How to Write a Business Plan
A business plan illustrates how you’ll turn an idea into a profitable venture, breaking down each step along the way.
When done right, it provides a detailed description of all aspects of your business, from financing to marketing — and you’ll revisit it as you develop and grow your company. Here’s how to write a business plan for your new venture.
- A business plan is a document that outlines your company’s main goals and strategies. It includes details of your organizational structure, target market, service or product line and more.
- Writing a business plan can help you set goals, identify opportunities and build a roadmap to take your business from where it is now to where you want it to be. A good business plan can also make it easier to attract investors or qualify for financing.
- To make sure all the important details are included in your business plan, you can use a business plan template or follow the steps outlined in this article.
1. Decide what format to use
Most business plans follow a similar outline. Templates are available online from multiple sources, including the Small Business Administration (SBA), SCORE, LivePlan and Google Docs. You can also start from scratch — but it’s a good idea to at least glance at templates to get a feel for what the final document should look like.
Most business plans use clean formatting, with each key component having a clear headline and its own dedicated page to make the information easy to read. These components often include:
- An executive summary
- A company description
- A market analysis
- Organization and management information
- Details about your service or product line
- Marketing plans and sales strategies
- Financial analysis and projections
- Funding requests
- An appendix with supporting documents like resumes, permits and more
There are multiple types of business plans, but most fall within two categories: traditional and lean startup plans. Traditional plans are longer, following the in-depth structure outlined in this article. Lean startup plans are shorter, typically around one or two pages, summarizing only the most important elements of your business strategy.
If your business is relatively simple or you plan to regularly update your business plan, a lean startup format might be right for you — this means you can skip the steps below that aren’t crucial to your business. However, a traditional, in-depth business plan is usually better if you plan to seek out investors or apply for a loan.
2. Write an executive summary
An executive summary is the first part of the business plan. Your executive summary should introduce readers to your business and include:
- Your mission statement
- Basic information about your product or service and what makes your business unique
- Introductory information on your company’s leadership team and key employees
- A quick overview of your financial information and growth plans
All of this information will be discussed in more detail in later sections, but featuring key information in your executive summary can capture the reader’s interest and get them up to speed about the basics of your business.
Executive summaries are typically one to two pages long, with each subsection having no more than a few sentences or bullet points.
3. Write your company description
The company description should provide details about your business and what you plan to offer. It should cover:
- Problems you expect to solve with your product or service
- Specific audience segments you plan to serve
- Key company strengths, like a desirable location, secured patents or ground-breaking technology
- Principal members, their planned or existing roles and relevant experience
All of these points should be organized under their own subheadings, keeping it easy to skim. This is the perfect place to boast about your strengths and get investors, partners and lenders excited about your plan.
4. Conduct a market analysis
A market analysis is a detailed breakdown and assessment of the industry and market you plan to reach. It should include:
- Your target market’s estimated size based on customer segments you plan to serve
- Growth potential within the industry, including factors like projected industry growth or competitor success
- Trends or themes in the marketplace, and how you’ll use these to create a competitive advantage
- Competitor strengths and weaknesses, and how you plan to outperform the competition
This is a critical section. You need to successfully demonstrate a plan to carve out a segment of the market and attract customers, so take the time to commit to your market research and present a solid argument.
Highlight any data that showcases your competitive advantage, even seemingly small factors. For instance, being an eco-friendly or sustainable brand can help you outperform competitors that don’t meet similar standards.
5. Decide on organization and management
Decide on your business structure and specify it, along with your location and date of incorporation.
You’ll also need to specify who will run the company. You should include the job descriptions and titles of anyone on the management team. The more expertise you can demonstrate, the better your business will look to investors.
Using an organizational chart to map out titles and responsibilities can be particularly helpful, and you can include CVs or resumes of key team members in the appendix.
6. Describe your service or product line
The executive summary briefly introduced your product or service line, but this is where you get into the details. This section should include:
- Extensive information about the product or service you plan to sell
- How specific product or service features will benefit customers
- Existing patents or copyrights, or plans to file for either
- Research and development that’s planned or underway to improve or expand on the current line
- Pricing information for individual products and services
This is another opportunity to show how your product or service is unique from what’s already on the market, and how you hope to scale beyond your existing products or services in the future.
7. Conduct a SWOT analysis
A SWOT analysis is an in-depth assessment that examines the following:
- Strengths or advantages that your business has, such as established patents for a unique product
- Weaknesses that can impact your business performance, such limited funding
- Opportunities from external factors that you can capitalize on, such as changes in the market that create new demand
- Threats that could negatively impact your business, including top competitors or potential supply chain disruptions
While some organizations may not want to highlight their potential weaknesses or threats to their business, doing so can show a realistic understanding of your challenges and provide an opportunity to highlight how you plan to overcome them.
Lenders and investors may be more nervous going into business with an owner wearing rose-colored glasses compared to one who understands the potential risks.
8. Plan for marketing and sales
Your marketing strategy should be thorough, outlining your branding, sales and promotion strategy. Clearly define your target market and where those customers are located.
This section should cover:
- Marketing strategies you plan to use to attract and convert customers based on audience segment
- Specific marketing platforms you use or plan to use, including social media, pay-per-click campaigns, content marketing, print ads and television ads
- Sales strategies you plan to use to nurture leads and close deals, including lead scoring, customizing offers or leveraging interactive demos
- Customer journey information, including how long it will take for users to purchase after discovering your product or service
- Details on the manufacturing and distribution processes, including strategies for fulfilling orders and delivering products to the end user
Your marketing and sales strategy should be tailored to your product lifecycle and your target audience. For example, a clothing business targeting Gen Z users may want to focus heavily on influencer marketing, TikTok ads and first-time purchase discount codes, while SaaS companies can benefit from prioritizing LinkedIn, referral marketing and free trials.
9. Create financial projections
Provide a financial outlook for the company for up to five years. Include projected income statements, balance sheets, business cash flow statements and budgets. If you’re in your first year, you can make projections on a monthly or quarterly basis, since you don’t have a full year’s worth of business data.
Established business owners should include past annual income statements, balance sheets and cash flow statements to give a sense of the business’s financial health. You can use financial forecasting software to quickly create reports and visuals that demonstrate unique projections, including best- and worst-case scenarios.
Whether your business is new or established, be conservative in your financial projections. Financial experts reading the document will know if you’ve embellished anything or if you’ve set unattainable business goals.
10. Include a funding request
If you’re using your business plan to acquire outside funding, include details about how much you need and how you will use the funds. Whether you’re seeking individual investors or applying for a small business loan, explain how you determined the amount of funding you need and how you’ll be able to pay off the debt.
You can use the financial projections you included in the last section to support your claims, though if your business is new, you may also need to include personal financial statements to demonstrate your creditworthiness.
If you won’t be using your business plan to apply for financing or attract investors, you can skip this section.
11. Optional: Add an appendix
Include any supporting documents you didn’t find a place for in other sections, such as credit histories, letters of reference, leader resumes, permits or legal documents.
In some cases, lenders or investors may request specific documentation such as proof of copyright or bank account statements, which can also be added here. It’s also a good place to provide more detail on anything discussed in the business plan, including photos of your products or prototypes and details on the research used in your market analysis.
If you have extensive documentation, you may want to consider adding a table of contents to your appendix.
Tips for creating a business plan
When writing a business plan, use these tips to showcase your business well:
- Keep it organized. Sort information under clean headers, making it simple for readers to review. You’re presenting a lot of information, so it needs to be easy to consume. Use clear, simple language to make your plan as easy to read as possible.
- Be detailed. While the executive summary provides a brief overview, every other section should have enough detail to explain why your business will be successful. Cite research and be specific in the points you’re making.
- Be realistic. Showcase realistic projections, include conservative timelines and be transparent about potential weaknesses and challenges. If you say that you’re going to sweep away the entire market share, you’ll likely be written off.
- Tailor the plan to your target audience. If you’re submitting a business plan to a lender in request for funding, you may want to provide information about the collateral you can bring to the table. If you’re submitting a business plan in an application for a grant, however, that information likely isn’t needed. Update your business plan accordingly.
How to use your business plan
You may need a business plan for multiple different reasons, including:
- Applying for financing, including business loans or lines of credit
- Trying to bring on investors
- Planning to bring on a business partner
- Considering going public
Outside of convincing external partners that your business is a solid opportunity, your business plan can also provide the essential information you need to launch and manage your company. It lays out the processes, tools, partners and strategies that will make your business successful. You can always pivot if needed, but having a clear direction that key stakeholders agree on is an essential starting point.
Over time, things change. Make sure you review and update your business plan regularly — at least once a year. You may also need to update your business plan if:
- There have been changes in your business’s processes, strategies or partners
- You are requesting funding and need updated financial data and projections
- Drastic changes to the market have caused your business to pivot
- You’re releasing a new product or service line, or targeting a net market segment
When key details of your business change, your business plan should too.
Frequently asked questions
No, you can follow along step-by-step to write each section of your business plan without a premade template. However, if you’re stuck, you can use a fill-in-the-blank template or start with an existing business plan and swap out the sections to be relevant to your own business. The SBA has multiple example business plans that can be useful for this.
A traditional business plan is often around 20 pages long, though the exact length depends on several factors, including the type of business and the scale of operations.
Even though business plans should be detailed, you should also focus on making them skimmable for your audience. For example, if you have multiple pages outlining your products and services, use charts, bullet points and even empty space to break up the text and make it easier to read.
Even if you’re a sole proprietor with a relatively simple business concept, you can still benefit from a business plan. This detailed document can also serve as a roadmap for your business, which can help you set priorities and make decisions as a business owner. And if you ever decide to expand your business, you’ll have a plan to build on.
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