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A good business plan should outline all the costs and the downfalls of each decision a company makes.
The idea behind putting together a business plan is to enable owners to have a more defined picture of potential costs and drawbacks to certain business decisions and to help them modify their structures accordingly before implementing these ideas.
It also allows owners to project what type of financing is required to get their businesses up and running.
Sometimes, a new business plan is prepared for an established business that is moving in a new direction.
A business plan is a fundamental tool any startup business needs to have in place prior to beginning its operations.
These business plans are short—as short as one page—and have very little detail.
If a company uses this kind of plan, they should expect to provide more detail if an investor or lender requests it.A complete business plan must include a set of financial projections for the business.These forward-looking projected financial statements are often called pro-forma financial statements or simply the "pro-formas." They include the overall budget, current and projected financing, a market analysis, and its marketing strategy approach.These tend to be much longer and require a lot more work.Lean startup business plans, on the other hand, use a standard structure even though they aren't as common in the business world.Any information about research and development (R&D) can also be included here.Financial planning: In order to attract the party reading the business plan, the company should include any financial planning and/or projections.For example, Tesla Motors.'s electric car business essentially began only as a business plan.A business plan is not meant to be a static document.In fact, very few companies are able to last without one.There are definitely more benefits to creating and sticking to a business plan including being able to think through ideas without putting too much money into them—and, ultimately, losing in the end.