Explain five benefits that a firm may enjoy by preparing a business plan. (10 marks)

Benefits that a firm may enjoy by preparing a business plan

Benefits that a firm may enjoy by preparing a business plan include:

1. Sourcing for finance/capital/loans. It can be used to convince financial institutions and investors to fund the firm’s operations.
2. A tool for evaluation. It can be used to determine whether the firm is achieving its goals and objectives/ help to make necessary adjustment/changes/ for supervision purposes
3. A tool for management. It can be used for- structuring the implementation of the functions /tool for planning. organizing, directing, staffing, coordinating budgeting/communicating
4. Gives the firm a competitive edge. It enables the firm to get a better understanding of the market and competitors.
5. Enhances efficiency in the use of the resources of the firm. It ensures that the resources available are allocated and used in the best way possible without wastage
6. Motivational tool. It inspires the management /employees /creates team work in accomplishing the objectives of the firm.
7. Framework /blue print/guide for- implementing a new business, thus assisting management in decision/actions on the (possible) strengths, weaknesses, opportunities and threats on a day to day basis

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