Business plans also eliminate chances of having poor systematic approach to decision making among the venture owners. A logical and systematic decision making process is needed to address the critical and comprehensive elements leading to a good decision making. By taking this approach, the owner of the venture will be less likely to miss; the key factors required in effectively make a decision. These factors are, creation of a constructive environment, generation of brilliant ideas, exploration of these ideas, choosing the best alternative and communicating this alternative to the rest of the employees. A business plan is also an equipment in assessing situations in the business operations. It identifies and recognizes the key opportunities and challenges, possible risk and barriers in the business. It illustrates the ways of overcoming this challenges thus encouraging objective analysis. In a situation where a project is involved in the business operation, a business plan serves as a mechanism in determining the scope and the magnitude of a project. It also a requirement for identifying and qualifying the core competencies and the resources required for the project development. As the project progresses, the business plan gives a description on how the internal operations will be structured from the top to the bottom in order to produce the project. It indicates what support services, facilities, legal advisory services, casting, equipment, locations, and subtitling required in successfully execute the project. It also documents any key capital requirements necessary for delivering the project, Outline sources of the capital and terms for funding the project and what financing has been sourced so far and how much is still required.
As a tool for communication, business plan attracts investment capital, convince workers to hire on, secure loans, and assist in attracting strategic business partners. Similarly, another factor required for communication is competency. In many businesses, they reach a point known as a strategic reflection point whereby the fundamental operations of a business profoundly change. Therefore, during this stage a business plan gives competence to the firm’s management or founders to determine the future of its operations. This shows that all the founders of an organization have to have some competence skills and managerial skills, which are outline in the business plan.
Apart from providing a map for the implementation and the requirements of a business, a business plan also serves as prospectors for any potential supporters and participants in the business. It gives the potential supporter confidence to be engaged in the operations of the business in terms of financial support or human resource support.