what is a business plan 
a business plan is a document that outlines a company s goals and the strategies to achieve them it s valuable for both startups and established companies for startups a well crafted business plan is crucial for attracting potential lenders and investors established businesses use business plans to stay on track and aligned with their growth objectives this article will explain the key components of an effective business plan and guidance on how to write one investopedia ryan oakleyunderstanding business plansany new business should have a business plan in place before beginning operations banks and venture capital firms often want to see a business plan before considering making a loan or providing capital to new businesses even if a company doesn t need additional funding having a business plan helps it stay focused on its goals research from the university of oregon shows that businesses with a plan are significantly more likely to secure funding than those without one 1 moreover companies with a business plan grow 30 faster than those that don t plan 2 according to a harvard business review article entrepreneurs who write formal plans are 16 more likely to achieve viability than those who don t 3a business plan should ideally be reviewed and updated periodically to reflect achieved goals or changes in direction an established business moving in a new direction might even create an entirely new plan there are numerous benefits to creating and sticking to a well conceived business plan it allows for careful consideration of ideas before significant investment highlights potential obstacles to success and provides a tool for seeking objective feedback from trusted outsiders a business plan may also help ensure that a company s executive team remains aligned on strategic action items and priorities while business plans vary widely even among competitors in the same industry they often share basic elements detailed below a well crafted business plan is essential for attracting investors and guiding a company s strategic growth it should address market needs and investor requirements and provide clear financial projections 4