A business plan is an instrument that brings things in order for the desired accomplishment. It does many functions. In order of importance, the functions of a business plan as follows:
Functions of a business plan
1. A Sales tool: The number one use of a business plan is as a sales tool. It serves as a prospectus, an invitation to invest or to provide a loan, and, at the same time, the first official presentation to the outside world of the kind of product or service they prepare will be offering. Prospective bankers or investors will initially judge the entrepreneur’s abilities and his or her chances for success on the quality of the business plan. Experience has taught them, it’s the jockey that wins the race, not the horse.
2. An exercise in strategic planning and business logistics: Assembling the business planning and business logistics. It is an exercise in strategic planning and business logistics. It is an exercise that too many of us action-oriented entrepreneurs tend to overlook, both during the start-up stage of our business, and later on, when we’re in the heat of the battle.
3. A barometer and a scorecard: A business plan sets goals – Written goals, published goals, goals for the world to see. Goals that publicly state the entrepreneur’s intentions.
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