Why a business needs a business plan
Entrepreneurship is a global phenomenon occurring in undeveloped, developed and developing countries. Different governments worldwide have so far acknowledged the importance and the impact of entrepreneurial activities on job creation and improvement of people’s standard of living. This has a significant impact on the economy of the nation. However, not all the entrepreneurs are experiencing this positive impact, because most of them have been unsuccessful because of business plans they prepare for their business and other factors. These include such factors like, opportunity recognition and assessment, the development of the business plan, the harnessing of resources and other management challenges. In this paper, I will discuss why a firm should prepare a business plan and how it affects the process involved in entrepreneurship of new venture creation and small business management from both a theoretical and practical perspective. In addition, I will give the definition of entrepreneurial success and a detailed explanation of a business plan in a business perspective.
Entrepreneurial success involves the attainment of all the processes functions, activities, and actions associated with the perception of opportunities and creation of organizations to pursue an entrepreneurial activity. For this success to be attained, the firm has to device new organizational forms and processes to enhance its ability to exploit new opportunities both locally and internationally. Entrepreneurial business is characterized by the capacity to plan-ahead according to the business plan of the organization and the capacity to be innovative and be willing to take the risk of the plans (Georgellis, Joyce, and Woods 2000:7). Innovation being one of the key factors, it can have a significant impact on the success of an entrepreneur in that without it automation decline is inevitable. According to Rogers, (Lee, J. and Runge, J. 2001), he defines innovation as the idea, practice or an object an individual perceives to be new. He further says that innovation does not need to be necessary a newly invented thing but rather, something new that can be adapted to the organization. The innovation an individual chooses is essential due to the following reasons: