It is logical, and a standard practice, for an entrepreneur to develop a business plan for his/her new business venture. As a matter of fact, it is impossible to obtain venture capital or a loan from the bank without a business plan – over and above the clear benefits of performing pro-active business planning.
The objective with a business plan is, among other things, to describe, identify and plan the business venture in detail – from the business opportunities, activities, legal structure, organizational structure, market, vision, mission, suppliers, marketing plan, financial planning and forecasts etc. etc. Focus is placed a lot on the product and the opportunities in the market – as well as the financial forecasts.
Unfortunately, too many business owners start their businesses without giving a second thought to the potential pitfalls (the inherent risks of the business venture) in the business plan! This is a part which is often neglected.
In other words, little or no attention is paid to the potential business risks – i.e. ANYTHING that has the power to eat your profits, i.e. any event, action, decision, lack of action or decision as well as any circumstance in- or outside of your business that causes or could cause PROFIT EROSION. Business risk is a generic term for the many causes/factors/threats that have been identified thus far as reasons for business failure - no matter whether these causes were of strategic, operational, financial or legal nature.
Regardless of whether you already operate a business or plan to start one, you will be in a better position to obtain venture capital for your business by developing a business plan in which you can show the bank or venture capitalist that you have identified your business risks and how you are planning to deal with it in order to grow.
This will prove to them that you are not only dreaming about business success, but that you are standing with both feet on solid ground by acknowledging the fact that you do face risks and that you have planned to deal with it.
In other words, that you have identified countermeasures to protect their investment capital and your profits against the negative financial impact of the business risks you are facing.
For this reason we have decided to assist small and medium business owners in profiting from their business risks TOO (i.e. by preventing profit loss) - by helping them change their patterns of thought. They need to change the way they are thinking about and dealing with their business risks, threatening their businesses' existence, future and growth! It must be done at strategic, operational, financial and legal level.
Let me know what you are thinking about this!
Another reason for a business plan - To learn more about this author, visit Michiel Jonker's Website.
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Michiel Jonker
(Visit Michiel's Website)
As a Certified Information Systems
Auditor, Michiel assists businesses in a
professional capacity by evaluating the
threats to their businesses. He acquired
the necessary knowledge, skills, and
techniques to minimize a business owner’s
risk of business failure and to maximize
his chances of high growth and success. He
strongly believes that you CAN maximize
your chances of business success, by
implementing the business solution he has
advocated for more than 12 years.
Michiel has decided to share his
experience with business owners by putting
almost everything he knows in a business
survival manual (compiled in an e-book
format) and written as a high growth SMB
coaching course for SMB business owners,
directors and managers - titled as the
“Survival Kit for Small and Medium
Businesses - Profit from your Business
Risks!” According to Michiel, his goal was
to add new techniques to a business
owner’s business survival kit and instruct
him or her in using these in the future -
without any help from a consultant! For
more information about the benefits of
implementing profit protection planning in
your business, please visit: www.business-around-the-globe.com
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