A business plan is a comprehensively written down document prepared by the entrepreneur describing formally all the relevant external and internal elements involved in starting a new venture. 

The business plan: 

(i) Viability: It helps in finding the viability of the venture in a designated market 

(ii) Guidance: It helps in providing guidance to the entrepreneur in organizing, planning activities as such: 

(a) identifying the resources required 

(b) enabling obtaining of licenses if required, etc. 

(c) working out with legal requirements. 

(iii) Queries: It helps in satisfying the queries, and issues of each group of people interested in the venture. 

(iv) Evaluation: It provides room for self¬assessment and self-evaluation. 

(v) Planning: It helps entrepreneur to plan ways to avoid obstacles. 

(vi) Obstacles: It helps to realize the obstacles which cannot be avoided or overcome, suggesting to stop the venture while still on paper without investing further time and money. 

(vii) Credit history: It reflects the entrepreneur’s credit history, the ability to meet debt and interest payments, and the amount of personal equity invested.