Final answer:
A business plan should be founded on understanding market opportunities, customer demands, and long-term success rather than just revenue growth or optimistic scenarios. It should incorporate economic concepts like price elasticity and investment opportunities to ensure profitability and sustainability.
Step-by-step explanation:
A business plan should be based on a comprehensive understanding of market opportunities, customer demands, and expectations of long-term success. While revenue growth is an integral part of a business plan, it is not the sole focus. Instead, a business must consider economic freedom, investment opportunities, and the creation of wealth. These elements are tied to the price elasticity of demand, which affects how total revenue is generated, and they are intrinsically linked to the long-term profitability and sustainability of a business.
The goal of a business, regardless of its size or complexity, is to earn a profit, which is calculated by subtracting total costs from total revenue. Additionally, it is important to note that while plans should be optimistic, they must also be realistic and not just be based on 'most things going right.' In the volatile world of free markets, expectations of economic performance and stock prices are guided by perceived future successes. Therefore, it is essential that a business plan is grounded in solid market research and realistic expectations about the company's future prospects.