Rhonda Abrams The Passionate Entrepreneur

If you're like me, you've got big hopes for your business in 2007, but you've also got dozens of things demanding your attention. How do you make sure you spend your time and money building the long-term success of your business? The best way is to develop an annual business plan.

Remember Rhonda's Rule: You can't reach a goal you haven't set.

Without a business plan, it's easy to spend the whole day -- or the whole year -- attending to pressing day-to-day details instead of focusing on activities that truly build your business.

Developing an annual business plan is a way to step back from the daily grind, set goals, and think through the best strategies for reaching those goals. Just as important, it helps you establish priorities and decide what not to do this year. That enables you to better use your limited resources of time and money.

Your annual business planning process can be fairly formal, like the one we do in my business. We developed a complete business plan about five years ago, and we also do an annual one. We set aside a few days, typically bring in a consultant, evaluate the past year, look at potential future threats, and develop a clear action plan with deadlines.

I can say without hesitation that no other single activity has helped my business grow, indeed survive, than undertaking this annual business planning process.

But your annual business planning process can be much simpler, especially if you're new to the concept. Start by setting aside a few hours or a day for planning. But, if possible, get away from the office or store, and especially the phones.

As you develop your annual business plan, keep it real. You may be tempted to set all kinds of goals -- return every phone call immediately, attend every trade show, develop 10 new products, and so on -- but since when did you become Super-Entrepreneur?

The key to a successful annual plan is to look at where you've been, where you want to go, and the best way to get there.

In tomorrow's column, I'll detail the specific steps you can take in developing your annual business plan.