The main purpose of a business plan for a new business is to OBTAIN FINANCE for the start-up. Potential investors or creditors will not provide finance unless clear details about the business proposal have been written down.

An entrepreneur needs to have a clear sense of purpose and direction so that they can use the correct marketing strategies, hire the correct employees etc... 

The business plan should include a TIMELINE, that FORECASTED TARGETS for SALES, REVENUE, PROFITS, MARKET SHARE etc..., these targets allow the business to evaluate its progress.

One disadvantage is that information in the business plan can become outdated very quickly, such as findings from market research which can frequently change as its based on consumer tastes, and this will inevitably impact the accuracy of these targets, which may need to changed.

After reading the three reasons why business plans are important for a start-up businsess, apply them directly to your upcoming EXTENDED ESSAY, to explain why it is essential for you to write a good plan in order to be successful. (Also mention how the disadvantage mentioned in 'to set targets' is also applicable to the EE process)

As mentioned above, the plan is used to secure finance and thus is used by POTENTIAL INVESTORS to make a judgement about the viability of the idea and the chances of the owners making a success of it.

EMPLOYEES will find that planning helps to identify specific objectives and targets and gives focus to their work, which aids motivation.

MANAGERS can use the updated versions of the plan to justify and apply for additional funding, to attract more partners or to supply data for the experts if a stock market flotation becomes an option.

SUPPLIERS may be able to tell from the parts of the business plan that are communicated externally whether it is worthwhile establishing a long-term trading relationship with the business.