Why is it important to learn how to write a business plan properly?
Shortly, a business plan is a document that presents the goals of your business and describes how to achieve those goals. In detail in this guide, we are going to tell why it is important to learn how to write this document properly.
For any entrepreneur, a well-thought-out business plan is the key to business success. Whatever goals they set for themselves – from attracting investments to developing a plan for the strategic growth of the company, help to successfully run a business.
There are basic rules for writing a business plan. In case you don’t know them, it is better to get help. Use a business paper writing service like essayshark.com. A writer who is knowledgeable in writing business plans will deliver a well-structured document for you.
Why is it important to learn to write a business plan?
A business plan can be internal – such a company needs to determine the development vector, and external – to attract funding, that is, investments, grants or loans.
It is needed to formulate a development strategy. The company prepares such a business plan for itself. The structure and format are not so important in it, the main thing is that the plan helps the project move towards goals, assess risks, and see weak and strong points.
It is needed to attract investment. To get funding, an entrepreneur draws up a business plan and presents it to investors. The investor, first of all, evaluates how much profit the project can bring. They also look at the payback period of the company and its competitive advantages. A business plan for attracting investments is usually drawn up according to international UNIDO standards.
It is needed to get government grants and subsidies. The business plan for obtaining state support differs in structure and requirements from the investment one, but it also needs to be defended before the commission that decides on the issuance of a grant. Requirements for business plans are most often prescribed in the competition program. In general, it is important to show the social significance of the project and the amount of tax revenues. It is also worth describing in detail the experience, education and qualifications of the entrepreneur, market analysis, the availability of own funds and equipment for doing business.
It is needed to take a loan from a bank. Some banks decide whether to issue a loan or not based on a business plan. Usually this is necessary for a large targeted loan: to open a new production line, build a building, launch a new product. Banks have different requirements for the content of the document, but first of all they are interested in the financial condition of the project: debts and sources of financing, liquid property for collateral, estimates, income forecast.
What influences a business plan?
Keep in mind that a business plan changes depending on the stage of development of the company and the external situation.
In times of crisis, as a rule, companies shorten the planning horizon and make a business plan not for three years, but for a year. This allows you to respond flexibly to change. It also helps to assess the state of the business and anticipate risks. For example, it will help to take into account current and possible restrictions in the legislation, develop a scheme for additional fundraising and evaluate the strategies of competitors.
In quiet times, entrepreneurs can reshape the business model, such as moving back from outsourcing to hiring their own team. These changes are also reflected in the business plan.
Typical mistakes
We can cite the lack of proper market analysis as an example of a typical mistake. Also, when calculating the financial model, not all possible costs are often taken into account, forecast inflation is ignored and the procedure for discounting cash flows is not applied.
We can call insufficient analysis of the target audience of the product and the lack of a company management structure common mistakes. We can also add the lack of teamwork to this. Business plans authors often do not take into account several scenarios: realistic, optimistic and pessimistic.
Is it worth taking a ready-made business plan or ordering it from third-party contractors?
Ready-made business plans can be used as templates when creating your own, as well as to study the field of activity in which the company plans to operate. Nevertheless, it is always necessary to fill the document with unique data that will highlight the project and interest investors.
You can contact specialized companies to draw up a business plan if it is needed for banks or government agencies that have special format requirements.
You can purchase a ready-made business plan for a typical business (cafe, hairdresser, small retail outlet), and then adjust its financial model to fit your parameters. You can take a ready-made plan if you need it, for example, to get a loan from a bank. A business needs a unique business plan to operate and grow.
When drawing up a business plan, it is worth consulting with more experienced entrepreneurs and being immersed in the details of the project yourself. In any case, it is better to initially prepare a business plan on your own in order to be able to reflect the unique characteristics of the project.
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