A business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and

the plan for reaching those goals. It may also contain background information about the organization or team
attempting to reach those goals.

The business goals may be defined for for-profit or for non-profit organizations. For-profit business plans typically
focus on financial goals, such as profit or creation of wealth. Non-profit and government agency business plans tend
to focus on organizational mission which is the basis for their governmental status or their non-profit, tax-exempt
status, respectively—although non-profits may also focus on optimizing revenue. In non-profit organizations,
creative tensions may develop in the effort to balance mission with "margin" (or revenue). Business plans may also
target changes in perception and branding by the customer, client, tax-payer, or larger community. A business plan
having changes in perception and branding as its primary goals is called a marketing plan.

Business plans may be internally or externally focused. Externally focused plans target goals that are important to
external stakeholders, particularly financial stakeholders. They typically have detailed information about the
organization or team attempting to reach the goals. With for-profit entities, external stakeholders include investors
and customers.[1] External stake-holders of non-profits include donors and the clients of the non-profit's services.[2]
For government agencies, external stakeholders include tax-payers, higher-level government agencies, and
international lending bodies such as the IMF, the World Bank, various economic agencies of the UN, and
development banks.

Internally focused business plans target intermediate goals required to reach the external goals. They may cover the
development of a new product, a new service, a new IT system, a restructuring of finance, the refurbishing of a
factory or a restructuring of the organization. An internal business plan is often developed in conjunction with a
balanced scorecard or a list of critical success factors. This allows success of the plan to be measured using non-
financial measures. Business plans that identify and target internal goals, but provide only general guidance on how
they will be met are called strategic plans.

Operational plans describe the goals of an internal organization, working group or department.[3] Project plans,
sometimes known as project frameworks, describe the goals of a particular project. They may also address the
project's place within the organization's larger strategic goals.[4][5]

Entrepreneurship is the act of being an entrepreneur, which is a French word meaning "one who undertakes an
endeavor". Entrepreneurs assemble resources including innovations, finance and business acumen in an effort to
transform innovations into economic goods. This may result in new organizations or may be part of revitalizing
mature organizations in response to a perceived opportunity. The most obvious form of entrepreneurship is that of
starting new businesses; however, in recent years, the term has been extended to include social and political forms of
entrepreneurial activity. When entrepreneurship is describing activities within a firm or large organization it is
referred to as intra-preneurship and may include corporate venturing, when large entities spin-off organizations. [1]

According to Paul Reynolds, entrepreneurship scholar and creator of the Global Entrepreneurship Monitor, "by the
time they reach their retirement years, half of all working men in the United States probably have a period of self-
employment of one or more years; one in four may have engaged in self-employoment for six or more years.
Participating in a new business creation is a common activity among U.S. workers over their course of their
careers." [2] And in recent years has been documented by scholars such as David Audretsch to be a major driver of
economic growth in both the United States and Western Europe.

Entrepreneurial activities are substantially different depending on the type of organization that is being started.
Entrepreneurship ranges in scale from solo projects (even involving the entrepreneur only part-time) to major
undertakings creating many job opportunities. Many "high value" entrepreneurial ventures seek venture capital or
angel funding in order to raise capital to build the business. Angel investors generally seek returns of 20-30% and
more extensive involvement in the business.[3] Many kinds of organizations now exist to support would-be
entrepreneurs, including specialized government agencies, business incubators, science parks, and some NGOs. In
more recent times, the term entrepreneurship has been extended to include elements not related necessarliy to
business formation activity such as conceptualizations of entrepreneurship as a specific mindset (see also
entrepreneurial mindset) resulting in entrepreneurial initiatives e.g. in the form of social entrepreneurship, political
entrepreneurship, or knowledge entrepreneurship have emerged.

The entrepreneur is an actor in microeconomics, and the study of entrepreneurship reaches back to the work of
Richard Cantillon and Adam Smith in the late 17th and early 18th centuries, but was largely ignored theoretically
until the late 19th and early 20th centuries and empirically until a profound resurgence in business and economics in
the last 40 years.

In the 20th century, the understanding of entrepreneurship owes much to the work of economist Joseph Schumpeter
in the 1940s and other Austrian economists such as Carl Menger, Ludwig von Mises and Friedrich von Hayek. In
Schumpeter, an entrepreneur is a person who is willing and able to convert a new idea or invention into a successful
innovation.[4] Entrepreneurship employs what Schumpeter called "the gale of creative destruction" to replace in
whole or in part inferior innovations across markets and industries, simultaneously creating new products including
new business models. In this way, creative destruction is largely responsible for the dynamism of industries and
long-run economic growth. The supposition that entrepreneurship leads to economic growth is an interpretation of
the residual in endogenous growth theory and as such is hotly debated in academic economics. An alternate,
description posited by Israel Kirzner suggests that the majority of innovations may be much more incremental
improvements such as the replacement of paper with plastic in the construction of a drinking straw.

For Schumpeter, entrepreneurship resulted in new industries but also in new combinations of currently existing
inputs. Schumpeter's initial example of this was the combination of a steam engine and then current wagon making
technologies to produce the horseless carriage. In this case the innovation, the car, was transformational but did not
require the development of a new technology, merely the application of existing technologies in a novel manner. It
did not immediately replace the horsedrawn carriage, but in time, incremental improvements which reduced the cost
and improved the technology led to the complete practical replacement of beast drawn vehicles in modern
transportation. Despite Schumpeter's early 20th-century contributions, traditional microeconomic theory did not
formally consider the entrepreneur in its theoretical frameworks (instead assuming that resources would find each
other through a price system). In this treatment the entrepreneur was an implied but unspecified actor, but it is
consistent with the concept of the entrepreneur being the agent of x-efficiency.

Different scholars have described entrepreneurs as, among other things, baring risk. For Schumpeter, the
entrepreneur did not bare risk: the capitalist did.

For Frank H. Knight [5] (1921) and Peter Drucker (1970) entrepreneurship is about taking risk. The behavior of the
entrepreneur reflects a kind of person willing to put his or her career and financial security on the line and take risks
in the name of an idea, spending much time as well as capital on an uncertain venture. Knight classified three types
of uncertainty.

 Risk, which is measurable statistically (such as the probability of drawing a red colour ball from a jar
containing 5 red balls and 5 white balls).
 Ambiguity, which is hard to measure statistically (such as the probability of drawing a red ball from a jar
containing 5 red balls but with an unknown number of white balls).
 True Uncertainty or Knightian Uncertainty, which is impossible to estimate or predict statistically (such as
the probability of drawing a red ball from a jar whose number of red balls is unknown as well as the
number of other coloured balls).

The acts of entrepreneurship are often associated with true uncertainty, particularly when it involves bringing
something really novel to the world, whose market never exists. However, even if a market already exists, there is
no guarantee that a market exists for a particular new player in the cola category.

The place of the disharmony-creating and idiosyncratic entrepreneur in traditional economic theory (which describes
many efficiency-based ratios assuming uniform outputs) presents theoretic quandaries. William Baumol has added
greatly to this area of economic theory and was recently honored for it at the 2006 annual meeting of the American
Economic Association.[6]