1. The business plan is a great material to impress people, especially the stakeholders. It can take the role of a sales tool to convince clients, investors, and bankers. In some cases, the business plan is the best way to make proposals and present marketing and sales strategies.
2. The business plan helps in assessing if the business venture is worth pursuing. The business plan is the forecast of what the company should look like in the future, say, five years. Working backwards, the company should earn as much as “X” today and in the years thereafter in order to earn a profit of “Y” five years from now.
3. The business plan is the tool to determine the breakeven point. At breakeven point, all revenues equal expenses. If the bottom figure of the financial figure is below the breakeven point, it means the business will be at a loss. Any figure beyond the breakeven point indicates profit.