Many people believe that business plans are just one-time documents for launching new ventures or raising capital. In reality, they can be among the most effective ongoing business-building tools.

At its simplest level, a business plan is a business proposition that says:  This is what exists today; this is what I want to exist tomorrow; and, this is how I intend to get there. We all go through that mental process all the time. When you formalize the process by committing your plans to paper, however, some surprising things happen.

Writing things down has been shown to actually create different neural pathways in your brain than occur when you merely imagine or ponder an idea. Language, which is a left-brain function, is the medium our brains use to translate all of the concepts, feelings, and creative impulses in the right-side of our brains into logical thought. Put another way, we think in words (try thinking about the color of a ripe banana without using the word 'yellow'). When you convert ideas into words, things that may have been hazy or disconnected become organized and systematic. While speaking also uses language, writing it down takes more effort, which the brain interprets as more of a commitment-in effect, marrying thought with intention. And, as neuroscientists are fond of saying, "the neurons that fire together, wire together" (translation:  it sticks!).

The next thing that happens in the process of writing about your objectives and intentions is that old assumptions naturally start giving way to new questions. If you do something in a particular way, for example, writing about it might make you question why you do it that way. Is it really the best way? How can you find out? If you determine that your approach might not be the most intelligent or effective, that's GREAT because that is the start of change.

Questioning is what leads to change, and change is what business plans are really all about--defining the steps that will help you transform what exists today into a more desirable set of circumstances in the future. It starts with asking the right questions...which gives rise to discovery...which leads to new ways of understanding your business, new ways of doing things, and new possibilities. 

The true value of formally engaging in the business plan process is the rigorous explorations that lead to a deeper understanding of challenges and opportunities, rather than "seat-of-the-pants" management. What makes it powerful is the impact it has on your thinking.

PART 2, will look at other effects and benefits of the plan process.

Greg Goodman has been an independent business plan consultant since 1982 and recently published the book, The Best Business Plan Book For Real Estate Agents, How to Write a Great Business Plan and Use It to Grow Your Business Constantly.