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Write your business plan

Business plans help you run your business.

A good business plan guides you through each stage of starting and managing your business. You’ll use your business plan as a roadmap for how to structure, run, and grow your new business. It’s a way to think through the key elements of your business.

Business plans can help you get funding or bring on new business partners. Investors want to feel confident they’ll see a return on their investment. Your business plan is the tool you’ll use to convince people that working with you — or investing in your company — is a smart choice.

Pick a business plan format that works for you

There’s no right or wrong way to write a business plan. What’s important is that your plan meets your needs.

Most business plans fall into one of two common categories: traditional or lean startup.

Traditional business plans are more common, use a standard structure, and encourage you to go into detail in each section. They tend to require more work upfront and can be dozens of pages long.

Lean startup business plans are less common but still use a standard structure. They focus on summarizing only the most important points of the key elements of your plan. They can take as little as one hour to make and are typically only one page.

Traditional business plan

Lean startup plan

Traditional business plan format

You might prefer a traditional business plan format if you’re very detail-oriented, want a comprehensive plan, or plan to request financing from traditional sources.

When you write your business plan, you don’t have to stick to the exact business plan outline. Instead, use the sections that make the most sense for your business and your needs. Traditional business plans use some combination of these nine sections.

Executive summary

Briefly tell your reader what your company is and why it will be successful. Include your mission statement, your product or service, and basic information about your company’s leadership team, employees, and location. You should also include financial information and high-level growth plans if you plan to ask for financing.

Company description

Use your company description to provide detailed information about your company. Go into detail about the problems your business solves. Be specific, and list out the consumers, organization, or businesses your company plans to serve.

Explain the competitive advantages that will make your business a success. Are there experts on your team? Have you found the perfect location for your store? Your company description is the place to boast about your strengths.

Market analysis

You'll need a good understanding of your industry outlook and target market. Competitive research will show you what other businesses are doing and what their strengths are. In your market research, look for trends and themes. What do successful competitors do? Why does it work? Can you do it better? Now's the time to answer these questions.

Organization and management

Tell your reader how your company will be structured and who will run it.

Describe the  legal structure  of your business. State whether you have or intend to incorporate your business as a C or an S corporation, form a general or limited partnership, or if you're a sole proprietor or limited liability company (LLC).

Use an organizational chart to lay out who's in charge of what in your company. Show how each person's unique experience will contribute to the success of your venture. Consider including resumes and CVs of key members of your team.

Service or product line

Describe what you sell or what service you offer. Explain how it benefits your customers and what the product lifecycle looks like. Share your plans for intellectual property, like copyright or patent filings. If you're doing  research and development  for your service or product, explain it in detail.

Marketing and sales

There's no single way to approach a marketing strategy. Your strategy should evolve and change to fit your unique needs.

Your goal in this section is to describe how you'll attract and retain customers. You'll also describe how a sale will actually happen. You'll refer to this section later when you make financial projections, so make sure to thoroughly describe your complete marketing and sales strategies.

Funding request

If you're asking for funding, this is where you'll outline your funding requirements. Your goal is to clearly explain how much funding you’ll need over the next five years and what you'll use it for.

Specify whether you want debt or equity, the terms you'd like applied, and the length of time your request will cover. Give a detailed description of how you'll use your funds. Specify if you need funds to buy equipment or materials, pay salaries, or cover specific bills until revenue increases. Always include a description of your future strategic financial plans, like paying off debt or selling your business.

Financial projections

Supplement your funding request with financial projections. Your goal is to convince the reader that your business is stable and will be a financial success.

If your business is already established, include income statements, balance sheets, and cash flow statements for the last three to five years. If you have other collateral you could put against a loan, make sure to list it now.

Provide a prospective financial outlook for the next five years. Include forecasted income statements, balance sheets, cash flow statements, and capital expenditure budgets. For the first year, be even more specific and use quarterly — or even monthly — projections. Make sure to clearly explain your projections, and match them to your funding requests.

This is a great place to use graphs and charts to tell the financial story of your business.  

Use your appendix to provide supporting documents or other materials were specially requested. Common items to include are credit histories, resumes, product pictures, letters of reference, licenses, permits, patents, legal documents, and other contracts.

Example traditional business plans

Before you write your business plan, read the following example business plans written by fictional business owners. Rebecca owns a consulting firm, and Andrew owns a toy company.

Lean startup format

You might prefer a lean startup format if you want to explain or start your business quickly, your business is relatively simple, or you plan to regularly change and refine your business plan.

Lean startup formats are charts that use only a handful of elements to describe your company’s value proposition, infrastructure, customers, and finances. They’re useful for visualizing tradeoffs and fundamental facts about your company.

There are different ways to develop a lean startup template. You can search the web to find free templates to build your business plan. We discuss nine components of a model business plan here:

Key partnerships

Note the other businesses or services you’ll work with to run your business. Think about suppliers, manufacturers, subcontractors, and similar strategic partners.

Key activities

List the ways your business will gain a competitive advantage. Highlight things like selling direct to consumers, or using technology to tap into the sharing economy.

Key resources

List any resource you’ll leverage to create value for your customer. Your most important assets could include staff, capital, or intellectual property. Don’t forget to leverage business resources that might be available to  women ,  veterans ,  Native Americans , and  HUBZone businesses .

Value proposition

Make a clear and compelling statement about the unique value your company brings to the market.

Customer relationships

Describe how customers will interact with your business. Is it automated or personal? In person or online? Think through the customer experience from start to finish.

Customer segments

Be specific when you name your target market. Your business won’t be for everybody, so it’s important to have a clear sense of whom your business will serve.

List the most important ways you’ll talk to your customers. Most businesses use a mix of channels and optimize them over time.

Cost structure

Will your company focus on reducing cost or maximizing value? Define your strategy, then list the most significant costs you’ll face pursuing it.

Revenue streams

Explain how your company will actually make money. Some examples are direct sales, memberships fees, and selling advertising space. If your company has multiple revenue streams, list them all.

Example lean business plan

Before you write your business plan, read this example business plan written by a fictional business owner, Andrew, who owns a toy company.

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More From Forbes

How To Start A Business Plan: A Step-By-Step Guide

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Creating a business plan is a critical first step for any entrepreneur. Knowing how to start a business plan will help you create a roadmap, guiding your business from startup to growth and beyond. Whether you're looking for investment, trying to set clear goals, or simply organizing your thoughts, a solid business plan can make all the difference.

Here is a guide to help you get started on your business plan:

1. executive summary.

What It Is: This section summarizes your business plan as a whole and outlines your company profile and goals.

What to Include:

• Business name and location
• Products or services offered
• Mission statement
• The purpose of the plan (e.g., seeking funding, guiding the startup process)

Tip: Keep it concise. Although it's the first section, it's often best to write it last, after you’ve detailed everything else.

2. Company Description

What It Is: This section provides detailed information about your company, including who you are, what you do, and what markets you serve.

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• Your business structure (e.g., sole proprietorship, LLC, corporation)
• The industry and marketplace needs your business meets
• Your business’s objectives and how you stand out from competitors

Tip: Use this section to highlight your company’s strengths and what makes you unique.

3. Market Research

What It Is: Market research demonstrates your understanding of the industry and target market.

• Market size and growth potential
• Target customer demographics
• Market trends and outlook
• Competitive analysis, including strengths and weaknesses of competitors

Tip: Include data and statistics to back up your findings and show that you’ve done your homework.

4. Organization and Management

What It Is: This section outlines your business’s organizational structure and management team.

• Organizational chart
• Information about the ownership of the company
• Backgrounds and qualifications of the management team
• Roles and responsibilities within the company

Tip: Highlight the skills and experiences of your team that will help the business succeed.

5. Products or Services Line

What It Is: Here, you detail the products or services you offer or plan to offer.

• A description of each product or service
• The lifecycle of products or services
• Research and development activities, if applicable
• Intellectual property, such as patents or trademarks

Tip: Focus on the benefits your products or services bring to your customers.

6. Marketing and Sales Strategy

What It Is: This section explains how you will attract and retain customers.

• Marketing strategies, including advertising, promotions, and public relations
• Sales strategies, including sales processes, channels, and tactics
• Pricing strategy and how it compares to competitors

Tip: Ensure your marketing and sales strategies are aligned with your market research findings.

7. Funding Request

What It Is: If you’re seeking funding , this section outlines your requirements.

• Your current funding needs
• Future funding requirements over the next five years
• How you intend to use the funds
• Potential future financial plans (e.g., selling the business, repaying debt)

Tip: Be specific and realistic about how much funding you need and how it will be used.

8. Financial Projections

What It Is: Financial projections provide a forecast of your business’s financial future.

• Income statements
• Cash flow statements
• Balance sheets
• Break-even analysis

Tip: Use realistic and conservative estimates. Consider hiring a financial professional to help with this section if needed.

9. Appendix

What It Is: The appendix includes any additional information that supports your business plan.

• Resumes of key management team members
• Permits and leases
• Legal documents
• Detailed market research data
• Product photos

Tip: Only include essential information that adds value to your business plan.

Final Tips for Creating a Business Plan

Creating a business plan requires clarity and precision. First and foremost, keep your business plan clear and concise. Avoid using jargon or complex language that could make the plan difficult to read or understand. Your aim should be to communicate your ideas effectively and efficiently.

Next, be realistic in your approach. Ensure that your goals and financial projections are attainable based on your research and understanding of the market. Overly ambitious projections can undermine your credibility and potentially lead to unrealistic expectations.

It's also essential to remember that a business plan is a dynamic document. As your business grows and market conditions change, you should revisit and revise your plan regularly. This helps you stay aligned with your goals and adapt to new challenges and opportunities.

Finally, seek feedback from experienced business professionals. Having someone with business experience review your plan can provide valuable insights and help identify any potential issues or areas for improvement. Their feedback can enhance the overall quality and effectiveness of your business plan.

By following these tips, you'll be better equipped to create a robust and effective business plan that can guide your business towards success.

The bottom line is that starting a business plan may seem challenging, but with careful planning and attention to detail, you can create a comprehensive guide to steer your business toward success. Use this step-by-step guide to ensure that all essential components are covered, giving your business the best possible start.

Melissa Houston, CPA is the author of Cash Confident: An Entrepreneur’s Guide to Creating a Profitable Business and the founder of She Means Profit . As a Business Strategist for small business owners, Melissa helps women making mid-career shifts, to launch their dream businesses, and I also guide established business owners to grow their businesses to more profitably.

The opinions expressed in this article are not intended to replace any professional or expert accounting and/or tax advice whatsoever.

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How to start and fund your own business

Learn how to start and manage your small business, and find local support if you need help.

How to start a business

If you want to start a new business, the Small Business Administration (SBA) can help. SBA’s 10-step guide explains how to plan, launch, and manage your business. 

As you grow your business, it’s important to understand taxes, how to hire and manage employees, and your legal responsibilities. SBA's Business Guide can help you manage day-to-day operations and prepare for success.

Funding your small business

Businesses need money to start and grow. And they may need money to recover after a disaster. There are no federal grants for starting a business . But small business owners can get money in different ways. This includes using personal funds, finding investors, or taking out loans.

The SBA also has funding for groups such as:

• Women-owned businesses
• Minority-owned businesses
• Native American-owned businesses
• Veteran-owned businesses
• Military spouse-owned businesses
• LGBTQ-owned businesses

If you own a rural business, you can find support to start, expand, or maintain your farm or rural business. Resources include:

• SBA financing options for rural businesses
• Farm Service Agency loans for farmers or ranchers

Find local support

The SBA provides free or low-cost counseling and training. You can:

• Find support to learn new skills
• Connect with other business owners
• Apply for a loan for a declared disaster area
• Find help with government contracting, and more. 

Contact SBA by:

• Calling SBA’s Answer Desk at 1-800-827-5722 or emailing [email protected]   
• Searching SBA’s network of partners for low-cost or free services in your area

LAST UPDATED: August 22, 2024

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How to Write a Business Plan: A Step-by-Step Guide & Tips

Starting your journey as a successful entrepreneur is never easy. It requires a lot of time and effort to start a business from scratch.

Planning is the key to achieving success here. It becomes difficult for you to reach your destination without a roadmap. So, it goes without saying that every successful entrepreneur needs a well-thought-out business plan to ensure success.

A common mistake aspiring entrepreneurs make is thinking they just need a brilliant idea to build a successful business from the ground up.

You need to take calculated steps, ensure that you’re moving in the right direction and document your action plan. However, creating a business plan may be tricky, especially when you’re just starting.

Hence, we have come up with a step-by-step guide that will help you write a business plan and start your journey as a successful entrepreneur.

Without further ado, let’s start.

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Why create a business plan.

Before proceeding with our guide, let’s address a looming question in our minds. Why do we need a business plan in the first place?

There may be a number of reasons that justify the process of creating a business plan before starting.

A business plan helps you ensure that your strategies align with your goals. Plus, it enables you to be prepared for growth opportunities and leverage available resources to the fullest.

A common misconception is that only large businesses need a business plan. Even if you’re a lone wolf, the absence of a concrete plan will make it difficult for you to make it to the other side.

A business plan not only makes it easy for you to start but also enables you to formulate growth strategies for the upcoming years.

You create short-term and long-term goals. Plus, you set priorities and plan your operations accordingly. With clear directions, it becomes easy to generate traction and grow your business at a steady pace. 

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One of the biggest challenges you may face when starting a business is raising an investment for it. It’s generally not easy to onboard investors. It’s one of the reasons many aspiring entrepreneurs resort to bootstrapping and let go of their life’s savings.

A well-thought-out business plan enables you to convince others to invest in your idea and finance your venture. Your investors may want to know about your course of action and how you plan to utilize the money. 

A business plan provides them with all the information that they may need. You not only clearly communicate your goals but also share the strategies that you will deploy to achieve them.

It shows your potential investors that their investment will be fruitful. Thus, it convinces them to give you a helping hand.

A business plan also helps you make informed decisions. It’s a go-to document to ensure that the strategies you deploy take you a step closer to achieving the set goals for your startup .

It helps you steer your efforts in the right direction. As a result, you operate at maximum efficiency and make the most of available resources.

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How to write a business plan.

You may find a variety of templates for writing a business plan. However, one size doesn’t fit all. A business plan comprises many components. These elements may vary depending on the structure of your business and your goals.

Whether you plan on creating a summarized plan or a comprehensive document, attention to detail is a must. You must tailor your plan to your needs and requirements. It enables you to offer personalized experiences, which 70% of customers expect from you.

The following recommendations will help you get started.

Do Your Research

The key to starting and making your business a success is thorough research . A common mistake is thinking that you just need an innovative idea to start a business.

There are a number of factors that come into play here, such as the demand for the solutions you intend to offer, the competitive landscape, the investment required, and so on.

You need to assess the feasibility of what you intend to do. This way, you will minimize the risk and know if your idea is worth executing.

For this, you may want to leverage relevant information sources and collect valuable insights for your business .

It helps you create a fool-proof plan, pitch your idea to potential investors, and devise data-driven strategies.

The Entrepreneur’s Guide to the Modern-Day Business Plan

Add your story.

You generally require an investment to start a venture. Hence, you pitch your idea to potential investors to generate funds . And the way you introduce your company to them makes a huge impact.

Your potential investors and other key stakeholders will want to know who you are, what you intend to do, and how you intend to do it.

Hence, you should carefully come up with a brief description of your company and formulate a mission statement.

Make sure that your origin and mission generate an appeal. They should showcase your ability to grow into an influential brand in the long run.

Remember to share other relevant information. It may include your values , the company’s ownership details, business structure, and information about key stakeholders or partners.

Introduce Your Solutions

After introducing yourself, you should focus on showcasing the solutions you offer and highlighting the unique selling proposition.

There may be countless alternatives to the products or services you plan to offer to the intended audience. Hence, you should focus on what makes you stand out from other players in your respective industry.

There’s no need to go into the nitty-gritty or share technical details. It’s best to be as straightforward as you can.

Just try to highlight the capabilities that come with the solutions you offer. It helps you acquire new customers by justifying why they should prefer you over other alternatives.

Don’t shy away from talking about the flaws in your products or services, and share details about how you plan to ensure continuous improvement.

Perform Competitor Mapping

Another key element when writing a business plan is to know your competitors and where you stand.

Being familiar with the competitive landscape is the cornerstone of creating performing business strategies and staying vigilant of your competitors’ tricks.

Your potential investors may also be interested in this information, as the insights help you estimate the market share that you can capture.

Knowing your competitors enables you to plan better. Furthermore, you can take inspiration from the strategies of competing brands and devise better ones for yourself.

Competitor mapping allows you to identify the potential audience segments that you can target and figure out an optimal price point .

As a result, it becomes easier for you to pitch your solutions to the right people and at the right price.

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Identify Customer Segments

Your business plan should contain information about the audience segments to which you wish to offer your solutions.

There may be different characteristics representing the intended audience. Based on the traits of your potential customers, it’s best that you create different buyer personas.

It helps you come up with fitting promotional strategies. Moreover, you know how to convey your message to your target audience.

Identifying promising customers helps you to communicate with them in a better way and establish lasting relationships in the long run.

Highlight Your Operational Efficiency

Your business plan must also include information about your operations. It includes information about the location of your operations, available resources, equipment you use, and human resources at your disposal. 

It helps you assess your strength and identify the battle fronts where you can compete. You may want to be a conglomerate in your respective industry. However, you can’t compete with one from the get-go.

Hence, adding this information to your business plan enables you to smartly pick your battles, as it’s unwise to participate in a race you will lose no matter what.

Furthermore, knowing your current operational capacity helps you assess what you need to grow your operations and plan your next move wisely.

7 Business Plan Essentials for Starting a Company

Define roles and responsibilities.

To ensure seamless operations, it’s essential to define the roles and responsibilities of your team clearly.

When your teams know what’s expected from them, it becomes easier for them to keep up with the workflows and meet your expectations.

Clearly communicating roles and responsibilities at work maximizes your efficiency and ensures optimal productivity.

It also enables you to identify the strengths or weaknesses of your teams and assess their impact on your overall performance.

Clearly stating roles and responsibilities improves collaboration across the board and makes growth hacking easy.

Display Your Marketing Tactics

Your business plan must include details about your marketing strategy. It may include information about your solutions, target audience, price, communication channels you plan to leverage, promotional tactics, and selling tactics.

Your investors and key stakeholders may be interested in knowing how you plan to reach out to your target audience and convince them to try the solutions you offer.

A well-thought-out marketing plan enables you to position your solutions the right way and get more eyeballs. Furthermore, it complements your branding initiatives.

It helps you ensure harmony in your messages across different channels, which cultivates trust and builds a positive reputation in the industry .

A Step-By-Step Guide to Writing a Killer Business Plan

Assess your financial stability.

Another important element to consider when writing a business plan is including information about the way you will manage your finances.

Your goal here is to predict your profit margin for upcoming years, which showcases your financial stability. Plus, you should share your action plan to mitigate the potential risks or threats.

This information helps you leverage available resources to their fullest and acknowledge high productivity.

Investors prefer to associate themselves with profitable businesses. Hence, adding a financial assessment and sharing strategies to boost your profit margin may help with raising capital.

Final Words

There you have it: a step-by-step guide and tips on how to write a business plan before you start.

Creating a business plan is essential before you start your entrepreneurial journey. It makes it easier for you to pitch your idea to potential investors and devise strategies that align with your goals.

If you plan on starting your own business, the recommendations in this article will help you document your strategies and action plan.

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