Anyone who is considering being an entrepreneur should know how important a business plan is, since business planning is needed to help in conveying the overall concept of the business. All businesses should have a business plan created, because they can serve as road maps for the operation of the business. A business plan is not hard to prepare and almost any business-minded individual will know how to create a business plan.
The importance of a business plan
Why is a business plan needed? All businesses should have an established business plan created since it can be useful in many ways. A business plan can explain the focus and objective of the business. A business plan helps to sell business ideas to investors, banks, or financial institutions. A business plan may even show business owners if there are flaws in the current and future planning process of the business.
Format of a business plan
A vision statement Every business should have a vision statement, which is a statement that details out the goals and purpose of the business. The vision statement should explain what the company would like to accomplish in the near future. A business profile A business profile will explain what the business is all about, and how the business will operate. The business profile should include the nature of the business, the intended market that the business is targeting and the products or services which the business is offering. Cash flow assessment A cash flow assessment should be based on a one-year projection that includes all of the business capital. A cash flow assessment should show what will happen if something goes wrong with the business, and how the issue would be taken care of. Cash flow projections are very important, because if the cash flow is under-estimated, it could really affect the business. Damage control plan Every business plan should include a damage control plan, because all businesses experience situations which can be damaging to the success of a business. The damage control plan should detail any types of threats that can affect the business, and how the business will handle the threatening situations. Some examples of threatening situations for a business could be the loss of sales or strong competition.