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Need for a Plan

Every organization needs a well thought out and documented business plan in order to create strategies for the future and attract capital, as well as provide a template for daily operations. Unfortunately, the vast majority of organizations, particularly small companies, have written very little about their operations, objectives or strategic goals.

In most cases, the catalyst to create a plan occurs in conjunction with the need to raise capital, complete a merger or acquisition, or establish a joint venture. Investors, creditors and partners want to know that the capital they invest in, or lend to, an organization, is going to be protected, and that the investment return they expect has a reasonable chance of occurring.

The difficulty is that the organization seeking capital may have an urgent and time sensitive need and often must scramble to formalize and document operating procedures and strategies. This leaves very little time for a thorough process of review and revision. Clearly, the earlier in the life of an organization that a plan is created the better. Nevertheless, even if the time frame is tight, creating a plan is always of value. The old adage rings true for every organization: Failure to plan is a plan to fail.

For those organizations with the foresight to create a business plan even before the need for capital forces a document, there are a variety of benefits.

First, a plan creates a guideline for day to day operations that all key managers and staff can follow. A well written plan minimizes discrepancies with operating philosophies and provides clarity for all those who must carry out the daily tasks.

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