Question

Why busiess plan is important to start a new business and what would be the prerequisites to write up an ideal business plan (3+9)

Answer 1

A business plan is a strategic document that outlines the business goals, plan and future course of action. It defines the projected outcomes and the timeframe within which the same are to be achieved. It is important for starting a new business since it gives a direction and a plan of action for functioning of the new business.

Prerequisites to write up an ideal business plan:

• The course of action the business will follow must be discussed among all stakeholders ad finalised
• A good knowledge of the industry in which the business will operate along with external environmental factors such as legal, economic, political, social etc must be gained
• Various business functions such as financial aspects, marketing and distribution channels, HR methodology to be followed must be examined and finalised
• It must be ensured that the sources of raw materials and market for selling finished products are available or can be made available with minimal planning and effort
• A study of the competitors operating in the industry and substitute products available must be done

After collecting all the required information, the business plan is documented formally.