Top 3 Reasons For Writing Business Plans
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Whether you are a start up or established business, and whether you are a non-profit organization, writing a business plan can be one of the most useful things you can do for your business. Obviously there are different types of business plans depending on the nature of your company or organization. It's not enough that you have a "hunch" your new start up will be a roaring success, or you believe your latest web. 2.0 idea a surefire "ten bagger" success for the lucky venture capitalist. There are people who need to take a close look at your business plan; whether it's you, internal management or external investors. In this article, we will look at the top three reasons for writing business plans.
First to answer the question: "Is the business feasible?"
Before you actually commit funds, manpower and time on starting a business, it helps to actually have a "dry run" to see if the venture you have in mind has a good chance of success. The business planning process forces you to look at what your competitors are doing and to ask yourself how you can differentiate your product or service. Typically we call this a SWOT analysis - Strengths, Weaknesses, Opportunities and Threats. At the same time you want to identify, as clearly as possible your unique selling proposition. This can be a special feature or something unique about your branding. Just be different and attractive in the eyes of your target market. Going through this process will give you a better idea of you chances for success in the marketplace.
Then look at your projected financials - do you have the required funds to start your business? Where are you going to raise the capital? How soon will the business break even? All of them are pertinent questions.
Secondly, a business plan is used to help secure loans from banks or financing from outside investors. Typically if you are a start up, you will find it very hard to get any financing from your local bank unless you have landed collateral, regardless if you have a plan written or not. If your business is established for several years and have healthy cash flow, then the bank will definitely want to see your financials before given you any loans or bridge financing.
If you are looking for angels or venture capital investment, then a business plan, particularly the executive summary is what they will require. What's more important to these investors, more than the plan itself, is the entrepreneur's track record and the strength of your management team. Be sure to include these important points in your bplan.
Last but not least, a written business plan should be constantly evolving. It acts as a blue print to guide management in the execution of business strategy and to meet goals. By constantly reviewing and updating the plan, it is used as a useful communication tool within the company to guide business growth.
We've looked at some good reasons from writing business plans. Now, if you don't think you know how to write one, help is available. Look for a template online, such as at the site given below. Or better still get business plan software. The good ones, such as Business Plan Pro 2007, are easy to use and will guide you to input the necessary text and numbers and come out with a complete plan for you. There's absolutely no reason why any business person should not have a business plan blueprint.
For more on business plans, and tips and templates to help you write a winning business plan for different types of start ups, established bsuinesses and non profits, go to www.businessplans4u.com
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