Preparing a business plan draws on a wide range of knowledge from many different business disciplines: finance, human resource management, intellectual property management, supply chain management, operations management, and marketing, among others. a good business plan can help to make a good business credible, understandable, and attractive to someone who is unfamiliar with the business.
It also describes the nature of the business, background information on the organization, the organization's financial projections, and the strategies it intends to implement to achieve the stated targets.
In its entirety, this document serves as a road map that provides direction to the business.
Business plans that identify and target internal goals, but provide only general guidance on how they will be met are called strategic plans.
Operational plans describe the goals of an internal organization, working group or department. The content and format of the business plan is determined by the goals and audience.
It is common for businesses, especially start-ups, to have three or four formats for the same business plan.
An "elevator pitch" is a short summary of the plan's executive summary.
Venture capitalists are primarily concerned about initial investment, feasibility, and exit valuation.
A business plan for a project requiring equity financing will need to explain why current resources, upcoming growth opportunities, and sustainable competitive advantage will lead to a high exit valuation.
Internally-focused business plans target intermediate goals required to reach the external goals.
They may cover the development of a new product, a new service, a new IT system, a restructuring of finance, the refurbishing of a factory or a restructuring of the organization.