What is the primary purpose of a business plan?

The primary purpose of a business plan is to outline the business goals, strategies, and financial projections. A business plan serves as a roadmap for the business, detailing not only what the business aims to achieve but also how it plans to reach those goals. This includes describing the target market, competitive landscape, marketing and operational strategies, and financial forecasts. By providing a comprehensive overview, a business plan helps entrepreneurs and managers clarify their vision and strategically plan for the future, which is essential for securing funding and guiding decision-making processes.

While other options might represent important aspects of running a business, they do not encapsulate the broader framework that a business plan provides. For instance, a marketing strategy focuses specifically on how to promote and sell a product, which is merely one element of the overall business objectives. Setting performance standards for employees is tied to operational management rather than strategy at the business level. Conducting market research, though critical for understanding the landscape in which the business operates, is a component that informs the business plan rather than serving as its main purpose.