What is a Business Plan?
Technically speaking, a “Business Plan” is an extended document with a broad market analysis, a description of the different competitors, and how a company (or project) is going to become a key player.
This document describes how a company is going to perform.
One of the most important parts of this “document” is the “Business Projections”.
- It reflects all these assumptions; strategies and actions to take place.
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Usually in Venture Capital companies or Banks, this document (Business Projections) is called “Business Plan”, because it is what you must “quick-view” in order to assess the “attractiveness” of a certain project.
* Example: Imagine that you have to assess 10 projects in one month; all of them with similar approaches. What would you do?
- Check their numbers, and ask for more data from those with better projections.
So, that is why, in general, we will call “Business Plan” to the Business Projections. Because practically everyone calls it that way.
Why are Business Plans so important?
“Plans are of little importance, but planning is essential“. – Sir Winston Churchill.
After years advising and restructuring broken companies we have seen all kinds of possible mismanagement, but not-planning could be easily pointed as the “Number 1” mistake.
By developing a proper Business Plan, you get ahead of what might happen to your Company.
In this section, we will propose you different Tips while developing a Business Plan, but you should never forget this 3 rules:
- The more data you have, the better.
- Growth projections must be justified.
- The more scenarios you forecast, the better.