4 reasons why you need a Business Plan

Every business should have a business plan. And 'the road map for success. But a well thought out business plan is essential if your company is looking for funding.

You are seeking a bank loan.

This plan is used to inspire confidence in your banker and convince him / her that your business is a good credit risk. It 's very logically, with particular attention to the financial projections and presentation of historical financial results. The bankers who make bad loans fired, so they like to err on the side of caution. A banker is looking for safety and a demonstration that the company can generate sufficient cash flow to pay interest and principal. The bankers are not looking for a great return on their money. They do not want to participate in the management of your company or sit on the board of directors. Your business plan will need answers to these questions:

Will the company's cash flow or be stable enough to make the payments on the loan?

or are the long-term prospects of favorable business?

o The company has a reasonably good track record?

Do you need an investor / partner.

The plan must show significant potential upside for the business. The banker was glad to get back his money more, say 10% interest. The investor can decide on a return of 30% to 50% or more. This plan must be written in an interesting and keep the attention of the reader. Your business plan is in competition with all other plans submitted to the investor. Make sure you answer the following questions:

or can rapidly grow the company?

or margins are attractive?

• You have succeeded in other business ventures?

o It is a market that is emerging, with a large and bright future?

o How much of society who are willing to give up, for both equity and management control?

Want to sell your business

We must demonstrate to a potential buyer that your company is worth paying a premium for. Sometimes this can be called a marketing presentation, offering memorandum, or evaluation. It is not strictly an evaluation, as you are trying to establish the selling price for the business, do not determine a value. Usually an assessment is completed by an objective third party. It is very likely to be asked:

o There is an untapped potential for the activity that a new owner could exploit?

o If the new owner has had more capital, the business could grow faster?

o There are new markets that could be included?

or may have reduced costs and increase profits? ......