Most write-ups about business planning appear to be aimed at start-up businesses. However, it is wrong to think that only start-ups need business plans. Those who want to establish a business or create improvements on an existing business need a business plan. Those who seek funding from banks and investors need a business plan. A start-up company, an expanding company, a diversifying company and any existing company need a business plan.
Company owners find business plans useful at all stages of their companies’ existence, whether they are seeking financing or trying out new investments and partnerships. A business plan can be used at any stage of your business to test new ideas, plan future investments or begin new ventures. By outlining the future goals for your business you can create on-target objectives that allow you to stay on track.
A well- written, well-researched and well-presented business plan is meant to convince others that you are establishing a feasible business that will create a profit. They are used by investment-seeking business leaders to convey their vision to possible investors. They may also be utilized by firms that are trying to attract employees, prospect for new business, deal with suppliers or to understand how to run their businesses in a better way.
The most frequent reason for writing a business plan is to secure funding from a bank or an investor. Indeed, most banks and investors will not even consider making a loan or an investment unless the business has a formal plan.
“Banks use business plans as a screening process,” says Daniel McGilvery, president of The Business Planning Institute in West Palm Beach, Florida.
A good business plan “doesn’t just present information, it convinces and sells the individual reading it that this is an opportunity worth investing in,” adds McGilvery.
The business plan gives a venue for a critical analysis of all the positive and negative aspects of your business ideas. Remember that to flourish in business you must plan concrete steps, set priorities, allocate resources, and manage the cash.