The number of business ideas scratched out on napkins or filling the pages of would-be- entrepreneurs’ notebooks is surely vast. Still, even though many people have ideas for businesses, only a select few manage to create something profitable.
The logical step after the napkin is developing a formal business plan, but many people often stop at creating a simple outline when they can and should do so much more.
A good business plan lays out the strategy and budget that can effectively transform an idea into a real-life, money-making reality. It’s the foundation you can build on and the roadmap you can follow to your goals.
And, of course, your business plan is a significant tool for acquiring funding.
Your Business Plan Should Help You Walk the Walk
When Palo Alto surveyed its Business Plan Pro software users, those who had completed a business plan were almost twice as likely to obtain capital and grow their business as those who did not have a business plan. That’s because anyone who chases money through official channels — bank loans, venture capitalists, or angel investors — will need to point to their plans as proof of potential.
If you have received all the funding you are likely to get from friends and family, pursuing angel investors can be a great next step. But unlike your relatives who will love you even if you fail, angel investors will expect to see evidence that investing in your business will be profitable down the line.
And if you pursue venture capital firms, be prepared for competition; you’ll have to stand out among hundreds of pitches. A well-researched, eye-catching business plan will give you that extra boost.
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