From the investor's perspective: We'll always look for entrepreneurs who demonstrate to us their willingness to &quot;put their money where their mouth is&quot; and who clearly &quot;have skin in the game.&quot; If we don't see indications that they believe in their vision enough to invest their own hard-earned cash, then we won't invest either.
they're not necessary, but they're usefully in making you think through things you might otherwise ignore. Writing the business plan is good discipline for the entrepreneur (and good entrepreneurs frequently have a problem with discipline). The business plan is perhaps the most important written document an entrepreneur can ever create. It describes all critical internal and external elements and strategies for guiding the direction of the venture’s first several years as well as giving potential investors an idea of the venture’s structure, objectives, and future plans. It communicates important entrepreneurial management practices, such as how the venture will mitigate risk, and how the venture will manage uncertainty.