What is the primary purpose of a business plan?

The primary purpose of a business plan is to outline company goals and strategies. A business plan serves as a comprehensive document that articulates what a business aims to achieve and how it plans to reach those objectives. This includes detailing specific goals, the vision for the company, and the strategies that will be implemented to navigate the competitive landscape.

It acts as a roadmap for the business, guiding decision-making and informing stakeholders—such as investors, partners, and employees—about the business's intentions. The development of a business plan is a strategic exercise that helps ensure all aspects of the business align towards achieving the overarching goals.

While evaluating employee performance, tracking financial expenditures, and conducting market analysis are important activities within a business, they serve different purposes and are not the primary focus of a business plan. A business plan integrates these elements, but its core function is to provide a structured approach to defining and pursuing company goals and strategies.