Five reasons why a business plan is important By Athulya - January 8, 2019 Last Updated at: Jul 02, 2020 +3 17006 Hand putting mix coins and seed in clear bottle and copyspace, Business investment growth concept. Planning is very important in any phase of our life. It can be anything from a short trip to a setting up a business. Planning helps you stay prepared to face any untoward situation and let you mitigate losses if any. When you set up a business, it is important to frame an efficient and effective plan. Planning plays an essential role in our lives. Be it anything, right from getting up in the morning to a trip, we plan. Planning is that one step which does not only indicate the presence of a conclusive act but also helps us to be ahead of certain unwanted situations and mitigate the losses, it is the starting point. When one is up for setting a business empire, it becomes all the more important to have an effective and efficient plan at hand to be implemented when and where required. If you need more pointers on government registrations, trademarks, patents or tax filing, browse a few services provided at Vakilsearch below Register a Company PF Registration MSME Registration Income Tax Return FSSAI registration Trademark Registration ESI Registration ISO certification Patent Filing in India Planning as such has been defined as a process which lays down the objectives of the organization together with developing various courses of action. But there are also other reasons for having a plan ready for the go. Business Plan It is pertinent to note that when one is involved in making a business plan, one must always give greater thought to the role that one’s audience will play. This is because it is only on account of their help and support, the business will become a reality. Thus, to get a positive reaction from the desired audience, one must give considerable importance to their audience. The benefits of having a business plan are: Feasibility of the plan: A business plan will in reality help one to understand whether pursuing the opportunity is worth it or not without actually delving in it and ending up losing the two most essential resources of all, that is, money and time. A business plan acts as a blueprint: The business plan will provide a detailed outline of the business which will not only attract capital and help people be on the same page but will also help equalize our emotions and prevent us from making mistakes, which at the initial stages can be very harmful. Helps identify potential weakness: As the head already suggests, despite preventing us from making fatal mistakes, business plans can also locate inherent and unrealized loopholes. Further, through a business plan, one can also receive potential opinions and feedbacks. Raising capital: Having a business plan will make it easier to raise funds as it will become very easy to communicate with the investors. It will give a detailed view of the business which will not only be advantageous for the aspirer but also the investors. Chances of Success: By being able to evaluate factors such as the feasibility and the potential weaknesses, one can avoid the pitfalls thereby making a progressive step towards success. It increases the chances of success considerably. Expert Guidance on Business Plan Other Advantages There are more advantages to have a proper business plan, some of them are as follows: Set specific targets for managers – Good governance requires the setting of specific objectives/business plan followed by proper monitoring and tracking. This also makes the managers and other stakeholders accountable for their tasks and decisions. Displacement: It is by far the most important concept you’ve ever heard of in the practical business. It goes as follows: “Whatever you do is something else you don’t do.” A proper business plan helps the business owners’ to deal with displacement. The decision on location and space requirements: It helps the business owners to decide whether a new place has to be rented, leased or purchased depending on the size and structure of the business. Business expansion: With a proper plan, any business can understand their workings and shall make necessary changes to pursue business expansion at the right time. One can regularly review assumptions, monitor progress and capture new developments to adjust them with good planning. The plan-to-actual analysis is a dashboard and the plan is controlled by adjustment. Growing the existing business: The business plan not only allows the owners to establish new businesses but also helps them grow them in their desired direction. Good planning for business sets milestones that you can work towards. These are key goals that you want to achieve, such as attempting to achieve a defined level of sales or opening the new facility etc. When we have visible goals that we can work towards, we work better. The decision on assets and liabilities: Employ your business plan to help you identify what will happen in the long run, which should be a major input to the classic make vs buy. Conclusion A business plan is important as it is the first step. It is important as it helps an organisation fight the start-up phase which usually decides the fate of an organization. Further, it is another step which affirms the commitment that one has towards one’s aspirations. If you want to set up a business, then it is better to have a business plan ready. Remember that a business plan is crucial for its success. Moreover, to fight external factors in the startup phase, the right plan will help you a lot. The rightly planned steps will decide the fate of your business.