What is a plan for?
A business plan is the fundamental basis of any venture, company, new line of business, or change of course. Not having a professional and complete business plan is like navigating without a roadmap.
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Would you undertake a journey without knowing your destination or the path to travel?
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Here are some fundamental reasons to have a good business plan:
BANK FINANCING
When seeking financing from any financial institution, it instrumental in demonstrating the seriousness and viability of your project. The probability of having their support increases dramatically, since they understand your idea and, more importantly, you show them that you understand it too.
INVESTORS (VC, Seed, Angel)
For people who invest in your idea (and in you), it is essential to demonstrate the profitability that their investment will have, the risk exposure, the market in which they will be immersed and exactly how you intend to ensure that their investment is best placed in your project and not somewhere else.
PREVIOUS ANALYSIS
With the business plan you can:
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Quantify in advance the risks
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Visualize costs and expenses
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Determine the necessary investment.
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Define a strategy regarding marketing and sales
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Estimate payback time
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Project balance sheet, income statement and cash flow
MEASURE YOUR RESULTS
By having a business plan that communicates with your accounting, you will be able, through a dashboard, to measure actual results against projections in order to identify and correct deviations from the plan. You can also measure against previous periods. You will have access to all the important metrics for your company's decision making