Reasons for Writing a Business Plan
People have all sorts of reasons for writing a business plan. Before you can even think about opening the doors to your business, you have to worry about writing your business plan. In it, you’ll talk about your different products or services, your whole marketing strategy, your cash flow projections, and your sales as well as operational forecasts. You’re not going anywhere without your business plan! However, based on what your specific objectives are for your company, you have to tailor your plan in slightly different ways. Here are different reasons for writing a business plan.
For Outside Loans or Investments
You can write a business plan to attract either outside loans or investments for your company. Whether you want your outside loans or investments from mere bankers or venture capitalists, you’ll have to tailor the plan to them. They’ll insist on seeing just how sure you are about your plan and if your plan is foolproof or not. As such, get ready to deal with a round of tough questioning from venture capitalists or bankers who want to determine how reliable your projections are.
For a Business Loan
A business plan involving a business loan means that your lenders will want to see something totally different. For this type of business plan, you’ll need to include an entire section that details your collateral or assets that you should pledge against said loan. Collateral is a term that refers to funds that can support your interest expenses, loan payments and even debt repayment. Banks are not permitted to make speculative loans, so you’ve got to make these banks feel more comfortable.
For Doing Business Overseas
If you’re going to be doing business internationally, then your plan offers a routine way of evaluating the market potential of your different products inside of a foreign marketplace. This means of evaluating is very crucial to your future business success because you’ll be showing in your plan if your products can really compete in a foreign marketplace.
These are some of the various reasons for writing a business plan. Note that not all business plans have to be straightforward in the sense of attracting outside loans or funding from angel investors, venture capitalists or banks. A business plan can also be used for a plan that involves a business loan or for ambitions of doing business overseas. Your plan will depend on what you want to do with your business.