Business plan is the written description of the future of a business. It is a tool for entrepreneurs to realise their business goals. Entrepreneurs can use the business plan for coordinating the human resource personnel towards the business goals. Managers can be directed properly through well prepared business plans. Investment seeking entrepreneurs can use the business plan for transmission of their vision to potential investors. Potential investors can be attracted to the business with proper business plan. Business plan is the guideline for managing the business in profitable ways. The business plan should explore business goals and strategies to all persons engaged in the business operations and the ways for achieving them. This will provide competitive strength for the firm. (An Introduction to Business Plans, 2008).
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A well prepared business plan is essential for the entrepreneurs to carry out their project in proper way. Entrepreneurs can use it to give focus for the business operations. It is a vital component of any successful business enterprise. While selecting the business plan the goals and objectives of the business firm have to be identified properly. Through proper planning, opportunities in the industry can be exploited effectively.
“For management or entrepreneurs seeking external support, the plan is the most important sales document that they are ever likely to produce. It acts as the key to raising finance” (Cox, 2008).
At the time of selection process of staff personnel, business plan will act as a basis for setting up of selection criteria. Thus best team members suitable to the business objectives can be selected. It explains the purpose of the organization. By establishing vision in the business plan it can persuade others to contribute for achieving the vision. Business plan can be used as yardstick for measuring the operational performance of employees and managers.
“A Business Plan is the foundation, or rather a springboard, towards the establishment and growth of a new business, particularly in the later stages of growth. A business plan is an essential tool for companies raising capital” (The Importance of a Business Plan, 2008).
Entrepreneurs can use the business plan for screening venture opportunities in the industry. It can be used for creating team spirit among the human resource. It can shape the business goals in a competitive way. By recognizing the opportunities and threats, effective measures can be followed for seizing the opportunity and overcome the threats.
Financial investors are now considering the human resource skill in the client firms for ensuring their capability to attain the business objectives. Thus a well prepared business plan will help entrepreneurs to raise the capital economically (A Good Business Plan).
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Along with opportunities in the environment, threats and challenges can be properly analyzed while preparing business plan. Thus solution for such challenges can be made in advance. Thus entrepreneurs are highly benefited from business plan. The business plan can be used as a basis for measuring the performance of the human resource in the enterprise and correction can de made in time. “Market research will take up a significant portion of the business plan. Consultants urge entrepreneurs to know their businesses inside and out, and whether they plan to seek outside financing, so that they can make reasonably accurate projections.” (Importance of a Business Plan: Making Accurate Projections, 2008).
Business plan is important for entrepreneurs for ensuring successful business operations. Adequate care should be taken while preparing business plan. The presentation of business plan is also important. Effectiveness of firm in achieving business objectives with profit should be ensured while preparing business plan.
- A Good Business Plan. [online]. Feliciano Financial Group: Inspiring People.
- An Introduction to Business Plans. (2008). [online]. Entrepreneur.com. Web.
- COX, Helen. (2008). The Importance of a Business Plan. [online]. Ezine Articles. Web.
- Importance of a Business Plan: Making Accurate Projections. (2008). [online]. Saint Vincent College.
- The Importance of a Business Plan. (2008). [online]. VC Gate: Powerful Venture Capital and Private Equity Software Directory. Web.