Right now, a small number of BBC's frames are sold to non-professional riders who nevertheless want the very best equipment available, regardless of price.

A prerequisite to deriving the benefits you get from using your written business plan is to keep it current. You should treat your business plan as a dynamic document that should be kept current as your business evolves. While you might have initially created your business plan for a specific purpose (such as obtaining financing), the plan can serve you well in a number of capacities. It provides the baseline against which to measure your business's performance. It can help you to anticipate the impact of changing market and economic conditions.

Now that you have decided on a planning interval and on the timing of the planning process, what do you do in between the scheduled planning windows? Obviously, you can use the plan to track actual performance against projected performance.

Every business plan should capture the unique characteristics of the business and the people who will run it. What sets your business apart from its competitors? While we have provided a list of the documents that should be included in a business plan, the presentation of the recommended information is, to a large extent, a matter of personal preference. In order to illustrate how business plans can vary from one another, consider reviewing the three sample plans included in the following case studies:

After you've committed to periodically scheduling planning periods, how do you determine when is the right time to engage in the planning process? Most small business owners won't have the luxury of a "strategic planning committee" or some other dedicated group to handle planning on an ongoing basis. In all likelihood, you are the only person in a position to create a business plan. Since the demands of the planning process fall on you, don't schedule your planning period so that it conflicts with other demands placed on you by your business. If the Thanksgiving to Christmas period is your busiest time of year, don't schedule your planning process during it.

Many people think of "planning" as an annual process. Thousands of companies publish an annual plan each year, outlining their expectations about operating results for the coming 12 months. Realistically, though, you're probably planning all the time. Most business owners are always thinking about ways to make their business better. In discussing a "planning interval," what we're really suggesting is periodically setting aside a certain amount of time to create or update a written business plan. Part of this planning commitment includes deciding just how often and at what time of the year to set aside that time.

When things don't go well for a business, there's a reason. However, it isn't always easy to figure out the reason (or combination of reasons). It could be that your business plan contains some faulty assumptions or conclusions. Or, it could be that your business is having operational difficulties of some sort. In either event, you have to isolate the cause of the problem before you can correct it. Some problems will be internal to your business, while others will result from external factors beyond your direct control.

Despite your best efforts, sometimes a business just doesn't take off the way you expected. The unfortunate fact is that a large percentage of new small businesses fail. But then, most small business owners don't bother to create a written business plan unless they are absolutely required to (as is usually the case if you need outside investors or bank financing). Without the benefits that a written plan can provide, it's just that much harder to cope when your business isn't meeting your goals.

Once you've identified the factors that you believe are causing your business to deviate from the course you charted in your business plan, the next step is to consider your options. In some cases, you'll be able to directly address the problem. For example, if a vendor is consistently late in delivering needed materials, you can look for an alternative source.

Once you begin operations according to your business plan, there are two possible outcomes. One is that your projections and assumptions prove to be relatively accurate. In that case, it's likely that your business will be performing as you had hoped. More likely, however, things aren't going exactly as projected. These departures from your plan may be small and not a source of concern, or they may be substantial and require immediate action on your part.

Monitoring your business's performance is, again, another of those back office activities that doesn't contribute directly to providing goods and services to your customers. As a practical matter, you'll probably have a feel for how you're doing because of your involvement with the day-to-day activities of your business. If you make the bank deposits each night, if you pay the bills each month, if you balance the books at the end of the month, then you already know a lot about how your business is doing. But it's worthwhile to supplement this familiarity with some hard and fast milestones.

If the projections contained in your business plan were a little understated or pessimistic, you might find yourself in the enviable position of exceeding your planned goals and objectives. Perhaps you'll achieve profitability months sooner than you expected, or maybe revenues are exceeding expectations. Fortunately, if you've prepared your plan according to our suggestions, you already have a document that will help you determine why you're enjoying greater than anticipated success. When you developed your action plans, you engaged in some contingency planning to prepare yourself to react quickly and appropriately if something didn't go as you hoped. Those contingency plans identify the factors that are likely to be causing the deviation.

The purpose of tracking how your business is performing against your business plan is to gather, compile, and analyze performance information in order to meet or exceed your goals and objectives. Choose the information to collect based on three considerations.