The reality test that a business plan must pass to attract financing from lenders and
investors involves proving that a market for the company’s product or service actually
does exist, and that the company actually can build it for the cost estimates in the plan.
Because a majority of the average company’s sales come from present customers, few
can afford to alienate any customers.
The due diligence process in analyzing and evaluating an existing business can be just
as time consuming as the development of a comprehensive business plan for a start-up.
When an employee in a business treats a customer poorly, that customer usually does
not complain; however, she does tell her “horror story” about that business to more than
10 other people.
A firm’s strategy must focus on establishing for the firm the key success factors the
entrepreneur has identified for the industry.
By studying the demographics of a proposed location, a small business owner can
determine how well it matches the market for the owner’s product or service.
A power center combines the drawing strength of a large regional mall with the
convenience of a neighborhood shopping center.
Financing the purchase of an existing business usually is easier than financing the
startup of a new one.
Measuring the success of its Web-based sales is not essential because customer tastes
and preferences are always changing.
A well-prepared business plan forces an entrepreneur to assess the venture’s chances of
success more objectively.