Why Is a Business Plan Important ?

Your "Business Plan" is where your idea is conceived, where the business is born, and where you nurture it and see it grow.

The business plan is a tool to help you focus on the most important professional and career decision in your life - owning a business. Investors like to see a well-organised proposal that demonstrates your hard work, intelligence, and vast knowledge in your business and industry. Without a business plan you will not be able to raise funds for your business.

In addition, the business plan will help you, your partners, associates, and employees understand the specific directions you will take to establish a successful venture. Communicating these directions in writing is particularly important so that all those involved are committed to the project.

The thinking and the work that will go into the preparation and the development of the business plan will result in :

Defining how all the pieces of your company fit together to create a vibrant organization capable of meeting its goals and objectives.

Defining your existing resources , the resources required to meet the goals and objectives and the resultant gap analysis . Understanding of this will help you to evolve strategies to fill the gap in your  resources.

It will provide a means for you (or your team) to understand exactly how you will solve all of the problems in order to cost-effectively deliver the goods or services needed to satisfy your customers. In a very competitive market, the planning process will be a means to introduce and manage innovative thinking at every step of the achievement process.

Achieve a  'buy-in' from all the  team members who prepare the plan. Also, it will communicate in very simple language the role and performance expectations of each team member.

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Empirically, it has been noticed that successful ventures are created after years of hard work and more importantly, after detailed attention to their past, current and future business activities; while, the unsuccessful ventures lose their direction or focus when it came to planning and operating their businesses. All businesses should prepare and regularly update their business plans. However, small businesses are most likely to prepare a business plan when they are just starting up or when a major change in their business is occurring, and often when additional investment is needed.