Definition of a business plan

Essay by grimesyUniversity, Bachelor'sA+, October 2004

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A business plan is a written document that articulates a business concept, market

potential, opportunities, growth strategies and financial requirements. (William Clark, A business plan should start with a simple statement of purpose

describing the following:

- The amount and type of loan required.

- The amount of money you are putting in (cash or equity).

- The period for which the loan will be outstanding.

- The purpose of the loan.

- The impact the loan and purpose will have on the company.

- The collateral that will be used to support the loan.

(William Motz,

A business plan is essential because it's an excellent opportunity to guide a start-up or

existing business. It forces the founder to consider every facet of a proposal business or growth

idea and places approval and funding decisions on paper, where they can be evaluated and

considered by all interested parties.

There are many different sources of financing for small business 's, some of them include

the most popular which is the line of credit financing, which is short term financing usually

granted by a bank up to a predetermined limit, debtor borrows as needed up to the limit of credit

with out need to renegotiate the loan. Lease financing is also available which would only apply

if you were financing the acquisition of plant or equipment by leasing it rather than buying it.

There is also asset based financing which is financing an enterprise by using its hard assets for

collateral to acquire a loan of sufficient size with which to finance operations. Another is royalty

based funding. This usually refers to financing for small companies that is secured and repaid

with royalties. Venture capital is another option. Money from investment pools or firms that

specialize in financing young companies'...