Two accountants go outside on a break from a Cognitor meeting when it begins to rain.

 

"Quick," said one accountant. "Open your umbrella."

 

"It won't help," responded his friend. "My umbrella is full of holes."

 

"Then why did you bring it in the first place?"

 

"I didn't think it would rain!"

An effective business plan will help you delineate objectives, directions, and strategies. It will be useful for you and your associates to reach a consensus about your practice's future. A business plan is a document that discusses your practice's plans, shows that the plans can be achieved, and demonstrates that the outcome satisfies the accounting professional's objectives.

 

Your business plan will contribute to bolstering the confidence of existing and potential clients and the firm's team. The plan should take the unexpected into consideration, direct your business in good times, and stabilize it during the bad. An accounting practice business plan is one of your most important tools: it guides practice growth by providing a map to navigate the minefield toward a successful future.

 

A well-crafted business plan should be used as a living document to assist you in managing your practice. Your business plan is the representation of all of the components of your practice -- the services you offer, the clients you target, and the ways you deliver one to the other. Your plan will facilitate your reasoning in determining how you will build and maintain the ability to meet your clients' needs. This ability to meet your clients' needs represents the underlying value of your practice. There is no substitute for thinking your accounting practice through and taking the time to put it down on paper.

 

The preparation of your business plan presents a unique opportunity to consider all phases of existing or new strategies. Your plan gives you the space to refine alternatives before testing them in the real marketplace.

Remember, though, to assess your business's actual performance against the plan. Then revise your business plan accordingly. Consider the alternative consequences of marketing service offerings and targeted market niche strategies. Determine the human and financial resources required to launch, develop, and prosper the practice. All of this simulation comes without the cost and heartbreak of trial-and-error operation.

 

Your plan should be as long as is needed to tell your practice's value proposition. An ideal length is 25 to 30 pages: a start-up plan should not exceed 50 pages. A good plan should take from a minimum of two months to six months to write. Developing a practice's business plan is widely considered to be the most important thing you do before going into business.