A business plan is a document which describes how a business will ultimately operate, i.e. meet its target market's needs; finance its operations; operate; continue to operate; and evolve to accommodate the changing wants and needs of its market or operating environments. A sound exit strategy (divestiture) is also an integral part of a good business plan.

For large firms and governments, business plans may be a compilation of several ancillary plans, or may be a stand alone plan that dovetails with larger strategic or operational plans. For small to medium sized organizations, the business plan is usually the document that guides the business in reaching its strategic targets; anticipates and allocates cashflows for each point in the business lifecycle; and used to leverage debt financing.

In addition to being a roadmap for the business, business plans are also developed to provide lenders (e.g., banks, trust companies, mezzanine lenders, venture capital firms, angel investors) with a detailed assessment of how investment dollars will be used to start, grow, or turnaround a business.

No longer are business plans "tome-like" dissertations on every aspect of businesses operations. Rather, they have evolved into streamlined, concise, easy to read documents that succinctly specify the who, what, when, where, why and how (W5) of the business. They provide a valid and convincing case that the request for capital is legitimate and appropriate, and offers a balanced approach to describing and assessing  product/service,  market opportunity, and cashflow (as well as payback) parameters.

It is important for businesses in the process of developing a business plan to know who their target audience is. For example, investors will require clear concise answers to:  How much capital do you need? When do you need it? When will I get my money back?...and most importantly, how much money will I get back at the end of the term? 

Sample Business Plan Template:

The emphasis in any particular business plan will depend on the business model, market, and strategic goals of the organization. The two critical components of a business plan are the marketing strategy (e.g., targeting, penetrating, developing markets) and cashflow (how much and when). A good business plans will include many, if not all of the following items:

• Company name and data
• Company ownership
• Management Summary
• Vision
• Mission
• Core organizational values
• Location, services, and facilities
• Financial and strategic objectives
• Business model (how you intend to make money)
• Organizational Structure
• Business Environment:  strengh, weakness, opportunity, threat analysis
• Description of product and/or service 
• Industry analysis
• Competitor analysis
• Market plan, including segmentation analysis
• Start-up requirements summary
• Action plan, tactical plan, implementation plan
• Sales forecast (make it realistic not "pie in the sky") 
• Strategic alliances
• Personnel (HR) Plan
• Review and evaluation plan (critical success factors and Balanced Scorecard)
• Investor payback strategy 
• Financial plan and key assumptions
• Key Financial Indicators
• Break Even Analysis
• Exit Strategy
• Pro Forma Cash Flow
• Pro Forma Income Statement
• Pro Forma Balance Sheet