Why the Hell Do You Need a Business Plan?
Posted on February 10th, 2009
Anyone who is seriously considering starting a business must prepare a business plan. A business plan contains the basic business idea and all related operating, marketing, financial, and managerial considerations. It is not unusual for a new company to come into being out of a rather haphazard process in which many ideas have been discussed. The most important benefit the entrepreneur will achieve from developing a business plan is that it will help assure systematic and deliberate coverage of all important aspects of the new venture.
The first user of a business plan is the entrepreneur who writes it. If it is properly and thoughtfully developed, it will help chart a course for the new business and help the entrepreneur uncover potential sources of danger. In addition, the business plan will permit prospective investors to examine the business opportunity to determine whether they want to invest in it. Factors in a business plan that interest investors include the following:
. Evidence of market acceptability of the new product or service.
. An experienced, highly qualified management team that will operate the new business.
. An understanding of investors’ needs to earn an acceptable return while limiting their risks.
. Initial concentration on a limited number of products or services.
. The existence of patents, copyrights, and trademarks that will help protect the new firm.
In contrast, the following factors seem to create an unfavorable reaction among investors as they read business plans:
. Apparent infatuation with a product or service rather than an objective, analytical evaluation of potential market opportunities.
. Financial projections that are inconsistent with industry norms.
. Growth projections that are unreasonably optimistic.
. Custom engineering requirements that make growth difficult.
In addition to investors, potential suppliers and employees are often very interested in the plan. Suppliers want to examine the plan carefully because they may be asked to sell their products and services to the new venture on credit terms. Prospective employees will be interested in reading the plan because they may be leaving existing jobs to join the new firm. Most people are somewhat averse to risk, and will not want to join the new company unless they think it has a good chance of being successful.
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iyour site never load.why?i have to share also my blogsite for mybusiness plans.it not listed in Google yet.Its about ordering business plans from me.Do you have also money for loan?I am being agent,ok.Pls emailmeif there are companes who make loans to start up biz.I also have starting biz.
yes ,we need business plan.Actually,for small business I am asked for my bank savings for 2months so,to payaprivate lender in post dated check.No collateral.Butformajor business projects, like fixed asset acquisitions involved, banks need it.