What Is the Meaning of a Business Plan?

A business plan summarizes the start-up and management of a new venture.

A business plan is, in simple terms, a plan that outlines the goals and objectives of a company and how they will be met. For a new venture, the business plan is an invaluable tool.

Contents

A business plan provides a summary of how a business will be managed and how it will grow. The main components include an executive summary; company description; marketing, operational and staffing plans; management and organizational structure; a risk analysis and financial information including forecasts, cash flow statements, balance sheets and income statements.

Function

The business plan serves two primary functions. The first is to provide a detailed blueprint for the start-up and successful operation of a company. It also serves as a financial prospectus for lenders and investors.

Considerations

Good business plans are clear, concise, factual and based on substantial research. They are also dynamic and are updated as necessary to reflect the current state of the venture.

References

• Gaebler Resources for Entrepreneurs: Business Plan Basics
• University of Alaska Center for Economic Development: Steps to Success for Rural Entrepreneurs-Writing Your Small Business Plan