Planning for Success Pierre SD

Posted by : Joe Farace

Undercapitalization and poor cash flow cause more small-business failures than any other single factor. The best way to stave off those inevitable cash flow peaks and valleys is to have a sufficiently large line of credit with your bank. If this is your first business loan application, or the amount you're asking for exceeds your current credit line, the bank expects more than a neatly filled-out credit application. The bank may, in fact, request a copy of your current business plan. Even if it doesn't, it's a good idea to include a business plan when asking for money for expansion, new equipment, or a line of credit sufficient to level out irregular cash flow.

If you're put off by the prospect of preparing a business plan, don't be. A business plan is simply a comprehensive report that tells the bank (or anyone else who's interested) about your operation's goals, marketing strategies, and financial strengths. Even if you're not applying for a loan, sitting down and preparing a formal business plan forces you to analyze in depth your operation's strengths and weaknesses. I've found that establishing goals and objectives--and writing them down--makes them easier to achieve.

Some SOHOers may see a business plan as a destination. It's not; it is a journey. You have to supply the vision behind a new venture or product line. A business plan is merely a tool that helps you make decisions. It helps you analyze your goals and lets you know i...

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