Importance of a Business Plan or Proposal
A business plan explains the entire business, including its executive summary, background, marketing plan, production plan, vision, and mission. It ensures whether the company will be successful or not. Entrepreneurs should have a business proposal to start a new business to avoid risk. It also assists the employees in accomplishing the business. The importance of a business plan becomes crucial to start up a new company.
A business proposal is a short business plan. The business proposal describes the business process. However, a business proposal includes an executive summary, problem statements, product, finance, and solution. The example of a business proposal for students certainly guides others to create a business plan. This business plan sample teaches how to write business plan assignments for students. Students might learn how to write a simple business plan and proposal.
The Ten Importance of a Business Plan are:
- Evaluating the Business Ideas
- Stakeholder Collaboration
- Bank Loan Sanction
- Analyzing Feasibility
- Assisting Entrepreneur
- Assisting Employees
- Customer Segmentation
- Product Description
- Financial Projection
- Risk Reduction
Evaluating the Business Ideas
Firstly business plan validates the reasonableness of profit from the business. It is written evidence to test the business idea’s profitability. A business plan also assists stakeholders and employees in evaluating the business idea and working accordingly. It also helps the management team in adequately managing and conducting business activities. A business plan shows entrepreneurs the way to start up a new business.
A business plan is essential for collaborating with stakeholders. The organizations provide the business profile to collaborate with each other. It represents the company to other parties to make a deal. It also assists the organization in winning the negotiation. For example, two companies want to collaborate on promoting each other products. In this situation, both universities share their company profile and business plan to know each other before signing the MoU. Additionally, It is crucial to persuade clients and investors.
Bank Loan Sanction
The business plan is also important to get get a bank loan. Most companies submit a company profile while applying for a bank loan. The bank authority surely evaluates business feasibility through the business report. It assists the Bank authority in assessing the business feasibility as well as sanctioning the loan.
The business plan is crucial for the start-up business and new programs or business plans under the company. For example, a TV program plan is compulsory to get permission to telecast a new program on Television. The authority analyzes the program’s feasibility through the written plan.
Thus, a business plan or proposal is significant for students who want to become entrepreneurs. It certainly shows the way for entrepreneurs to start a new business.
Additionally, the business plan assists employees in understanding their goals in the particular organization. Every business proposal includes an executive summary and company background information. So, It is a perfect written document for getting business ideas. It also demonstrates the employee’s common goals. Therefore, this business plan teaches employees how to work effectively in the organization.
Customer segmentation is a way of identifying the group of customers who want to buy specific products. The business proposal mentions the demographic and psychographic factors to identify those groups of customers. Therefore, the organization sends the products to the specific customers who need them.
A business plan describes product details to customers. The customers learn about the products through it.
The business plan describes financial projections, including determining capital conditions. It shows how to divide and invest the fund nicely for different purposes. It also maintains proper cash flow.
The business proposal assists in reducing risk for new organizations. The business plan includes a SWOT analysis to assess the business risk. A complete business proposal shows how to overcome threats to achieve the goal.