Your business plan isn’t something you’ll spend a lot of time crafting then just have it sit in the drawer or a folder on your desktop. It’s a document you will find yourself showing to a variety of parties. Here are a few groups of people who like to see business plans.
Investors Want to See Your Business Plan
The first group of people who like to see your business plans are potential investors. Whether it’s your local bank, a venture capital group, angel investors - it doesn’t matter. Anyone who is putting skin in the game wants to make sure they’ll get paid.
Is a business plan a guarantee they’ll be paid? No of course not. But it does show that you’ve done your homework and are conducting your business methodically. You won’t operate willy-nilly. You have a plan for how you’re going to grow your business and use the capital that comes in.
Don’t think your company needs investors? Maybe not - but you never know. The fastest way for companies to grow is to borrow money. You don’t want to close the door to rapid growth, do you?
Leadership Likes to See Business Plans
As your company grows, you’ll hire top talent to run it, right? From supply chain and operations to accounting and marketing, growing companies need an ever-increasing number of employees to manage all of the daily tasks.
Your leadership team wasn’t born yesterday, and they want to make sure they’re joining a winning company. While having a business plan isn’t a sure-fire way to help them feel comfortable with the direction of the company, at least they’ll be aware.
Plus, business plans tend to evolve over time. By having your leadership team involved and reviewing the business plan, they can offer recommendations on how to improve it. Maybe your marketing lead recommends a different target market to add into the plan. Perhaps your operations team has determined a new partner to work with that will save the company a lot of money. Keep your leadership team involved - you’ll be glad you did!
Potential Parent Companies Want to Review Your Business Plan
The dream for a lot of small business owners is to eventually be bought out by a bigger company. This is very common these days, because the fastest way for a big company to grow in a new category is to purchase a company that’s already winning in that space.
For example, let’s say your company is doing very well in a new niche drink. Drink brands is Coke’s specialty - wouldn’t it be nice if they bought you out?
The thing is, a company won’t buy yours unless they see a business plan. Mergers and acquisitions are long, expensive processes. Part of that process is the parent company making sure the smaller one is worth buying.
If you don’t have a plan, how much confidence will the potential parent company have in yours? Probably not very much!
Having a solid business plan is important. Give us a call at 714-663-8000 and we’ll help you draft one that is interesting, thorough and gets results.