A business plan is a document that outlines how a business works and how it plans to succeed. It is designed to focus the business strategy, to set milestones and goals and to make basic financial projections.
Formal business plans focus internal managers' attention and provide information to external individuals. A business plan typically includes an executive summary, an overview of the company and its management structure, the products and services offered by the company and its financial projections. Critical factors unique to the business type are also addressed, such as the patent approval process in a chemical firm or the location details of a restaurant. Internal business plans require less sophistication while business plans for investors require more detail.
According to the Harvard Business Review, business plans should be flexible and dynamic documents. Palo Alto Software recommends keeping business plans as digital files and planning a regular review schedule. Physical versions of the organic plan act as snapshots at a particular time.