Important reality: Your business plan is about running your business. It’s not just a document. You may not ever print it, but, whether or not you need to produce a document for a bank or an investor, you still want a plan to help you manage your business. You want planning to help you grow. It’s a matter of focus, accountability, management, and steering the business.

Don’t think it has to be a document. You can leave it on your computer, and share it with your team, whether or not you formally edit and print. It’s still there, and, if you use it right, vital for a healthy business.

What’s a reasonable expectation for sales? Expenses? Cash flow? That should be in your plan, whether printed or not.

What are your most important strengths and weaknesses, and opportunities and threats? What’s your key target market focus? Your ideal buyer? What are your long-term goals? What are the key metrics for your business? Who does what? That too should be in your plan, whether you print it or not; and whether you show it to outsiders or not.

One of the more important fundamentals of business planning is that your plan should be just what you need to run your business, no more, no less. As you start with your planning — which should be as you start with your business — it might be as simple as an elevator speech. That means you know the key points, such as the customer story, what makes you unique, and what you’re focusing on most.

What this means, in practical terms, is that the plan is the first step towards planning process, meaning better business management, steering your business.

This is a key element of the plan-as-you-go business planning approach, which is now in my latest book (The Plan-As-You-Go Business Plan) and built into LivePlan. 

The plan isn’t just the printed document. It’s normally on your computer. It’s your strategy, your priorities, the details of basic numbers, budgets, and who does what.

And from that plan, the main plan that lives forever on the computer, you share its highlights with your managers as business management. Call that the operations plan. It starts with the business plan — only as big as you need it to be — and you use that to create the details of who does what, with dates and deadlines and budgets. They live permanently in the plan, but you pull from that for operations.

Or you use the plan to create the summary presentation (also called pitch) that you want to share with prospective investors. In that case you want a good slide presentation that brings the key points to the investors, but using proper presentation techniques, pictures not words. That presentation starts with a plan, though, because you have to really know what the key points are.

Or you use the plan to create the elevator speech, which is a very short talk, as short as a minute or two, that highlights what you do for whom, and where you’re going. You can’t summarize what you don’t know, so that starts with a plan.

The same is true of the summary memo, which is a short document you use to summarize your business plan for outsiders, if you need to. People use that as an introduction in email. It’s not the same as a plan, but you need to have the plan before you can summarize it.

And finally, of course, if you need a business plan as a formal document, that too comes from the plan you keep live on your computer. As you have the business plan events — the need to show your plan to a banker, or investor, or partner — you have it available, revised and reviewed, the latest live version, so you give it some editing and polish and spin it out from your printer as a document.

Notice that none of these outputs stands as something you do instead of the plan. And none of these outputs is really the plan. The plan exists at the core, and you create the outputs as needed.

With all of these various iterations and outputs, always keep assumptions on top, where you can see them for every review meeting. Minding the changing assumptions is one of the significant advantages of the plan-as-you-go approach over the more traditional methods.

Tim BerryTim Berry

Tim Berry is the founder and chairman of Palo Alto Software and Follow him on Twitter @Timberry.