Importance Of A Business Plan by Moses Isaac

Satchel Paige, the famous basketball player, once said, "If you don't know where you're going , any road will take you there," As an entrepreneur you want to know where you're going. You want to choose that road, not just take any one, The process of developing and writing a business plan will help you identify and clarify many of the issues that need to be addressed as an entrepreneurial venture is organised, launched and managed. Preparing the business plan is an important outcome of the planning process.

The process of planning involves deciding where you want to go, how to get there, and what to do reduce (as much as possible) any uncertainties. It's a way of thinking about the future in which planning serves as the bridge between the present and the future - that is, where we currently are and where we would like tobe. For instance, think of the college degree would like to get someday. You've had to plan your classes semester by semester so that you complete the required ones in the correct swquence for getting desired degree. Perhaps you've followed a degree program a type of planning document that outline where you are currently and where you would like to be. That "plan" serve as the bridge between the present and the future untile one day that goad of graduating with a college degree is attained. For an entrepreneurial venture, one document that results from the planning process is a business plan, which is a written document that summarises a business opportunity and defines how the identified opportunity is to be seized and exploited. The process of developing and writing a business plan involves critically analyzing where your venture currently is and where it's headed. That business plan, then, becomes a blue print and ongoing business, and not just simply done for the start up phase. Instead the business plan serves as a 'living' document that guides entrepreneur as he or she makes decision throughout the life of entrepreneurial venture.

As you might be able to conclude so far, the business plan is an important document for entrepreneurs. Itserves five main purposes.

The first purpose of a business plan is that it's a development tool for the organizational founders. As the founders udentify and access opportunitites, the structured outline of a business plan forces them to address important issues. Rather than just blindly and wild by pursuing ideas, the business plan provides a check and balance for the founders. This type of structured start up planning by entrepreners has been wildly studied by researchers who, for the most part, agree that this type of planning can be beneficial.

The business plan's second purpose is that it is useful for helping clarify the venture's vision and mission. As we discussed earlier original vision and mission statements are important element in planning the entrepreneurial venture. When included in the business plan, these statements describe and explain to others what entrepreneurial venture is about. Again, the founders are "forced" to carefully consider their organizational purpose, values and expectations.

The third purpose that the business plan serves is that it defines planning and evaluation guideline for managing the ongoing entrepreneurial venture. As we stand earlier, the business plan is a working document that should be used beyond the start-up phase. It should guide decision makers on planning and evaluating issues throughout the life of the business. It also should help clarify what the goals and plans are, and it should help to define how goal attainment is going to be measured. However we need to aware of the fact thatalthough a business plan attempts to define a desirable future path for the venture, unexpected factors can - often do-significantly alter that path. But even given the fact that uncertainities exist, not having some type of plan would make managing the uncertainities even more challenging for an entrepreneur.

Helping an entrepreneur secure needed financial resource is the next purpose served by business plan. Potential lenders and investors will require some type of financial analysis and projections before making a decision on whether to provide a loan or to invest capital in the business. These people arent going to provide many without some type of analysis of current and future financial data. Again, the structured nature of the business plan forces an entrepreneur to do these important calculations and projections. This is often the hardest part of an entrepreneur in preparing a business plan, but it is critical to include because it will be absolutely necessary to obtain any potential outside financing.

The final purpose of the business plan is that its an effective tool for guiding growht. We know that what characterizes an entrepreneurial venture is its focus on growth. Although some entrepreneurs may get lucky and gwoth just sort of "happens," you dont want to bank future on luck. A well written future business plan can lay the foundation for growth to happen. As we'eve said before, the business plan provide the road map for pursuing the opportunitites that await. A successful entrepreneur does'nt want to "take just any road" bus needs to plan for the future and the future growth of the venture through developing a strong business plan.

Moses Isaac