The importance of a business plan

8/2/2011

Drafting a solid business plan is essential for all small businesses, whether just starting a new venture, expanding an existing company or maintaining organized operations and management.

The U.S. Small Business Administration recommends drafting a business plan before looking for financing or applying for SBA backing. Financiers will want to see as many details as possible on a prospective investment, and presenting a well-prepared plan creates a professional image and the kind of business savvy that leads to success.

According to an L.A. Times report, Barbara and Greg Gerovac, owners of the Anaheim Brewery in California, revised their written plan before being approved for a loan.

"They looked at the construction bids," Barbara told the paper, "and, same thing, came back and said, 'You know, I think there are some equipment costs you can get some more solid numbers on."

The couple did receive funding for their wholesale and retail beer business once they reworked their business plan. Not only were they able to procure the commercial loan they needed, they likely entered their business venture armed with more information vital to success - the figures and estimates necessary for the bank's approval were also important pieces of the business finance and operations puzzle.