C1 Lack of Planning
Effective business planning helps identify target markets. Without effective planning, entrepreneurs may lack understanding of target markets and miss opportunities or changes in consumer preferences, leading to products that don't meet demand. Businesses with strategic can adapt proactively to changes in the market.
Clearly defined targets and tracking progress against them can help a business become more organised, efficient and be aware of opportunities for growth. Businesses with strategic plans can evaluate performance, make adjustments and are therefore less likely to fail.
Business plans help entrepreneurs to secure loans. Lenders need detailed plans to assess if a business is viable, profitable and likely to be able to make repayments before lending money. When lenders see a business as a higher risk they may add higher interest rates which increase the cost of borrowing.
