What Is the Definition of a Business Plan?

One of the most important aspects of running a business is the business plan. A business plan is an ever-changing, ever-growing document that must be edited continually as the business grows. Besides just telling the world who you are, the business plan helps the owner and managers keep goals in sight, keeping them focused and on track to reach new levels of success.

Definition

The business plan is a document that tells the world who you are, what you have to offer, where you are going and how you plan to get there.

History

The first section of the business plan should include a history of the company as a whole--or, for a new company, should give a background on how the company came into existence.

What is Offered

The next section of the business plan should explain what types of items are for sale or what services the company offers.

Forecast

This section of the business plan should tell how the company hopes to grow. This should include expanding into different markets, including new items in the future or offering other services and any other goals the company has.

Financial Projections

The final major section of the business plan should include projected financial statements, including cash flows and expected profits. This section should also specify any steps the company plans to take to reach its goals stated in the previous section.

Uses

A business plan is used to give investors and banks a clear picture of the company. The plan is also intended to keep the owner and managers a road map for their goals.