Why a Business Plan | Binsultan.net

When you approach a banker for a loan for a startup business, you will require a business plan. If you have an existing business and are approaching a bank for capital to expand the business, they often will not require a business plan, but they may look more favorably on your application if you have one.

Whats in a business plan?

A business plan should convincingly prove the capabilities of the business to generate revenue to cover your expenses, a business plan may vary depending on your audience. If you are writing a plan for your colleagues and partners to expand an existing business, then the focus of that plan may be more operational than financial. If you are writing a plan for a bank, the most important aspect to the bank manager will be your financials. Are your assumptions realistic? So to make these assumption clear the best option any one can opt is Free Business Plan Softwarewill there be enough cash flow that you can make for the monthly payments for the loan you have requested? If your business is making $1,000 a month and your payments are $1,200 a month, the bank is likely to turn you away.

If you are writing a plan for a venture capitalist, the most important factors in a decision to invest in a company is the promoters credibility, track record etc. In real estate, where the three biggest criteria are ?location, location and location,? the venture capital axiom is ?people, people and people.? VCs will ask, how experienced are the people that are going to run this business? Do they have knowledge of the industry? Have they started successful ventures in the past? Here Business Plan Software will provide a better picture of your plan.

What makes a successful business plan?

Presents a well thought out idea

Contains clear and concise writing

Has a logical structure

Illustrates managements ability to make the business a success

Shows profitability

Key reasons for writing a business plan :

1.Define a new business

2.Support a loan application

3.Raise equity funding

4.Evaluate a new product line, promotion, or expansion

5.Create a regular business review

6.Define agreements between partners

7.Set a value on a business for sale or legal purposes

Business Plan Makes it happen

Your business plan is like your key depreciator; it will get you in the door where youll have to convince investors and loan officers that you can put your plan into action. Make sure your business plan is printed out on good quality paper, you have checked the spelling and grammar, and that your numbers add up. Anyone who sees errors while reading your plan will wonder whether you have attention and focus and will you be making similar errors in running your business.

A great business plan is the best way to show bankers, venture capitalists, and other investors that you are worthy of financial support. Make sure that your plan is clear, focused and realistic. Then show them that you have the tools, talent and team to make it happen.

Source: http://binsultan.net/business/why-a-business-plan/

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