Business plan is an important tool that help businesses to set their corporate goals and objectives while it also gives business owners ability to track their business progress.

Having a business plan should be the first thing done when starting a new business.

The best way for businesses to clarify their business ideas is by having well-detailed and resourceful Business plan. Though, it can change at any time, Business plan serves as a road-map to the future of the business.

It has been proven that 45% of Entrepreneurs that have Business Plans before starting their business build viable and successful businesses that last the test of time.

Here, we will highlight some major importance of business plans

1. It facilitates easy decision making: While businesses will continue to encounter challenges at different phases, it is important for Entrepreneurs to manage crisis in the best way. Building Business Plan helps to answer critical questions about the business challenges and it gives business owners a clear direction of the business.

2. It serves as insight: business plan is a management tool that gives business owners and managements insight into the business. Writing a business plan involves making research about the business, this research helps to understand the business processes and provides business operational details.

3. Business plan helps to convert business ideas and vision to successful business: every business start off as an idea or a vision, this idea or vision becomes successful business when strategic steps are taken. Business plan helps to bring ideas and visions into a written documents that serves as a guide.

4. It helps to avoid mistakes: business owners who carry out business activities without a business plan is liable to make mistakes which put the business at risk of failure or total collapse. Such mistakes include pricing problem, marketing problem, funding problem, etc. Business plan provides adequate information to avoid these problems.

5. Business plan serves as a communication tool: business objectives are best communicated to employees, partners, investors and other stakeholders using a business plan.

6. Business plan as a business benchmark: successful businesses have benchmark which serves as standard against which the business performance are measured. The goals and objectives in business plan is a useful benchmark to measure how the business has performed.

7. Business plan helps to secure financing: businesses that need fund from lenders, investors or grant givers to finance their businesses must have detailed business plan that gives an overall image of business activities. This helps investors and lenders to determine viability of the business and if such business can meet it repayment obligations as at when due.

Fagbemi Abiola Isaac, ACA

ALPHA KAPPA CONSULTS.

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