Which of the following is a function of a business plan?
A) to improve the balance sheet and enhance net worth
B) to raise capital through federally registered shares of the company
C) to improve credibility with customers and other stakeholders
D) to determine the viability of one's enterprise
E) to create a long-term relationship with an investment banking firm

Question

Quizplus · Accepted Answer

The purpose of a business plan is to determine the viability of one's enterprise. It helps to assess the potential challenges and pitfalls, identify opportunities, and formulate strategies to overcome them. While a business plan may indirectly improve the balance sheet and credibility with stakeholders, its primary function is to determine the feasibility and sustainability of a business idea. The other options - raising capital, creating a long-term relationship with an investment banking firm - are more tactical objectives that may be achieved as a result of having a solid business plan, but they are not the core purpose of a business plan.

Which of the Following Is a Function of a Business