Question

DISCUSSION BOARD #1 Click on the above DISCUSSION BOARD 1 link. You will CREATE THREAD to add your initial post REQUIREMENT: Why is it important to have a Business Plan? KEEP IN MIND THE FOLLOWING: • Post your INITIAL RESPONSE to the prompt early in the assignment period so that others have time to respond to you. • REPLY to atleast 2 other students post.

Answer 1

Business Plan is a Blueprint of the Entire Business.
Its like a bird eye view to the entire business.

Business plan includes what situation a company is presently in and where it wants to go.
Writing business plan is especially useful for the entrepreneurs who require financial help from the outside sources like banks and financial institutions.

The reason is that the outside sources advance funds to entrepreneurs based on the soundness of their enterprises as reflected in business plans. In nutshell, writing a business plan is not without its costs and sacrifices, nonetheless the benefits of it outweigh its costs.

An objective without a plan is just a dream. Until committed to papers intentions are seeds without soil, sails without winds or mere wishes which do not lead to execution and without execution there is no payoff. The preparation of a business plan or project report is of great significance for an entrepreneur.

The business plan serves the two essential functions: First and most important the business plan is like a road map. It describes the direction the enterprise is going in, what its goals are, where it wants to be, and how it is going to get there. It also enables an entrepreneur to know that he is proceeding in the right direction. Some hold the view that without well spelled out goals and operational methods/tactics, most businesses flounder on the rocks of hard times.

The second function of the business plan is to attract lenders and investors. Although, it is not mandatory for the small enterprises to prepare business plans, yet it is useful and beneficial for them to prepare the project reports for various reasons. The preparation of business plan is beneficial for those small enterprises which apply for financial assistance from the financial institutions and the commercial banks. It is on the basis of business plan or project report that the financial institutions make appraisal if the enterprise requires financial assistance or not.

If yes, how much. Similarly, other organisations which provide various assistances such as work shed, raw material, seed/margin money, etc. are also equally interested in knowing the economic soundness of the proposal. In most cases, the quality of the firm’s business plan weighs heavily in the decision to lend or invest funds.

Research evidence reveals that many firms, of course, start without business plans. Speaking alternatively, their implementation stage starts with no plan, i.e. guide-map. But, most of these firms realize eventually in the hard rocks, of business environment that they need to recreate their beginnings and write their business plans at some point down the road.

The fact of the matter is that in todays highly uncertain and competitive business environment, only the most reluctant entrepreneur with the simplest business concept avoids writing a business plan. The very significance of business plan can be expressed as “if an entrepreneur fails to write business plan, he plans to fail in his/her business.”