What are the three basic purposes of business plans?

The correct choice highlights the three basic purposes of business plans as communication, management, and planning tools. A business plan serves as a comprehensive document that communicates to stakeholders—such as investors, employees, and business partners—the vision and strategy of a business. It outlines how the business intends to operate and succeed, making it an important tool for managing expectations and fostering collaboration.

In terms of management, a well-structured business plan provides a framework for making informed decisions, setting objectives, and measuring progress over time. It acts as a guide for managing daily operations and aligning resources with strategic goals.

Furthermore, business plans are essential planning tools that allow businesses to map out their short-term and long-term strategies. They help in anticipating challenges, identifying opportunities, and laying out steps to achieve business objectives, thereby reinforcing accountability and strategic thinking within the organization.

Each of the other choices touches on important aspects of running a business but does not encapsulate the fundamental purposes of a business plan as effectively as this one. For instance, marketing is a component of a business strategy, but it does not represent the broader functions of communication and management found in a comprehensive business plan.