Why write a business plan?
Write a business plan can seem tedious work. But in any case, it will be no time wasting. The business plan will allow you to check the profitability of your project (A), calculate your financing needs (B) and especially trying to convince investors and your banker.
A. Check the profitability of its project
When you are about to take a trip, the first thing you are going to check is to make sure the path you want to take will allow you to get to your destination. You also will check whether your fuel is sufficient. Your GPS is unable to calculate and offer you a ride with fewer plugs without first knowing your destination. The business plan is also used for this. He will let you know if the strategy you have chosen to follow you allow or not to get closer to the success of your project.
B. Calculate funding needs
Calculate your financing needs will help you avoid unpleasant surprises cash. To do this, after making your statement of cash flows, you should watch how much you need to do to stay in the red …
C. To convince investors and his banker
Your investors and your banker will await you on one point that will determine their involvement in your adventure: the return on investment.
When you start your business, the first months are often negative because you have to invest to generate sales that only occur later.
Facing your investors and your banker, then you have to give arguments proving to them that your project will pay off in more or less long term. They then ask you to highlight a key ratio.
2. It’s not that accounting
However, contrary to popular belief, the business plan is not just accounting, it is also to do a market study (A), which will allow you to set up a coherent action plan (B ). Most people who engage in entrepreneurship also forget one of the key points of the project’s success is consistency between Man Project-Team (C). The business plan includes this given him.