Business plan is very important in every business activity and should be prepared by every entrepreneur and business that wants to embark on any investment project.
In order to prepare a very successful business plan, you would need to first of all know the meaning and purpose of a business plan. In this article I would define the meaning of a business plan, its purpose and the importance of a successful business plan.
What is a business plan?
In order to prepare a successful business plan, you need to know the definition of a business plan. A business plan can be defined as a statement which shows details of a projected financial statement for a period, basically showing a detailed projection of the income and expenditure for the business or project.
What is the importance of a business plan?
Most people ask the question about the purpose of preparing a business plan? Why do I have to prepare a business plan? Or do I have to prepare a business plan for a particular project in my business? The answer to all these questions is a very big yes.
As a business man or entrepreneur you would need to frequently prepare business plans either for a new project/investment you might want to embark on or an expansion of your existing business. You might also find it necessary to prepare a business plan when you need to solicit for funds to either expand an existing business or to embark on a new business/investment.
Expansion of an existing business:
For every business venture, one of the main objectives is to expand, in other words growth. As a business man you would like to see your business take a new step forward in terms of growth, which is usually associated with increased sales revenue and profits. However, as the business grows, there is the need for frequent investments or injection of additional capital into the business, which many businesses and entrepreneurs find most often than not an upheaval in their business growth.
However, this upheaval or limiting factor can be erased if the business owner or management can meet the right investor (s) to invest in their expansion project.
Let’s take for an example a business which is into manufacturing wants to expand through increased productivity and sales, but finds out that there is a limiting factor in the acquisition of machinery that would aid them in their expansion/growth bid. With a very good business plan the said company would be able to secure the necessary funds needed for the purchase of the machinery. So how does it work? It is not as difficult as you may think; in this article we are going to teach you the simplest way that a good business plan can let you achieve success in your business venture.
Embarking on a new business/investment:
As an entrepreneur you look around your surroundings for possible investment opportunities, and most often than not a new business idea pops up, however, there often bottle necks when it comes to the financing the business.
There again the importance of a business should not be underestimated as with a very good business plan you should be able to acquire the necessary funds for your investment. With a good business plan funds can be solicited from banks, individual investors and the government sometimes comes in to invest in feasible ventures to create employment.
In summary, it is very important that regardless of the source of funding, be it personal funding or solicited funding businesses and entrepreneurs prepare business plans for what ever business project they intend to embark on.
Everyone retires. When a company has no succession planning in place to replace those who are going to retire, it will experience a major setback.
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