Elements of a Business Plan
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A highly-motivated colleague of yours has been running a part-time small business for additional income. Within the past couple of months the company started to experience rapid growth and your colleague would like to turn it into a full-time venture. The colleague realizes that his retained earnings, at this point, are not yet enough to sustain the rapid growth so he has come to you for help. You have been asked to prepare a research paper for him that will provide information he can review as he considers expanding full-time. Prepare:
* An explanation of the elements of a business plan
* An explanation of why a business plan is needed
* Explore start-ups, expansions, relocation's, and franchising elements
* An analysis of the financial aspects of going full-time
* What do bankers, lenders, or investors want in a business plan
* Advice for how to present the business plan to bankers, lenders, or investors
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Solution Summary
This solution explains how to create a business plan in detail including an outline, a financial plan, marketing aspects, different types of businesses, etc.
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The business plan is a written proposal that identifies the intended company, analyzes the business situation, lists planned operations, and projects financial data. It puts your business ideas into written form. Planning is critical to a successful business. Types of plans vary according to the needs of the business. For example, plans may be long-term and/or short-term; simple or complex; detailed or general; lengthy or brief. The specific needs of the business should include: purpose and objectives; expansion or curtailment strategies under consideration; possible new products; financing needs; and identification of problems and potential solutions.
The primary purpose of business planning is to ensure profitability. Planning helps you determine the purpose of the business. It also helps you know where you are, where you want to go, and how to get there. A plan gives you a path to follow as you seek your goals. It provides details for potential lenders to examine. Lenders must gain insight into your situation before deciding whether or not to lend you money. The business plan serves as a communication tool to consultants, advisers, investors, future employees and suppliers who need to learn about your operation and objective. Collecting data causes you to discuss your proposed business with specialists in your field of interest.
Banks and other lending institutions vary in their business requirements. Lenders are taking a risk when they lend money to a new business. Therefore, the plan must convince them that your business has the potential of a making a ...
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