I’ve seen it all too many times – a business plan for a small business startup that once the business gets going, their business plan simply sits on a shelf gathering dust. It’s sad to see this waste of time and energy. It really shouldn’t be that way. Worse yet, most business plans are put together for financing and nothing else.

A business’ start up business plan should be a valuable document in managing the small business. In fact, it should be a living thriving document critical to the success to the business. If your plan is not up to the task, then fix it or create a new one that is. Here are some critical elements to a good business plan that allows it to be a management tool rather than just a bother.

1. The business plan should be a realistic predictor of the future of the business. This is particularly true for a business start up.

2. The plan should be based on solid conservative assumptions backed by research not one of these “If 20% of the market buys X products or services from us, then….” The better the research, the better the plan and often the better the business will perform.

3. The plan should be a living document, easily changed to reflect new discoveries in the market, competitors, costs, etc. By updating your business plan with newly discovered information will give you a new picture of what your businesses’ results will look like. That way, a) It will be a better base to make decisions from and b) It will allow you to do “what ifs” on various business scenarios.

4. It should be very detailed so minor changes in your business will roll through to both the bottom line in your P&L as well as your Balance Sheet.

5. It should have a cash flow component, as the lack of cash is the biggest reason why most businesses fail. As a matter of fact, many businesses that fail were making money. But no matter how much money a business is making, without the cash to pay bills and buy materials, etc, a business is doomed.

So if you are thinking of or are in the process of starting a new business, make a business plan a critical, living and breathing part of your business start up process and beyond. Your pocketbook will thank you for many years to come.