The Importance of Business Plans for an Organization

1292 Words5 Pages
The business plan is of critical importance for any organization. The business plan lays down the blueprint for how the organization will be run, in what markets and products, and how the organization's financials should look. For the entrepreneur, the business plan is essential because the different things contained in the business plan will force the entrepreneur to critically examine every aspect of his or her business. This paper will outline some of the key components of a business plan, and why they are important.

A business plan is "a written document that describes in detail how a new business is going to achieve its goals" (Investopedia, 2012), although established businesses sometimes use business plans as well. The business plan document is not the most important part of the business plan, but rather the process of gathering the information, processing it and compiling it is the most important part. The business plan forces the person running the business to fully envision all of the details of the business prior to sinking much money into the idea. The idea is therefore more fully-fleshed out, so that the business stands a greater chance of success, if the business plan has been created with intellectual honesty.

The business plan document is also important for other stakeholders. While somebody planning a business might think he or she has a genius idea that can't miss, other stakeholders need to see that the person with the idea has done his or her due
Get Access