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A business plan is important in that it serves two core purposes; it provides 1) financial validation and 2) serves as a roadmap.: With regards to financial validation, your business plan gives a strong indication, to both you and outside funding sources, as to whether your venture will be financially successful.Your financial projections, if completed properly (more on this below), allow financing sources to calculate whether you’ll be able to repay your loan or provide an appropriate Return on Investment.
And it must validate that financially it makes sense.
For example, while you might be able to get a million people to pay you $20 for a new computer, but if you can’t manufacture the computers for significantly less than $20, the business isn’t viable.
Importantly, the written sections of your business plan support your financial projections.
For instance, the Industry Analysis section must prove that your market size is large enough to support your success.
And your Marketing Plan section must show that you’ll be employing promotional tactics that allow you to attract customers at a reasonable cost.: In particular, the Operations Plan section of your business plan lays out your action plan.
It details the key accomplishments and milestones you have established and when you expect to complete this.When you are conceiving a new business or new product or service, you should at least create a basic business plan (see our simple business plan template below).This business plan should cover the basics of your plan.A business plan for strategy focuses on ensuring you have the right strategy (marketing strategy, operations strategy, HR strategy, etc.) to grow a successful company.When you add the need for funding to this, you must also spend time convincing funding sources why your company will succeed.I say this not to brag, but to assure you that much information online about business plans is false.Below you will find correct answers to the most common business plan questions.There are small business plans that generally cover companies up to 50 employees.Medium and large company business plans are usually for companies with 51-250 employees and 250 employees respectively.If you are seeking outside funding or are looking to grow your business to the next level, it is also time to create a business plan.There are several types of business plans, but they are all similar.