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The trusted business plan, it has been a staple of established and startup business for around 40 years coming into prominent use in the late 1970's early 1980's. A traditionally business plan is simply a tool that a manager or entrepreneur can use to collect ones thoughts on how to tackle a business challenge. There is no set format or defined sections of a business plan which can lead to some confusion on what should and should not be included.
In today's business climate the entrepreneurs that need a full business plan tend to be ones that are seeking traditional bank loans. However, many angle and venture capitalist still prefer a well defined business plan although they seem to be falling out of favor in the investment industry that is leaning towards more dynamic types of plans.
As detailed in an article by Sherrie Scott on Chron, traditional plans designed to be used in-house are considered “working plans.” A working plan is detail-oriented and provides company executives with an outline for running the business. It does not contain manager profiles, nor does it include information that is necessary for eyes outside the company to see such as an appendix section.
Plans that are utilized to attract investors and lenders are considered “presentation plans.” These plans are similar to working plans but they include illustrations and other elements to make the document more appealing to people outside of the company.
Presentation plans tend to have an extensive financial analysis section that projects out business 5 years with extensive detail in regards to expenses and potential revenue. They will almost always include a detailed marketing plan on not only how you will attract customers but also how you will build your initial awareness in the market you are entering.
PRO-TIP: Make sure that you document you assumptions when building your financials or marketing plan. Potential banks & investors are going to want to see what types of assumptions you have made about revenue and customer acquisition.
There are thousands of business plans you can download in Word, Excel and other formats. Some specifically for products, others for services. We provided an outline for download to help you determine what sections you need in your business plan.
- It gives you a glimpse of the future.
- You’ll know how to allocate your resources.
- A business plan puts everyone onto the same page.
- It allows others to know that you’re taking this business seriously.
- It’s an easy way to identify core demographics.
- Forces you to create a robust financial analysis of your company or business challange.
- A business plan can turn out to be inaccurate.
- Too much time can be spent on analysis.
- They take a lot of time and effort to produce.
- There is often a lack of accountability.
- It restricts the freedom you once had.
- It creates an environment of false certainty.
- Read here for more about these 14 Pro and Cons of a Business Plan