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The benefits of having a business plan

An overwhelming percentage of new small businesses fail within few years of operation. There are a variety of reasons why a business might not be successful but the majority of companies that do find longevity have one thing in common: a business plan.

They began with a clear plan and sought expert advice from authorities that could provide valuable guidance. Here are several benefits to developing a professional business plan for your company:

Attract capital investment

A business plan is a must if you're hoping to attract investors to your business in any form. Whether you are interested in applying for a small business loan with a bank, looking for angel investors, or perhaps a joint venture, potential investors are going to want to see a detailed business plan. A business plan includes information about the company's products and services, its management team, and its financials.

The financial reporting details the current state of the company and includes projects for up to five years. A useful guide is to review the Form S-1 that companies must file before they go public. As this is often an involved process, many businesses and entrepreneurs elect to have a professional assist in developing their business plan.

Identify hidden issues

Business plans can help a company identify hidden issues and opportunities for the company. For example, real estate deals or lease negotiations can be complicated matters and ones that can make or break a new business. The same holds true with new supplier agreements and avoiding employment law mistakes. Having an attorney assist with the development of your business plan provides several benefits in this area, including hidden opportunities for negotiation are identified and guidance about the best course of action for the future success of the business.

A useful planning tool

A formal business plan is one of the best planning tools for your company's future. Financial projections are laid out for several years and, as the owner, you can track these to determine whether or not you are on course. If you're not, it may be possible to make adjustments to business operations before it is too late. Without a written plan, many businesses don't know that they're in trouble until it's too late.

Few businesses can operate successfully without some sort of formal plan. The benefit of having a professional business plan developed with your attorney's guidance is that your company can attract more investors and identify opportunities for your business that may otherwise go unnoticed.

1 Comment

My brothers are planning on starting up a business soon. I like how you explained that a business plan can help to attract investors to a business. I hope that sharing this article with my brothers can convince them to hire an attorney to make a good business plan.

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