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Your business plan is like
your calling card, it will get you in the door where
you'll have to convince investors and loan officers
that you can put your plan into action.
Once you have raised the
money to start or expand your business, your plan will
serve as a road map for your business. It is not a static
document that you write once and put away. You will
reference it often, making sure you stay focused and
on track, and meet milestones. It will change and develop
as your business evolves.
Not everyone who starts
and runs a business begins with a business plan, but
it certainly helps to have one. If you are seeking funding
from a venture capitalist, you will certainly need a
comprehensive business plan that is well thought out
and contains sound business reasoning.
If you are approaching
a banker for a loan for a start-up business, your loan
officer may suggest a Small Business Administration
(SBA) loan, which 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.
Reasons for writing a
business plan include:
- Support a loan application
- Raise equity funding
- Define and fix objectives
and programs to achieve those objectives
- Create regular business
review and course correction
- Define a new business
- Define agreements between
partners
- Set a value on a business
for sale or legal purposes
- Evaluate a new product
line, promotion, or expansion
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