What is the primary purpose of a business plan?

A business plan is a planning document for a start-up enterprise. The plan shall describe, among other things, the business idea, the market, the organization, the product or services, the implementation plan, the finances, budgets, capital needs, financing and the most important risk factors. The plan will normally cover the next five years.

The plan is primarily a tool for the entrepreneur himself. The process of writing the plan is often more important than the finished product. For example, a realistic budget could reveal whether the business idea needs to be changed or rejected.  

A business plan is not least an important document for investors, financial institutions and possibly others invited into the project.