Ask
loan officers in any financial institutions
in Trinidad and Tobago:
What is your biggest obstacle to approving
commercial loans for small and medium sized
businesses?
Answers will vary slightly but they will
all agree that most small businesses do
not have a written business plan. That fact
makes it difficult to approve many small
business loans.
But ask any small business owner and they
will tell you, that they do have a plan
in their heads. For example, a taxi driver
will say: “My plan is simple, I start
working at 7 AM dropping passengers from
point a to point B then at the end of the
week I have $2500. I do it 6 days a week
and I rest on Sundays.
Some small retailers would say, “I
buy stock from the US and Japan, mark it
up and sell thousands of dollars worth of
clothing every day. Occasionally, I have
a sale and with the average turnover, I
make approximately $25,000 per month. The
only plan I really need is when to repurchase.”
Businesses that operate like that will sooner
or later experience cash flow challenges.
So the big question becomes…
Why do you need a business plan when you
are making money without one?
In Trinidad and Tobago thousands of businesses
in the various sectors such as; manufacturing,
small and large retailers, agri-businesses,
professional services, restaurants along
with the service and entertainment industries
all operate without a business plan.
The simple answer is; if the business is
doing so good without a business plan, imagine
what it would do with one.
Historically, most businesses are doomed
to failure within the first couple of years
and most business owners give a similar
reason for their failure; lack of funding.
Few ever realize that their failure is really
because of a lack of a proper business planning.
As our economy surges forward thousands of new entrepreneurs are coming up with...
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