Describe the business plan and the start-up decisions made by small businesses.

The starting point for virtually every new business is a business plan, in which the entrepreneur summarizes business strategy for the new venture and shows how it will be implemented. Entrepreneurs must also decide whether to buy an existing business, operate a franchise, or start from scratch. Further, common funding sources include personal funds, family and friends, savings, lenders, investors, and government agencies. Venture capital companies are groups of small investors seeking to make a profit on companies with rapid growth potential. Angels are private investors who make money available to new ventures in return for a share of the business. Most of these firms and individuals do not lend money but rather invest it, supplying capital in return for partial ownership. Lending institutions are more likely to finance an existing business than a new business because the risks are better understood.