What is the primary purpose of a business plan?

The primary purpose of a business plan is to outline business goals and strategies. A business plan serves as a roadmap for entrepreneurs, detailing how their business intends to achieve its objectives and the strategies they will employ to do so. It encompasses an analysis of the market, competition, and operational structure, as well as financial projections, which are essential for guiding decision-making and securing funding from investors or lenders.

While assessing company assets, increasing employee morale, and reducing operational costs can be beneficial outcomes related to effective planning and management practices, they do not capture the overarching intent of a business plan. The focus of a business plan is primarily to set forth a clear strategy for achieving business success and ensuring all stakeholders understand the vision and the steps necessary to realize it.