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It is a tool for raising capital.
It is a road map to the management of business.
It creates an inbuilt control system to reduce inefficiency and wastages.
It ensure opportunity are identities and well exploited.
It helps in focusing efforts towards achieving objectives.
It helps in focusing efforts towards achieving objectives.
It helps in countering competitors.
It ensures utilization and allocation of the available resources.
or
A business plan is necessary to an entrepreneur for the following reasons:
ii. Avoiding mistakes-in the process of drawing a plan; mistakes that would take place in
the business are identified and corrected in the plan. This helps in avoiding the
occurrence of such mistakes in the business.
iii. Identifying strength and weaknesses-A business plan helps in identifying strengths or
weaknesses and where weaknesses are detected, remedial actions may be taken early
enough.
iv. Requirement by financiers-Financial institutions such as banks may require a business
plan before they can accept to finance the activities of the business.
v. Allocation of resources-It helps to determine the resources required and plan on how
and where to use them. This ensures that resources are neither underutilized nor used
for the wrong purpose.
vi. Facilitates business evaluation-A business plan helps an entrepreneur to assess the
progress of the business and any deviation (difference) from the intended plan can be
corrected in good time.
vii. It helps an entrepreneur outline competition-It helps the entrepreneur to be fully aware
of the market she or he plans to operate in, understand important trends and know who
her/his competitors are and their strengths and weaknesses. This information aids the
entrepreneur to develop products that are better than those of the competitors.
viii. A motivating factor-A business plan is communicated to all employees in the business.
This makes them aware of the direction to be taken by the business. This motivates
them to work towards that direction.
ix. Adaptability-Normally, not all events occur as predicted in the business plan. However, a
well drawn business plan should give room to accommodate any changes that might
occur in the future.
x. Tool for control-Planning involves setting of standards against which performances can
be assessed. In case of deviation corrective measures can be taken.
monica20 answered the question on November 1, 2017 at 11:08
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