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Importance of a Business plan and Issues with Start-up

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Importance of a Business plan and Issues with Start-up

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Answers obtained from SBA online, Quicken small Business site, and Entreworld.org.

1. What is the purpose of a business plan, and why is it an essential first step for a start-up firm?

A business plan closely describes your business, analyzes your goals, and functions as your business's resume. It helps you designate resources properly, handle unanticipated dilemmas, and make good business choices. The importance of a compendious, cerebral business plan cannot be overemphasized. A lot depends on: outside funding, credit from suppliers, management of your operation and finances, promotion and marketing of your business, and achievement of your goals and objectives. If you are approaching a banker for a loan for a start-up business, your loan officer may recommend a Small Business Administration (SBA) loan, which will necessitate a business plan.

Motives for writing a business plan include: to support a loan application, raise equity funding, define objectives and describe programs to achieve those objectives, create a regular business review and course correction process, define a new business, define agreements between partners, set a value on a business for sale or legal purposes, and evaluate a new product line, promotion, or expansion. A business plan should confirm that your business will produce sufficient revenue to swathe your expenses, but a business plan may vary depending upon who your audience is. If you are proposing a plan for your colleagues and partners, for example, to swell an existing business, then the focus of that plan may be more operational than financial. A great business plan is the best way to show bankers, venture capitalists, and angel investors that you are worthy of financial support. Make sure that your plan is clear, focused and sensible. Then demonstrate to them that you have the utensils, talent and team to make it happen.

2. What are some of the sources for financing that these websites recommend exploring?

Grants...