My opinion about Business plans
What is Business Plan?
Definition: “A written document describing the nature of the business, the sales and marketing strategy, and the financial background, and containing a projected profit and loss statement” (Small Business Encyclopedia) Business Plan is a document that describes what you intend to do in future concerning development and promotion of your business and how you plan to do it. So business plans are inherently strategic. In few words, a Business plan conveys your business goals, the strategies you will use to meet them, potential problems that may confront your business and ways to solve them, the organizational structure of your business, and finally, the amount of capital required to finance your venture and keep it going. Purposes of writing Business plans?
Business plans solve a number of tasks for those who provide and read them. Firstly, they are used by investment-seeking entrepreneurs to convey their vision to potential investors, to gain their interest and finally receive external funding. From the opposite side, they should convince the potential investors that the idea is the successful one and worth financing (the market is thoroughly analyzed, all alternatives studied, threats and opportunities are taking into consideration). “Both venture capitalists and angel investors have the difficult task of balancing risk versus reward in their decisions. Your first challenge is to show them the financial opportunity you are presenting to them. Explain why your venture has the potential to grow quickly and be extremely profitable compared to other ventures they might be looking at. Then show what you have done to mitigate risk” (Hill) Secondly, Business plans could be used for internal purposes - just to manage an ongoing business. They may help to understand how to manage the company better; or may also be used by companies that are trying to attract key employees or deal with suppliers. Personally I...
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