keroplounge.blogg.se - Who said quality is the best business plan

You can easily establish the breakeven point of the business and prepare cash flow forecasts.

You will be able to clarify the marketability and profitability of your product or service.

Having a business plan helps you communicate your ideas to investors and lenders.

You can easily spot and correct errors on paper before they occur.

By carrying out your SWOT analysis as part of your business plan, you are able to identify your strengths and weaknesses/challenges.

It prevents you from making costly mistakes.

The importance of preparing a business plan cannot be over-emphasized. You need business plan to support the valuation. A need may arise whereby you need to carry out the valuation of your business either for sale or other legal purposes.

To determine the valuation of business.

If not, you can investigate the causes and quickly take remedial actions. By this comparison, you can determine whether things are going as initially planned.

To review and correct business performance: Your business plan creates a benchmark through which you can review your performance.

As your business starts to grow, there may be a need to introduce a new product line or you want to expand your current level of operation, you need business plan to evaluate the feasibility of the project. It is not that you forget about business plan after you must have prepared one at the start of your business.

To assess a new product line or expansion.

Among other things, they will like to see the financial information about your business showing historical performance (for existing business) and future projection. You cannot just convince them with the word of mouth.

Whether you need equity capital to start a new business or to finance expansion programme, potential investors will like to see your business plan. Business plan will help you define the objectives of your business and describe programs and strategies to achieve those objectives. As a new business, you need business plan to describe and give detailed analysis of what your business is out to achieve. You cannot claim to have good understanding of your business, if you have not documented it. Business plan can be used for other purposes as enumerated below. I guess this is why many business owners do not deem it necessary to prepare one for their businesses. Some people believe that business plan is only needed when they want to apply for bank loan. Capital without a good plan on how it can be productively applied will not bring desired returns.

Many people believe that capital is all that is needed to start a business but this is not true. Skills, expertise or capital can never be a substitute to planning. You cannot afford to get started without thinking through what you are going to do– how you are going to do it, how you will finance it, how you will make money doing it.

Many young entrepreneurs usually make the mistake of just jumping into business in their excitement without putting a strong foundation in place. The rate of business failure can drastically be reduced if attention is paid to adequate planning.įailing to plan is a sure way to failure. There is a saying that he who fails to plan has already planned to fail. You really can’t over-prepare in business! No one ever plans to fail in any endeavour. In most of the mistakes I’ve made, there has been this common theme of inadequate planning beforehand. Hear what Chris Corrigan said about planning: You can’t overestimate the need to plan and prepare. And the common denominator for the business failure is the lack of adequate planning. It is statistically gathered that many businesses could not survive their first five years.