Articles about creating business plans tend to focus on plans for new businesses. However, while most new businesses require business plans, existing companies may require them as well. Sometimes this is to seek additional funding for an expansion of the business or to take advantage of an opportunity. Sometimes these are internal business plans used to focus the management and staff of the company on the same goal and to better inform everyone not only about what the company is, but about what it wants to be.
Similarities Between Business Plans For New and Existing Businesses
Both types of business plans should cover the customers the company will target and the competitors it faces. Both should detail the marketing and operations plans for the business. Both should delve into the financial targets for the business, on both the revenue and cost sides. This information presents either funders or employees with a clear idea of what the business intends to do.
Differences Between Plans For Existing and New Businesses
Whenever a plan must be presented to external funders for consideration it must be a formal document, carefully formatted and proofread thoroughly. However, for existing businesses preparing a business plan for internal use only, the level of formality can be relaxed a bit. While the format and order of a business plan should serve an internal or external plan well, there is not a requirement for an internal plan to stick to this structure.
Furthermore, a business plan for an existing business should include actual financial statements along with pro forma statements. This allows for pro forma statements to be based both on plans for future activities as well as reasonable extrapolations from past performance. New businesses have no financial records to pull from and can only take educated guesses based on the market they are entering.
Eric Powers is associated with Growthink, a business plan consulting firm. Since 1999, Growthink's business plan consultants have developed more than 2,000 professional business plans for entrepreneurs and business owners who have raised more than $1 billion in growth capital.
