Company Description & Strategies: The More Details, the Better

The best business plans aren't full of airy dreams. They're chock full of specifics, says Berry. A good plan will include a concrete description of the firm, the product or service it offers, along with details on staffing and ongoing projects (along with completion dates). For example, will a prototype of the product be ready for a big trade show in June? Will sales hit a certain figure before you can implement new marketing strategies?

If there are a handful of people on your team, this part of the business plan can serve to make sure everyone is on the same page. It's also important to let everyone — including outside advisers — know that you're open to their input, says Hadzima. "The smart entrepreneur is constantly scanning the landscape, talking to customers, probing assumptions," he says. "You don't go into a room, seal the doors and create a business plan. It's a very collaborative project." 

Financial Projections: Be Realistic

Naturally, a business plan needs to include some financial information. But be warned: An all-too-common mistake for enthusiastic entrepreneurs is to project astronomically high revenues. Anticipating that you'll be raking in cash within in a few months after you kick off your business is a good way to disappoint yourself and others, says Berry. So be conservative.

Professional investors, who see pie-in-the-sky financial figures all the time, will automatically be skeptical if your figures seem too optimistic. More impressive is the plan that outlines the financial risks you face, says Hadzima. Explaining the potential pitfalls upfront will help you build credibility with partners and investors, and you'll find that you're less likely to be on the defensive all the time.

Bleak as it sounds, you should start mapping out your financials by overestimating startup costs and underestimating initial revenue figures, says Eric van Merkensteijn, a Wharton professor of entrepreneurship who, in the late 1990s, left academia to put his entrepreneurial theories to work by opening van M's Music Bar & Grille in Philadelphia. "Take what you believe will be your upfront investment cost, then double that number, then double it again," says the embattled restaurateur who closed van M's (renamed the M Lounge) in 2004 and returned to academia, via UPenn's Center for Organizational Dynamics. "Only then will you have a number that's somewhat realistic." 

You're Done! Now Prepare to Revise

A business plan is just that — a plan. It's not a contract, and the sky won't fall if you happen to be slightly off, or even way off, in your calculations. If you've been thoughtful in your market analysis and conservative about financial projections, your business might beat your initial expectations. But if it doesn't, says Berry, it's not necessarily a sign that you should throw up your hands and flee the business world.

Instead, consider your business plan a constantly evolving document. Update it regularly to reflect changes in your goals and expectations. If you're still focused on meeting certain key dates, like a break-even point, or a certain number of initial sales, it's a good idea to know how far away you still are from that goal so you can adjust your funding accordingly.

Be patient. Nobody says launching a successful small business is easy. Consider the creation of your business plan just one small step on your journey to moguldom.