Business Plans - The Basics of Creating a Business Plan
A business plan is a vital tool for any business. If you operate or plan to operate a home business, the more you know about business plans the more likely your business will succeed. This article discusses what a business plan, why you might need one, and how to write a business plan.
What are Business Plans?
A business plan is a document that is a valuable tool that can act as a blueprint for your home business.
Business plans are essential for getting a business loan, but they're also important even if you don't need outside funding for your small or home business.
What Types of Business Plans are There?
Formal business plans are detailed documents, usually prepared for the primary purpose of securing outside funding for the business. Informal business plans are road maps of the business that may only consist of handwritten notes that act as a guide to the owners of a business in day to day operations and in planning expansions.
Whether formal or informal, when properly written and maintained, business plans provide a means to help you stay focused.
Do You Need a Business Plan?
If you intend to secure outside funding for your business, you can expect a business plan to be a requirement. However, even if you're starting small or have your own resources to fund your business, informal business plans can greatly improve the chances that your home or small business will succeed.
They also provide a blueprint for growing your business.
The US Small Business Administration (SBA) estimates that as many as 90 percent of all small businesses fail in the first two years. Those statistics can be very frightening. After all, why would you want to spend a lot of time and effort as well as risk your own money when there is only one chance in ten your business will survive?
Keep in mind that a large proportion of those who start a small business don't know how to plan. They may also not be willing to take the time to learn how to write a business plan and keep it up to date. While you might be able to succeed without one, being armed with information on how to write good business plans will give you a considerable leg up in starting a business, keeping it operational, managing your money, and cultivating business growth
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