A business plan is an essential document that can provide focus and direction for a company. It is also an essential document to have when asking for a loan or for an investor’s money. There are four types of business plans that one can depending on its needs.
The first plan is called the mini-plan and gets right to the point without excessive information. This plan is designed to be read quickly and easily by an investor or a potential lender. The working plan is similar to the mini-plan as it gets right to the point and leaves out information that the company already knows about itself. A working plan is best for internal use and is typically used to guide the company as it grows.
The “what-if” plan is similar to a working plan. It helps a company determine what to do in the event of a worst-case scenario, such as a manager leaving or a significant decline in market share. The final type of commonly used business plan is the presentation plan. It allows the company to show and tell an investor or lender why their money is safe within that company. At times, a presentation is preferred as it can better convey the benefits of collaborating with a business.
Prior to beginning business operations, it may be worthwhile to create a business plan. Once the plan is created or before it is finalized, it may be worthwhile to talk to a business law attorney. An attorney may be able to review the plan and offer advice as to how a company should proceed to adhere with any state or federal regulations. An attorney may also be helpful when a company is ready to seek investors.
Source: Entrepreneur, “The 4 Types of Business Plans“, December 22, 2014
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