Who needs a Business Plan?
A thorough business plan will help you reflect your ideas, but is also crucial when looking for investors.
Setting up a business plan takes time and can be a painful process.
The following four groups are interested in your business plan:
You - Map out your Idea
The business plan is the ideal way to map out your ideas. By writing your thoughts onto paper you are forced to define your target group and their individual needs. Furthermore, you will look into your finances and determine where you spend money and make sales. By writing a business plan you will get an idea if your company is sustainable or not.
Banks – Obtaining Loans
If you need to borrow capital from a bank they will always want to look at your business plan. They will assess the plausibility and productivity of your start-up, thus determining their return on investment. For that reason your business plan should also look the part (i.e. layout, pictures, graphics etc.). If the bank decides to invest they will want to know your ability to meet financial obligations and a guarantee of payment of loan. A thorough liquidity planning is therefore essential.
Equity Investors – Seed and Growth Capital
A thorough business plan is also helpful when looking for equity. Especially business angels and venture capitalists will want to see your plan. Investors will be interested in the value of the equity, the offer for participation and expected return on investment.
Public and Private Sponsorships - Winning Prize Money at START-UP Competitions
In most start-up competitions you can win seed capital without having to give away a share of your company. Your start-up is mostly assessed by a panel of experts and compared with the competitors. A thorough and flawless business plan will increase your chances of winning.