Why a Business Plan? Avoid the Path to Failure

Why would you need a business plan for an established business? Did you ever have one? Maybe things are just fine, business is great, and your business is making tons of money. And very possibly, your business is doing the best it can already. However..what if it isn’t? How will you know?

Let us consider for a moment that your business could be better. Without a thoughtful, honest and focused look at your business and the industry you are in, you may be missing opportunities. Or you may not be aware of certain market indicators that would cause you to revisit your current way of doing things. To be ahead of the game; “forewarned is forearmed” so to speak.

A business plan will bring all of the components of a successful business into focus. You will have an excellent handle on market conditions, your competition, new methods, services or products within your industry, pricing information, potential new clients or customers, marketing and sales techniques, opportunities for new business relationships, revenue streams and much more.

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How Do I Write a Business Plan?

Why Write A Business Plan?

How Do I Write A Business Plan is a question very much on a business executives mind usually around mid-year or during the last quarter of the financial year? As it is part of the management process, most businesses would have scheduled the business plan sub-process to start at a suitable time of the year. There are others, usually small independent entrepreneurs who may probably put it together as the need arises. This could be due to the need to apply for financial assistance or to impress a third party on some important business matter or venture. However it is done, a business plan is important as it serves as a performance reference, sets the business direction and rallies the team to an agreed business objective.

The 7 Elements Of A Business Plan

Executive summary which is written after the plan is finalized. It briefly provides an overview of the business plan in terms of the approach employed and key considerations in terms of business offerings, key staff and expectations in terms of financial results.

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The Importance of a Business Plan For Entrepreneurs

A business plan is an indispensable tool for an entrepreneur and not only because of its importance to the fundraising process, but because of how it helps businesspeople crystallize their strategy and evaluate their process. These are the three major reasons to create a business plan if you are a hopeful entrepreneur.

Fundraising

Most literature on business planning focuses on the need for a plan to encourage external investment into the company, whether it is through loans or equity investment. Most funders will not consider putting money into a company without seeing a well-written, convincing business plan. An entrepreneur must make sure the plan speaks in terms the funders will understand, and meets their requirements for the qualifications of the management team, funding requested, and financial return.

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