A well-developed business plan demonstrates to everyone that one is serious. Potential partners, investors, employees, and not least the entrepreneur consider tangible evidence as a sign of dedication and determination.
2.It leads to risk reduction
Writing a business plan involves careful consideration of the potential of the idea and possible alternatives. Such as a feasibility study can prevent you bet on the wrong horse and unnecessary costs and wasted effort.
3.It Demonstrates market research
Without in-depth market knowledge the business or investor has no idea if the product or service is needed. What is the size of the market? Is there a growing market? Are there likely to trend shifts?
4.It increases the knowledge about the competition
A business plan must have a thorough analysis of the direct and indirect competition. It is essential to find their weaknesses and exploit. A plan without a clear battle plan is not convincing.
5.It encourages research into customer needs
One of the key components of the business plan is of course the product being offered and whether it fits well with the needs of the customer. What the customer wants, when he buys and how often? Success depends on the answer to that question.