A business plan is a detailed written document (like a report) outlining the purpose and aims of a business, and detailing how a business sets out to achieve its goals and objectives. Business aim is what the business hopes to achieve and business objectives are ways for how the business is going to achieve its aim.
In details, a business plan starts with describing the business in general. This part of the plan includes details of the entrepreneur, the idea for the business and information about the skills and expertise of managers and workers who need to be recruited.
A business plan also describes the business opportunity (i.e. information about the product and why the entrepreneur believes customers will buy it) and the market (e.g. the current size, potential for growth, trends and main competitors, etc.).
A business plan is a useful planning tool as it requires the owner(s) to consider the marketing, production, finance and human resources of the business. The financial part of the business plan includes financial forecasts – a cash-flow forecast and projected sales revenue and profit for at least the first year of trading.
