why do you need a business plan

1. Why Should You Write a Business Plan? You don’t need a business plan, but most businesses who find success formed a business plan. Not having a business plan is like taking an exam with out studying. “A study of small businesses survey found that companies that had a business plan were far more likely to succeed than those that did not.” and “University of Pennsylvania's Wharton School said, "A comprehensive and complete business plan is crucial to the success of any business” (Schiff.) Although there are businesses who did not form a business plan, but some and most don’t have the luxury of “enjoying greater revenue and profit growth than companies that don't have one, and their failure rate is much lower” (Schiff.) Companies aimed for success while reducing risk should have a business plan.

2. Who needs a business plan? A business plan should be presented in many scenarios such as loans, investments, working with partners and management team, also when selling your business. “Most banks require a plan, and even those that don’t strictly require it expect it. They expect it to be a summary of the business, with some predictable key points” (Berry.) Evidently most banks won’t take you serious if a business plan is not presented. As for investments, “the plan won’t get you the investment, but not having a plan will mean you won’t get investment. Investors require a business plan. They invest in the people, the idea, the track records, the market, the technology, and other factors; but they look to the business plan to define and explain the business” (Berry.)When partners are in the picture, a business plan is crucial because no one can read minds and people can forget, so plan is a great firm foundation both parties to rely on. Management team holds the same idea as partners. “The day-to-day business routine is distracting, problems come up, opportunities appear, and commitments should be followed and tracked. How do you know where you are in business