01. To make the business idea clear
A business plan gives details about the proposed goods or service to be
offered and its uniqueness, to the persons who are interested of the business.
02. To understand the business environment
Business environment keeps on changing all
the time. Changes occur in the internal
environment of a business, as well as in the
economic, social, political and technological
conditions and the natural environment. All
of these changes can be identified early through
business planning.
03. To guide the business
It indicates what activities should be done by each party involved in the
business.
04. To indicate the future direction of the business
The business plan clarifies what status the business should achieve in future.
05. To raise the necessary funds
Investors prefer to put their money into profitable ventures. A business plan
displays the proposed activities and expected benefits of the business. A
business plan is essential for organizations such as banks when making
investment-related decisions.
06. To make a good estimate of the demand
The market demand is a main factor determining the success or failure of a
business. It is necessary to be well aware of the competitors and substitutes, as
well as their market share and strategies; and to form suitable strategies to
face them. All of these require planning.
07. To identify the resources required for the business
A business plan identifies the physical and human resources necessary for
business activities.
08. To find out the success of the business
If you forecast your business activities before starting up the business, you
can see what outcome you will be getting by the end of a given period of time.
If you have successfully forecasted your business plan, you can understand
today whether your business will be a success or a failure in future. This will
help you to face future uncertainties successfully.
09. To get an overall image of the business
A business plan gives details about the various activities of the business for
a given period of time in future. So it provides a clear view of how the business
will be in future.
