102 Reasons Why Do We Need Business Plan To An Entrepreneur – Importances of Business Plan in Entrepreneurship

  1. The concept of business:

Their different concept of business. As we know that necessity is the mother of invention. If you follow this theory and convert this idea into a business, then it does not take time to become a millionaire. There are many businessmen who want to create the monopoly in the market.

They become the single seller in the market which makes their profit gap very high due to no competition. If you have also such unique ideas and new concept then you can invest in the business and can appear in the business like a storm. Many examples of the very minor child have become the millionaire at very teenage due to their new ideas and unique concept.

  1. Pledge for business:

There are many newcomers who have not the knowledge about the business or the business that they are doing or want to do. Although, they are wasting their hard work and efforts. They even make the business as the game. Business is also the place where you have to give unlimited and untimely duty without any definite timetable like the job.

While you have chosen the business as the platform for shining up your career, then it will be very beautiful. You have to show your hard work, efforts, and commitment to taking the business from bottom to top level. For all these, the business plan gives you the energy and motivates your walks.

  1. Escaping from threats:

The road of business is not plain. You have to strike with many threats. And if you do not hold the capabilities of fighting with all those upcoming obstacles and barriers, then your business will also puncture. Threats from the external environment, the threat from government, the threat from goons, threats from a political party, threats from society and nearer environment are always in the trying of sucking some funds by showing any reason.

So these are also the threat which you have prepared to fight with it. Threats always want to pull your moving legs and progress of the business. So the business plan is the strategic weapon to beat it.

  1. Saving the expenditure:

There are many unused things and unnecessary was the amount are investing. In a simple sense, it’s not an investment, its expenditure. There is much expenditure going on in the business like as expenses made for the breakfast, electronics bill and other miscellaneous activities.

These all are the unwanted expenditure which increases the cost of the product. When we even make the expenditure smarty and invest our money smartly, then there cut off much expenditure. In many cases, we show, that due to bad management, there is occurring of extra expenditure which also reduces the production of business and growth as well.

  1. Determination of incentives:

If you do not make the provision of proving the incentive to the employees, then they even not invest their ultimate effort, invest ideas and use their creativity in the business. Incentives are the additional factor of making them happy and keeping them motivated.

If you are not able to provide them with the incentive, bonus facilities to the employees, they may leave your business. And it happens time to time, the business would not stay instability. You know that the business instability has not long life.

Everything gets disappointed and slowly it started to disappear. So the business plan helps to determine the ranges and classification of incentives providing to different staffs.

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  1. Schedule of providing the holiday:

When you start the business, you have to also adopt the system for better movement of business. Employees are not the machine who can work without taking the rest. They are also a human being. And you well know that human being needs rest.

So you have to also make the provision of providing the weekly holiday on any particular day which even provides the time to take rest and spend the time with family. Earning money is not only everything, but sharing happiness also increases the betterment of the family.

It makes to remain the love and care always alive in the family. In this case, also, a business plan helps to decide all these matters quickly.

  1. Refreshment scheme:

Relaxation and refreshment are the two word which is demandable by almost everyone. As we know that people earn for enjoyment and refreshment. If they earn and cannot get the time to enjoy and refresh their life, then they even suffer from depression.

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Refreshment should also be provided by the business organization once a time in the year. Making the period of refreshment, entertainment and enjoyment helps to relieve them from tiredness and boredom. So you should also denote the period or week for refreshment which also increases their motivational factors and positivity towards their work.

  1. Applying of depreciation system:

As we know that depreciation is the systematic reduction of tangible assets until it becomes. It is mostly done or adopted to reduce the cost and expenditures of business. It is also the system of dividing the burdens or cost of the machinery. Mostly the depreciation is adopted on machinery. In a manufacturing business, there is the need for many machines which cost high.

And it all should be purchased, then, there creates the blunder problem fro running of the business due to overload. It also helps to pay the tax in limited order. Dividing in allotment also divides the overload and cost of the machines. So there is a different method of depreciation, which can be adopted according to suitability and nature of the business.

  1. Rule of depreciation:

The rule of depreciation is also applied and charge according to the life of machines. Mostly the business adopts the fixed installment method. It states the amount of the cost of materials into estimated life. So that the cost of the material divided into 10 years mostly, that makes the business to stay in profit always.

It never makes the business in loss due to segmentation of the cost. It also reduces the tax payment and increases the profit of the business. These all the things are possible only because of the business plan.

  1. Insurance to the business:

Nobody knows what will happen tomorrow. So it is said that the future is uncertain. Even the man become a millionaire in seconds and even become poor in second. These all are the action and reaction of the time. Business is not operated at less investment.

So the probability of happening loss or accident also lies in the same percentage. Most of the business is running insurance, By doing insurance, they do not have any mental fear of bearing all the amount. If anything happens, the money will be born by the insurance company. This is the benefit of the business if they have done insurance.

  1. Insurances to the employees:

Doing the insurance of business and product is another thing and doing the insurance is another case. These two are a different aspect that makes the organization more robust. Employee’s insurance has also a great role in utilizing them. If you have done their insurances too, then all the amount will be paid by them if anything happens to any employees. Here also, there is a need for a business plan.

  1. Auditing and reporting:

Auditing and reporting are also the important facts of the business which helps to show and analyze the growth of business and its direction. Auditing is related to a financial subject which helps the business to perform in right and systematic way.

Auditing and reporting help to robust your financial statement. It helps to know the business actual condition, performances, and movement. When the auditioning is done in the right manner, it ascertains the strength and weakness of the business.

  1. Limitation of pressure on employees:

This is also one of the thinking matter that how much pressure should be given to the employees and staff to utilize them and engage them in works. Putting more pressure on the employees may increase their works of duration but not the production.

So there should be given the limited and sweet pressure on the employees so that they can give more output in a short period of time. There are also some employees who do not listen to their managers and does the action according to themselves. Those kinds of employees should be kept on pressure. This kinds of matter can be only solved when there is a business plan.

  1. Limitation of pressure on manager and management:

This types of action should be taken in a high scale business where there is a large number of employees and many departmental managers. In that situation, you have gives pressure in balancing way on both teams. Managers should also be directed according to the goal and plan. When you give more pressure on the managers, they may also leave the job in mid phase.

So the half works are done by them never get completed. That is why there is a need of business plan which maintains the balance of pressure over the management and managers to operate the business in a proper manner.

  1. Cash management system:

Cash in the business must be available at any time. The business even does not move a single step with cash. In every step, there is the need for cash. As we also know that almost all the works can be performed by the cash.

Cash is only the way which can solve even the blunder problems. Similarly, the cash should be managed in the right way, so that the cash can be at hand when it needs to deal with any other partners and agency. Business must have always cash to make continuity in the operation of the business.

  1. Credit collection management:

It is also one of the challenging tasks of the business which makes the business weak when the money is not collected at the time. So business should always be operated in the balancing of cash transaction and credit transaction.

If you do credit transaction more than a cash transaction, then the business wheel will not go far. Business always demands cash. Without the incoming and outgoing of cash in business will let it survive. So you have to manage a team and strategy to collect the credit from the market for reinvestment and growth.

  1. The contract period for employees and managers:

As we know that while at the time of appointing or hiring the new employees, there is done the contract for works. So the contract period even differs according to the level of works and post.

All these things should be defined at the time of hiring. It is done mostly to provide them with some fund while leaving the company. Nextly, there may be the thinking or planning of appointing the staff for the post only for any definite years. So all these subjects should be clearly defined while appointing them.

  1. Facilities after contribution for a long period of time:

This is also the most typical subject to make the employees happy and give them some fund for spending their rest of the life. As in many big scale business or company, there is the provision of proving huge funds that are given when they contribute more than 10 years or more than that.

Mostly, some percent of the amount is deposited into their account for providing them as gift and contribution incentives. This is also the matter which can be discussed in the business plan and get its solution.

  1. Judging the movement of business:

It simply states the sense of moving or walking just by closing the eyes is also the accidental facts which will make you fall into any pit. If you do not judge the business over some period of time, then you cannot improve your mistakes, controls the over expenses and weakness. It is the primary and compulsory analysis of overviewing the entire business.

Overviewing of business over the period of time also increase the production, utilization of resources and finally also the transaction. These all things are the projection works which is recorded in the business plan. These action helps to grow the business faster and increase their progressive report and height.

  1. Fast services to the customer:

As we know that customer is always in haste and hurry. They pay you the cash instantly and need the product instantly. They have no time. So they want to purchase the more goods at less time. That is why you have to always focus on the speed of services delivery.

The customer does not want n to waste their free time in your shop or place of purchasing. It is also the most considerable matter to highlight for speed transaction. Focusing on the speed of delivering the services also makes the business systematic and more transactional.

The customer is always the king of the market and you have to always to try to keep them happy anyway. For all these kinds of work performances, there is a need for a business plan which projects about it.

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