Business Plan FAQ
Q: What is a business plan and why do I need one?
A: A business plan precisely defines your business, identifies your goals, and serves as your firm's résumé. Its basic components include clear description of the company, market and management information, a current and pro forma balance sheet, an income statement, and a cash flow analysis. It helps you allocate resources properly, handle unforeseen complications, and make the right decisions. As it provides specific and organized information about your company and how you will repay borrowed money, a good business plan is a crucial part of any loan package. Additionally, it can tell your sales personnel, suppliers, and others about your operations and goals.
Q: Why do I need to define my business in detail?
A: It may seem silly to ask yourself, "What business am I really in?", but some owners and managers have gone broke because they never answered that question. One watch store owner realized that most of his time was spent repairing watches, while most of his money was spent selling them. He finally decided he was in the repair business and discontinued the sales operations. His profits improved dramatically.
References:
• Small Business Administration
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