| A business plan is an indispensable tool for an | | | | creating a business plan requires the entrepreneurial |
| entrepreneur and not only because of its importance | | | | team to go through this research and analysis |
| to the fundraising process, but because of how it helps | | | | systematically, creating a better foundation for |
| businesspeople crystallize their strategy and evaluate | | | | strategy. Having to write down the strategy also |
| their process. These are the three major reasons to | | | | creates an opportunity to make sure all of the |
| create a business plan if you are a hopeful | | | | founders are literally on the same page about what |
| entrepreneur. | | | | they intend to do. If they are not, fruitful discussions can |
| Fundraising | | | | be started which are better to get out of the way at |
| Most literature on business planning focuses on the | | | | this early stage while plans are still much more flexible. |
| need for a plan to encourage external investment into | | | | Evaluating Progress |
| the company, whether it is through loans or equity | | | | Finally, while the action plan outlined in the business plan |
| investment. Most funders will not consider putting | | | | is being implemented over the first months and years |
| money into a company without seeing a well-written, | | | | of operation, the business plan is both a guide and a |
| convincing business plan. An entrepreneur must make | | | | means to see how well the results of the business |
| sure the plan speaks in terms the funders will | | | | stack up to the projections made early on. The pro |
| understand, and meets their requirements for the | | | | forma financial statements can make this type of |
| qualifications of the management team, funding | | | | evaluation very easy. Make sure that the original pro |
| requested, and financial return. | | | | formas are kept in spreadsheet format so that actual |
| Strengthening Strategy | | | | financials can be laid out alongside them. If your |
| When strategy is an amorphous concept, existing in | | | | budgeted targets are saved in your accounting |
| the minds of the various company founders, it is loose | | | | software, such as Quickbooks, this kind of comparison |
| and perhaps even contradictory. It also does not | | | | can be even easier and variances can be measured |
| necessarily make use of the best research on the | | | | automatically. |
| market, customers, and competitors. The process of | | | | |