Get premium membership and access questions with answers, video lessons as well as revision papers.

Explain the importance of a business plan to an entrepreneur.

      

Explain the importance of a business plan to an entrepreneur.

  

Answers


Martin
The importance of a business plan is as follows:

- Better understanding of the business A business plan helps the entrepreneur appreciate the business needs of his venture beforehand. Through a well prepared business plan, the entrepreneur will be able to see clearly the problems he had not thought of earlier, so he becomes well prepared psychologically to deal with them.

- Financing from financial institutions An entrepreneur will need to secure funds for his business. Most lenders will require that he comes up with a business plan before they consider him for financing.

- A tool for management The entrepreneur refers to the business plan to the business plan to check whether the growth of the business is in line with the plan he had envisioned earlier. If not, he will have sufficient basis to manage the growth of the business s to direct it towards the right direction

- Communication tool A business plan is a strong communication tool for the business. It defines the purpose, competition, management and personnel. It clearly identifies the vision and mission of the business to all the stake holders.

- Highlights risks involved A credible plan will incorporate the risks the business is likely to encounter. They could be financial, operational or control risks as well as the measures put in place to manage the risks.


marto answered the question on February 4, 2019 at 09:07


Next: Explain the primary sources of marketing intelligence.
Previous:  Explain the importance of the statement of cash flows in the business plan of an entrepreneur

View More CPA Entrepreneurship and Communication Questions and Answers | Return to Questions Index


Learn High School English on YouTube

Related Questions