The importance of a business plan cannot be overemphasized in any business. They are just as important to a micro-business although they don’t need to be nearly as formal. If you are seeking venture capital or financing you’re likely to need a business plan of 50-100 pages. For a micro-business, you shouldn’t need more than 5.

A business plan precisely defines your business and identifies your goals. The basic components include a current and projected balance sheet, an income statement, and a cash flow analysis. It helps you allocate resources properly, handle unforeseen complications, and make good business decisions.

Many entrepreneurs drag their feet when it comes to preparing a written document. They argue that their marketplace changes too fast for a business plan to be useful or that they just don’t have enough time. But just as a builder won’t begin construction without a blueprint, eager business owners shouldn’t rush into new ventures without a business plan.

Before you begin writing your business plan, consider four core questions:

• What service or product does your business provide and what needs does it fill?

• Who are the potential customers for your product or service and why will they purchase it from you?

• How will you reach your potential customers?

• Where will you get the financial resources to start your business?

What goes in a business plan? The body can be divided into four distinct sections:

• Description of the business

• Marketing

• Finances

• Management

Addenda should include an executive summary, supporting documents, and financial projections.

A business plan is a tool with three basic purposes: communication, management, and planning. As a communication tool, it is used to attract investment capital, secure loans, convince workers to hire on, and assist in attracting strategic business partners which are typically not goals of micro-businesses.

As a management tool, the business plan helps you track, monitor and evaluate your progress. The business plan is a living document that you will modify as you gain knowledge and experience. By using your business plan to establish timelines and milestones, you can gauge your progress and compare your projections to actual accomplishments. It can also let you know when when it’s time to shut down a particular venture. Each of your micro-businesses should have a business plan. That way you can compare the time and money you’re putting into each so that when you begin to get squeezed on on or the other you can shut down the worst performer.

As a planning tool, the business plan guides you through the various phases of your business. A thoughtful plan will help identify roadblocks and obstacles so that you can avoid them and establish alternatives. This is particularly important for micro-businesses that are run by more than one person. Having clearly defined roles in critical in these situations.

The SBA has a pretty good section on its website that discusses business plans in greater detail. Just remember that their target audience is small businesses that are looking for financing. Micros just need a short outline to keep everything defined.

I was going to write a post about tools that you should have at your disposal when starting your new venture but discovered that Lifehacker had beat me to it while I was looking for a way to put tasks on my Blackberry and sync them to my PC without using Outlook. (Still haven’t figured that one out, I’ll let you know when I do.)

I agree with most of what was presented. Godaddy can be, ummm, strident in their marketing but it doesn’t bother me that much. I’ve never used DreamHost but it looks like they’ve got a pretty good deal running through 4/25/2009 and I like that they’re concerned about the environment. If you’re planning one sticking with just one domain for the forseeable future almost all the hosting companies have a deal that includes domain registration. Just make sure you can take it with you when you leave. There’s nothing worse than building up your brand and finding out that you’ve got to abandon it if you want to change hosting companies.

The simple fact is this is going to be easier for some people than others. To run a successful Micro-business empire you must have a constant stream of potential new ventures. Keep in mind that all successful businesses (micro or macro) must do one thing: Satisfy a need or want. This can’t be stressed enough. It doesn’t matter if you sell the cheapest snow removal equipment and have the best customer service if you are located in Jamaica. Nobody will buy it (except maybe your mother).

Below are some strategies to help you come up with new business concepts. You don’t have to do them all but the more you use the more ideas you’ll come up with.

• Keep up with demographic changes - Demographics changes offer new opportunities. For instance, one of the biggest demographic changes in the US is the aging of the Baby Boomers. What new products and services are they likely to need in the coming years?
• Study Problems - Can something be done better, or faster, or cheaper? What can you do to make the world a better or safer or more fun place?
• Engage in People Watching - This has been a hobby of mine since I was a teenager I love to go to the Mall or the airport or downtown and watch people. They’re fascinating. Use the opportunity to recognize emerging trends or identify un-met needs.
• READ - Trade journals, magazines, newspapers, local business journals. All of these sources will help give you ideas about emerging trends. Maybe there’s a concept in another area that could be applied to your location. Keep an eye on non-fiction best-sellers for trends that can be exploited. If you had spotted the protein diet trend this there a micro-business that you could have come up with?
• Surf the Web - Hang out in forums of subjects that interest you. Is there something that somebody else is doing in a different location that is applicable to yours? Trends and fads usually start on one coast or another and work their way in.

Now you’ve got all these ideas swirling around in your head what do you do with them? I keep paper and a pen near me wherever I got so I can write things down as they occur to me. On occasion, I have been know to call myself on my cell phone to leave a message so I can remember it later.

Millionaire’s Micro-business Brainstorm Hour

I set aside an hour each day (at the same time every day because that’s what works for me) called Brainstorm Hour. During that time, I collect all the scraps of paper and write down every idea I’ve had in the last day in one place so I can start to organize them. During Brainstorm Hour, nothing else goes on — no phone calls, no laundry, no worrying about anything except concept generation. All these thoughts and ideas are put on the Future Ventures List that way when I need (or want) to start a new micro-business all the ideas are already there.

Ok, part-time “work” is not really what we’re all about here but many of the points Marci Alboher makes in her post on Shine apply to the micro world. It’s all about time management and finding things you love.

Over at The Simple Dollar,  Trent posted a list of 50 businesses you can start on your own. He doesn’t call them micros but that’s ok that’s what they are. Look through the list and run with it….