Business plans are used for many purposes, and that purpose can influence what is emphasized in the plan. Every business plan has sections that include the executive summary, business description, marketing plan, competitive analysis, development plan, management and operations plan, and financial statements and plan. It’s what goes into each section that must specifically address the purpose of the plan.
Business plans are as important for startup companies as they are for the large corporation ready to expand. Small and medium-sized companies, as well as the corporate giants develop business plans because they provide benchmarks for measuring progress. That’s one of the purposes then for developing a business plan – measuring actual results against strategic goals. Each section will establish periodic goals like number of marketing campaigns to run in a year, sales growth projections and net profit goals.
Another reason for preparing a business plan is to raise money. In that case, you will need to develop a well honed mission, clear objectives and goals and an executive summary that explains the type of business being started, the amount of capital needed and the type of financing. In addition, the marketing and financial plans need to be crafted so that they make sense in terms of the market and competition. This business plan will be used to get the attention of investors so you will want to show that the business will be able to make money or grow sufficiently to service the debt. If the investors will be equity partners, then the business plan will have to indicate how the company will be able to secure the investment and produce the desired rate of return.
A third reason business plans are developed is to attract people who aren’t investors. For example, a business plan can be used as a marketing tool when pursuing new customers representing large buyers. It is also used to attract suppliers or exceptional staff. The sections of the plan these people are most interested in needs to be fully developed. For example, large suppliers want to know you will have the right kind and volume of business and that plans for growth equates to supplier success also. Executive talent will read the business plan to discover information about corporate culture and the growth agenda.
In other words, a business plan is not just for attracting investors. It’s for all businesses at any stage of development and is used for multiple purposes.
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