Wealth Management

Voted #6 on Top 100 Family Business influencer on Wealth, Legacy, Finance and Investments: Jacoline Loewen My Amazon Authors' page Twitter:@ jacolineloewen Linkedin: Jacoline Loewen Profile

April 25, 2011

Think you do not need a business plan?

That question of just how necessary a business plan is and the value it adds is often raised by company owners. 
It is true that for the entrepreneur, the business usually starts with a half-baked idea and a written plan seems restricting and premature. If the venture needs to raise money beyond a good friend's budget or your uncle's finances, then you will need to find an Angel who may be an executive with extra cash, a group of professional investors or a Venture Capitalist. 
Then you absolutely need the plan as a key indicator that you are serious. It is selling your financial competence. 
Here is what a financier will be thinking:

1) How do financiers know it is credible, or profitable?
2) How seriously will I take you as an entrepreneur if you believe you don't need a plan?
3) Show me your cash flows, and explain when I get my money back.
4) What is your organic/inorganic growth plan?
5) Explain your competition's strengths, opportunities, technology, and the role of offshore outsourcing options.
6) John Smith has exactly what you are proposing - why should I fund you instead of him?

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