Entrepreneurial Finance Essay Example | Topics and Well Written Essays - 2000 words

Entrepreneurial Finance - Essay Example ing the relevant external and internal elements which are involved in new business startups it answers the questions such as where the organization stands right now, which direction is it going in and how to get there. It acts as a resume for any proposed business and is usually created to explain the vision and entrepreneur has for his business. A business plan is read by investors, employees, bankers, venture capitalists, customers, suppliers and advisors. Every stakeholder has a different perspective and interest in the business and so the content and focus of a business plan depends upon who is going to read it. For a profit organization, a business plan typically focuses on the financial goals such as profits. It comprises of the industry dynamics, company’s vision and mission, the resources required to run the business, the amount of capital needed, the sources of capital, the production and marketing plan and the pro forma financial statements to determine the expected profitability of the company over time. In short, it is a complete document consisting of all the information related to a business. A business plan is valuable not only to an entrepreneur, but to potential investors or even the new personnel who want to familiarize themselves with the venture, its goals and objectives. Following are three major roles of a business plan: The financial assessment of a business is an important activity which must be carried out on a continuous basis. It is done to identify if the business is solvent, that is, if its assets exceeds its debt and thus making the business capable of paying to all its creditors on time. Secondly, it helps entrepreneurs of investors to estimate the equity value of the company at any given point in time. A business is considered a financial success if it meets the following criteria: The financial plan of a business is the section in the business plan which determines if the new business venture is viable or not, or if it would be