“It’s fine to celebrate success but it is more important to heed the lessons of failure.”
~ Bill Gates
In continuing with this week’s theme about the importance and benefits of business planning, today’s business plan benefits are as follows:
- To document your revenue model. How exactly will your business make money? This is a critical question to answer in writing, for yourself and your investors. Documenting the revenue model helps to address challenges and assumptions associated with the model. And upon reading your plan, others may suggest additional revenue streams to consider.
- To determine your financial needs. Does your business need to raise capital? How much? One of the purposes of a business plan is to help you to determine exactly how much capital you need and what you will use it for. This process is essential for raising capital for business and for effectively employing the capital. It will also enable you to plan ahead, particularly if you need to raise additional funding in the future.
- To attract investors. A formal business plan is the basis for financing proposals. The business plan answers investors’ questions such as: Is there a need for this product/service? What are the financial projections? What is the company’s exit strategy? While investors will generally want to meet you in person before writing you a check, in nearly all cases, they will also thoroughly review your business plan.
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Today’s Question: What is the term given to a retail store in which manufacturers sell their stock directly to the public through their own brand?
Previous Question: The discovery of Metallica’s song “I Disappear” on a file sharing network in 2000 started a chain of events that led to the demise of the original incarnation of what company?
Answer: Napster. This was the discovery that helped bring the illegal sharing of mp3 files to the spotlight. This initial battle between music producers and consumers has since led to several innovative compromises—music services such as iTunes, Pandora, and Spotify.
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