It communicates
your understanding of the business and it makes reasonable assumptions and
forecasts of sales, expenses, and cash flow.
When writing your business plan, it is important to keep in mind for whom you are
writing it. If you are writing a business plan for an investor or a bank you should
assume that they know nothing about your business and industry. Also, keep
your business plan short and to the point. If you were a loan officer, would you
rather read a sixty-page plan or a seven-page plan? Bankers and investors want
just the facts – all of the facts – but just the facts. If, on the other hand, you are
writing a business plan just for yourself, you should construct it to suit your
needs. It should indicate your goals and what strategies you will put in place to
achieve the goals.
If you are writing a business plan for an investor or a bank, the following
information and format is recommended (Note: This information is also important
for an informal business plan).
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