Business Plan
A business plan describes a project's idea, market, revenue model, and expenses. This document shows whether demand, pricing, and unit economics add up before any money is invested in the project.
What a Business Plan Includes
A business plan typically includes a description of the product and its value, an analysis of the market and competitors, a marketing plan, operational processes, the team, a financial model, and risks. For internal purposes, a short version of a few pages is sufficient. Investors are usually presented with a more detailed version, including several scenarios, calculations, and payback periods.
Who Needs It and Why
For an entrepreneur, a business plan helps validate an idea and avoid spending money on a business model that is bound to be unprofitable. For an investor or a bank, it shows how the project will generate returns on the investment. For the team, it sets benchmarks against which actual results are compared at the end of a quarter or year.