Business plans may sound boring, but they’re really important. Why are business plans so important? Why do they matter?
There are a lot of reasons why it’s critical that you have a good business plan. Let’s break it down a little bit. Let’s think about how and why business plans are so important. We discussed in an earlier blog the good, the bad, and the ugly of business plans. http://www.mcbrideforbusiness.com/blog/business-plans-the-good-the-bad-and-the-ugly/ Let’s assume you’ve done the hard work to make a good business plan. Why is having a business plan so important?
#1 A good business plan is your road map to success. It requires you to analyze and think through the various different issues in your business. Literally, to figure out how you’re going to get from here to there. It really makes you concentrate on connecting the dots.
#2 A business plan can be used to get equity investment. If you approach an investor about bringing investing money into your company, they’re going to ask about your business plan. They’re going to want to know what they’re actually investing in. They want to understand the investment and how it will benefit them.
#3 A business plan can also be used for securities law compliance. Not only are you going to want to show your business plan to an investor, but you may want to use it as a document as legal protection to show that you’ve explained the business to an investor and that they understood the risks associated with the business and that the investment has been fully vetted.
#4 A good business plan can be used for financing. If you need to borrow money from a bank, you can show them your business plan. By showing that business plan and what you develop, they can understand the risks. This business plan may be used as a bridge to a loan.
There are a lot of great reasons why you need a strong business plan and they can really help to fuel your business. Where are your business plans at? What are you struggling with? What do you need to make a better business plan? How would a great business plan help you? Discuss it in the comments below.
This posting is intended to be a tool to familiarize readers with some of the issues discussed herein. This is not meant to be a comprehensive discussion and additional details should be discussed with your attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity. FreeImages.com/ Hans-Gunther Dreyer.
About the Author
Shawn McBride is the Chief Innovation Officer at McBride For Business, LLC. He is a frequent speaker at events. His signature keynote, The 3 Laws of Empowerment (www.rshawnmcbridelive.com), gives audiences an entertaining look at how they can prepare, plan and protect themselves. You can reach R. Shawn McBride at firstname.lastname@example.org or (214) 418-0258.
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