When should you write a business plan?
There are many reasons a person or company might need to prepare and write a business plan. The most obvious motivation is to obtain funding; whether that is for a bank or SBA loan, a grant, investors or from a venture capitalist firm. Each one of these funding sources requires a plan to be presented before them, where all the necessary information they want to see is in an easy to find, readable and aesthetically pleasing manner. Of course, each of these funding sources have slightly different requirements on what should be included in the plan, so it's best to determine how much funding you are after and what kind of funding sources offer that amount. You may start out thinking that you need to go to an angel investor but then realize that the SBA gives loans up to $2 million in certain circumstances, and so a simpler plan will required.
Another time when you should write a business plan is when you want to see your company succeed. It can be used as a management instrument and as a planning device. The business plan will grow with your company to keep your goals on track and assist in evaluating your progress. The business plan states very specific information about your company that will help it to succeed, like:
• A Mission Statement, the true essence of what your business is here to do, via goals, actions and decision making.
• Company structure, including management and hierarchy
• An executive summary, which aids in decision making, since it is a summary of business proposals and/or problems and how to overcome these issues
• Financial Projections and targets
What are other times when you should write a business plan? Sometimes leasing agencies or landlords require a business plan before a lease can be fully obtained. It is a means of assurance for the leasing agency that the new leaser has the means to pay their rent. Perhaps you are starting a new partnership and both parties want to align their goals. The best way to do this is through a business plan. Or maybe you have an existing business that you will be incorporating and need a business plan as a guide for the process.
These are just some of the reasons people write business plans. If you are having trouble composing a business plan and need help, call our experts at MasterPlans for a free consultation at 877.453.2011. After writing over 8000 custom business plans, we can help you, too, write a successful plan that encompasses your needs and visions.
