What is a business plan?

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Business Plan Software

What is a business plan?

A business plan is a written description of what you plan on doing and how you plan on doing it. Depending upon who's going to read your business plan, and what you are going to use it for, your business plan will vary in form and length.

Whenever entrepreneurs hear the term "business plan," they envision a one-inch thick document crammed with every possible piece of business-related information. This is not always the case. A business plan has many uses, which dictates what information, and how much of it, you should include in your business plan.

For example, a business plan could be used internally to identify goals and strategies to key employees. Since people inside your business may already be familiar with your business and how it operates, such a business plan may be much shorter and less formal.

However, most entrepreneurs write business plans to obtain funding. Since many investors want to know the "ins" and "outs" of your business, your business plan needs to explain your products and services, markets, competition, industry, operations, and opportunities in greater detail. This could result in a pretty hefty document, especially when your business plan includes a detailed financial forecast.

Before writing your business plan, you will need to identify who is going to read your business plan and your reasons for writing it.