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Define business plan and reasons for writing a business plan?

 Define a business plan and reasons for writing a business plan?

Answer:

‘’A business plan is a written document that describes all the aspects of a business venture in a concise manner’’

“A business plan is a written document that describes in detail how a business—usually a startup—defines its objectives and how it is to go about achieving its goals. A business plan lays out a written roadmap for the firm from marketing, financial, and operational standpoints.”

Business plans are important documents used for the external audience as well as the internal audience of the company. For instance, a business plan is used to attract investment before a company has established a proven track record or to secure lending. They are also a good way for companies' executive teams to be on the same page about strategic action items and to keep themselves on target towards the set goals.

Although they're especially useful for new businesses, every company should have a business plan. Ideally, the plan is reviewed and updated periodically to see if goals have been met or have changed and evolved. Sometimes, a new business plan is created for an established business that has decided to move in a new direction.

The followings are the reasons for writing a business plan.

1-Internal reason:

 The internal reason for writing a business plan is a force that compels the firm’s founders to systematically think through each aspect of their new venture. It usually takes several days or weeks to complete a well-developed business plan. A clearly written business plan also helps a firm’s rank-and-file employees working in the organization move forward in a consistent and purposeful manner. The existence of a business plan is particularly useful for the functional department heads of a young firm.

2-External reason:

The second reason to write a business plan is to create a selling document for a company. It provides a mechanism for a young company to present itself to external stakeholders who are being recruited to join a firm such as potential investors, suppliers, business partners and key job candidates. 

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