Business_Plan

WHAT ARE THE FOUR KEY REASONS FOR WRITING A BUSINESS PLAN' A business plan is a document that sets out the operational and financial objectives of a business and contains the detailed plans and budgets showing how the objectives are to be achieved. Business plans are prepared to give an overall picture of the business and has number of benefits to business, but like everything around us, businesses and circumstances in constant change, so business plan also needs to be changed and updated otherwise it will not have much function. In basic terms, business plan is a written document that aims to set out the business ideas and functions in concise details. Its purpose is to provide a complete description of the business and its objectives. Four Main Key reasons to prepare a business plan are: 1. To provide information about the business and the intentions of the owners. Example: what the business is going to produce or provide to the customer. 2. To give an overall picture of the business in concise details to people and institutions who might be interested in providing financial and/or any other resources. Example: When the business apply for an overdraft or loan, bank will want to see the business plan and wants to see if the business safe to lend the money. 3. Preparing a business plan enables the business to develop tactical plans and strategic thinking, to show that how the different part of the business fit together and work together to make the business profitable. 4. Business plan enables the business to set financial targets and detailed budget plans so that the actual costs and revenues can be checked against the targets and budgets A properly prepared business plan acts like a road map, as it identifies the business’s destination (the strategic objectives) then can be used as a guide to get the businesses there, but must be updated regularly to keep up with business developments and changing circumstances otherwise it wont be worth of any value to the business.