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Advantages
- Enables owners of new or existing business to review their ideas and see if it will provide a profitable future
- Reduces risk- guide for business for what to do and when
- Allows business to measure success against plan; make changes if need be
- help ensure finance is available e.g. bank loans, lenders will see if business is organised
- helps to set objectives in order to achieve aims
- Helps set up a business successfully
- helps to co-ordinate actions- plan should be set out to for how an objective is going to be achieved.
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Disadvantages
- Uncertainty of what will happen in the future makes it harder to predict your statistics e.g. the no. units sold of the product
- Lack of experience. Usually people who make their plans lack very much experience and are not as effective when planning.
- Change. Business plans need to be reviewed and updated regularly.
- Does not guarantee business success. -Plan quality may be low due to lack of experience from the people who wrote it.
- Takes time and effort which may be expensive, especially for small businesses.
- New opportunities can be missed if they are not in the plan.
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