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"DONE DEAL - Eclector builds, hosts and manages online bookstores for brands with traffic: not-for-profits, businesses, bloggers and social networkers."
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3 Ways Business Plans Get You Funding
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When most entrepreneurs need funding to start or grow their business, they quickly learn one key fact: they need a business plan.
Note: This chart is based on no real research whatsoever. Which means, there are no guarantees to get financing, even if you have an awesome business plan.
Like you need a resume to apply for a job, and a completed application to gain admittance to a university, business plans are required to apply for business financing.
And like resumes and college applications, business plans are viewed as a necessary evil by most entrepreneurs.
Yet, this shouldn’t be the case. Because unlike completing your resume or college application, the process of completing your business plan has been proven to improve your success — not only in gaining funding, but when executing on your business.
With regards to getting you funding, here’s why business plans are so critical. To begin, funding sources are used to reviewing written company materials before investing. In the public markets, they review annual reports and other financial filings to determine the health and prospects of a company and whether or not they should invest.
And the same holds true when assessing private companies like yours. You need to present a business plan that paints the right picture of your business: one that gets investors and lenders excited to work with you.
Importantly, you should look at your business plan much like a public company’s annual report. If you look at an annual report, you’ll quickly notice that it’s much more of a marketing document than a research report. Annual reports include nice pictures and graphics, they highlight the company’s top accomplishments, and they paint a pretty picture of future prospects.
That’s not to say that your business plan shouldn’t be more sober, and include information about worthy competitors. It should. But it shouldn’t be a massive data-dump; but rather should paint a positive picture regarding how and why your company will be successful in the future.
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