A business plan is a formal and written document, capturing the goals of a business, the way these goals will be achieved and the time frame for attaining these goals. It is a blue print for navigating the future and delivering the desired outcomes of the business.
A business plan is an important document aimed at a company's external and internal audiences. For instance, a business plan is used to attract investment before a company has established a proven track record. It can also help to secure lending from financial institutions.
Furthermore, a business plan can serve to keep a company's executive team on the same page about strategic action items and on target for meeting established goals.
Although they're especially useful for new businesses, every company should have a business plan. Ideally, the plan is reviewed and updated periodically to reflect goals that have been met or have changed. Sometimes, a new business plan is created for an established business that has decided to move in a new direction.
There are several reasons that necessitate making a business plan including: