Contrary to popular belief, business plans do not generate business financing. True, there are many kinds of financing options that require a business plan, but nobody invests in a business plan.
Investors need a business plan as a document that communicates ideas and information, but they invest in a company, in a product, and in people.
Small business financing myths:
Venture capital is a growing opportunity for funding businesses. Actually, venture capital financing is very rare. I’ll explain more later, but assume that only a very few high-growth plans with high-power management teams are venture opportunities.
Bank loans are the most likely option for funding a new business. Actually, banks don’t finance business start-ups. I’ll have more on that later, too. Banks aren’t supposed to invest depositors’ money in new businesses.
Business plans sell investors. Actually, they don’t well-written and convincing business plan (and pitch) can sell investors on your … Read More