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A business plan is a blueprint of how a company will be run.A company often needs a business plan before it can borrow money from a bank.Including all financial details in your business plan will enable you to pinpoint how much capital you will need for continued growth.
This highly recognized management tool is basically a written document that describes who you are, what you plan to achieve, how you plan to overcome the risks involved and provide the returns anticipated.
Often people think of business plans are limited to starting up new companies or applying for business loans.
How will your company or product/service make a difference in the lives of your customers?
Make sure you show your lender that you've done your homework.
If your business is all in your head, it's hard to convince lenders, investors and shareholders that you have a credible company and that you'll use their funding well.
And that's precisely where a business plan comes in.For example, if you are in the RV (recreational vehicle) industry, define which types of vehicles you offer and their prices.Indicate whether you will offer premium-priced vehicles or discounted and slightly used vehicles.Your business plan outlines what your business does and what you are trying to achieve.It explains what the market opportunity is, what makes your business special and how you will make it a success.Good plans are usually highly detailed and include information on all aspects of the business, including the industry, marketing, finance, personnel and various operating procedures.They are specific, communicate to all company employees and require commitment from everyone.Be sure to modify your information depending on your target audience.For example, your bank will be interested in how you intend to repay the loan or overdraft, what you intend to do with the money and how it will help your business grow.Potential investors will also want to see the expected return and sources of funding, while shareholders are looking for the prospect of the share price and what dividend they can expect on their shares.Generally, lenders, shareholders and investors want facts and figures that back up what you say. Keep in mind that you should have a lawyer look over all contracts and legal issues.