TIP #3: The Business Blueprint
Your business plan isn’t just a formality; it’s the map to your success. Failing to create or update it could derail your dreams. A solid plan attracts investors and keeps you focused on your goals. This is tip #3 in our top 10 list of ways to avoid legal pitfalls—let us help you avoid them all.
At the formation stage and throughout the life of a business, the business plan provides a vision of the goals of the business and the capital required to meet those goals. It is a document which is relied upon by investors and creditors when making decisions to invest or lend money to the business. For this reason, representations made in the business plan must be carefully scrutinized by the business owner, as well as legal and financial professionals. If a business fails and litigation ensues, representations in the business plan often play a large role in determining the liability, if any, of the promoters of the business and/or its owners.
Equally important, the business plan serves as the company’s road map to success. The most often cited reason businesses fail is lack of capital. A good business plan accurately determines the capitalization needs of a business. Experienced investors and creditors will always carefully examine a company’s business plan prior to investing or loaning money to a business. As well, a good working relationship with your banker, established at the onset, is an invaluable resource to assist in meeting the financial needs of a growing business.