Experts explain why business plans matter

Opinions are often diverse when it comes to business plans. However, entrepreneurs who create and follow one tend to succeed, according to a study reported in the International Small Business Journal. Besides helping to forecast the business's future, a business plan can be used as a tool to grow an Illinois company by helping the owner to realistically put his or her idea into reality.

The research involved an analysis of entrepreneurs beginning a U.S. business. In the study, the researchers discovered that entrepreneurs who work on a solid business plan throughout a year gained valuable insight in three particular areas: competition, the reaction of key stakeholders of the start-up and their knowledge about their company environment as it relates to the way markets develop.

Another excellent benefit of having a business plan is that it helps both new and experienced business owners to learn from their planning. While it may seem difficult and time consuming to craft the business plan, business operators who take time to do this task generally improve their business skills in self-efficacy and expectations of the company's profits. Further, a detailed business plan can come in handy if the owner needs to apply for a loan.

Business plans involve details including making predictions about business income and expenditures, and analyzing and targeting potential markets. Planning can also help minimize the uncertainties entrepreneurs face, such as keeping pace with technological progress and federal regulations.

While many people dream about owning their own business, they may postpone the idea for many reasons, one of which is a fear that they will fail because they lack knowledge and experience. For these reasons, potential entrepreneurs might consider contacting an attorney who focuses his or her practice on business and commercial law. An attorney might be able to offer valuable information regarding taxes, filing the necessary paperwork, the types of business entities and other legal matters.

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