Many people think that the only reason to develop a business plan is to convince potential lenders or investors to provide financial backing. This view is a little short-sighted, however. A well-developed plan can serve as one of your most important management tools. A good plan will provide a blueprint and step-by-step instructions on how to translate your idea into a profitably marketed service or product.

Everyone who opens his or her own business has a plan, however informal. The camera store clerk who decides to open a photographic studio may not have a formal, written plan outlining the steps to be taken. Hopefully, however, at some level she has organized the relevant information, performed her own analysis of the market, and decided that she can make a living by starting out on her own. Perhaps she has been moonlighting by photographing weddings and other special occasions, and the demand for her professional services seems sufficient to support her without the camera store job.

If you have ever considered or even dreamed of going into business for yourself, you've already engaged in some degree of business planning. Most likely your planning was intertwined with your thoughts about the personal issues that accompany a decision to start your own business.

Location, location, location is important, important, important. And so are the qualities of your facility. Even if you still haven't grown out of your home office, the suitability of the physical environment of your business should be re-evaluated periodically in terms of image, overhead costs, and efficiency.

Suppose your only employee decides to charge you with sexual harassment. The employee you should have hired, but didn't, sues you for age discrimination. Do you have formal hiring policies to protect you from unfounded claims should they arise?

Most of us fall into one of two categories: either we love technology and desperately want every new gadget or we loathe it and want it to leave us alone. Both types of people often have trouble managing their technology needs. But the business owner who can handle basic technology will have the productive capacity of approximately five people, thus achieving significant savings on employees or outside service costs.

Plan some "toes-up" time for yourself every week. The time demands of owning your own business will always be greater than you ever dreamed possible. If you fall into the trap of working seven days a week and 20 hours a day, both you and your business will meet an early grave. Plan your time well and include time for rest and recreation.

Managing your business finances is one of your most critical tasks. Are you getting your financial statements regularly? Are they complete, timely, and accurate? Neglecting good accounting habits can be dangerous to your financial health.

Here are a series of suggestions for working smarter:

Many of the initial marketing problems experienced by new businesses involve miscalculations in one or more of the basics:

To achieve success is one thing, to sustain it is another. Like housekeeping, identifying potential problems in your business is a daily chore. And often, once identified, some problems defy resolution and must be managed as conditions to be endured rather than situations to be solved. At whatever level or stage your business is in (infancy, survival, nominal success), vigilance in the following areas will improve your chance of continued success.

Property insurance can make you whole in the event you sustain a loss to any business property, be it a truck, store fixtures, inventory, raw materials, and so on. If possible, you'll want to get "all risk" forms of insurance in order to secure the broadest coverage available. Otherwise, you'll have to insure each class of property with a separate policy. "All risk" policies generally cover all perils not explicitly excluded.

A lack of sufficient capital is the most common dilemma for a new business. Working capital is the source from which all cash blessings flow; it's the blood of your business.

A clumsy client trips on the antique oriental rug in your office, falls, and considers retiring on the proceeds of this misadventure. Or, your product is swallowed by a customer's dog, with the predictable ill effects. Or, your inventory gets fried in a warehouse fire — along with your computer, which held all your accounts receivable records, among other irreplaceable files. To avoid losing a lot of sleep, evade these potential pitfalls and manage your risk.

Special forms of insurance are available to cover special needs. Among the most common of these special-purpose coverages are:

Liability implies negligence. If you permit a hazard to exist, you are negligent. An example is neglecting to remove the ice and snow from the sidewalk in front of your store. But these days, no matter how diligently you remove all possible hazards from you business, you could be sued successfully for accidents resulting from the carelessness of a customer too. Businesses these days are assumed to be responsible for just about anything, and so liability insurance is your last line of defense against devastating claims for things over which you may have little or no control.

Use passwords, and change them often. Restrict access to your electronic files as much as you can. No one needs to know all about your business but you.

The check is in the mail, or is it? One ongoing commitment should be to always open any and all mail yourself, personally. Don't ever delegate this chore. Most of the mail you'll receive will be routine in nature, and this task could easily be assigned to an employee. But that one piece in a thousand is the one you can't afford to miss seeing first. You will be amazed at the things you can learn from tending to this seemingly low-level task.

Locks and keys may be low tech, but they're a high priority for securing physical assets. And it's a good idea, by the way, to have your locks changed periodically.

Be discreet about how much you reveal of your business or personal information to anyone, including your banks. Your accountant and attorney need and deserve your full disclosure in order for them to serve your needs properly. Their confidentiality obligations to clients are universally respected. But others, such as banks, creditors, and suppliers will always ask for far more than they actually need. Just because they ask for it doesn't require you to give it. Negotiate on a need-to-know basis.

Okay, you're past the "ma and pa" stage (the first two stages in a business's life are infancy and survival). This third success stage, nominal success, will require a fundamental decision. Are you going to hire a skilled manager and let him or her run the business in its static form while you sit on the beach or are you going to start up another kind of business? Or, are you going to try to grow this business by utilizing the borrowing power of the firm to finance an expansion?

Some of the most common pitfalls in business can be avoided if you pay attention to some simple security precautions. Get in the habit of:

Wherever you are on the road to success, you can dodge the unhappy consequences of some of the more common mistakes that cause the early demise of new ventures by continually watching out for some common pitfalls. The fundamentals, the blocking and tackling of business, must be observed in order to prevent certain disaster. They won't prevent all disasters but, still, an ounce of prevention of the basic pitfalls is surely worth well more than a pound of cures.

Success is measured differently depending on which stage of maturation your business is in. The three basic stages on the road to success are:

The first stage in a business's life was infancy. The next stage is a state of survival, and it could take anywhere from a month or five years to reach this plateau. The keys to this phase are: