Why should you create business plan? Why not?

A business plan can be valuable as it provides a direction for the business. It outlines objectives as well as strategies for growth and deals with any downturns your business might face. This is useful as it can help define the long-term goals of a business and goes a long way to helping your start up realise its initial aims. It is also essential to provide a business plan to obtain finance from banks and investors. It demonstrates your commitment to your business and shows why they should provide funding for your start-up. Strong and sustainable revenue streams, in particular, will be highly desirable for banks and investors.

There are opinions, however, that in the early stages of a start-up, a comprehensive business plan is a waste of time and effort given the rapid evolution that occurs in the initial stages of a start-up. Start-ups should not be restricted by detailed business plans and be flexible enough to adapt to the ongoing feedback received from testing their ideas in the market place. Despite this, it is generally acknowledged that business plans are necessary to convince investors that you have thought through the key aspects of your business and have a concrete vision going forward. They are also useful in the later stages of your business when you have more experience and knowledge to work from.


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