Importance of Business Plans for Entrepreneurs: Sector Justifications

This report, submitted to the University of Edinburgh, explores the utility of business plans for entrepreneurs across the security, IT, and hospitality sectors. It addresses concerns about the necessity of business plans, providing sector-specific justifications for their use. The report highlights how business plans aid in break-even analysis, risk management, and strategic readiness. It emphasizes the application of tools like SWOT and PESTEL analysis to navigate market conditions and financial projections. The conclusion underscores the business plan's role in guiding entrepreneurs toward sustainable business practices and securing investment, offering a practical framework for business development and expansion.

Entrepreneurship- B
Utility of Business Plan for Entrepreneurs -
Justifications for Security, IT and Hospitality
sectors
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Table of Contents
Introduction.................................................................................................................................................3
Justifications................................................................................................................................................3
Security sector.........................................................................................................................................3
IT sector...................................................................................................................................................3
Hospitality sector.....................................................................................................................................3
Conclusion...................................................................................................................................................4
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Introduction
Refer to previous essay, Utility of Business Plan for Entrepreneurship, the role of business plan
was discussed refer to entrepreneur point of view. There are differences of opinion received from
different entrepreneurs of different sectors. They are not interested to use this module for their
business raising question of its viability. This essay will give justification for the practice of
business plan for them individually.
Justifications
Security sector
This sector is service-based. If any business plan is not made for this venture, the entrepreneur
will not be able to make break-even analysis in respect of revenue and time. Being an
entrepreneur in service segment, he should know when he will reach coveted level of revenue to
meet his fixed and overhead expenses. Business plan can give tentative forecast of such
projection with the pricing strategy of services offered to the clients. The cash flow statement can
project the tentative time to reach cash positive position. Hence, the utility of business plan is not
in theoretical concept, but in real-life through guidance of different stages of business process for
sustainability.
IT sector
IT sector is involved in sale of different IT related products and service related to installation and
maintenance of these saleable items and respective services. Being an entrepreneur in this
segment, the use of SWOT and PESTEL analysis can give clear idea of market conditions. The
hurdles in this business can be overcome by business plan with analysis of probable risk
management and assessment of different internal and external factors featured in SWOT
analysis. PESTEL analysis can give clear idea of the socio-economic situation, in which the
business will be started. It is fact that future can only prove the success of any business, but
proper planning in different aspects of business through business plan can give strategic
readiness for implementation of Plan A or Plan B as per changed market scenario.
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Hospitality sector
This sector is also involved in sales and service of hospitality products. The entrepreneur of this
segment had raised question about the viability of financial projection due to probability of
losing the premises on which the business would be planned to start due to non-arrangement of
finance. It is the preamble of any business plan that the assets in consideration with its buying
value are to be projected in balance sheet as an asset. If the said asset in the form of premises is
not available by the time of arranging fiancé, the requirement of fund would be same or higher to
match the requirement of the business. The role of business plan is to convince the investors. If
the business plan is realistic with proper financial projection, the investors will judge the
viability of the project and invest in the project leaving no scope of losing the premises. Hence,
the role business plan will not be ignored for this specific issue of procurement of premises.
Conclusion
Business plan is the well accepted instrument for entrepreneurs to start any venture or for
expansion of any existing business to understand different aspects of the business with its
financials. It may not be able to project exact forecast for periods, but the distinct idea provided
by it can be useful for the entrepreneur to start a business and run in sustainable manner.
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