Importance of a Business Plan

By SistasExpress

You are not guaranteed success when you start a business. You can increase your chances however, if you write a business plan. Planning requires a lot of strategic thinking. Think about the following:

• What will make your company or business successful
• What are the risk assoicated with your business
• Who is the competition
• How is the competition successful
• You must work your business everyday to keep a competive edge
• Always look for other ways to take advantage of your best skills

When you write your business plan keep in mind who is going to read it.

Business plans are good for raising seed money for your company. There are different types of money for new and developing companies. The type of financing you apply for has specific language that applies to what stage you are in the develpment of your business. Here as just a few;

• Seed money - this is money you need to need to demonstrate that your basic business is firm and has the potential to generate a lot of money
• Start up money - THis is money on the intial level of investment so you can get your business up and running. These funds help you organize your business. You can test your products with these funds.
• First stage money - additional money the appears after you start up money is used up. These funds are used to support growing your business
• Second stage money - is money raised when you are further along in your business, and the business has a proven track record. These funds are generally used to expand a business
• Mezzanine money - I know, I thought of it too, theater!! No, this is the in between level of investment money. This is where a business in between a regular business bank loan or equity investment
• Bridge money - These are funds to help a business through rough spots, to smooth out your business low cash flows before a public offering. This smooths things out until the public offering is completed-this is stock offering. Your business is really pumping if you can do this, don't you think?

You see a business plan can help you achieve a lot of things important to your business. So please take the time write a business plan. Be organized and start good habits first, and you will not have to worry about correcting those bad habits while creating your business.