A business plan provides a structure to deepen and strengthen a business idea or to develop in more detail the broad actions that have arisen during a strategic planning exercise. It helps to reveal gaps in available information. It forms the basis on which a business concept can be realised, a low-cost dry run for the real thing plus a communication tool for stakeholders.
Any business concept needs to address three key questions:
A new enterprise matures based on the quantity and quality of three ingredients:
In later stages of the company, a business plan becomes a tool to help management to think about the strategic rather than the operational day-to-day side of the business. It allows management to measure progress and to evaluate assumptions underlying the business plan.