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Three main purpose of a business plan

While some owners may be tempted to jump directly into startup mode, writing a business plan is a crucial first step for budding entrepreneurs to check the viability of a business before investing too much time or money. The purpose of a business plan is to help articulate a strategy for starting your business. It also provides insight on steps to be taken, resources required for achieving your business goals and a timeline of anticipated results. For existing small businesses, a business plan should be updated annually as a way to guide growth and navigate the expansion into new markets.
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What Are the Main Purposes of a Business Plan?

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The concept of business plan and the purpose of preparing a business plan

Product and service reviews are conducted independently by our editorial team, but we sometimes make money when you click on links. Learn more. Preparing a business plan is like outlining an itinerary for a road trip. You want a clear map that you can follow step by step while developing your business. Editor's note: Looking for information on creating a custom business plan?
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The concept of business plan and the purpose of preparing a business plan

In this edited excerpt, the authors offer five reasons why someone would want to write a business plan and what they'll use it for. Anybody beginning or extending a venture that will consume significant resources of money, energy or time and that's expected to return a profit should take the time to draft some kind of business plan. The classic business plan writer is an entrepreneur seeking funds to help start a new venture. Many great companies had their starts in the form of a plan that was used to convince investors to put up the capital necessary to get them under way. Many business plans are written by and for companies that are long past the startup stage but also well short of large-corporation status.
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A company business plan includes specific tactics for reaching objectives set in the business strategy. A business plan is merely a "plan for the business," where the business may be a profit-making company, a government organization, or a non-profit organization. A business plan can also represent a product line, an individual product, a line of service products, or some other part of a larger business entity. For companies in private industry, the heart of the business plan is a business model and business strategy which describe how and where the company expects to make and spend money. All other parts of the business plan stem from the model.
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