Question

Frederick is about to start a small manufacturing business soon. He has asked some of his friends, who are entrepreneurs, for advice. They have told Frederick that he needs to have a business plan in place. Frederick wants to know why a business plan is so important. Which of the following statements would be true?
A. A business plan will help Frederick attract and persuade investors.
B. A business plan will help Frederick guarantee profits in the future.
C. A business plan will help Frederick trick potential customers.
D. A business plan will help Frederick choose the type of product his business should manufacture.

Answer 1

A business plan will help Frederick attract and persuade investors.  A business plan is primarly used to explain the business to potential stakeholders like investors.

Answer 2

Correct answer is Option A, A Business Plan will help Frederick attract and persuade investors.

Frederick is an entrepreneur. He is starting a new business. Many of his friends are entrepreneurs. He asked them for the advice. They told Frederick that he needs to have a business plan. Frederick wants to know why business plan is so important. So the importance of business plan is inevitable. Your business plan determines the future of your business. If your business plan is influential, it will attract investors. Investors will see the potential in your business through your business plan and they will want to invest in your business. So a business plan is very much important while starting a business.