On the other hand, a business plan also being a key factor, it is defined, as a product of the strategic thinking and the planning process. The strategic ways developed in the process of planning is then communicated in the form of a business plan. This business plan is directed to lenders, associates within the company and the potential investors. The importance of a business plan is a critical step that each company has to recognize. This is because it allows the business to leverage the competence and knowledge of the management team involved. The management team uses it to develop a strategic direction for the organization leading to its chances for success. In addition, when a venture owner has million-dollar ideas, unless it is put down in a business plan, all this ideas will be useless to the business. This is because by stating them in a business plan, the team is forced to contemplate all aspects of the business to be stated including those, which has been given a little thought.
Furthermore, it gives the owner of the business an opportunity to use the advisory team to bring the business to a success. A business plan gives an outlay of what the business is all about, the opportunities owner of the business sees and how he or she intends to make money. It is a guide to carry out the strategic thinking as an idea into the successful business operations. In the midst of change in the technology because of the new products, processes, and services, the business plan is of much importance to enable the firm lay down the strategies of adapting to these changes.
The effects of the changing environment have lead to a reduced product life cycle of the new products. This means that the old products needs to be replaced which is only possible through creative thinking leading to innovation. Therefore, use of a business plan in the process of creative thinking, and innovation will enable the firm to come up with the ways of improving the product. This can be installation of new machinery, or a change of all production system of the firm.
The nature of customers in the current days is so sophisticated, demanding, and segmented. The business plan will set the overall market, and customers to be targeted in the various marketing services in the business. Customers expect new things, and therefore, innovation skills are necessary to satisfy their needs while retaining them in the organization. To accomplish this, a good business plan will give the innovation skills required to needs of the customers. It also narrates the marketing strategies to be used to reach these customers. It gives an outlay on the state why and how the owner of the business believes that the marketing strategies chosen are the best and can be profitable. A business plan gives the appendix copies of marketing information the firm has researched on, and a description on the competition and how to compete with the other competitors in the market.