Business Plans and the Future of Your Business Venture Part I

Every one in the business world needs a document where he/she writes his/her path to success. This document is called: business plan. In a business plan you must write all the aspects of your future venture. Here you must write what it is the overall strategy to succeed. For example there are parts where you must detail your marketing plan, here in this part you write how are you going to get clients for your business, what will be the cost to reach your audience, how many competitors you have, what it is your competitive advantage, and many other important aspects.

Now let's go to the financial plan in the business plan. This is a very important part because here you are going to demonstrate how smart you will be with your money or with the bucks you will get from your future investors or bankers. Here in the financial plan you must write what will be the capital structure, with structure we mean what will be the relation between you own money or the money of your investors and the money from debts.

You must be clear, when you write your financial plan, that you will not spend cash to pay debts to your investors, because they are literally giving you the money, but you must use it wisely. They are giving you that money because you signed a contract to give them part of your business, let's say a 10%, or 5% in shares also called stocks.

When you acquire debts from bankers or any other lender, you must be very smart investing and spending that money you got from hose institutions. You also must check your ratio between debts and capital. If your debts are 80% of your business capitalization then you are in serious trouble.