It can assist in helping you predicting future events that may affect your business.
A good way to see how Many Capital may need to be invested (if it's in start-up stages)
Can be used to assist in getting external finances. I.e. Business Angels, Bank Loans etc. - a lot of external financiers would like to see a business plan before providing anything. Especially if your very small(Banks are unlikely to give loans out to small businesses anyway.)
Gives you a sense of direction - You know where you want to be at the end of the financial period (likely a year) and helps you produce your Aims and Objectives for this period.
Helps the owner determine weather the business will be profitable and brake-even (the point where you are no longer making a loss or profit) before starting up a business.
Not 100% accurate. As some world events you cannot or may of not predicted. I.e. Recessions, Wars, Changes in legislation.
Takes time to produce a business plan.
It may not be realistic for the business. This causes issues with getting external finances. For example, predicting you'll make 500 Sales in your first day. It might happen but it probably wont.
Overall, a good or bad business plan can make or brake a business. This is because without making one you are more likely to make mistakes along the way or have no sense of direction. Therefore, it's important that any business (Especially start-up businesses) that have a business plan of some form, but it still should not be trusted as world events that affect it might occur!