Antonio is an entrepreneur who is working on introducing a new gym in the Boca Raton market. He is aiming this gym to an older population taking advantage of the expected growth of this population in the U.S.A. Antonio will need some capital for this. Rita is a partner of a successful export company that sends heavy machinery to Latin America for construction, and she thinks it would be an excellent idea to open a chain of shops in the countries of interest to provide regular maintenance for the machinery; even though she knows she has the funds necessary for this, she still needs the approval of her business partners. Francisco, an avid entrepreneur, owns a Venezuelan restaurant in Doral and is considering opening a second business in Pembroke Pines. Francisco is asking his cautious brother Martin to move to the US, so he can help with the new store in Pembroke Pines since Martin has the capital and skills required for the new business.
What do Antonio, Rita, and Francisco have in common? They all need a Business Plan. All businesses, from the one expanding internationally to the ones that are still in the idea phase, require a business plan. A business that is already going can discover the power of such a tool in order to elicit a change, to adapt to the current market needs, to the new demands of the current clientele and to ensure the future viability of the business. A business plan can also help with breaking stagnation and recovering momentum.
The business plan fulfills multiple fundamental purposes for any business, amongst them we can mention:
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It is a management guide; it can provide a map on how to successfully navigate the competitive environment of the American market.
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It is a necessary component of any financing application, be it a bank, private investors, or friends and family, as a business plan clearly shows the thought process behind any financing request, the execution of the entrepreneur’s vision for the business, associated risks, the team that will accompany such execution, and most importantly, your capacity to repay a loan or the return investors will achieve on their investment in your business.
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If you are applying for a US Visa, the plan is the source of information for the immigration department to estimate your probability of success on a business idea and how granting you such Visa will benefit the American economy, exports, etc.
I can accept that the “All Powerful” qualifier can be a daring one. Nevertheless, I feel that it is justified to add it to such a fundamental tool like the business plan. If we go read through, which is strongly recommended, the Small Business Act, we can evaluate the importance that the US government puts on a small business being able to develop and implement a business plan in order to access financial and managerial help from the Small Business Administration.
The biggest value that a business plan can add is that it is the result of a structured mental exercise that the entrepreneur will need in order to make a small business successful. The active participation of the entrepreneur in its assembly is key as it shows a capacity to commit and carry forward what was agreed upon.
Completely delegating the business plan to an external adviser od consultant, without the entrepreneur getting fully involved in its development, will produce a document that, while it might achieve certain purposes, like acquiring financial assistance, will end up collecting dust in a shelf somewhere. It will hold no value as you will have no commitment to it. On the other hand, any professional adviser will demand active participation from the investor when developing a business plan, for it to acquire its full worth.
While preparing the “all powerful” business plan, the entrepreneur will bring, as a minimum, the idea, knowledge of their project, the vision for the business, management style, business enthusiasm and level of commitment. The adviser will provide the methodology and structure that will help create a product that is valid, achievable, and viable. The adviser will also provide the experience, information, and knowledge of the current market, economic, and political environment, of current legislation and most importantly, the neutral position that will allow correcting any bias the enthusiasm and passion that the entrepreneur might bring to the table.
In brief, it is difficult to put a value on the importance of a business plan; which makes the “all powerful” adjective not quite as daring.