Why do you need a business plan?

Acquiring financing, investors, and partners for your business can be a challenge if you don't have the right type of documents ready. A business plan offers you the ability to teach others about your business so you can acquire the financing you need along with other things. A business plan is easy to create and it will easily help you establish yourself as a reputable company.

Understanding a business plan
The first place you need to start with is understanding exactly what a business plan is. A business plan allows you to focus on the immediate needs and the future needs of the company. In the business plan you will outline what your products and services include along with information pertaining to your target audience. Market research information should be included along with a marketing plan and financial projections for the company. Even if you have been in business for awhile you need to upgrade your business plan to prepare the company for growth and development.

Choosing a business plan outline
Another important thing you need to understand is the outline for your business plan. There are several elements you need to include in the business plan. Here are a few key elements to include:

• Summary


• Mission statement


• Keys to success


• Market analysis


• Financial analysis

Not only is it helpful for lenders to see that you have done a financial projection it is also helpful for you to see. This allows you to see your break even costs and you can find out if you need to start focusing on generating more income to sustain the needs of the business.

Make it specific
A business plan will change for each industry and for your particular business. Don't provide a general business plan to lenders and others; make sure you create a specific business plan. Financial history is a huge part of the business plan and you need to spend extra time on this to make sure you have all of the documents you need for the lenders. Here are the main elements that are important for lenders to see:

• Cash flow projections. If you have cash flow statements already, use them to develop cash flow projections for the future. Future cash flow projections allow lenders to see that you can actually sustain the loan. Cash flow is vital to your business and without it you will have a hard time keeping your company afloat.


• Plan for success. The other thing you need to have is a plan for success. How are you going to get the product out of your hands and into the hands of the consumers? A good marketing strategy goes a long way to show lenders how you will implement your business for success.

Business plan format
Now that you have all the documents ready, you can put together everything into it proper format. This is the order in which you need to organize your documents and include in the business plan:

• Executive summary


• Company description


• Products and services


• Market analysis


• Strategy and implementation


• Management structure


• Financial plan

Preparing all of the documents individually and then organizing them together allows you to have all of the sections properly checked by others to ensure you have all of the right information in the business plan. Always have at least 2-3 other people check over your business plan to make sure you haven't missed anything. Lenders will notice if there are mistakes or other issues with the business plan and they will reject your loan.