One thing every new venture must do is the transition from strategy formulation to the implementation stage of new venture operation. And one fact remains that entrepreneurship is not complete until what is invented gets to the market.
A business plan can be defined as the written document which expresses in details the proposed business activities of an organization ( particularly new business). In other words, by the business plan, the entrepreneur expresses in writing his or her vision, the likely strategy to be employed, and operations of the proposed venture.
Basically, the business plan represents the minimum document required by any financial source and creates a ticket for the entrepreneur to enter the investment process.
Below are the benefits of a business plan for an entrepreneur:
- The entire business process compels the entrepreneur to walk through and identify all the rough and smooth roads of business, thereby helping him or her to avoid paying high tuition fee of business failure.
- Business planning process enables the entrepreneur to reduce anxieties and tensions by confronting them during the process of developing and writing.
- A properly crafted business plan usually lead managers to manage successfully as it contains all the tools of management- mission statement, objectives, goals, strategies, etc.
- It provides the first line training on business for the entrepreneur. It makes him or her get familiar with necessary details of business.
- It forces the entrepreneur to get interested in all aspects of the business, hence, he or she views the venture more critically and objectively.
- It restores confidence in the entrepreneur as the projection of risks and knowledge of critical factors reduce fear of an unknown future.
- An effective business plan guides the company’s operation, as it usually contains a direction of its future course coupled with required strategies to achieve it.
- Most importantly, it provides the entrepreneur the necessary tool with which to link and communicate with investors. That is, it is a prerequisite for sourcing of capital.
Business plans must therefore describe all the relevant internal and external elements involved in starting a new business. It is to be noted that all existing businesses also require business plans.