Put simply, a birth plan is a document you create to communicate your wishes and requests to your medical practitioner, the birth team, and your support team (whether that's your partner, a doula, or someone else). You write the plan months before labor begins, when you have time to research and think through your options — preferably before contractions make concentrating difficult!
Planning ahead also allows you to switch medical practitioners if your current doctor or midwife isn't on board with your plans.
Despite the name, a birth plan also includes your wishes for the immediate postpartum period, like how you intend to feed your baby and where you want her to sleep if you're giving birth in a hospital. Birth plans also cover the fun options, like who will announce the baby's gender and who cuts the cord.