why is a business plan important when you start with the business?

i have to do a project on family business, and one of the question in my questionnaire is: Did you have a business plan when the business started? and depending upon what people hav selected, i have to interpret it. so please help me

2 Replies to “why is a business plan important when you start with the business?”

  1. Business plans are the foundation of any business that will be successful.
    They state the purpose, goals, objectives…and then how they will be achieving these goals financially and strategically.

    It explains the means to the end.

    Especially if you are looking for investors, a weak or absent business plan will result in rejection. The BP needs to convince whomever you are trying to convince that they will be missing out on a financially beneficial investment.

  2. Since your project involves research in family businesses, you can proceed in the following manner.

    Once you have put the obvious question, there can be the following answers
    a) No plan as such, we went ahead as and went opportunity arose
    b) Planned, but it was in our minds (not documented)
    c) Had sketched down some aspects, but not complete
    d) Had a well documented business plan.

    Option a)
    Such plans have a high probability of failure, and if they worked, it was because of luck or instant cover ups. Highly risky and not recommended.

    Option b)
    These are dependent on the person who is the key factor for the business. In his absence, the system goes haywire.

    Option c)
    Lots of confusion, since the plan is sketchy, and clarifications are required at every stage

    Option d)
    The most recommended technique, easier to find investors, and things can work even though the planner is not available.

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