Why Are Business Plans Important

Why Are Business Plans Important-3
Your document basically lays out all the information a potential investor needs to know before buying shares of a new company.Bankers and private investors will want to know the same information.

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Practically Speaking is a weekly column that addresses your most pressing business dilemmas. When those situations arise, it’s almost always necessary to have a plan in writing.

The advice is the opinion of long-time business owner Gene Marks. Consultants and financial advisors love to tell their clients that they should have business plans. The plan should be pretty detailed too, depending on who the reader will be.

So if you decide to go down this road you’ll need to create a formal policy.

The policy should include the maximum amount to be lent (usually no more than a paycheck), interest rate (always the market rate — no special considerations should be given or it may be considered taxable) and payment terms.

That said, after having written and reviewed hundreds of business plans, I feel there are four key sections used in almost all situations, and these are augmented by additional sections depending on the circumstances.

These four key sections are the executive summary, marketing plan, key management bios, and financial plan. This is one of the shortest sections of a business plan, but the one you should spend the most time working on.

The marketing paragraphs should include information about the size of the market, sales forecast, demographics of your potential customers and competition, and your competitive advantages.

In the operations/staffing/management paragraphs, demonstrate management’s leadership and industry experience, along with a few key details about the location, staffing, and operations.

But if it’s for a very short term problem it may be a decent answer for the employee without you having to go through a whole internal process to setup an employee loan system.

When you apply for a job, you get one shot — one resume and cover letter — to present to a potential employer and hope, out of hundreds of applicants, they choose you to interview. In this post, you will understand which sections of the business plan are considered the most critical and why, as well as learn what to include in these sections.

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