what is the easy way to write a business plan

Step-by-Step Guide to Writing a Simple Business Plan

By Joe Weller | October 11, 2021

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A business plan is the cornerstone of any successful company, regardless of size or industry. This step-by-step guide provides information on writing a business plan for organizations at any stage, complete with free templates and expert advice. 

Included on this page, you’ll find a step-by-step guide to writing a business plan and a chart to identify which type of business plan you should write . Plus, find information on how a business plan can help grow a business and expert tips on writing one .

What Is a Business Plan?

A business plan is a document that communicates a company’s goals and ambitions, along with the timeline, finances, and methods needed to achieve them. Additionally, it may include a mission statement and details about the specific products or services offered.

A business plan can highlight varying time periods, depending on the stage of your company and its goals. That said, a typical business plan will include the following benchmarks:

• Product goals and deadlines for each month
• Monthly financials for the first two years
• Profit and loss statements for the first three to five years
• Balance sheet projections for the first three to five years

Startups, entrepreneurs, and small businesses all create business plans to use as a guide as their new company progresses. Larger organizations may also create (and update) a business plan to keep high-level goals, financials, and timelines in check.

While you certainly need to have a formalized outline of your business’s goals and finances, creating a business plan can also help you determine a company’s viability, its profitability (including when it will first turn a profit), and how much money you will need from investors. In turn, a business plan has functional value as well: Not only does outlining goals help keep you accountable on a timeline, it can also attract investors in and of itself and, therefore, act as an effective strategy for growth.

For more information, visit our comprehensive guide to writing a strategic plan or download free strategic plan templates . This page focuses on for-profit business plans, but you can read our article with nonprofit business plan templates .

Business Plan Steps

The specific information in your business plan will vary, depending on the needs and goals of your venture, but a typical plan includes the following ordered elements:

• Executive summary
• Description of business
• Market analysis
• Competitive analysis
• Description of organizational management
• Description of product or services
• Marketing plan
• Sales strategy
• Funding details (or request for funding)
• Financial projections

If your plan is particularly long or complicated, consider adding a table of contents or an appendix for reference. For an in-depth description of each step listed above, read “ How to Write a Business Plan Step by Step ” below.

Broadly speaking, your audience includes anyone with a vested interest in your organization. They can include potential and existing investors, as well as customers, internal team members, suppliers, and vendors.

Do I Need a Simple or Detailed Plan?

Your business’s stage and intended audience dictates the level of detail your plan needs. Corporations require a thorough business plan — up to 100 pages. Small businesses or startups should have a concise plan focusing on financials and strategy.

How to Choose the Right Plan for Your Business

In order to identify which type of business plan you need to create, ask: “What do we want the plan to do?” Identify function first, and form will follow.

Use the chart below as a guide for what type of business plan to create:

Is the Order of Your Business Plan Important?

There is no set order for a business plan, with the exception of the executive summary, which should always come first. Beyond that, simply ensure that you organize the plan in a way that makes sense and flows naturally.

The Difference Between Traditional and Lean Business Plans

A traditional business plan follows the standard structure — because these plans encourage detail, they tend to require more work upfront and can run dozens of pages. A Lean business plan is less common and focuses on summarizing critical points for each section. These plans take much less work and typically run one page in length.

In general, you should use a traditional model for a legacy company, a large company, or any business that does not adhere to Lean (or another Agile method ). Use Lean if you expect the company to pivot quickly or if you already employ a Lean strategy with other business operations. Additionally, a Lean business plan can suffice if the document is for internal use only. Stick to a traditional version for investors, as they may be more sensitive to sudden changes or a high degree of built-in flexibility in the plan.

How to Write a Business Plan Step by Step

Writing a strong business plan requires research and attention to detail for each section. Below, you’ll find a 10-step guide to researching and defining each element in the plan.

Step 1: Executive Summary

The executive summary will always be the first section of your business plan. The goal is to answer the following questions:

• What is the vision and mission of the company?
• What are the company’s short- and long-term goals?

See our  roundup of executive summary examples and templates for samples. Read our executive summary guide to learn more about writing one.

Step 2: Description of Business

The goal of this section is to define the realm, scope, and intent of your venture. To do so, answer the following questions as clearly and concisely as possible:

• What business are we in?
• What does our business do?

Step 3: Market Analysis

In this section, provide evidence that you have surveyed and understand the current marketplace, and that your product or service satisfies a niche in the market. To do so, answer these questions:

• Who is our customer? 
• What does that customer value?

Step 4: Competitive Analysis

In many cases, a business plan proposes not a brand-new (or even market-disrupting) venture, but a more competitive version — whether via features, pricing, integrations, etc. — than what is currently available. In this section, answer the following questions to show that your product or service stands to outpace competitors:

• Who is the competition? 
• What do they do best? 
• What is our unique value proposition?

Step 5: Description of Organizational Management

In this section, write an overview of the team members and other key personnel who are integral to success. List roles and responsibilities, and if possible, note the hierarchy or team structure.

Step 6: Description of Products or Services

In this section, clearly define your product or service, as well as all the effort and resources that go into producing it. The strength of your product largely defines the success of your business, so it’s imperative that you take time to test and refine the product before launching into marketing, sales, or funding details.

Questions to answer in this section are as follows:

• What is the product or service?
• How do we produce it, and what resources are necessary for production?

Step 7: Marketing Plan

In this section, define the marketing strategy for your product or service. This doesn’t need to be as fleshed out as a full marketing plan , but it should answer basic questions, such as the following:

• Who is the target market (if different from existing customer base)?
• What channels will you use to reach your target market?
• What resources does your marketing strategy require, and do you have access to them?
• If possible, do you have a rough estimate of timeline and budget?
• How will you measure success?

Step 8: Sales Plan

Write an overview of the sales strategy, including the priorities of each cycle, steps to achieve these goals, and metrics for success. For the purposes of a business plan, this section does not need to be a comprehensive, in-depth sales plan , but can simply outline the high-level objectives and strategies of your sales efforts. 

Start by answering the following questions:

• What is the sales strategy?
• What are the tools and tactics you will use to achieve your goals?
• What are the potential obstacles, and how will you overcome them?
• What is the timeline for sales and turning a profit?
• What are the metrics of success?

Step 9: Funding Details (or Request for Funding)

This section is one of the most critical parts of your business plan, particularly if you are sharing it with investors. You do not need to provide a full financial plan, but you should be able to answer the following questions:

• How much capital do you currently have? How much capital do you need?
• How will you grow the team (onboarding, team structure, training and development)?
• What are your physical needs and constraints (space, equipment, etc.)?

Step 10: Financial Projections

Apart from the fundraising analysis, investors like to see thought-out financial projections for the future. As discussed earlier, depending on the scope and stage of your business, this could be anywhere from one to five years. 

While these projections won’t be exact — and will need to be somewhat flexible — you should be able to gauge the following:

• How and when will the company first generate a profit?
• How will the company maintain profit thereafter?

Business Plan Template

Download Business Plan Template

Microsoft Excel | Smartsheet

This basic business plan template has space for all the traditional elements: an executive summary, product or service details, target audience, marketing and sales strategies, etc. In the finances sections, input your baseline numbers, and the template will automatically calculate projections for sales forecasting, financial statements, and more.

For templates tailored to more specific needs, visit this business plan template roundup or download a fill-in-the-blank business plan template to make things easy. 

If you are looking for a particular template by file type, visit our pages dedicated exclusively to Microsoft Excel , Microsoft Word , and Adobe PDF business plan templates.

How to Write a Simple Business Plan

A simple business plan is a streamlined, lightweight version of the large, traditional model. As opposed to a one-page business plan , which communicates high-level information for quick overviews (such as a stakeholder presentation), a simple business plan can exceed one page.

Below are the steps for creating a generic simple business plan, which are reflected in the template below .

• Write the Executive Summary This section is the same as in the traditional business plan — simply offer an overview of what’s in the business plan, the prospect or core offering, and the short- and long-term goals of the company. 
• Add a Company Overview Document the larger company mission and vision. 
• Provide the Problem and Solution In straightforward terms, define the problem you are attempting to solve with your product or service and how your company will attempt to do it. Think of this section as the gap in the market you are attempting to close.
• Identify the Target Market Who is your company (and its products or services) attempting to reach? If possible, briefly define your buyer personas .
• Write About the Competition In this section, demonstrate your knowledge of the market by listing the current competitors and outlining your competitive advantage.
• Describe Your Product or Service Offerings Get down to brass tacks and define your product or service. What exactly are you selling?
• Outline Your Marketing Tactics Without getting into too much detail, describe your planned marketing initiatives.
• Add a Timeline and the Metrics You Will Use to Measure Success Offer a rough timeline, including milestones and key performance indicators (KPIs) that you will use to measure your progress.
• Include Your Financial Forecasts Write an overview of your financial plan that demonstrates you have done your research and adequate modeling. You can also list key assumptions that go into this forecasting. 
• Identify Your Financing Needs This section is where you will make your funding request. Based on everything in the business plan, list your proposed sources of funding, as well as how you will use it.

Simple Business Plan Template

Download Simple Business Plan Template

Microsoft Excel |  Microsoft Word | Adobe PDF  | Smartsheet

Use this simple business plan template to outline each aspect of your organization, including information about financing and opportunities to seek out further funding. This template is completely customizable to fit the needs of any business, whether it’s a startup or large company.

Read our article offering free simple business plan templates or free 30-60-90-day business plan templates to find more tailored options. You can also explore our collection of one page business templates . 

How to Write a Business Plan for a Lean Startup

A Lean startup business plan is a more Agile approach to a traditional version. The plan focuses more on activities, processes, and relationships (and maintains flexibility in all aspects), rather than on concrete deliverables and timelines.

While there is some overlap between a traditional and a Lean business plan, you can write a Lean plan by following the steps below:

• Add Your Value Proposition Take a streamlined approach to describing your product or service. What is the unique value your startup aims to deliver to customers? Make sure the team is aligned on the core offering and that you can state it in clear, simple language.
• List Your Key Partners List any other businesses you will work with to realize your vision, including external vendors, suppliers, and partners. This section demonstrates that you have thoughtfully considered the resources you can provide internally, identified areas for external assistance, and conducted research to find alternatives.
• Note the Key Activities Describe the key activities of your business, including sourcing, production, marketing, distribution channels, and customer relationships.
• Include Your Key Resources List the critical resources — including personnel, equipment, space, and intellectual property — that will enable you to deliver your unique value.
• Identify Your Customer Relationships and Channels In this section, document how you will reach and build relationships with customers. Provide a high-level map of the customer experience from start to finish, including the spaces in which you will interact with the customer (online, retail, etc.). 
• Detail Your Marketing Channels Describe the marketing methods and communication platforms you will use to identify and nurture your relationships with customers. These could be email, advertising, social media, etc.
• Explain the Cost Structure This section is especially necessary in the early stages of a business. Will you prioritize maximizing value or keeping costs low? List the foundational startup costs and how you will move toward profit over time.
• Share Your Revenue Streams Over time, how will the company make money? Include both the direct product or service purchase, as well as secondary sources of revenue, such as subscriptions, selling advertising space, fundraising, etc.

Lean Business Plan Template for Startups

Download Lean Business Plan Template for Startups

Microsoft Word | Adobe PDF

Startup leaders can use this Lean business plan template to relay the most critical information from a traditional plan. You’ll find all the sections listed above, including spaces for industry and product overviews, cost structure and sources of revenue, and key metrics, and a timeline. The template is completely customizable, so you can edit it to suit the objectives of your Lean startups.

See our wide variety of  startup business plan templates for more options.

How to Write a Business Plan for a Loan

A business plan for a loan, often called a loan proposal , includes many of the same aspects of a traditional business plan, as well as additional financial documents, such as a credit history, a loan request, and a loan repayment plan.

In addition, you may be asked to include personal and business financial statements, a form of collateral, and equity investment information.

Download free financial templates to support your business plan.

Tips for Writing a Business Plan

Outside of including all the key details in your business plan, you have several options to elevate the document for the highest chance of winning funding and other resources. Follow these tips from experts:.

• Keep It Simple: Avner Brodsky , the Co-Founder and CEO of Lezgo Limited, an online marketing company, uses the acronym KISS (keep it short and simple) as a variation on this idea. “The business plan is not a college thesis,” he says. “Just focus on providing the essential information.”
• Do Adequate Research: Michael Dean, the Co-Founder of Pool Research , encourages business leaders to “invest time in research, both internal and external (market, finance, legal etc.). Avoid being overly ambitious or presumptive. Instead, keep everything objective, balanced, and accurate.” Your plan needs to stand on its own, and you must have the data to back up any claims or forecasting you make. As Brodsky explains, “Your business needs to be grounded on the realities of the market in your chosen location. Get the most recent data from authoritative sources so that the figures are vetted by experts and are reliable.”
• Set Clear Goals: Make sure your plan includes clear, time-based goals. “Short-term goals are key to momentum growth and are especially important to identify for new businesses,” advises Dean.
• Know (and Address) Your Weaknesses: “This awareness sets you up to overcome your weak points much quicker than waiting for them to arise,” shares Dean. Brodsky recommends performing a full SWOT analysis to identify your weaknesses, too. “Your business will fare better with self-knowledge, which will help you better define the mission of your business, as well as the strategies you will choose to achieve your objectives,” he adds.
• Seek Peer or Mentor Review: “Ask for feedback on your drafts and for areas to improve,” advises Brodsky. “When your mind is filled with dreams for your business, sometimes it is an outsider who can tell you what you’re missing and will save your business from being a product of whimsy.”

Outside of these more practical tips, the language you use is also important and may make or break your business plan.

Shaun Heng, VP of Operations at Coin Market Cap , gives the following advice on the writing, “Your business plan is your sales pitch to an investor. And as with any sales pitch, you need to strike the right tone and hit a few emotional chords. This is a little tricky in a business plan, because you also need to be formal and matter-of-fact. But you can still impress by weaving in descriptive language and saying things in a more elegant way.

“A great way to do this is by expanding your vocabulary, avoiding word repetition, and using business language. Instead of saying that something ‘will bring in as many customers as possible,’ try saying ‘will garner the largest possible market segment.’ Elevate your writing with precise descriptive words and you'll impress even the busiest investor.”

Additionally, Dean recommends that you “stay consistent and concise by keeping your tone and style steady throughout, and your language clear and precise. Include only what is 100 percent necessary.”

Resources for Writing a Business Plan

While a template provides a great outline of what to include in a business plan, a live document or more robust program can provide additional functionality, visibility, and real-time updates. The U.S. Small Business Association also curates resources for writing a business plan.

Additionally, you can use business plan software to house data, attach documentation, and share information with stakeholders. Popular options include LivePlan, Enloop, BizPlanner, PlanGuru, and iPlanner.

How a Business Plan Helps to Grow Your Business

A business plan — both the exercise of creating one and the document — can grow your business by helping you to refine your product, target audience, sales plan, identify opportunities, secure funding, and build new partnerships. 

Outside of these immediate returns, writing a business plan is a useful exercise in that it forces you to research the market, which prompts you to forge your unique value proposition and identify ways to beat the competition. Doing so will also help you build (and keep you accountable to) attainable financial and product milestones. And down the line, it will serve as a welcome guide as hurdles inevitably arise.

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How to Write a Business Plan: Step-by-Step Guide + Examples

Noah Parsons

24 min. read

Updated March 18, 2024

Writing a business plan doesn’t have to be complicated. 

In this step-by-step guide, you’ll learn how to write a business plan that’s detailed enough to impress bankers and potential investors, while giving you the tools to start, run, and grow a successful business.

• The basics of business planning

If you’re reading this guide, then you already know why you need a business plan . 

You understand that planning helps you: 

• Raise money
• Grow strategically
• Keep your business on the right track 

As you start to write your plan, it’s useful to zoom out and remember what a business plan is .

At its core, a business plan is an overview of the products and services you sell, and the customers that you sell to. It explains your business strategy: how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow. 

A good business plan is much more than just a document that you write once and forget about. It’s also a guide that helps you outline and achieve your goals. 

After completing your plan, you can use it as a management tool to track your progress toward your goals. Updating and adjusting your forecasts and budgets as you go is one of the most important steps you can take to run a healthier, smarter business. 

We’ll dive into how to use your plan later in this article.

There are many different types of plans , but we’ll go over the most common type here, which includes everything you need for an investor-ready plan. However, if you’re just starting out and are looking for something simpler—I recommend starting with a one-page business plan . It’s faster and easier to create. 

It’s also the perfect place to start if you’re just figuring out your idea, or need a simple strategic plan to use inside your business.

Dig deeper : How to write a one-page business plan

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• What to include in your business plan

Executive summary

The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally just one to two pages. Most people write it last because it’s a summary of the complete business plan.

Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan. 

In fact, it’s common for investors to ask only for the executive summary when evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation , or more in-depth financial forecasts .

Your executive summary should include:

• A summary of the problem you are solving
• A description of your product or service
• An overview of your target market
• A brief description of your team
• A summary of your financials
• Your funding requirements (if you are raising money)

Dig Deeper: How to write an effective executive summary

Products and services description

This is where you describe exactly what you’re selling, and how it solves a problem for your target market. The best way to organize this part of your plan is to start by describing the problem that exists for your customers. After that, you can describe how you plan to solve that problem with your product or service. 

This is usually called a problem and solution statement .

To truly showcase the value of your products and services, you need to craft a compelling narrative around your offerings. How will your product or service transform your customers’ lives or jobs? A strong narrative will draw in your readers.

This is also the part of the business plan to discuss any competitive advantages you may have, like specific intellectual property or patents that protect your product. If you have any initial sales, contracts, or other evidence that your product or service is likely to sell, include that information as well. It will show that your idea has traction , which can help convince readers that your plan has a high chance of success.

Market analysis

Your target market is a description of the type of people that you plan to sell to. You might even have multiple target markets, depending on your business. 

A market analysis is the part of your plan where you bring together all of the information you know about your target market. Basically, it’s a thorough description of who your customers are and why they need what you’re selling. You’ll also include information about the growth of your market and your industry .

Try to be as specific as possible when you describe your market. 

Include information such as age, income level, and location—these are what’s called “demographics.” If you can, also describe your market’s interests and habits as they relate to your business—these are “psychographics.” 

Related: Target market examples

Essentially, you want to include any knowledge you have about your customers that is relevant to how your product or service is right for them. With a solid target market, it will be easier to create a sales and marketing plan that will reach your customers. That’s because you know who they are, what they like to do, and the best ways to reach them.

Next, provide any additional information you have about your market. 

What is the size of your market ? Is the market growing or shrinking? Ideally, you’ll want to demonstrate that your market is growing over time, and also explain how your business is positioned to take advantage of any expected changes in your industry.

Dig Deeper: Learn how to write a market analysis

Competitive analysis

Part of defining your business opportunity is determining what your competitive advantage is. To do this effectively, you need to know as much about your competitors as your target customers. 

Every business has some form of competition. If you don’t think you have competitors, then explore what alternatives there are in the market for your product or service. 

For example: In the early years of cars, their main competition was horses. For social media, the early competition was reading books, watching TV, and talking on the phone.

A good competitive analysis fully lays out the competitive landscape and then explains how your business is different. Maybe your products are better made, or cheaper, or your customer service is superior. Maybe your competitive advantage is your location – a wide variety of factors can ultimately give you an advantage.

Dig Deeper: How to write a competitive analysis for your business plan

Marketing and sales plan

The marketing and sales plan covers how you will position your product or service in the market, the marketing channels and messaging you will use, and your sales tactics. 

The best place to start with a marketing plan is with a positioning statement . 

This explains how your business fits into the overall market, and how you will explain the advantages of your product or service to customers. You’ll use the information from your competitive analysis to help you with your positioning. 

For example: You might position your company as the premium, most expensive but the highest quality option in the market. Or your positioning might focus on being locally owned and that shoppers support the local economy by buying your products.

Once you understand your positioning, you’ll bring this together with the information about your target market to create your marketing strategy . 

This is how you plan to communicate your message to potential customers. Depending on who your customers are and how they purchase products like yours, you might use many different strategies, from social media advertising to creating a podcast. Your marketing plan is all about how your customers discover who you are and why they should consider your products and services. 

While your marketing plan is about reaching your customers—your sales plan will describe the actual sales process once a customer has decided that they’re interested in what you have to offer. 

If your business requires salespeople and a long sales process, describe that in this section. If your customers can “self-serve” and just make purchases quickly on your website, describe that process. 

A good sales plan picks up where your marketing plan leaves off. The marketing plan brings customers in the door and the sales plan is how you close the deal.

Together, these specific plans paint a picture of how you will connect with your target audience, and how you will turn them into paying customers.

Dig deeper: What to include in your sales and marketing plan

Business operations

The operations section describes the necessary requirements for your business to run smoothly. It’s where you talk about how your business works and what day-to-day operations look like. 

Depending on how your business is structured, your operations plan may include elements of the business like:

• Supply chain management
• Manufacturing processes
• Equipment and technology
• Distribution

Some businesses distribute their products and reach their customers through large retailers like Amazon.com, Walmart, Target, and grocery store chains. 

These businesses should review how this part of their business works. The plan should discuss the logistics and costs of getting products onto store shelves and any potential hurdles the business may have to overcome.

If your business is much simpler than this, that’s OK. This section of your business plan can be either extremely short or more detailed, depending on the type of business you are building.

For businesses selling services, such as physical therapy or online software, you can use this section to describe the technology you’ll leverage, what goes into your service, and who you will partner with to deliver your services.

Dig Deeper: Learn how to write the operations chapter of your plan

Key milestones and metrics

Although it’s not required to complete your business plan, mapping out key business milestones and the metrics can be incredibly useful for measuring your success.

Good milestones clearly lay out the parameters of the task and set expectations for their execution. You’ll want to include:

• A description of each task
• The proposed due date
• Who is responsible for each task

If you have a budget, you can include projected costs to hit each milestone. You don’t need extensive project planning in this section—just list key milestones you want to hit and when you plan to hit them. This is your overall business roadmap. 

Possible milestones might be:

• Website launch date
• Store or office opening date
• First significant sales
• Break even date
• Business licenses and approvals

You should also discuss the key numbers you will track to determine your success. Some common metrics worth tracking include:

• Conversion rates
• Customer acquisition costs
• Profit per customer
• Repeat purchases

It’s perfectly fine to start with just a few metrics and grow the number you are tracking over time. You also may find that some metrics simply aren’t relevant to your business and can narrow down what you’re tracking.

Dig Deeper: How to use milestones in your business plan

Organization and management team

Investors don’t just look for great ideas—they want to find great teams. Use this chapter to describe your current team and who you need to hire . You should also provide a quick overview of your location and history if you’re already up and running.

Briefly highlight the relevant experiences of each key team member in the company. It’s important to make the case for why yours is the right team to turn an idea into a reality. 

Do they have the right industry experience and background? Have members of the team had entrepreneurial successes before? 

If you still need to hire key team members, that’s OK. Just note those gaps in this section.

Your company overview should also include a summary of your company’s current business structure . The most common business structures include:

• Sole proprietor
• Partnership

Be sure to provide an overview of how the business is owned as well. Does each business partner own an equal portion of the business? How is ownership divided? 

Potential lenders and investors will want to know the structure of the business before they will consider a loan or investment.

Dig Deeper: How to write about your company structure and team

Financial plan

Last, but certainly not least, is your financial plan chapter. 

Entrepreneurs often find this section the most daunting. But, business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast. 

A typical financial forecast in a business plan includes the following:

• Sales forecast : An estimate of the sales expected over a given period. You’ll break down your forecast into the key revenue streams that you expect to have.
• Expense budget : Your planned spending such as personnel costs , marketing expenses, and taxes.
• Profit & Loss : Brings together your sales and expenses and helps you calculate planned profits.
• Cash Flow : Shows how cash moves into and out of your business. It can predict how much cash you’ll have on hand at any given point in the future.
• Balance Sheet : A list of the assets, liabilities, and equity in your company. In short, it provides an overview of the financial health of your business. 

A strong business plan will include a description of assumptions about the future, and potential risks that could impact the financial plan. Including those will be especially important if you’re writing a business plan to pursue a loan or other investment.

Dig Deeper: How to create financial forecasts and budgets

This is the place for additional data, charts, or other information that supports your plan.

Including an appendix can significantly enhance the credibility of your plan by showing readers that you’ve thoroughly considered the details of your business idea, and are backing your ideas up with solid data.

Just remember that the information in the appendix is meant to be supplementary. Your business plan should stand on its own, even if the reader skips this section.

Dig Deeper : What to include in your business plan appendix

Optional: Business plan cover page

Adding a business plan cover page can make your plan, and by extension your business, seem more professional in the eyes of potential investors, lenders, and partners. It serves as the introduction to your document and provides necessary contact information for stakeholders to reference.

Your cover page should be simple and include:

• Company logo
• Business name
• Value proposition (optional)
• Business plan title
• Completion and/or update date
• Address and contact information
• Confidentiality statement

Just remember, the cover page is optional. If you decide to include it, keep it very simple and only spend a short amount of time putting it together.

Dig Deeper: How to create a business plan cover page

How to use AI to help write your business plan

Generative AI tools such as ChatGPT can speed up the business plan writing process and help you think through concepts like market segmentation and competition. These tools are especially useful for taking ideas that you provide and converting them into polished text for your business plan.

The best way to use AI for your business plan is to leverage it as a collaborator , not a replacement for human creative thinking and ingenuity. 

AI can come up with lots of ideas and act as a brainstorming partner. It’s up to you to filter through those ideas and figure out which ones are realistic enough to resonate with your customers. 

There are pros and cons of using AI to help with your business plan . So, spend some time understanding how it can be most helpful before just outsourcing the job to AI.

Learn more: 10 AI prompts you need to write a business plan

• Writing tips and strategies

To help streamline the business plan writing process, here are a few tips and key questions to answer to make sure you get the most out of your plan and avoid common mistakes .  

Determine why you are writing a business plan

Knowing why you are writing a business plan will determine your approach to your planning project. 

For example: If you are writing a business plan for yourself, or just to use inside your own business , you can probably skip the section about your team and organizational structure. 

If you’re raising money, you’ll want to spend more time explaining why you’re looking to raise the funds and exactly how you will use them.

Regardless of how you intend to use your business plan , think about why you are writing and what you’re trying to get out of the process before you begin.

Keep things concise

Probably the most important tip is to keep your business plan short and simple. There are no prizes for long business plans . The longer your plan is, the less likely people are to read it. 

So focus on trimming things down to the essentials your readers need to know. Skip the extended, wordy descriptions and instead focus on creating a plan that is easy to read —using bullets and short sentences whenever possible.

Have someone review your business plan

Writing a business plan in a vacuum is never a good idea. Sometimes it’s helpful to zoom out and check if your plan makes sense to someone else. You also want to make sure that it’s easy to read and understand.

Don’t wait until your plan is “done” to get a second look. Start sharing your plan early, and find out from readers what questions your plan leaves unanswered. This early review cycle will help you spot shortcomings in your plan and address them quickly, rather than finding out about them right before you present your plan to a lender or investor.

If you need a more detailed review, you may want to explore hiring a professional plan writer to thoroughly examine it.

Use a free business plan template and business plan examples to get started

Knowing what information you need to cover in a business plan sometimes isn’t quite enough. If you’re struggling to get started or need additional guidance, it may be worth using a business plan template. 

If you’re looking for a free downloadable business plan template to get you started, download the template used by more than 1 million businesses. 

Or, if you just want to see what a completed business plan looks like, check out our library of over 550 free business plan examples . 

We even have a growing list of industry business planning guides with tips for what to focus on depending on your business type.

Common pitfalls and how to avoid them

It’s easy to make mistakes when you’re writing your business plan. Some entrepreneurs get sucked into the writing and research process, and don’t focus enough on actually getting their business started. 

Here are a few common mistakes and how to avoid them:

Not talking to your customers : This is one of the most common mistakes. It’s easy to assume that your product or service is something that people want. Before you invest too much in your business and too much in the planning process, make sure you talk to your prospective customers and have a good understanding of their needs.

• Overly optimistic sales and profit forecasts: By nature, entrepreneurs are optimistic about the future. But it’s good to temper that optimism a little when you’re planning, and make sure your forecasts are grounded in reality. 
• Spending too much time planning: Yes, planning is crucial. But you also need to get out and talk to customers, build prototypes of your product and figure out if there’s a market for your idea. Make sure to balance planning with building.
• Not revising the plan: Planning is useful, but nothing ever goes exactly as planned. As you learn more about what’s working and what’s not—revise your plan, your budgets, and your revenue forecast. Doing so will provide a more realistic picture of where your business is going, and what your financial needs will be moving forward.
• Not using the plan to manage your business: A good business plan is a management tool. Don’t just write it and put it on the shelf to collect dust – use it to track your progress and help you reach your goals.
• Presenting your business plan

The planning process forces you to think through every aspect of your business and answer questions that you may not have thought of. That’s the real benefit of writing a business plan – the knowledge you gain about your business that you may not have been able to discover otherwise.

With all of this knowledge, you’re well prepared to convert your business plan into a pitch presentation to present your ideas. 

A pitch presentation is a summary of your plan, just hitting the highlights and key points. It’s the best way to present your business plan to investors and team members.

Dig Deeper: Learn what key slides should be included in your pitch deck

Use your business plan to manage your business

One of the biggest benefits of planning is that it gives you a tool to manage your business better. With a revenue forecast, expense budget, and projected cash flow, you know your targets and where you are headed.

And yet, nothing ever goes exactly as planned – it’s the nature of business.

That’s where using your plan as a management tool comes in. The key to leveraging it for your business is to review it periodically and compare your forecasts and projections to your actual results.

Start by setting up a regular time to review the plan – a monthly review is a good starting point. During this review, answer questions like:

• Did you meet your sales goals?
• Is spending following your budget?
• Has anything gone differently than what you expected?

Now that you see whether you’re meeting your goals or are off track, you can make adjustments and set new targets. 

Maybe you’re exceeding your sales goals and should set new, more aggressive goals. In that case, maybe you should also explore more spending or hiring more employees. 

Or maybe expenses are rising faster than you projected. If that’s the case, you would need to look at where you can cut costs.

A plan, and a method for comparing your plan to your actual results , is the tool you need to steer your business toward success.

Learn More: How to run a regular plan review

Free business plan templates and examples

Kickstart your business plan writing with one of our free business plan templates or recommended tools.

Free business plan template

Download a free SBA-approved business plan template built for small businesses and startups.

Download Template

One-page plan template

Download a free one-page plan template to write a useful business plan in as little as 30-minutes.

Sample business plan library

Explore over 500 real-world business plan examples from a wide variety of industries.

View Sample Plans

How to write a business plan FAQ

What is a business plan?

A document that describes your business , the products and services you sell, and the customers that you sell to. It explains your business strategy, how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

What are the benefits of a business plan?

A business plan helps you understand where you want to go with your business and what it will take to get there. It reduces your overall risk, helps you uncover your business’s potential, attracts investors, and identifies areas for growth.

Having a business plan ultimately makes you more confident as a business owner and more likely to succeed for a longer period of time.

What are the 7 steps of a business plan?

The seven steps to writing a business plan include:

• Write a brief executive summary
• Describe your products and services.
• Conduct market research and compile data into a cohesive market analysis.
• Describe your marketing and sales strategy.
• Outline your organizational structure and management team.
• Develop financial projections for sales, revenue, and cash flow.
• Add any additional documents to your appendix.

What are the 5 most common business plan mistakes?

There are plenty of mistakes that can be made when writing a business plan. However, these are the 5 most common that you should do your best to avoid:

• 1. Not taking the planning process seriously.
• Having unrealistic financial projections or incomplete financial information.
• Inconsistent information or simple mistakes.
• Failing to establish a sound business model.
• Not having a defined purpose for your business plan.

What questions should be answered in a business plan?

Writing a business plan is all about asking yourself questions about your business and being able to answer them through the planning process. You’ll likely be asking dozens and dozens of questions for each section of your plan.

However, these are the key questions you should ask and answer with your business plan:

• How will your business make money?
• Is there a need for your product or service?
• Who are your customers?
• How are you different from the competition?
• How will you reach your customers?
• How will you measure success?

How long should a business plan be?

The length of your business plan fully depends on what you intend to do with it. From the SBA and traditional lender point of view, a business plan needs to be whatever length necessary to fully explain your business. This means that you prove the viability of your business, show that you understand the market, and have a detailed strategy in place.

If you intend to use your business plan for internal management purposes, you don’t necessarily need a full 25-50 page business plan. Instead, you can start with a one-page plan to get all of the necessary information in place.

What are the different types of business plans?

While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. Here are a few common business plan types worth considering.

Traditional business plan: The tried-and-true traditional business plan is a formal document meant to be used when applying for funding or pitching to investors. This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix.

Business model canvas: The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea.

One-page business plan: This format is a simplified version of the traditional plan that focuses on the core aspects of your business. You’ll typically stick with bullet points and single sentences. It’s most useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.

Lean Plan: The Lean Plan is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance. It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.

What’s the difference between a business plan and a strategic plan?

A business plan covers the “who” and “what” of your business. It explains what your business is doing right now and how it functions. The strategic plan explores long-term goals and explains “how” the business will get there. It encourages you to look more intently toward the future and how you will achieve your vision.

However, when approached correctly, your business plan can actually function as a strategic plan as well. If kept lean, you can define your business, outline strategic steps, and track ongoing operations all with a single plan.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Table of Contents

• Use AI to help write your plan
• Common planning mistakes
• Manage with your business plan
• Templates and examples

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Written by Jesse Sumrak | May 14, 2023

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Business plans might seem like an old-school stiff-collared practice, but they deserve a place in the startup realm, too. It’s probably not going to be the frame-worthy document you hang in the office—yet, it may one day be deserving of the privilege.

Whether you’re looking to win the heart of an angel investor or convince a bank to lend you money, you’ll need a business plan. And not just any ol’ notes and scribble on the back of a pizza box or napkin—you’ll need a professional, standardized report.

Bah. Sounds like homework, right?

Yes. Yes, it does.

However, just like bookkeeping, loan applications, and 404 redirects, business plans are an essential step in cementing your business foundation.

Don’t worry. We’ll show you how to write a business plan without boring you to tears. We’ve jam-packed this article with all the business plan examples, templates, and tips you need to take your non-existent proposal from concept to completion.

Table of Contents

What Is a Business Plan?

Tips to Make Your Small Business Plan Ironclad

How to Write a Business Plan in 6 Steps

Startup Business Plan Template

Business Plan Examples

Work on Making Your Business Plan

How to Write a Business Plan FAQs

What is a business plan why do you desperately need one.

A business plan is a roadmap that outlines:

• Who your business is, what it does, and who it serves
• Where your business is now
• Where you want it to go
• How you’re going to make it happen
• What might stop you from taking your business from Point A to Point B
• How you’ll overcome the predicted obstacles

While it’s not required when starting a business, having a business plan is helpful for a few reasons:

• Secure a Bank Loan: Before approving you for a business loan, banks will want to see that your business is legitimate and can repay the loan. They want to know how you’re going to use the loan and how you’ll make monthly payments on your debt. Lenders want to see a sound business strategy that doesn’t end in loan default.
• Win Over Investors: Like lenders, investors want to know they’re going to make a return on their investment. They need to see your business plan to have the confidence to hand you money.
• Stay Focused: It’s easy to get lost chasing the next big thing. Your business plan keeps you on track and focused on the big picture. Your business plan can prevent you from wasting time and resources on something that isn’t aligned with your business goals.

Beyond the reasoning, let’s look at what the data says:

• Simply writing a business plan can boost your average annual growth by 30%
• Entrepreneurs who create a formal business plan are 16% more likely to succeed than those who don’t
• A study looking at 65 fast-growth companies found that 71% had small business plans
• The process and output of creating a business plan have shown to improve business performance

Convinced yet? If those numbers and reasons don’t have you scrambling for pen and paper, who knows what will.

Don’t Skip: Business Startup Costs Checklist

Before we get into the nitty-gritty steps of how to write a business plan, let’s look at some high-level tips to get you started in the right direction:

Be Professional and Legit

You might be tempted to get cutesy or revolutionary with your business plan—resist the urge. While you should let your brand and creativity shine with everything you produce, business plans fall more into the realm of professional documents.

Think of your business plan the same way as your terms and conditions, employee contracts, or financial statements. You want your plan to be as uniform as possible so investors, lenders, partners, and prospective employees can find the information they need to make important decisions.

If you want to create a fun summary business plan for internal consumption, then, by all means, go right ahead. However, for the purpose of writing this external-facing document, keep it legit.

Know Your Audience

Your official business plan document is for lenders, investors, partners, and big-time prospective employees. Keep these names and faces in your mind as you draft your plan.

Think about what they might be interested in seeing, what questions they’ll ask, and what might convince (or scare) them. Cut the jargon and tailor your language so these individuals can understand.

Remember, these are busy people. They’re likely looking at hundreds of applicants and startup investments every month. Keep your business plan succinct and to the point. Include the most pertinent information and omit the sections that won’t impact their decision-making.

Invest Time Researching

You might not have answers to all the sections you should include in your business plan. Don’t skip over these!

Your audience will want:

• Detailed information about your customers
• Numbers and solid math to back up your financial claims and estimates
• Deep insights about your competitors and potential threats
• Data to support market opportunities and strategy

Your answers can’t be hypothetical or opinionated. You need research to back up your claims. If you don’t have that data yet, then invest time and money in collecting it. That information isn’t just critical for your business plan—it’s essential for owning, operating, and growing your company.

Stay Realistic

Your business may be ambitious, but reign in the enthusiasm just a teeny-tiny bit. The last thing you want to do is have an angel investor call BS and say “I’m out” before even giving you a chance.

The folks looking at your business and evaluating your plan have been around the block—they know a thing or two about fact and fiction. Your plan should be a blueprint for success. It should be the step-by-step roadmap for how you’re going from Point A to Point B.

How to Write a Business Plan—6 Essential Elements

Not every business plan looks the same, but most share a few common elements. Here’s what they typically include:

• Executive Summary
• Business Overview
• Products and Services
• Market Analysis
• Competitive Analysis
• Financial Strategy

Below, we’ll break down each of these sections in more detail.

1. Executive Summary

While your executive summary is the first page of your business plan, it’s the section you’ll write last. That’s because it summarizes your entire business plan into a succinct one-pager.

Begin with an executive summary that introduces the reader to your business and gives them an overview of what’s inside the business plan.

Your executive summary highlights key points of your plan. Consider this your elevator pitch. You want to put all your juiciest strengths and opportunities strategically in this section.

2. Business Overview

In this section, you can dive deeper into the elements of your business, including answering:

• What’s your business structure? Sole proprietorship, LLC, corporation, etc.
• Where is it located?
• Who owns the business? Does it have employees?
• What problem does it solve, and how?
• What’s your mission statement? Your mission statement briefly describes why you are in business. To write a proper mission statement, brainstorm your business’s core values and who you serve.

Don’t overlook your mission statement. This powerful sentence or paragraph could be the inspiration that drives an investor to take an interest in your business. Here are a few examples of powerful mission statements that just might give you the goosebumps:

• Patagonia: Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.
• Tesla: To accelerate the world’s transition to sustainable energy.
• InvisionApp : Question Assumptions. Think Deeply. Iterate as a Lifestyle. Details, Details. Design is Everywhere. Integrity.
• TED : Spread ideas.
• Warby Parker : To offer designer eyewear at a revolutionary price while leading the way for socially conscious businesses.

3. Products and Services

As the owner, you know your business and the industry inside and out. However, whoever’s reading your document might not. You’re going to need to break down your products and services in minute detail.

For example, if you own a SaaS business, you’re going to need to explain how this business model works and what you’re selling.

You’ll need to include:

• What services you sell: Describe the services you provide and how these will help your target audience.
• What products you sell: Describe your products (and types if applicable) and how they will solve a need for your target and provide value.
• How much you charge: If you’re selling services, will you charge hourly, per project, retainer, or a mixture of all of these? If you’re selling products, what are the price ranges?

4. Market Analysis

Your market analysis essentially explains how your products and services address customer concerns and pain points. This section will include research and data on the state and direction of your industry and target market.

This research should reveal lucrative opportunities and how your business is uniquely positioned to seize the advantage. You’ll also want to touch on your marketing strategy and how it will (or does) work for your audience.

Include a detailed analysis of your target customers. This describes the people you serve and sell your product to. Be careful not to go too broad here—you don’t want to fall into the common entrepreneurial trap of trying to sell to everyone and thereby not differentiating yourself enough to survive the competition.

The market analysis section will include your unique value proposition. Your unique value proposition (UVP) is the thing that makes you stand out from your competitors. This is your key to success.

If you don’t have a UVP, you don’t have a way to take on competitors who are already in this space. Here’s an example of an ecommerce internet business plan outlining their competitive edge:

FireStarters’ competitive advantage is offering product lines that make a statement but won’t leave you broke. The major brands are expensive and not distinctive enough to satisfy the changing taste of our target customers. FireStarters offers products that are just ahead of the curve and so affordable that our customers will return to the website often to check out what’s new.

5. Competitive Analysis

Your competitive analysis examines the strengths and weaknesses of competing businesses in your market or industry. This will include direct and indirect competitors. It can also include threats and opportunities, like economic concerns or legal restraints.

The best way to sum up this section is with a classic SWOT analysis. This will explain your company’s position in relation to your competitors.

6. Financial Strategy

Your financial strategy will sum up your revenue, expenses, profit (or loss), and financial plan for the future. It’ll explain how you make money, where your cash flow goes, and how you’ll become profitable or stay profitable.

This is one of the most important sections for lenders and investors. Have you ever watched Shark Tank? They always ask about the company’s financial situation. How has it performed in the past? What’s the ongoing outlook moving forward? How does the business plan to make it happen?

Answer all of these questions in your financial strategy so that your audience doesn’t have to ask. Go ahead and include forecasts and graphs in your plan, too:

• Balance sheet: This includes your assets, liabilities, and equity.
• Profit & Loss (P&L) statement: This details your income and expenses over a given period.
• Cash flow statement: Similar to the P&L, this one will show all cash flowing into and out of the business each month.

It takes cash to change the world—lenders and investors get it. If you’re short on funding, explain how much money you’ll need and how you’ll use the capital. Where are you looking for financing? Are you looking to take out a business loan, or would you rather trade equity for capital instead?

Read More: 16 Financial Concepts Every Entrepreneur Needs to Know

Startup Business Plan Template (Copy/Paste Outline)

Ready to write your own business plan? Copy/paste the startup business plan template below and fill in the blanks.

Executive Summary Remember, do this last. Summarize who you are and your business plan in one page.

Business Overview Describe your business. What’s it do? Who owns it? How’s it structured? What’s the mission statement?

Products and Services Detail the products and services you offer. How do they work? What do you charge?

Market Analysis Write about the state of the market and opportunities. Use date. Describe your customers. Include your UVP.

Competitive Analysis Outline the competitors in your market and industry. Include threats and opportunities. Add a SWOT analysis of your business.

Financial Strategy Sum up your revenue, expenses, profit (or loss), and financial plan for the future. If you’re applying for a loan, include how you’ll use the funding to progress the business.

5 Frame-Worthy Business Plan Examples

Want to explore other templates and examples? We got you covered. Check out these 5 business plan examples you can use as inspiration when writing your plan:

• SBA Wooden Grain Toy Company
• SBA We Can Do It Consulting
• OrcaSmart Business Plan Sample
• Plum Business Plan Template
• PandaDoc Free Business Plan Templates

Get to Work on Making Your Business Plan

If you find you’re getting stuck on perfecting your document, opt for a simple one-page business plan —and then get to work. You can always polish up your official plan later as you learn more about your business and the industry.

Remember, business plans are not a requirement for starting a business—they’re only truly essential if a bank or investor is asking for it.

Ask others to review your business plan. Get feedback from other startups and successful business owners. They’ll likely be able to see holes in your planning or undetected opportunities—just make sure these individuals aren’t your competitors (or potential competitors).

Your business plan isn’t a one-and-done report—it’s a living, breathing document. You’ll make changes to it as you grow and evolve. When the market or your customers change, your plan will need to change to adapt.

That means when you’re finished with this exercise, it’s not time to print your plan out and stuff it in a file cabinet somewhere. No, it should sit on your desk as a day-to-day reference. Use it (and update it) as you make decisions about your product, customers, and financial plan.

Review your business plan frequently, update it routinely, and follow the path you’ve developed to the future you’re building.

Keep Learning: New Product Development Process in 8 Easy Steps

What financial information should be included in a business plan?

Be as detailed as you can without assuming too much. For example, include your expected revenue, expenses, profit, and growth for the future.

What are some common mistakes to avoid when writing a business plan?

The most common mistake is turning your business plan into a textbook. A business plan is an internal guide and an external pitching tool. Cut the fat and only include the most relevant information to start and run your business.

Who should review my business plan before I submit it?

Co-founders, investors, or a board of advisors. Otherwise, reach out to a trusted mentor, your local chamber of commerce, or someone you know that runs a business.

Ready to Write Your Business Plan?

Don’t let creating a business plan hold you back from starting your business. Writing documents might not be your thing—that doesn’t mean your business is a bad idea.

Let us help you get started.

Join our free training to learn how to start an online side hustle in 30 days or less. We’ll provide you with a proven roadmap for how to find, validate, and pursue a profitable business idea (even if you have zero entrepreneurial experience).

Stuck on the ideas part? No problem. When you attend the masterclass, we’ll send you a free ebook with 100 of the hottest side hustle trends right now. It’s chock full of brilliant business ideas to get you up and running in the right direction.

About Jesse Sumrak

Jesse Sumrak is a writing zealot focused on creating killer content. He’s spent almost a decade writing about startup, marketing, and entrepreneurship topics, having built and sold his own post-apocalyptic fitness bootstrapped business. A writer by day and a peak bagger by night (and early early morning), you can usually find Jesse preparing for the apocalypse on a precipitous peak somewhere in the Rocky Mountains of Colorado.

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How to write a business plan in seven simple steps

When written effectively, a business plan can help raise capital, inform decisions, and draw new talent.

Companies of all sizes have one thing in common: They all began as small businesses.  Starting small  is the corner for those just getting off the ground. Learn about how to make that first hire, deal with all things administrative, and set yourself up for success.

Writing a business plan is often the first step in transforming your business from an idea into something tangible . As you write, your thoughts begin to solidify into strategy, and a path forward starts to emerge. But a business plan is not only the realm of startups; established companies can also benefit from revisiting and rewriting theirs. In any case, the formal documentation can provide the clarity needed to motivate staff , woo investors, or inform future decisions.  

No matter your industry or the size of your team, the task of writing a business plan—a document filled with so much detail and documentation—can feel daunting. Don’t let that stop you, however; there are easy steps to getting started. 

What is a business plan and why does it matter? 

A business plan is a formal document outlining the goals, direction, finances, team, and future planning of your business. It can be geared toward investors, in a bid to raise capital, or used as an internal document to align teams and provide direction. It typically includes extensive market research, competitor analysis, financial documentation, and an overview of your business and marketing strategy. When written effectively, a business plan can help prescribe action and keep business owners on track to meeting business goals. 

Who needs a business plan?

A business plan can be particularly helpful during a company’s initial growth and serve as a guiding force amid the uncertainty, distractions, and at-times rapid developments involved in starting a business . For enterprise companies, a business plan should be a living, breathing document that guides decision-making and facilitates intentional growth.

“You should have a game plan for every major commitment you’ll have, from early-stage founder agreements to onboarding legal professionals,” says Colin Keogh, CEO of the Rapid Foundation—a company that brings technology and training to communities in need—and a WeWork Labs mentor in the UK . “You can’t go out on funding rounds or take part in accelerators without any planning.”

How to make a business plan and seven components every plan needs

While there is no set format for writing a business plan, there are several elements that are typically included. Here’s what’s important to consider when writing your business plan. 

1. Executive summary 

No longer than half a page, the executive summary should briefly introduce your business and describe the purpose of the business plan. Are you writing the plan to attract capital? If so, specify how much money you hope to raise, and how you’re going to repay the loan. If you’re writing the plan to align your team and provide direction, explain at a high level what you hope to achieve with this alignment, as well as the size and state of your existing team.

The executive summary should explain what your business does, and provide an introductory overview of your financial health and major achievements to date.  

2. Company description 

To properly introduce your company, it’s important to also describe the wider industry. What is the financial worth of your market? Are there market trends that will affect the success of your company? What is the state of the industry and its future potential? Use data to support your claims and be sure to include the full gamut of information—both positive and negative—to provide investors and your employees a complete and accurate portrayal of your company’s milieu. 

Go on to describe your company and what it provides your customers. Are you a sole proprietor , LLC, partnership, or corporation? Are you an established company or a budding startup? What does your leadership team look like and how many employees do you have? This section should provide both historical and future context around your business, including its founding story, mission statement , and vision for the future. 

It’s essential to showcase your point of difference in your company description, as well as any advantages you may have in terms of expert talent or leading technology. This is typically one of the first pieces of the plan to be written.

3. Market analysis and opportunity

Research is key in completing a business plan and, ideally, more time should be spent on research and analysis than writing the plan itself. Understanding the size, growth, history, future potential, and current risks inherent to the wider market is essential for the success of your business, and these considerations should be described here. 

In addition to this, it’s important to include research into the target demographic of your product or service. This might be in the form of fictional customer personas, or a broader overview of the income, location, age, gender, and buying habits of your existing and potential customers. 

Though the research should be objective, the analysis in this section is a good place to reiterate your point of difference and the ways you plan to capture the market and surpass your competition.

4. Competitive analysis 

Beyond explaining the elements that differentiate you from your competition, it’s important to provide an in-depth analysis of your competitors themselves.

This research should delve into the operations, financials, history, leadership, and distribution channels of your direct and indirect competitors. It should explore the value propositions of these competitors, and explain the ways you can compete with, or exploit, their strengths and weaknesses. 

5. Execution plan: operations, development, management 

This segment provides details around how you’re going to do the work necessary to fulfill this plan. It should include information about your organizational structure and the everyday operations of your team, contractors, and physical and digital assets.

Consider including your company’s organizational chart, as well as more in-depth information on the leadership team: Who are they? What are their backgrounds? What do they bring to the table? Potentially include the résumés of key people on your team. 

For startups, your execution plan should include how long it will take to begin operations, and then how much longer to reach profitability. For established companies, it’s a good idea to outline how long it will take to execute your plan, and the ways in which you will change existing operations.

If applicable, it’s also beneficial to include your strategy for hiring new team members and scaling into different markets. 

6. Marketing plan 

It’s essential to have a comprehensive marketing plan in place as you scale operations or kick off a new strategy—and this should be shared with your stakeholders and employees. This segment of your business plan should show how you’re going to promote your business, attract customers, and retain existing clients.

Include brand messaging, marketing assets, and the timeline and budget for engaging consumers across different channels. Potentially include a marketing SWOT analysis into your strengths, weaknesses, opportunities, and threats. Evaluate the way your competitors market themselves, and how your target audience responds—or doesn’t respond—to these messages.

7. Financial history and projections  

It’s essential to disclose all finances involved in running your company within your business plan. This is so your shareholders properly understand how you’re projected to perform going forward, and the progress you’ve made so far. 

You should include your income statement, which outlines annual net profits or losses; a cash flow statement, which shows how much money you need to launch or scale operations; and a balance sheet that shows financial liabilities and assets. 

“An income statement is the measure of your financial results for a certain period and the most accurate report of business activities during that time, [whereas a balance sheet] presents your assets, liabilities, and equity,” Amit Perry, a corporate finance expert, explained at a WeWork Labs educational session in Israel.

It’s crucial to understand the terms correctly so you know how to present your finances when you’re speaking to investors. Amit Perry, CEO and founder of Perryllion Ltd.

In addition, if you’re asking for funding, you will need to outline exactly how much money you need as well as where this money will go and how you plan to pay it back. 

12 quick tips for writing a business plan 

Now that you know what components are traditionally included in a business plan, it’s time to consider how you’ll actually construct the document.

Here are 12 key factors to keep in mind when writing a business plan. These overarching principles will help you write a business plan that serves its purpose (whatever that may be) and becomes an easy reference in the years ahead. 

1. Don’t be long-winded

Use clear, concise language and avoid jargon. When business plans are too long-winded, they’re less likely to be used as intended and more likely to be forgotten or glazed over by stakeholders. 

2. Show why you care

Let your passion for your business shine through; show employees and investors why you care (and why they should too). 

3. Provide supporting documents

Don’t be afraid to have an extensive list of appendices, including the CVs of team members, built-out customer personas, product demonstrations, and examples of internal or external messaging. 

4. Reference data

All information regarding the market, your competitors, and your customers should reference authoritative and relevant data points.  

5. Research, research, research

The research that goes into your business plan should take you longer than the writing itself. Consider tracking your research as supporting documentation. 

6. Clearly demonstrate your points of difference

At every opportunity, it’s important to drive home the way your product or service differentiates you from your competition and helps solve a problem for your target audience. Don’t shy away from reiterating these differentiating factors throughout the plan. 

7. Be objective in your research

As important as it is to showcase your company and the benefits you provide your customers, it’s also important to be objective in the data and research you reference. Showcase the good and the bad when it comes to market research and your financials; you want your shareholders to know you’ve thought through every possible contingency. 

8. Know the purpose of your plan

It’s important you understand the purpose of your plan before you begin researching and writing. Be clear about whether you’re writing this plan to attract investment, align teams, or provide direction. 

9. Identify your audience

The same way your business plan must have a clearly defined purpose, you must have a clearly defined audience. To whom are you writing? New investors? Current employees? Potential collaborators? Existing shareholders? 

Related articles

10. Avoid jargon

Avoid using industry-specific jargon, unless completely unavoidable, and try making your business plan as easy to understand as possible—for all potential stakeholders. 

11. Don’t be afraid to change it

Your business plan should evolve with your company’s growth, which means your business plan document should evolve as well. Revisit and rework your business plan as needed, and remember the most important factor: having a plan in place, even if it changes.

A business plan shouldn’t just be a line on your to-do list; it should be referenced and used as intended going forward. Keep your business plan close, and use it to inform decisions and guide your team in the years ahead. 

Creating a business plan is an important step in growing your company 

Whether you’re just starting out or running an existing operation, writing an effective business plan can be a key predictor of future success. It can be a foundational document from which you grow and thrive . It can serve as a constant reminder to employees and clients about what you stand for, and the direction in which you’re moving. Or, it can prove to investors that your business, team, and vision are worth their investment. 

No matter the size or stage of your business, WeWork can help you fulfill the objectives outlined in your business plan—and WeWork’s coworking spaces can be a hotbed for finding talent and investors, too. The benefits of coworking spaces include intentionally designed lounges, conference rooms, and private offices that foster connection and bolster creativity, while a global network of professionals allows you to expand your reach and meet new collaborators. 

Using these steps to write a business plan will put you in good stead to not only create a document that fulfills a purpose but one that also helps to more clearly understand your market, competition, point of difference, and plan for the future. 

For more tips on growing teams and building a business, check out all our articles on  Ideas by WeWork.

Caitlin Bishop is a writer for WeWork’s  Ideas by WeWork , based in New York City. Previously, she was a journalist and editor at  Mamamia  in Sydney, Australia, and a contributing reporter at  Gotham Gazette .

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How to Write the Perfect Business Plan: 10 Essential Steps

Whether you’re starting a new small business or are already years into operating one, a business plan is one of the best ways to clarify your long-term vision. Follow our step-by-step guide to writing a highly effective business plan.

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hether you’re starting a new small business or are already years into operating one, a business plan is one of the best ways to clarify your long-term vision. While every business plan is different, there are several key elements to consider that will benefit you in the long run. 

Follow our step-by-step guide to writing a highly effective business plan. 

What is a business plan?

A business plan is a document that outlines your business goals and how you plan to achieve them. Ideally, this will become your roadmap for marketing, sales, finance, and growth. 

In other words, a business plan is...

• An explanation of your overall vision.
• A valuable tool to plan and track your business fundamentals.
• An overview of your path to profitability, which can help get funding for your company.

Do You Need A Business Plan?

While it’s not a requirement, having a business plan is strongly recommended. In a recent QuickBooks survey , nearly 70% of current business owners recommended writing a business plan.

Creating a business plan is especially useful in the following scenarios:

• Applying for business loans
• Seeking additional rounds of funding or investors 
• Growing your employee headcount  
• Attracting top-level management candidates 
• Looking for opportunities to scale your business

10 Steps To Creating A Comprehensive Business Plan

While not every business plan is the same, there are a few key steps you should take to create an effective and comprehensive document:

1. Create an executive summary

Think of an executive summary as your company's elevator pitch in written form. It should be 1 to 2 pages in length and summarize important information about your company and goals. If you are pitching your business plan to get funding, you should ensure your executive summary appeals to investors.

What should you include in an executive summary?

• An overview of your business
• Your company mission statement
• A concise description of products or services offered
• A description of your target market and customer demographics
• A brief analysis of your competition
• Financial projections and funding requirements
• Information about your management team
• Future plans and growth opportunities
• An overall summary of your business plan

2. Write your company description

Your company description is a more detailed and comprehensive explanation of your business. It should provide a thorough overview of your company, including your company history, your mission, your objectives, and your vision. A company description should help the reader understand the context and background of the business, as well as the key factors that contribute to its success.

What should you include in your company description?

• Official company name 
• Type of business structure
• Physical address(es)
• Company history and background information
• Mission statement and core values
• Management team members and their qualifications
• Products and services offered
• Target market and customer segmentation
• Marketing and sales strategy
• Goals (both short- and long-term)
• Vision statement

Novo Note : The company description is your chance to expound on the pain points your company solves. It should also give a reader an accurate impression of who you are. 

3. Conduct and outline market analysis

This is one of the most important steps in building a business plan. Here, you will assess the size and dynamics of the market your business operates in.

How to conduct a market analysis

Market analyses include both quantitative and qualitative data. You may want to conduct surveys or lean on existing industry research to gather this information. You’ll want to answer:

• What is the size of the market?
• How much revenue does your industry generate?
• What trends are impacting this industry?
• Where are opportunities for innovation?
• What are the most well-known companies in the industry? What tactics do they use to sell to customers? How do they price their offering?
• Where are there gaps in the market? 
• What are your customer demographics? What problems do they have that need solving? What are their values, desires, and purchasing habits?
• What barriers to entry, if any, exist? These could include startup costs, legal requirements, environmental conditions that impact consumer behavior, and market saturation.

What is your target market?

In this section, you will specify the customer segment(s) you’re targeting . You can divide customers into small segments organized by age, location, income, and lifestyle. The goal is to describe what type of consumer will be most interested in your offering.

Novo Note : Regardless of your company’s size, understanding the trends and opportunities within your target market enables you to build a more effective marketing plan to distinguish yourself from the marketplace and grow your business. This analysis might also help you find potential customers or new products you could offer. 

4. Analyze your competitors

After conducting a market analysis, you need to do a deep dive into your competitors. Look at how the competition is succeeding or failing and how each competitor has positioned itself. For example, you might want to evaluate your competitors’ brand, pricing, and distribution strategies. 

How to conduct a competitive analysis

You’ll want to research your competitors and ask the following questions:

• What are their strengths?
• What are their weaknesses?
• What are their customer reviews like?
• How do they price their offering(s)?
• What are their value propositions?
• What marketing and sales channels do they leverage?
• How are they growing and evolving?

Novo Note : After you develop a strong understanding of the competitive landscape, consider how your business is unique. Solidifying your competitive advantage can help you appeal to your target audience.  

5. Describe your products or services

This is your chance to go into more detail about the products and services you offer! Use this opportunity to note where your offering or service differs from others in the industry. Highlight the standout features of your product, your company’s unique ability to solve customer problems, and your product roadmap.

What to include:

• Your product catalog
• Key differentiating features
• Information about the production process
• The resources required for production
• Plans for future product releases

6. Define your marketing and sales strategy

Your marketing plan describes your strategy for connecting with your target market and generating leads. It doesn't need to be full-fledged at this point, but it should answer who you're trying to sell to and how you plan to target them. Investors also want to know how you plan on selling your brand and breaking into the market, so make sure to consider their perspective as you develop your marketing strategy.

• Your sales and marketing budget
• Your key sales and marketing objectives
• Details about your sales process and sales goals
• Platforms or strategies you’ll employ to reach your target audience
• PR initiatives, content ideas, and social media strategies

7. Gather your business financials and outline financial projections

Your financials section lays out your company's past and current performance. You can also include a roadmap that dives into financial projections for your business. Aim to include projections for the next five years at a minimum.

• Income statements
• Cash flow statements
• Balance sheets
• Explanation of any significant changes

Novo Note : Novo offers integrations with accounting software like Quickbooks and Xero , allowing you to seamlessly access all your financial information within your business checking account .

8. Describe your organization

Your business plan should also include an organizational chart that maps your company’s structure. 

What to include :

• Company’s management structure
• Other key personnel, along with their roles and responsibilities
• Expertise of your team (feature any specialists or experts)

Novo Note : This is also a good place to explain the legal structure of your company — for example, if you are an LLC , a corporation, or a sole proprietorship . 

9. Outline your funding requests

If you’re looking for business funding, include an outline of any funding requests and requirements.

• Why you are requesting funding
• What the funding will be used for specifically
• Desired terms and conditions of funding
• The length of time over which the funding will be used
• Type of funding required (for example, debt or equity)

Novo Note : Propose a five-year funding plan, and aim to be as detailed as possible about how you will utilize the funds to grow your business. 

10. Create an appendix

The last section, the appendix, includes supporting documents and additional information not listed elsewhere in your business plan. Not all of these items are necessary to include, so you’ll need to evaluate which are most relevant to your business. You might also want to include a table of contents to help keep the appendix organized.

Items to consider including:

• Bank statements
• Business credit history
• Legal documents
• Letters of reference

Sample Business Plans

Need an example to help you through the process? Check out the Small Business Administration’s downloadable examples or this even more in-depth one from Harvard Business School.

Tips For Creating A Great Business Plan

Here are some of our favorite tips for creating the most effective and efficient business plan:

• Keep it short and sweet : You want to be sure people will actually read your business plan, so stay on topic and to the point.
• Make it digestible : No need to use the fanciest terminology or draft up the most complex graphs. Keep wording and ideas simple and straightforward — it’s the most impactful way to get your information across.
• Triple-check your work : There’s nothing worse than noticing a grammar, spelling, or mathematical error when you’re presenting your vision. So proofread… and then proofread again!
• Start early : It’s never too late to write a business plan, but the earlier you do it, the stronger your strategy for growth and expansion will be from the start.
• Reference credible sources : If you are going to reference third-party research in your business plan, lean on sources that are widely recognized as authorities. Try tapping into trade associations and government resources, like U.S. Census data or data from the Bureau of Labor Statistics.
• Set yourself apart : Wherever you can, explain why your product or service stands out and how it can solve a problem.
• Be objective : Avoid the instinct to only showcase the good. Stakeholders and investors want to know that you are realistic and have a contingency plan if you hit a bump in the road.

Updating Your Business Plan

As with most situations in business (and life), things change! So don’t think that your business plan has to be set in stone after you create it. Instead, you should plan to return to it once a year and make updates.

Be sure to do the following when you review and update your business plan:

• Analyze your progress: Review your original business plan and compare it to your actual financial data. Are you moving in the right direction, or do you need to reevaluate your strategy?
• Consider whether your product offerings need to be adjusted: For example, decide if you want to diversify your product offerings or scale back and focus on a singular product. 
• Reassess your overall goals: Perhaps your sales goals have changed with your new marketing strategy. Or maybe your customer’s needs have changed. In any case, be flexible where needed. 

We know there’s a lot that goes into creating a business plan, but it’s worth it. There’s no one-size-fits-all formula for developing a business plan, but our steps outlined above will put you on the right track for developing a comprehensive, investor-friendly document.

Take time to review your business plan annually and make changes as your needs and goals change.

Novo Platform Inc. strives to provide accurate information but cannot guarantee that this content is correct, complete, or up-to-date. This page is for informational purposes only and is not financial or legal advice nor an endorsement of any third-party products or services. All products and services are presented without warranty. Novo Platform Inc. does not provide any financial or legal advice, and you should consult your own financial, legal, or tax advisors.

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What Is a Business Plan?

Understanding business plans, how to write a business plan, common elements of a business plan, how often should a business plan be updated, the bottom line, business plan: what it is, what's included, and how to write one.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

A business plan is a document that details a company's goals and how it intends to achieve them. Business plans can be of benefit to both startups and well-established companies. For startups, a business plan can be essential for winning over potential lenders and investors. Established businesses can find one useful for staying on track and not losing sight of their goals. This article explains what an effective business plan needs to include and how to write one.

Key Takeaways

• A business plan is a document describing a company's business activities and how it plans to achieve its goals.
• Startup companies use business plans to get off the ground and attract outside investors.
• For established companies, a business plan can help keep the executive team focused on and working toward the company's short- and long-term objectives.
• There is no single format that a business plan must follow, but there are certain key elements that most companies will want to include.

Investopedia / Ryan Oakley

Any new business should have a business plan in place prior to beginning operations. In fact, banks and venture capital firms often want to see a business plan before they'll consider making a loan or providing capital to new businesses.

Even if a business isn't looking to raise additional money, a business plan can help it focus on its goals. A 2017 Harvard Business Review article reported that, "Entrepreneurs who write formal plans are 16% more likely to achieve viability than the otherwise identical nonplanning entrepreneurs."

Ideally, a business plan should be reviewed and updated periodically to reflect any goals that have been achieved or that may have changed. An established business that has decided to move in a new direction might create an entirely new business plan for itself.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. These include being able to think through ideas before investing too much money in them and highlighting any potential obstacles to success. A company might also share its business plan with trusted outsiders to get their objective feedback. In addition, a business plan can help keep a company's executive team on the same page about strategic action items and priorities.

Business plans, even among competitors in the same industry, are rarely identical. However, they often have some of the same basic elements, as we describe below.

While it's a good idea to provide as much detail as necessary, it's also important that a business plan be concise enough to hold a reader's attention to the end.

While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.

Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.

The length of a business plan can vary greatly from business to business. Regardless, it's best to fit the basic information into a 15- to 25-page document. Other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and attached as appendices.

These are some of the most common elements in many business plans:

• Executive summary: This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services: Here, the company should describe the products and services it offers or plans to introduce. That might include details on pricing, product lifespan, and unique benefits to the consumer. Other factors that could go into this section include production and manufacturing processes, any relevant patents the company may have, as well as proprietary technology . Information about research and development (R&D) can also be included here.
• Market analysis: A company needs to have a good handle on the current state of its industry and the existing competition. This section should explain where the company fits in, what types of customers it plans to target, and how easy or difficult it may be to take market share from incumbents.
• Marketing strategy: This section can describe how the company plans to attract and keep customers, including any anticipated advertising and marketing campaigns. It should also describe the distribution channel or channels it will use to get its products or services to consumers.
• Financial plans and projections: Established businesses can include financial statements, balance sheets, and other relevant financial information. New businesses can provide financial targets and estimates for the first few years. Your plan might also include any funding requests you're making.

The best business plans aren't generic ones created from easily accessed templates. A company should aim to entice readers with a plan that demonstrates its uniqueness and potential for success.

2 Types of Business Plans

Business plans can take many forms, but they are sometimes divided into two basic categories: traditional and lean startup. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These plans tend to be much longer than lean startup plans and contain considerably more detail. As a result they require more work on the part of the business, but they can also be more persuasive (and reassuring) to potential investors.
• Lean startup business plans : These use an abbreviated structure that highlights key elements. These business plans are short—as short as one page—and provide only the most basic detail. If a company wants to use this kind of plan, it should be prepared to provide more detail if an investor or a lender requests it.

Why Do Business Plans Fail?

A business plan is not a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections to begin with. Markets and the overall economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All of this calls for building some flexibility into your plan, so you can pivot to a new course if needed.

How frequently a business plan needs to be revised will depend on the nature of the business. A well-established business might want to review its plan once a year and make changes if necessary. A new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is an option when a company prefers to give a quick explanation of its business. For example, a brand-new company may feel that it doesn't have a lot of information to provide yet.

Sections can include: a value proposition ; the company's major activities and advantages; resources such as staff, intellectual property, and capital; a list of partnerships; customer segments; and revenue sources.

A business plan can be useful to companies of all kinds. But as a company grows and the world around it changes, so too should its business plan. So don't think of your business plan as carved in granite but as a living document designed to evolve with your business.

Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."

U.S. Small Business Administration. " Write Your Business Plan ."

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How to Prepare and Write the Perfect Business Plan for Your Company Here's how to write a business plan that will formalize your company's goals and optimize your organization.

By Matthew McCreary • May 5, 2021

Are you preparing to start your own business but uncertain about how to get started? A business plan ought to be one of the first steps in your entrepreneurial journey because it will organize the ideas that have been spinning around in your brain and prepare you to seek funding, partners and more.

What is a business plan?

A business plan is a detailed document that outlines a company's goals and how the business, well, plans to achieve those goals over the next three or more years. It helps define expected profits and challenges, providing a road map that will help you avoid bumps in the road.

Stever Robbins writes in an Entrepreneur article titled, "Why You Must Have a Business Plan," that a business plan "is a tool for understanding how your business is put together…. Writing out your business plan forces you to review everything at once: your value proposition, marketing assumptions, operations plan, financial plan and staffing plan." But, a business plan is about more than just reviewing the past state of your business or even what your business looks like today.

Robbins writes that a well-written business plan will help you drive the future by "laying out targets in all major areas: sales, expense items, hiring positions and financing goals. Once laid out, the targets become performance goals."

The business plan can help your company attract talent and funding, because when prospects ask about your business, you already have an articulated overview to offer them. How they react can allow you to quickly understand how others see your business and pivot if necessary.

What should you do before you write your business plan?

It might sound redundant, but you actually need to plan your business plan. Business plans can be complicated, and you'll be held accountable for the goals you set. For example, if you plan to open five locations of your business within the first two years, your investors might get angry if you only manage to open two.

That's why it's essential that, before writing your business plan, you spend some time determining exactly which objectives are essential to your business. If you're struggling to come up with a list of goals on your own, Entrepreneur article "Plan Your Business Plan" offers some questions you can ask yourself to spark some inspiration.

How determined am I to see this venture succeed?

Am I willing to invest my own money and work long hours for no pay, sacrificing personal time and lifestyle, maybe for years?

What's going to happen to me if this venture doesn't work out?

If it does succeed, how many employees will this company eventually have?

What will be the business's annual revenue in a year? What about in five years?

What will be the company's market share in that amount of time?

Will the business have a niche market, or will it sell a broad spectrum of goods and services?

What are my plans for geographic expansion? Should it be local or national? Can it be global?

Am I going to be a hands-on manager, or will I delegate a large proportion of tasks to others?

If I delegate, what sorts of tasks will I share? Will it be sales, technical work or something else?

How comfortable am I taking direction from others? Can I work with partners or investors who demand input into the company's management?

Is the business going to remain independent and privately owned, or will it eventually be acquired or go public?

It's also essential to consider your financial goals. Your business might not require a massive financial commitment upfront, but it probably will if you're envisioning rapid growth. Unless you're making your product or service from scratch, you'll have to pay your suppliers before your customers can pay you, and as "Plan Your Business Plan" points out, "this cash flow conundrum is the reason so many fast-growing companies have to seek bank financing or equity sales to finance their growth. They are literally growing faster than they can afford."

How much financing will you need to start your business? What will you be willing to accept? If you're desperate for that first influx of cash, you might be tempted to accept any offer, but doing so might force you to either surrender too much control or ask investors for a number that's not quite right for either side.

These eight questions can help you determine a few financial aspects of your planning stages:

What initial investment will the business require?

How much control of the business are you willing to relinquish to investors?

When will the business turn a profit?

When can investors, including you, expect a return on investment?

What are the business's projected profits over time?

Will you be able to devote yourself full-time to the business?

What kind of salary or profit distribution can you expect to take home?

What are the chances the business will fail, and what will happen if it does?

You should also consider who, primarily, is going to be reading your business plan, and how you plan to use it. Is it a means of raising money or attracting employees? Will suppliers see it?

Lastly, you need to assess the likelihood of whether you actually have the time and resources to see your plan through. It might hurt to realize the assumptions you've made so far don't actually make a successful business, but it's best to know early on, before you make further commitments.

Related: Need a Business Plan Template? Here Is Apple's 1981 Plan for the Mac.

How to Write a Business Plan

Once you've worked out all the questions above and you know exactly what goals you have for your business plan, the next step is to actually write the darn thing. A typical business plan runs 15 to 20 pages but can be longer or shorter, depending on the complexity of the business and the needs of your venture. Regardless of whether you intend to use the business plan for self-evaluation or to seek a seven-figure investment, it should include nine key components, many of which are outlined in Entrepreneur 's introduction to business plans:

1. Title page and contents

Presentation is important, and a business plan should be presented in a binder with a cover that lists the business's name, the principals' names and other relevant information like a working address, phone number, email and web address and date. Write the information in a font that's easy to read and include it on the title page inside, too. Add in the company logo and a table of contents that follows the executive summary.

2. Executive summary

Think of the executive summary as the SparkNotes version of your business plan . It should tell the reader in as few words as possible what your business wants and why. The executive summary should address these nine things:

The business idea and why it is necessary. (What problem does it solve?)

How much will it cost, and how much financing are you seeking?

What will the return be to the investor? Over what length of time?

What is the perceived risk level?

Where does your idea fit into the marketplace?

What is the management team?

What are the product and competitive strategies?

What is your marketing plan?

What is your exit strategy?

When writing the executive summary, remember that it should be somewhere between one-half page to a full page. Anything longer, and you risk losing your reader's attention before they can dig into your business plan. Try to answer each of the questions above in two or three sentences, and you'll wind up with an executive summary that's about the right length.

Related: First Steps: Writing the Executive Summary of Your Business Plan

3. Business description

You can fill anywhere from a few paragraphs to a few pages when writing your business description, but try again to keep it short, with the understanding that more sections will follow. The business description typically starts with a short explanation of your chosen industry, including its present outlook and future possibilities. Use data and sources (with proper footnotes) to explain the markets the industry offers, along with the developments that will affect your business. That way, everyone who reads the business description, particularly investors, will see that they can trust the various information contained within your business plan.

When you pivot to speaking of your business, start with its structure. How does your business work? Is it retail, service-oriented or wholesale? Is the business new or established? Is the company a sole proprietorship, partnership or corporation? Who are the principals and who are your customers? What do the distribution channels look like, and how can you support sales?

Next, break down your business's offerings. Are you selling a physical product, SaaS or a service? Explain it in a way that a reader knows what you're planning to sell and how it differentiates itself from the competition (investors call this a Unique Selling Proposition, or USP, and it's important that you find yours). Whether it's a trade secret or a patent, you should be specific about your competitive advantage and why your business is going to be profitable. If you plan to use your business plan for fundraising, you can use the business description section to explain why new investments will help make the business even more profitable.

This, like everything else, can be brief, but you can tell the reader about your business's efficiency or workflow. You can write about other key people within the business or cite industry experts' support of your idea, as well as your base of operations and reasons for starting in the first place.

4. Market strategies

Paint a picture about your market by remembering the four Ps: product, price, place and promotion.

Start this section by defining the market's size, structure and sales potential. What are the market's growth prospects? What do the demographics and trends look like right now?

Next, outline the frequency at which your product or service will be purchased by the target market and the potential annual purchase. What market share can you possibly expect to win? Try to be realistic here, and keep in mind that even a number like 25% might be a dominant share.

Next, break down your business's plan for positioning, which relates to the market niche your product or service can fill. Who is your target market, how will you reach them and what are they buying from you? Who are your competitors, and what is your USP?

The positioning statement within your business plan should be short and to the point, but make sure you answer each of those questions before you move on to, perhaps, the most difficult and important aspect of your market strategy: pricing.

In fact, settling on a price for your product or service is one of the most important decisions you have to make in the entire business plan. Pricing will directly determine essential aspects of your business, like profit margin and sales volume. It will influence all sorts of areas, too, from marketing to target consumer.

There are two primary ways to determine your price: The first is to look inward, adding up the costs of offering your product or service, and then adding in a profit margin to find your number. The second is called competitive pricing, and it involves research into how your competitors will either price their products or services now or in the future. The difficult aspect of this second pricing method is that it often sets a ceiling on pricing, which, in turn, could force you to adjust your costs.

Then, pivot the market strategies section toward your distribution process and how it relates to your competitors' channels. How, exactly, are you going to get your offerings from one place to the next? Walk the reader step by step through your process. Do you want to use the same strategy or something else that might give you an advantage?

Last, explain your promotion strategy. How are you going to communicate with your potential customers? This part should talk about not only marketing or advertising, but also packaging, public relations and sales promotions.

Related: Creating a Winning Startup Business Plan

5. Competitive analysis

The next section in your business plan should be the competitive analysis, which helps explain the differences between you and your competitors … and how you can keep it that way. If you can start with an honest evaluation of your competitors' strengths and weaknesses within the marketplace, you can also provide the reader with clear analysis about your advantage and the barriers that either already exist or can be developed to keep your business ahead of the pack. Are there weaknesses within the marketplace, and if so, how can you exploit them?

Remember to consider both your direct competition and your indirect competition, with both a short-term and long-term view.

6. Design and development plan

If you plan to sell a product, it's smart to add a design and development section to your business plan. This part should help your readers understand the background of that product. How have the production, marketing and company developed over time? What is your developmental budget?

For the sake of organization, consider these three aspects of the design and development plan:

Product development

Market development

Organizational development

Start by establishing your development goals, which should logically follow your evaluation of the market and your competition. Make these goals feasible and quantifiable, and be sure to establish timelines that allow your readers to see your vision. The goals should address both technical and marketing aspects.

Once the reader has a clear idea of your development goals, explain the procedures you'll develop to reach them. How will you allocate your resources, and who is in charge of accomplishing each goal?

The Entrepreneur guide to design and development plans offers this example on the steps of producing a recipe for a premium lager beer:

Gather ingredients.

Determine optimum malting process.

Gauge mashing temperature.

Boil wort and evaluate which hops provide the best flavor.

Determine yeast amounts and fermentation period.

Determine aging period.

Carbonate the beer.

Decide whether or not to pasteurize the beer.

Make sure to also talk about scheduling. What checkpoints will the product need to pass to reach a customer? Establish timeframes for each step of the process. Create a chart with a column for each task, how long that task will take and when the task will start and end.

Next, consider the costs of developing your product, breaking down the costs of these aspects:

General and administrative (G&A) costs

Marketing and sales

Professional services, like lawyers or accountants

Miscellaneous costs

Necessary equipment

The next section should be about the personnel you either have or plan to hire for that development. If you already have the right person in place, this part should be easy. If not, then this part of the business plan can help you create a detailed description of exactly what you need. This process can also help you formalize the hierarchy of your team's positions so that everyone knows their roles and responsibilities.

Finish the development and design section of your business plan by addressing the risks in developing the product and how you're going to address those risks. Could there be technical difficulties? Are you having trouble finding the right person to lead the development? Does your financial situation limit your ability to develop the product? Being honest about your problems and solutions can help answer some of your readers' questions before they ask them.

Related: The Essential Guide to Writing a Business Plan

7. Operations and management plan

Want to learn everything you'll ever need to know about the operations and management section of your business plan, and read a real, actual web article from 1997? Check out our guide titled, "Writing A Business Plan: Operations And Management."

Here, we'll more briefly summarize the two areas that need to be covered within your operations and management plan: the organizational structure is first, and the capital requirement for the operation are second.

The organizational structure detailed within your business plan will establish the basis for your operating expenses, which will provide essential information for the next part of the business plan: your financial statements. Investors will look closely at the financial statements, so it's important to start with a solid foundation and a realistic framework. You can start by dividing your organizational structure into these four sections:

Marketing and sales (including customer relations and service)

Production (including quality assurance)

Research and development

Administration

After you've broken down the organization's operations within your business plan, you can look at the expenses, or overhead. Divide them into fixed expenses, which typically remain constant, and variable, which will change according to the volume of business. Here are some of the examples of overhead expenses:

Maintenance and repair

Equipment leases

Advertising and promotion

Packaging and shipping

Payroll taxes and benefits

Uncollectible receivables

Professional services

Loan payments

Depreciation

Having difficulty calculating what some of those expenses might be for your business? Try using the simple formulas in "Writing A Business Plan: Operations And Management."

8. Financial factors

The last piece of the business plan that you definitely need to have covers the business's finances. Specifically, three financial statements will form the backbone of your business plan: the income statement, the cash-flow statement and balance sheet . Let's go through them one by one.

The income statement explains how the business can make money in a simple way. It draws on financial models already developed and discussed throughout the business plan (revenue, expenses, capital and cost of goods) and combines those numbers with when sales are made and when expenses are incurred. When the reader finishes going through your income statement, they should understand how much money your company makes or loses by subtracting your costs from your revenue, showing either a loss or a profit. If you like, you or a CPA can add a very short analysis at the end to emphasize some important aspects of the statement.

Second is the cash-flow statement, which explains how much cash your business needs to meet its obligations, as well as when you're going to need it and how you're going to get it. This section shows a profit or loss at the end of each month or year that rolls over to the next time period, which can create a cycle. If your business plan shows that you're consistently operating at a loss that gets bigger as time goes on, this can be a major red flag for both you and potential investors. This part of the business plan should be prepared monthly during your first year in business, quarterly in your second year and annually after that.

Our guide on cash-flow statements includes 17 items you'll need to add to your cash-flow statement.

Cash. Cash on hand in the business.

Cash sales . Income from sales paid for by cash.

Receivables. Income from collecting money owed to the business due to sales.

Other income. The liquidation of assets, interest on extended loans or income from investments are examples.

Total income. The sum of the four items above (total cash, cash sales, receivables, other income).

Material/merchandise . This will depend on the structure of your business. If you're manufacturing, this will include your raw materials. If you're in retail, count your inventory of merchandise. If you offer a service, consider which supplies are necessary.

Direct labor . What sort of labor do you need to make your product or complete your service?

Overhead . This includes both the variable expenses and fixed expenses for business operations.

Marketing/sales . All salaries, commissions and other direct costs associated with the marketing and sales departments.

Research and development . Specifically, the labor expenses required for research and development.

General and administrative expenses. Like the research and development costs, this centers on the labor for G&A functions of the business.

Taxes . This excludes payroll taxes but includes everything else.

Capital. Required capital for necessary equipment.

Loan payments. The total of all payments made to reduce any long-term debts.

Total expenses. The sum of items six through 14 (material/merchandise, direct labor, overhead, marketing/sales, research and development, general and administrative expenses, taxes, capital and loan payments).

Cash flow. Subtract total expenses from total income. This is how much cash will roll over to the next period.

Cumulative cash flow . Subtract the previous period's cash flow from your current cash flow.

Just like with the income statement, it's a good idea to briefly summarize the figures at the end. Again, consulting with a CPA is probably a good idea.

The last financial statement is the balance sheet. A balance sheet is, as our encyclopedia says, "a financial statement that lists the assets, liabilities and equity of a company at a specific point in time and is used to calculate the net worth of a business." If you've already started the business, use the balance sheet from your last reporting period. If the business plan you wrote is for a business you hope to start, do your best to project your assets and liabilities over time. If you want to earn investors, you'll also need to include a personal financial statement. Then, as with the other two sections, add a short analysis that hits the main points.

9. Supporting documents

If you have other documents that your readers need to see, like important contracts, letters of reference, a copy of your lease or legal documents, you should add them in this section.

Related: 7 Steps to a Perfectly Written Business Plan

What do I do with my business plan after I've written it?

The simplest reason to create a business plan is to help people unfamiliar with your business understand it quickly. While the most obvious use for a document like this is for financing purposes, a business plan can also help you attract talented employees — and, if you share the business plan internally, help your existing employees understand their roles.

But it's also important to do for your own edification, too. It's like the old saying goes, "The best way to learn something is to teach it." Writing down your plans, your goals and the state of your finances helps clarify the thoughts in your own mind. From there, you can more easily lead your business because you'll know whether the business is reaching the checkpoints you set out to begin with. You'll be able to foresee difficulties before they pop up and be able to pivot quickly.

That's why you should continue to update your business plan when the conditions change, either within your business (you might be entering a new period or undergoing a change in management) or within your market (like a new competitor popping up). The key is to keep your business plan ready so that you don't have to get it ready when opportunity strikes.

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October 31, 2023

Block Advisors

How to Write a Business Plan Step-By-Step

October 31, 2023 • Block Advisors

QUICK ANSWER:

• A business plan outlines your business’s goals, services, financing, and more.
• Business plans vary in length and complexity but should always include an explanation of what your business will do and how it will do it.
• Business plans serve as a guide for business owners and employees and are key to boosting investor confidence.

Whether you’re a serial entrepreneur or just getting your first small business idea off the ground, creating a business plan is an important step. Good business planning will help you clarify your goals and objectives, identify strategies, and note any potential issues or roadblocks you might face.

Not every business owner chooses to write a business plan, but many find it to be a valuable step to take when starting a business. Creating a business plan can seem daunting and confusing at first. But taking the time to plan and research can be very beneficial, especially for first-time small business owners.

If you want to learn how to create a business plan or if you feel you just need a little business plan help, read on!

What is a Business Plan?

A business plan serves as a comprehensive document that outlines your business’s goals, services, financing, leadership, and more details essential to its success. Think of the plan as the who, what, and why of your new business:

Who are the major players in your business?

What goods or services do you offer and why are they important?

Why are you in business and why should customers choose you?

Business plans can range in complexity and length, but, at their core, all plans explain what the business will do and how it will do it. A business plan serves as a guide for business owners and employees and should boost investor confidence. Some important advantages of business plans include:

• Shows investors you have an in-demand product or service, a solid team to achieve business goals, and the potential for growth and scalability.
• Increases the likelihood of securing a business loan, locking in investments, or raising capital. >>Read: A Guide to Raising Capital as a Small Business Founder
• Helps recognize partnership opportunities with other companies.
• Identifies and defines competitors within your given industry.

Looking for an examples of a successful business plan? Check out the SBA’s business plan page for walkthroughs of different business plan outlines.

How to Write a Business Plan: 10 Simple Steps

Starting with a blank page is undoubtedly intimidating. So, begin with a structured business plan template including the key elements for each section. Once your outline is complete, it’ll be time to fill in the details. Don’t worry, you’ll know how to write a business plan in no time. We’ve broken each section down to help you write a business plan in a few simple steps.

1. Brainstorm and Draft an Executive Summary for Your Business Plan

This will be the first page of your business plan. Think of it as your business’ written elevator pitch. In this high level summary, include a mission statement, a short description of the products or services you will be providing, and a summary of your financial and growth projections.

This section will be the first part people read, but you may find it easier to write it last. Writing it after building out the rest of your plan may help you condense the most important information into a concise statement. You’ll need to streamline your thoughts from the other sections into a one page or less summary.

2. Create a Business Description

In this next section, describe your business. Add more specific details than the executive summary. You should include your business’s registered name, the address of your business’s location, basic information about your business structure , and the names of key people involved in the business.

The company description should also answer these two questions:

• Who are you?
• What do you plan to do?

Explain why you’re in business. Show how you are different from competitors. Tell investors why they should finance your company. This section is often more inspirational and emotional. Make sure you grab the reader’s attention. The goal is to get them to believe in your vision as much as you do.

What business structure is right for my company?

Answer these six questions to help you find your fit

3. Outline Your Business Goals

This section should serve as an objective statement. Explain what you want to accomplish and your timeline. Business goals and objectives give you a clear focus. They drive your business to success, so dream big. Include objectives that will help you reach each goal. Don’t forget to make your goals and objectives SMART – that is, they should be:

S pecific | M easurable | A ttainable | R elevant | T ime-bound

4. Conduct and Summarize Market Research

Next, outline your ideal customer with some research. Do the math to estimate the potential size of your target market. Make sure you are choosing the right market for your product, one with plenty of customers who want and need your product. Define your customer’s pain points. Explain your expertise in relation to the market. Show how your product or service fills an important gap and brings value to your customers. Use your findings to build out a value proposition statement.

5. Conduct a Competitive Analysis

In a similar way, you’ll also want to conduct and include a competitive analysis. The purpose of this analysis is to determine the strengths and weaknesses of competitors in your market, strategies that will give you a competitive advantage, and how your company is different. Some people choose to conduct a competitive analysis using the SWOT method .

6. Outline Your Marketing and Sales Strategies

Your marketing sales strategy can make or break your business. Your marketing plan should outline your current sales decisions as well as future marketing strategies. In this section, you should reiterate your value proposition, target markets, and customer segments. Then, include details such as:

• A launch plan
• Growth tactics and strategies
• A customer retention plan
• Advertising and promotion channels (i.e. social media, print, search engines, etc.)

7. Describe Your Product or Service

By this point, your products or services have probably been mentioned in several areas of the business plan. But it’s still important to include a separate section that outlines their key details. Describe what you’re offering and how it fits in the current market. Also include details about the benefits, production process, and life cycle of your products. If you have any trademarks or patents, include them here. This is also a good time to ask yourself, “Should my plan include visual aids?”

[ Read More Must-Have Tips to Start Your Small Business ]

8. Compile Financial Plans

Financial health is crucial to the success of any business. If you’re just starting your business, you likely won’t have financial data yet. However, you still need to prepare a budget and financial plan. If you have them, include income statements , balance sheets , and cash flow statements . You can also include reporting metrics such as net income and your ratio of liquidity to debt repayment ability.

If you haven’t launched your business yet, include realistic projections of the same information. Set clear financial goals and include projected milestones. Share information about the budget. What are the business operations costs? Ensure you are comprehensive when considering what costs you may need to prepare for.

9. Build a Management and Operations Plan

Identify your team members. Highlight their expertise and qualifications. Outline roles that still need to be filled now to establish your company and later as the business grows. Read More: 8 tax steps to take when hiring employees >>

Include a section detailing your logistics and operations plan. Consider all parts of your operation. Create a plan that provides details on suppliers, production, equipment, shipment and fulfillment, and inventory. This shows how your business will get done.

10. Create an Appendix – A Place for Additional Information and Documents

Lastly, assemble an organized appendix. This section can contain any other relevant information a reader might need to enhance their understanding of other sections. If you feel like the appendix is getting long, consider adding a table of contents at the beginning of this section. Appendices often include documents such as:

• Licenses and permits
• Bank statements
• Resumes of key employees
• Equipment leases

How to Create a Business Plan: The Bottom Line

A business plan helps you identify clear goals and provides your business direction. Many small business plans are 10-20 pages in length. But as long as the essentials are covered, feel empowered to build a plan that works for you and your company’s needs. Creating a business plan will help you identify your market and target customers, define business aims, and foster long-term financial health.

We’re ready to help you get your business started on the right foot today, and help you find long-term satisfaction as you pursue your business dream. Writing a business plan can be exciting. But if the steps to starting your business are feeling overwhelming, Block Advisors is here to help. Make an appointment today – our experts can assist you with tax prep , bookkeeping , payroll , business formation , and more .

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Defining employee compensation and taxable wages, a guide to raising capital as a small business founder, how to onboard new employees for their first day, find tax help in your area..

How to Write a Business Plan (Plus Examples & Templates)

• 3 years ago

Have you ever wondered how to write a business plan step by step? Mike Andes, told us: 

This guide will help you write a business plan to impress investors.

Throughout this process, we’ll get information from Mike Andes, who started Augusta Lawn Care Services when he was 12 and turned it into a franchise with over 90 locations. He has gone on to help others learn how to write business plans and start businesses.  He knows a thing or two about writing  business plans!

We’ll start by discussing the definition of a business plan. Then we’ll discuss how to come up with the idea, how to do the market research, and then the important elements in the business plan format. Keep reading to start your journey!

What Is a Business Plan?

A business plan is simply a road map of what you are trying to achieve with your business and how you will go about achieving it. It should cover all elements of your business including: 

• Finding customers
• Plans for developing a team
•  Competition
• Legal structures
• Key milestones you are pursuing

If you aren’t quite ready to create a business plan, consider starting by reading our business startup guide .

Get a Business Idea

Before you can write a business plan, you have to have a business idea. You may see a problem that needs to be solved and have an idea how to solve it, or you might start by evaluating your interests and skills. 

Mike told us, “The three things I suggest asking yourself when thinking about starting a business are:

• What am I good at?
• What would I enjoy doing?
• What can I get paid for?”

If all three of these questions don’t lead to at least one common answer, it will probably be a much harder road to success. Either there is not much market for it, you won’t be good at it, or you won’t enjoy doing it. 

As Mike told us, “There’s enough stress starting and running a business that if you don’t like it or aren’t good at it, it’s hard to succeed.”

If you’d like to hear more about Mike’s approach to starting a business, check out our YouTube video

Conduct Market Analysis

Market analysis is focused on establishing if there is a target market for your products and services, how large the target market is, and identifying the demographics of people or businesses that would be interested in the product or service. The goal here is to establish how much money your business concept can make.

Product and Service Demand

A search engine is your best friend when trying to figure out if there is demand for your products and services. Personally, I love using presearch.org because it lets you directly search on a ton of different platforms including Google, Youtube, Twitter, and more. Check out the screenshot for the full list of search options.

With quick web searches, you can find out how many competitors you have, look through their reviews, and see if there are common complaints about the competitors. Bad reviews are a great place to find opportunities to offer better products or services. 

If there are no similar products or services, you may have stumbled upon something new, or there may just be no demand for it. To find out, go talk to your most honest friend about the idea and see what they think. If they tell you it’s dumb or stare at you vacantly, there’s probably no market for it.

You can also conduct a survey through social media to get public opinion on your idea. Using Facebook Business Manager , you could get a feel for who would be interested in your product or service.

 I ran a quick test of how many people between 18-65  you could reach in the U.S. during a week. It returned an estimated 700-2,000 for the total number of leads, which is enough to do a fairly accurate statistical analysis.

Identify Demographics of Target Market

Depending on what type of business you want to run, your target market will be different. The narrower the demographic, the fewer potential customers you’ll have. If you did a survey, you’ll be able to use that data to help define your target audience. Some considerations you’ll want to consider are:

• Other Interests
• Marital Status
• Do they have kids?

Once you have this information, it can help you narrow down your options for location and help define your marketing further. One resource that Mike recommended using is the Census Bureau’s Quick Facts Map . He told us,  

“It helps you quickly evaluate what the best areas are for your business to be located.”

How to Write a Business Plan

Now that you’ve developed your idea a little and established there is a market for it, you can begin writing a business plan. Getting started is easier with the business plan template we created for you to download. I strongly recommend using it as it is updated to make it easier to create an action plan. 

Each of the following should be a section of your business plan:

• Business Plan Cover Page
• Table of Contents
• Executive Summary
• Company Description
• Description of Products and Services

SWOT Analysis

• Competitor Data
• Competitive Analysis
• Marketing Expenses Strategy 

Pricing Strategy

• Distribution Channel Assessment
• Operational Plan
• Management and Organizational Strategy
• Financial Statements and/or Financial Projections

We’ll look into each of these. Don’t forget to download our free business plan template (mentioned just above) so you can follow along as we go. 

How to Write a Business Plan Step 1. Create a Cover Page

The first thing investors will see is the cover page for your business plan. Make sure it looks professional. A great cover page shows that you think about first impressions.

A good business plan should have the following elements on a cover page:

• Professionally designed logo
• Company name
• Mission or Vision Statement
• Contact Info

Basically, think of a cover page for your business plan like a giant business card. It is meant to capture people’s attention but be quickly processed.

How to Write a Business Plan Step 2. Create a Table of Contents

Most people are busy enough that they don’t have a lot of time. Providing a table of contents makes it easy for them to find the pages of your plan that are meaningful to them.

A table of contents will be immediately after the cover page, but you can include it after the executive summary. Including the table of contents immediately after the executive summary will help investors know what section of your business plan they want to review more thoroughly.

Check out Canva’s article about creating a  table of contents . It has a ton of great information about creating easy access to each section of your business plan. Just remember that you’ll want to use different strategies for digital and hard copy business plans.

How to Write a Business Plan Step 3. Write an Executive Summary

An executive summary is where your business plan should catch the readers interest.  It doesn’t need to be long, but should be quick and easy to read.

Mike told us,

How long should an executive summary bein an informal business plan?

For casual use, an executive summary should be similar to an elevator pitch, no more than 150-160 words, just enough to get them interested and wanting more. Indeed has a great article on elevator pitches .  This can also be used for the content of emails to get readers’ attention.

It consists of three basic parts:

• An introduction to you and your business.
• What your business is about.
• A call to action

Example of an informal executive summary 

One of the best elevator pitches I’ve used is:

So far that pitch has achieved a 100% success rate in getting partnerships for the business.

What should I include in an executive summary for investors?

Investors are going to need a more detailed executive summary if you want to secure financing or sell equity. The executive summary should be a brief overview of your entire business plan and include:

• Introduction of yourself and company.
• An origin story (Recognition of a problem and how you came to solution)
• An introduction to your products or services.
• Your unique value proposition. Make sure to include intellectual property.
• Where you are in the business life cycle
• Request and why you need it.

Successful business plan examples

The owner of Urbanity told us he spent 2 months writing a 75-page business plan and received a $250,000 loan from the bank when he was 23. Make your business plan as detailed as possible when looking for financing. We’ve provided a template to help you prepare the portions of a business plan that banks expect.

Here’s the interview with the owner of Urbanity:

When to write an executive summary?

Even though the summary is near the beginning of a business plan, you should write it after you complete the rest of a business plan. You can’t talk about revenue, profits, and expected expenditures if you haven’t done the market research and created a financial plan.

What mistakes do people make when writing an executive summary?

Business owners commonly go into too much detail about the following items in an executive summary:

• Marketing and sales processes
• Financial statements
• Organizational structure
• Market analysis

These are things that people will want to know later, but they don’t hook the reader. They won’t spark interest in your small business, but they’ll close the deal.

How to Write a Business Plan Step 4. Company Description

Every business plan should include a company description. A great business plan will include the following elements while describing the company:

• Mission statement
• Philosophy and vision
• Company goals

Target market

• Legal structure

Let’s take a look at what each section includes in a good business plan.

Mission Statement

A mission statement is a brief explanation of why you started the company and what the company’s main focus is. It should be no more than one or two sentences. Check out HubSpot’s article 27 Inspiring Mission Statement for a great read on informative and inspiring mission and vision statements. 

Company Philosophy and Vision

The company philosophy is what drives your company. You’ll normally hear them called core values.  These are the building blocks that make your company different. You want to communicate your values to customers, business owners, and investors as often as possible to build a company culture, but make sure to back them up.

What makes your company different?

Each company is different. Your new business should rise above the standard company lines of honesty, integrity, fun, innovation, and community when communicating your business values. The standard answers are corporate jargon and lack authenticity. 

Examples of core values

One of my clients decided to add a core values page to their website. As a tech company they emphasized the values:

•  Prioritize communication.
•  Never stop learning.
•  Be transparent.
•  Start small and grow incrementally.

These values communicate how the owner and the rest of the company operate. They also show a value proposition and competitive advantage because they specifically focus on delivering business value from the start. These values also genuinely show what the company is about and customers recognize the sincerity. Indeed has a great blog about how to identify your core values .

What is a vision statement?

A vision statement communicate the long lasting change a business pursues. The vision helps investors and customers understand what your company is trying to accomplish. The vision statement goes beyond a mission statement to provide something meaningful to the community, customer’s lives, or even the world.

Example vision statements

The Alzheimer’s Association is a great example of a vision statement:

A world without Alzheimer’s Disease and other dementia.

It clearly tells how they want to change the world. A world without Alzheimers might be unachievable, but that means they always have room for improvement.

Business Goals

You have to measure success against goals for a business plan to be meaningful. A business plan helps guide a company similar to how your GPS provides a road map to your favorite travel destination. A goal to make as much money as possible is not inspirational and sounds greedy.

Sure, business owners want to increase their profits and improve customer service, but they need to present an overview of what they consider success. The goals should help everyone prioritize their work.

How far in advance should a business plan?

Business planning should be done at least one year in advance, but many banks and investors prefer three to five year business plans. Longer plans show investors that the management team  understands the market and knows the business is operating in a constantly shifting market. In addition, a plan helps businesses to adjust to changes because they have already considered how to handle them.

Example of great business goals

My all time-favorite long-term company goals are included in Tesla’s Master Plan, Part Deux . These goals were written in 2016 and drive the company’s decisions through 2026. They are the reason that investors are so forgiving when Elon Musk continually fails to meet his quarterly and annual goals.

If the progress aligns with the business plan investors are likely to continue to believe in the company. Just make sure the goals are reasonable or you’ll be discredited (unless you’re Elon Musk).

You did target market research before creating a business plan. Now it’s time to add it to the plan so others understand what your ideal customer looks like. As a new business owner, you may not be considered an expert in your field yet, so document everything. Make sure the references you use are from respectable sources. 

Use information from the specific lender when you are applying for lending. Most lenders provide industry research reports and using their data can strengthen the position of your business plan.

A small business plan should include a section on the external environment. Understanding the industry is crucial because we don’t plan a business in a vacuum. Make sure to research the industry trends, competitors, and forecasts. I personally prefer IBIS World for my business research. Make sure to answer questions like:

• What is the industry outlook long-term and short-term?
• How will your business take advantage of projected industry changes and trends?
• What might happen to your competitors and how will your business successfully compete?

Industry resources

Some helpful resources to help you establish more about your industry are:

• Trade Associations
• Federal Reserve
• Bureau of Labor Statistics

Legal Structure

There are five basic types of legal structures that most people will utilize:

• Sole proprietorships
• Limited Liability Companies (LLC)

Partnerships

Corporations.

• Franchises.

Each business structure has their pros and cons. An LLC is the most common legal structure due to its protection of personal assets and ease of setting up. Make sure to specify how ownership is divided and what roles each owner plays when you have more than one business owner.

You’ll have to decide which structure is best for you, but we’ve gathered information on each to make it easier.

Sole Proprietorship

A sole proprietorship is the easiest legal structure to set up but doesn’t protect the owner’s personal assets from legal issues. That means if something goes wrong, you could lose both your company and your home.

To start a sole proprietorship, fill out a special tax form called a  Schedule C . Sole proprietors can also join the American Independent Business Alliance .

Limited Liability Company (LLC)

An LLC is the most common business structure used in the United States because an LLC protects the owner’s personal assets. It’s similar to partnerships and corporations, but can be a single-member LLC in most states. An LLC requires a document called an operating agreement.

Each state has different requirements. Here’s a link to find your state’s requirements . Delaware and Nevada are common states to file an LLC because they are really business-friendly. Here’s a blog on the top 10 states to get an LLC.

Partnerships are typically for legal firms. If you choose to use a partnership choose a Limited Liability Partnership. Alternatively, you can just use an LLC.

Corporations are typically for massive organizations. Corporations have taxes on both corporate and income tax so unless you plan on selling stock, you are better off considering an LLC with S-Corp status . Investopedia has good information corporations here .

There are several opportunities to purchase successful franchises. TopFranchise.com has a list of companies in a variety of industries that offer franchise opportunities. This makes it where an entrepreneur can benefit from the reputation of an established business that has already worked out many of the kinks of starting from scratch.

How to Write a Business Plan Step 5. Products and Services

This section of the business plan should focus on what you sell, how you source it, and how you sell it. You should include:

• Unique features that differentiate your business products from competitors
• Intellectual property
• Your supply chain
• Cost and pricing structure 

Questions to answer about your products and services

Mike gave us a list  of the most important questions to answer about your product and services:

• How will you be selling the product? (in person, ecommerce, wholesale, direct to consumer)?
• How do you let them know they need a product?
• How do you communicate the message?
• How will you do transactions?
• How much will you be selling it for?
• How many do you think you’ll sell and why?

Make sure to use the worksheet on our business plan template .

How to Write a Business Plan Step 6. Sales and Marketing Plan

The marketing and sales plan is focused on the strategy to bring awareness to your company and guides how you will get the product to the consumer.  It should contain the following sections:

SWOT Analysis stands for strengths, weaknesses, opportunities, and threats. Not only do you want to identify them, but you also want to document how the business plans to deal with them.

Business owners need to do a thorough job documenting how their service or product stacks up against the competition.

If proper research isn’t done, investors will be able to tell that the owner hasn’t researched the competition and is less likely to believe that the team can protect its service from threats by the more well-established competition. This is one of the most common parts of a presentation that trips up business owners presenting on Shark Tank .

SWOT Examples

Examples of strengths and weaknesses could be things like the lack of cash flow, intellectual property ownership, high costs of suppliers, and customers’ expectations on shipping times.

Opportunities could be ways to capitalize on your strengths or improve your weaknesses, but may also be gaps in the industry. This includes:

• Adding offerings that fit with your current small business
• Increase sales to current customers
• Reducing costs through bulk ordering
• Finding ways to reduce inventory
•  And other areas you can improve

Threats will normally come from outside of the company but could also be things like losing a key member of the team. Threats normally come from competition, regulations, taxes, and unforeseen events.

The management team should use the SWOT analysis to guide other areas of business planning, but it absolutely has to be done before a business owner starts marketing. 

Include Competitor Data in Your Business Plan

When you plan a business, taking into consideration the strengths and weaknesses of the competition is key to navigating the field. Providing an overview of your competition and where they are headed shows that you are invested in understanding the industry.

For smaller businesses, you’ll want to search both the company and the owners names to see what they are working on. For publicly held corporations, you can find their quarterly and annual reports on the SEC website .

What another business plans to do can impact your business. Make sure to include things that might make it attractive for bigger companies to outsource to a small business.

Marketing Strategy

The marketing and sales part of business plans should be focused on how you are going to make potential customers aware of your business and then sell to them.

If you haven’t already included it, Mike recommends:

“They’ll want to know about Demographics, ages, and wealth of your target market.”

Make sure to include the Total addressable market .  The term refers to the value if you captured 100% of the market.

Advertising Strategy

You’ll explain what formats of advertising you’ll be using. Some possibilities are:

• Online: Facebook and Google are the big names to work with here.
• Print : Print can be used to reach broad groups or targeted markets. Check out this for tips .
• Radio : iHeartMedia is one of the best ways to advertise on the radio
• Cable television : High priced, hard to measure ROI, but here’s an explanation of the process
• Billboards: Attracting customers with billboards can be beneficial in high traffic areas.

You’ll want to define how you’ll be using each including frequency, duration, and cost. If you have the materials already created, including pictures or links to the marketing to show creative assets.

Mike told us “Most businesses are marketing digitally now due to Covid, but that’s not always the right answer.”

Make sure the marketing strategy will help team members or external marketing agencies stay within the brand guidelines .

This section of a business plan should be focused on pricing. There are a ton of pricing strategies that may work for different business plans. Which one will work for you depends on what kind of a business you run.

Some common pricing strategies are:

• Value-based pricing – Commonly used with home buying and selling or other products that are status symbols.
• Skimming pricing – Commonly seen in video game consoles, price starts off high to recoup expenses quickly, then reduces over time.
• Competition-based pricing – Pricing based on competitors’ pricing is commonly seen at gas stations.
• Freemium services –  Commonly used for software, where there is a free plan, then purchase options for more functionality.

HubSpot has a great calculator and blog on pricing strategies.

Beyond explaining what strategy your business plans to use, you should include references for how you came to this pricing strategy and how it will impact your cash flow.

Distribution Plan

This part of a business plan is focused on how the product or service is going to go through the supply chain. These may include multiple divisions or multiple companies. Make sure to include any parts of the workflow that are automated so investors can see where cost savings are expected and when.

Supply Chain Examples

For instance, lawn care companies  would need to cover aspects such as:

• Suppliers for lawn care equipment and tools
• Any chemicals or treatments needed
• Repair parts for sprinkler systems
• Vehicles to transport equipment and employees
• Insurance to protect the company vehicles and people.

Examples of Supply Chains

These are fairly flat supply chains compared to something like a clothing designer where the clothes would go through multiple vendors. A clothing company might have the following supply chain:

• Raw materials
• Shipping of raw materials
• Converting of raw materials to thread
• Shipping thread to produce garments
• Garment producer
• Shipping to company
• Company storage
• Shipping to retail stores

There have been advances such as print on demand that eliminate many of these steps. If you are designing completely custom clothing, all of this would need to be planned to keep from having business disruptions.

The main thing to include in the business plan is the list of suppliers, the path the supply chain follows, the time from order to the customer’s home, and the costs associated with each step of the process.

According to BizPlanReview , a business plan without this information is likely to get rejected because they have failed to research the key elements necessary to make sales to the customer.

How to Write a Business Plan Step 7. Company Organization and Operational Plan

This part of the business plan is focused on how the business model will function while serving customers.  The business plan should provide an overview of  how the team will manage the following aspects:

Quality Control

• Legal environment

Let’s look at each for some insight.

Production has already been discussed in previous sections so I won’t go into it much. When writing a business plan for investors, try to avoid repetition as it creates a more simple business plan.

If the organizational plan will be used by the team as an overview of how to perform the best services for the customer, then redundancy makes more sense as it communicates what is important to the business.

Quality control policies help to keep the team focused on how to verify that the company adheres to the business plan and meets or exceeds customer expectations.

Quality control can be anything from a standard that says “all labels on shirts can be no more than 1/16″ off center” to a defined checklist of steps that should be performed and filled out for every customer.

There are a variety of organizations that help define quality control including:

• International Organization for Standardization – Quality standards for energy, technology, food, production environments, and cybersecurity
• AICPA – Standard defined for accounting.
• The Joint Commission – Healthcare
• ASHRAE – HVAC best practices

You can find lists of the organizations that contribute most to the government regulation of industries on Open Secrets . Research what the leaders in your field are doing. Follow their example and implement it in your quality control plan.

For location, you should use information from the market research to establish where the location will be. Make sure to include the following in the location documentation.

• The size of your location
• The type of building (retail, industrial, commercial, etc.)
• Zoning restrictions – Urban Wire has a good map on how zoning works in each state
• Accessibility – Does it meet ADA requirements?
• Costs including rent, maintenance, utilities, insurance and any buildout or remodeling costs
• Utilities – b.e.f. has a good energy calculator .

Legal Environment

The legal requirement section is focused on defining how to meet the legal requirements for your industry. A good business plan should include all of the following:

• Any licenses and/or permits that are needed and whether you’ve obtained them
• Any trademarks, copyrights, or patents that you have or are in the process of applying for
• The insurance coverage your business requires and how much it costs
• Any environmental, health, or workplace regulations affecting your business
• Any special regulations affecting your industry
• Bonding requirements, if applicable

Your local SBA office can help you establish requirements in your area. I strongly recommend using them. They are a great resource.

Your business plan should include a plan for company organization and hiring. While you may be the only person with the company right now, down the road you’ll need more people. Make sure to consider and document the answers to the following questions:

• What is the current leadership structure and what will it look like in the future?
• What types of employees will you have? Are there any licensing or educational requirements?
• How many employees will you need?
• Will you ever hire freelancers or independent contractors?
• What is each position’s job description?
• What is the pay structure (hourly, salaried, base plus commission, etc.)?
• How do you plan to find qualified employees and contractors?

One of the most crucial parts of a business plan is the organizational chart. This simply shows the positions the company will need, who is in charge of them and the relationship of each of them. It will look similar to this:

Our small business plan template has a much more in-depth organizational chart you can edit to include when you include the organizational chart in your business plan.

How to Write a Business Plan Step 8. Financial Statements 

No business plan is complete without financial statements or financial projections. The business plan format will be different based on whether you are writing a business plan to expand a business or a startup business plan. Let’s dig deeper into each.

Provide All Financial Income from an Existing Business

An existing business should use their past financial documents including the income statement, balance sheet, and cash flow statement to find trends to estimate the next 3-5 years.

You can create easy trendlines in excel to predict future revenue, profit and loss, cash flow, and other changes in year-over-year performance. This will show your expected performance assuming business continues as normal.

If you are seeking an investment, then the business is probably not going to continue as normal. Depending on the financial plan and the purpose of getting financing, adjustments may be needed to the following:

• Higher Revenue if expanding business
• Lower Cost of Goods Sold if purchasing inventory with bulk discounts
• Adding interest if utilizing financing (not equity deal)
• Changes in expenses
• Addition of financing information to the cash flow statement
• Changes in Earnings per Share on the balance sheet

Financial modeling is a challenging subject, but there are plenty of low-cost courses on the subject. If you need help planning your business financial documentation take some time to watch some of them.

Make it a point to document how you calculated all the changes to the income statement, balance sheet, and cash flow statement in your business plan so that key team members or investors can verify your research.

Financial Projections For A Startup Business Plan

Unlike an existing business, a startup doesn’t have previous success to model its future performance. In this scenario, you need to focus on how to make a business plan realistic through the use of industry research and averages.

Mike gave the following advice in his interview:

Financial Forecasting Mistakes

One of the things a lot of inexperienced people use is the argument, “If I get one percent of the market, it is worth $100 million.” If you use this, investors are likely to file the document under bad business plan examples.

Let’s use custom t-shirts as an example.

Credence Research estimated in 2018 there were 11,334,800,000 custom t-shirts sold for a total of $206.12 Billion, with a 6% compound annual growth rate.

With that data,  you can calculate that the industry will grow to $270 Billion in 2023 and that the average shirt sold creates $18.18 in revenue.

Combine that with an IBIS World estimate of 11,094 custom screen printers and that means even if you become an average seller, you’ll get .009% of the market.

Here’s a table for easier viewing of that information.

The point here is to make sure your business proposal examples make sense.

You’ll need to know industry averages such as cost of customer acquisition, revenue per customer, the average cost of goods sold, and admin costs to be able to create accurate estimates.

Our simple business plan templates walk you through most of these processes. If you follow them you’ll have a good idea of how to write a business proposal.

How to Write a Business Plan Step 9. Business Plan Example of Funding Requests

What is a business plan without a plan on how to obtain funding?

The Small Business Administration has an example for a pizza restaurant that theoretically needed nearly $20k to make it through their first month.

In our video, How to Start a $500K/Year T-Shirt Business (Pt. 1 ), Sanford Booth told us he needed about $200,000 to start his franchise and broke even after 4 months.

Freshbooks estimates it takes on average 2-3 years for a business to be profitable, which means the fictitious pizza company from the SBA could need up to $330k to make it through that time and still pay their bills for their home and pizza shop.

Not every business needs that much to start, but realistically it’s a good idea to assume that you need a fairly large cushion.

Ways to get funding for a small business

There are a variety of ways to cover this. the most common are:

• Bootstrapping – Using your savings without external funding.
• Taking out debt – loans, credit cards
• Equity, Seed Funding – Ownership of a percentage of the company in exchange for current funds
• Crowdsourcing – Promising a good for funding to create the product

Keep reading for more tips on how to write a business plan.

How funding will be used

When asking for business financing make sure to include:

• How much to get started?
• What is the minimum viable product and how soon can you make money?
• How will the money be spent?

Mike emphasized two aspects that should be included in every plan, 

How to Write a Business Plan Resources

Here are some links to a business plan sample and business plan outline. 

• Sample plan

It’s also helpful to follow some of the leading influencers in the business plan writing community. Here’s a list:

• Wise Plans –  Shares a lot of information on starting businesses and is a business plan writing company.
• Optimus Business Plans –  Another business plan writing company.
• Venture Capital – A venture capital thread that can help give you ideas.

How to Write a Business Plan: What’s Next?

We hope this guide about how to write a simple business plan step by step has been helpful. We’ve covered:

• The definition of a business plan
• Coming up with a business idea
• Performing market research
• The critical components of a business plan
• An example business plan

In addition, we provided you with a simple business plan template to assist you in the process of writing your startup business plan. The startup business plan template also includes a business model template that will be the key to your success.

Don’t forget to check out the rest of our business hub .

Have you written a business plan before? How did it impact your ability to achieve your goals?

Brandon Boushy

Brandon Boushy lives to improve people’s lives by helping them become successful entrepreneurs. His journey started nearly 30 years ago. He consistently excelled at everything he did, but preferred to make the rules rather than follow him. His exploration of self and knowledge has helped him to get an engineering degree, MBA, and countless certifications. When freelancing and rideshare came onto the scene, he recognized the opportunity to play by his own rules. Since 2017, he has helped businesses across all industries achieve more with his research, writing, and marketing strategies. Since 2021, he has been the Lead Writer for UpFlip where he has published over 170 articles on small business success.

Related posts

• September 27, 2023

How to Start a Business: The Ultimate Guide (2024)

• August 3, 2022

Free Business Plan Template (With Examples)

• May 3, 2022

How to Get a Business License (In 3 Steps)

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How to Write a Professional Business Plan in 10 Easy Steps

Home » Blog » How to Write a Business Plan in 10 Easy Steps

During financial uncertainty, many of us press pause on our entrepreneurial aspirations.

Wondering if now’s the right time to start our business . Doubting our ideas and worrying about the what-ifs and maybes! 

A business plan removes the uncertainty and what-ifs from the equation. It validates our business ideas, confirms our marketing strategies, and identifies potential problems before they arise.  

Replacing our doubts with positivity, ensuring we see the complete picture, and increasing our chances of success.

Because you could be starting and running your own business . But you’ll only know for sure it’s the right move for you when you write your business plan.

Here’s everything you need to know to create the perfect business plan.

What is a business plan?

A well-written business plan contains the recipe for your new business’s growth and development. 

It’s your compass. 

It describes your goals and how you’ll achieve them by infusing the ingredients you need to turn your dream into a reality. 

• Your business description- Tells readers about your idea, why it'll succeed, and how you'll make it happen.
• A market analysis- That backs up your company description.
• Your management and organization plan- Includes employees or contractors because even a one-person show may need a team's help on a contract basis, like bookkeeping services, graphic design, research, and if your business grows, with time, also full-time employees.
• Your products or services descriptions- Explaining how they work, where you'll get them, and how much they`ll cost.
• A target audience analysis- So, you know exactly who you`re selling to and what makes them buy what you`re offering.
• Your marketing and sales plan- Proving your chosen niche is profitable and how you'll reach your customers.
• A financial funding request/projections - What you need and how you'll get it.

Your business plan is like a GPS, guiding your business to its destination for the next 3 to 5 years. 

Why is a business plan important?

Here’s the short answer.

A business plan enables you to convey your vision to those who can help you make it a reality.  

It does it in 2 ways:

• It empowers you to evaluate your goals and confirm their viability before entering a marketplace.
• And equips you with the information, using a proven outline, that convinces others to help you achieve them.

A business plan does it by explaining who you are, what you are going to do, and how you’ll do it. It clarifies your strategies, identifies future roadblocks, and determines your immediate and future financial and resource needs.

Let’s look at what that means and why each part is important.

A business plan helps you evaluate your ideas

Do you have over one business idea or a range of products or services you believe you could bring to a single marketplace? 

If so, a business plan helps determine which is worth focusing on and where to apply your energy and resources by evaluating your idea’s possible market share and profitability before investing.

Clarifies your costs

Your chosen market determines your initial investment and future revenue. And it would be best if you knew those before you invest a dollar in your business idea.

With your chosen idea, your business plan can help you understand your set-up and running costs, the resources you’ll need, and the time it’ll take to get started.

It’s also where you’ll calculate your future sales and revenue goals to ensure they fit your budget and required breakeven point.  

And those are essential because every business needs a consistent cash flow to stay afloat!

Steers your business in the right direction

Your business plan guides you through every stage of starting and running your business . 

It acts as your GPS, giving you a course to steer. Ensuring your business stays on track, helping you achieve your goals every step of the way.  

Acts as your financial guide

As your new business grows, you might need to expand. 

But with expansion come big spending decisions, such as purchasing expensive equipment, leasing a new location, or hiring your first employees.

Your business plan’s financial forecast gives you a solid foundation to build on by clarifying when you’re ready to make those investments, ensuring you don’t overreach.

And when you are ready to employ staff, it helps you with that too!

Helps recruit the people you need

Your business is often only as good as its employees. A business plan helps you communicate your vision and pitch your dream to the best candidates. Building their confidence in your venture and encouraging them to join you.

It's essential if seeking a loan or investment

Do you need a loan from a bank or a venture capitalist/angel investor?

If so, you’ll need a business plan that shows your past and future financial trajectory so potential investors can evaluate your business’ feasibility to determine whether you’re worth the risk.

It's an asset if you want to sell your business

Owners of legal entities, such as LLCs, can sell all or part of their business to raise funds for other business ventures or expand their existing ones.

A solid business plan with proven financial recordings and realistic forecasts based on current performance can make your business more attractive to potential investors. 

And it makes sense because when buyers understand your business model and its potential growth, they’ll see the value in it for them.  

All great reasons to write a business plan, don`t you agree?

Okay, here’s how you do it: 

The steps for creating a business plan

Most business plan templates are similar, containing several steps for writing a conclusive plan. If you’re interested in a very short plan, we prepared a lean (one-page) version, including a template . 

The perfect business plan isn’t one or the other; it’s the plan that meets your business needs.

That said, every business plan should contain crucial elements and essential details . And a rhythm to your outline that encourages action, growth, and investors to read it from start to finish. Our step-by-step guide, along with our template, will help you achieve both. 

But first, you must choose the style that works for you:

Pick a business plan format that works for you

You can tackle creating a business plan in different ways; one could be a long-form, more traditional approach or a one-page business plan that acts as a summarized road map.

Traditional business plans use a standard, industry-expected structure, with each section written in great detail. They require a lot of research because businesses often use them to gain investment, and they can be anywhere from 10 to 50 pages long. 

A one-page business plan uses a similar structure but summarizes each step by highlighting the key points. 

You can write a one-page plan in an hour and use it as a personal blueprint for running your business or as a guide to writing a future traditional plan.

Here are the core component that create a great business plan:

1.  An executive summary

2.  Your company’s description

3. Market analysis

4. management and organization outline, 5. products and service description, 6. target audience analysis, 7. marketing and sales plan.

8. Financial funding request 

9. Financial projections

10. an appendix, 1. an executive summary.

The first section of your business plan’s an executive summary that tells anyone reading in simple terms what your business is and why you believe it’ll be successful.

It’s the most crucial part of your plan because anyone reviewing it often decides whether to continue reading based on what’s in your executive summary.

Your executive should contain your mission statement (why you’re starting your business). A product/service description. Your leadership team and financial information.

Even though the first thing people read is your executive summary, it’s the last section you write. 

The next step is about you:

2. Your company's description

Here you sell yourself and your business by telling readers why you’re starting your business and know it’ll succeed.

You must be realistic, business-like, and detailed.  

Begin by explaining who you are, what you plan on doing, and how you’ll do it. Describe your future market, your target audience, and why they need your product/service. 

Elaborate on your unique selling point (USP) and how your competitive advantage will ensure your success. 

Describe your team, highlight their skills and technical expertise, and if you`re a brick-and-mortar business, discuss your location and why it’s right for your target audience or logistics. 

Now your market:

A great business idea is only as good as its future marketplace. Enter a declining market with an insufficient or uninterested audience, and you’ll be toast.

Choose one on an upward trajectory with people you understand and need your product, and you’ll be in business. 

That makes your market analysis a crucial step in your business plan outline. Here’s where you identify your target audience, competitors’ performance, strengths and weaknesses, and whether the market can sustain your business needs.

Your market analysis should include the following:

• Your market description and outlook- Provide a detailed outline defining your market, including its size, trends, growth rate, and outlook.
• Target Market- Describe your ideal customers, including their demographics such as age, gender, employment status, income level, and lifestyle preferences. Also, include your market size, what motivates your ideal clients, and how you'll reach them.
• Competitive Analysis- Identify your main competitors and list their strengths and weaknesses. Also, highlight any potential roadblocks that might prevent you from entering your chosen marketplace.

Step 4 is where you tell readers how you’ll construct your business and who’ll run it.  

Describe your business’s legal structure, whether you’re a sole proprietor intending to form an LLC or a limited/general partnership with dreams of incorporating an S or C corps. 

Include your registered business name and any DBA brand name you have. And any member’s percentage ownership and managerial duties per your operating agreement.

And consider using a chart to show who runs what section of the business. Explain how each employee, manager, or owner’s experience and expertise will contribute to your venture’s success. And if you have them, include your team’s resumes and CVs.

Now you must get technical about what you plan to offer.

List your products or services and explain how they work. If in the development stage, describe the process and when you’ll be market ready.

Include the following product/service information:

• Describe how your product/service will benefit your target audience.
• Provide a breakdown of costs per unit made/sold, life cycle, and expected profit margins.
• Explain your supply chain, order fulfillment, and sales strategy.
• Include your plans for intellectual property, like trademarks and patents.

Your product and service description brings you to those who matter most. Your target audience:

The target audience section of your business plan is the most important one to get right. After all, your customers are your business. And the better you know them, the easier it’ll be to sell to them. 

To gain a clear picture of your ideal clients, learn about their demographics and create a client persona.

Those include: 

• Their location
• Education level
• Employment status
• Where they work
• How much they earn
• How they communicate
• Preferred social media platforms
• Common behavior patterns
• Free time interests
• And what their values and beliefs are

You need your target audience’s demographics to create a branding style that resonates with them. To build marketing strategies that engage their interest. And to identify where to spend your advertising dollars.

Target market’s persona in place, your next step is to describe how you’ll reach and sell to them:

Your marketing plan outlines your strategies to connect with and convert your ideal clients. 

Here’s where you explain how you’ll reach your audience, describe your sales funnel, and develop customer loyalty to keep customers.

Your business plan doesn’t require your complete marketing/sales plan but should answer basic questions like:

• Who's your target market?
• Which channels will you use to reach them? (Social media, email, website, traditional marketing, etc.)
• What sales strategies will you use?
• Which resources do you need to implement those strategies?
• Do you have the resources, and if not, where will you get them?
• What are the potential marketing obstacles, and how you'll overcome them?
• What's your initial marketing campaign timeline and budget?
• What your success metrics are, and how you'll measure them?

8. Financial funding request

This step applies if you require funding to start or grow your business.

Similar to the marketing plan step, including your entire financial plan is unnecessary. However, you’ll need to answer specific questions to explain how much investment you require and how you’ll use it.

The following financial funding outline will suffice:

• Your current capital balance and how much future capital you'll need.
• Specify whether you want equity or debt.
• The terms and conditions you need and the duration of any loan repayments.
• Provide a detailed description of why you need investment, IE., to pay salaries, buy equipment or stock, and what percentage will go where.

Start-ups that need investment must rely on something other than past sales and balance sheets. Here, you’ll need to use financial projections to persuade lenders you’ll generate enough profit to repay their loans. And that investors will get a worthwhile return. 

Your goal is to convince potential lenders or investors that your business will make enough profit to repay any loans or fulfill your equity promises.

Depending on your loan requirements and market, these projections can vary from 3 to 5 years. 

Financial projections aren’t an exact science; you’re forecasting the future! However, accuracy is essential (meaning your projected numbers must add up correctly). And while your goals should be positive, they must also be realistic.

What to include in your financial forecast:

• Forecasted income statements.
• Capital expenditures, fixed and variable.
• Quarterly and annual balance sheets.
• Projected cash flow statements.

Be specific with your projections and ensure they match your funding requests. And if you have collateral to put against a loan, include it at the end of your financial projections to improve your chances of approval. 

Also, consider using charts and graphs to tell your financial story, as visuals are great for conveying your message.

Use your appendix to list and provide supporting information, documents, or additional materials you couldn’t fit in elsewhere.

If the appendix is lengthy, start it with a table of contents.

What to include:

• Key employee resumes.
• Letters of reference.
• Licenses and permits.
• Intellectual property - patents or trademarks.
• Legal documents.
• Any current contracts.
• Product pictures and information.
• Bank statements/credit history.

Financial uncertainty shouldn`t stop you from following your dreams. In fact, recessions are often the best time to start a business . 

And your business plan is one of the main things that can help you make your dream of owning a business a reality.

Take it one step at a time, do your research, and use your business plan to remove the uncertainty of the unknown. 

Because then you’ll know if the time is right to start your business.

This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness.

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How to Easily Write a Business Plan in 30-Minutes

Posted november 2, 2022 by noah parsons.

Writing a business plan can be intimidating. You know that you need to put a plan together to start a successful business, but you find yourself staring at a blank Word or Google doc wondering what to do next.

It doesn’t have to be this way. If you’re willing to give up your preconceptions that a plan has to be a lengthy document that you spend a lot of time and energy on once and then file away—you’ll discover that there are better (and faster) ways to plan.

Introducing the 30-minute plan

A traditional business plan can take hours, days, or even weeks to put together. 

We recommend a simpler process that you can complete in under an hour. Sounds too good to be true? We successfully used this process ourselves to build LivePlan , and it’s a major reason why LivePlan is so successful. With a one-page business plan, we were able to quickly figure out our strategic goals and what it would take to grow the business. 

You can do this, even if you’ve never written a business plan before. The key is to focus on creating a business plan that fits on one page. By focusing on a single page, you skip all the formatting, complete sentences, and paragraphs of text that most people skip anyways. Instead, you’ll prioritize outlining your actual business strategy, the business model you’ll use to make money, and the marketing and sales strategies you’ll use to grow.

How to write a business plan in just 11 steps

When putting together your one-page business plan , think in bullet points and short sentences. The goal is to keep each section as short as possible. Here is what you need to include, along with an example of a bike shop business plan I put together in just 27 minutes.

1. Value proposition

This section answers the question, “What does your business do?” Your goal is to communicate the value you are providing to your customers in a way that is as simple and direct as possible. Think of it like this—if you’re at a party and someone asks you what your business does, can you describe it in a single sentence? 

Struggling to define your value? Check out this simple formula to create your unique value proposition .

2. Market need

What’s the problem you solve for your customers? Why would they go out shopping for a solution? Why does your business need to exist? Why would they choose you over other alternatives? 

If you’re not sure, try talking to your potential customers and ask them what they might like about your products or services. 

For your one-page business plan, one or two short sentences will do here. Keep things short and direct.

3. Your solution

Describe your product or service and why it’s better than the alternatives. Essentially, if someone asked you what you sell, what would your answer be? Your solution should be the answer to the market need that you described in the previous section that delivers the value you described in your value proposition.

4. Target market

Describe your ideal customer . Who are they? Be as specific as possible—age, gender, shopping habits, and so on. If you target different types of people, create market segments for each group. If you are targeting different market segments, list each segment and its approximate size. 

For example, if you are targeting “young families” in addition to “older parents”, try and figure out how many people are in each group. For your initial plan, you don’t need to get too specific – you can always add more detail later as flesh out your plan.

5. Competition

Every business has competition . Who do your customers buy from if they aren’t going to buy from you? What makes your business and products better than the alternatives that are out there?

6. Funding needs

Nearly every business needs some money to get off the ground. Think about how much money you’ll need and how you plan on using it. Even if you’re starting your business with your own savings or using credit card debt, it’s a good idea to plan on how you will use the funds until you start making sales.

7. Sales channels

These are the places where you will sell your products. If you’re selling online, your online store is a sales channel. If you also have a physical store, that’s another sales channel.

8. Marketing activities

What will you do to market your business ? If you plan on buying advertising, list the types of advertising you plan on doing here. Remember, different target markets might need different types of marketing activities to get your product in front of them.

9. Budget and sales goals

How much is it going to cost to run your business? What sales goals do you need to reach for your business to be a success? Don’t sweat the details to start and just think in broad strokes to get a rough idea of how your business will work financially . 

You can start by just listing your primary revenue streams and your major expenses. As you learn more about the details, you can start to add estimates for how much sales you’ll bring in and what your actual expenses will be. Eventually, you’ll expand these broad estimates into a more detailed forecast, but initially just stick to high-level estimates.

10. Milestones

What are the major tasks you need to accomplish to get your business up and running? This will help you stay on track and meet your goals. For most businesses, you should focus on the near term and highlight what you want to accomplish in the next few months. 

Shorter-term milestones might include signing a lease on an office or designing your first prototype. Other businesses may have very long research and development cycles and should map out key milestones for the next 12-24 months. These businesses might have milestones related to getting regulatory approval or entering clinical trials.  

Regardless of the timeframe of your milestones, make sure to assign milestones to people on your team so you have real responsibility and accountability.

Even if you’re starting out with just yourself as the only employee of your business, write a few quick bullets about why you’re the right person to run this business. If you need to hire key people in the future, list those positions as well, even if you don’t know who specifically will fill those positions right now.

This one-page plan looks pretty good—one of its strong points is that it’s built to help you visualize your plan and easily share it with others. While I used LivePlan to put this plan together, you can start by downloading this free Word doc template. 

Need additional guidance? Check out this article for more detailed instructions to successfully build your one-page plan .

What to do after completing your simple business plan

Now that you’ve saved all that time writing your business plan, what should you do next? 

With an initial plan in place, you’re primed to use a process known as growth planning that helps both startups and existing businesses grow more quickly and nimbly than their competitors. 

Here are the initial steps you can take to put your new plan into action and start growth planning:

Test your idea and revise your plan

It’s rare to get a business idea right the first time. Almost every business makes changes to their initial idea to become a successful, growing company. That’s why it’s important to test your idea early and make adjustments before you sink too much money into your business. 

There are plenty of ideas in the article linked above, but the core concept of validating your business idea is to go out and talk to potential customers and gather feedback. It doesn’t matter if you’re starting a tech company or a cookie business. Get your app design or your cookie samples into potential customers’ hands and hear what they have to say.

Once you have feedback, revise your plan. Your marketing or sales strategy might change, or perhaps you decide to change your overall value proposition. Either way, revise your plan and test again until you have a business model that works.

Expand into a more detailed business plan

The one-page plan is simple and effective, but there may be a time when you need to expand your plan and create a more detailed business plan . Lenders and investors may want to see a more detailed business plan if only to prove that you’ve taken time to think through all the details of getting your business up and running. 

Or, maybe you just want to add more details to your plan, and expanding beyond the single page makes sense for you. This may be more robust market research, expanded financial forecasts, or other details that make your plan more useful.

Luckily, by starting with a simple business plan format, you can easily expand on the necessary sections without having to start over. And, the real value in detailed planning is the process that you go through to create the plan. 

You’ll be forced to answer questions about your business that you might have been tempted to gloss over or ignore completely if you skip the planning process. If a detailed business plan sounds like it will be a useful tool for you, check out this detailed step-by-step guide , as well as a free template you can download .

Review and revise

Revising your initial business plan isn’t just for new businesses that are just figuring out their path to success. Businesses that are up and running also benefit from regularly going back and revising their plan as things change. Your sales goals might need to be adjusted or you might need to adjust your expense budget. Perhaps you’ll decide to sell to a different kind of customer. Your one-page plan is a great place to document those changes and will help you track your progress toward your goals .

When you update your plan, you’re setting new goals to strive for. You’re also ensuring that your business strategy is documented and ready to share with new business partners, investors, and employees. I’ve found that sharing my company’s plan with employees improves transparency and gives everyone the big picture of what we’re trying to do. It ensures that everyone is moving the company in the same direction.

Download our one-page business plan template

Your simple one-page business plan is your guide to building the business you want and your key to finding success. And, thankfully, it’s so much easier and faster than traditional business planning. 

If you want to get started on your plan right away, you can download our free one-page plan template . With that, you will be well on your way to a better business strategy, without all the time and hassle of drafting a lengthy business plan.

If you want to elevate your ability to build a healthy, growing business, you may want to explore the growth planning process and learn how it can help you build a sustainable, profitable business. You should also consider LivePlan.

It’s a product that makes growth planning easy and features step-by-step guidance that ensures you cover everything necessary while reducing the time spent on formatting and presenting. You’ll also gain access to financial forecasting tools that propel you through the process. Finally, it will transform your plan into a management tool that will help you easily compare your forecasts to your actual results.

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Noah Parsons

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How to Write a Business Plan in 8 Simple Steps

Many or all of the products and brands we promote and feature including our ‘Partner Spotlights’ are from our partners who compensate us. However, this does not influence our editorial opinion found in articles, reviews and our ‘Best’ tables. Our opinion is our own. Read more on our methodology here .

A business plan is a written document that describes your business, usually covering strategies, objectives, marketing, sales and financial forecasts. More than that, it can be a way to provide a clear roadmap designed to take your business from where it is today to where you want it to be in the future.

But if you haven’t created one before, it can be hard to know where to start. That is why we have put together a guide on how to write a business plan, including the elements you might want to include, and the different small business plan formats you may want to consider.

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8 step business plan checklist

When writing a business plan, there are several factors to pay particular attention to.

• Have you included an executive summary detailing your mission statement?
• Are you clear on both your competitive advantages AND the key risks facing your business?
• Do you have a detailed organisational chart showing the structure of your business personnel?
• Are you on top of trends in your industry, and how your business can stand out?
• Have you explained how you will attract and retain your customer base?
• Are you explicit about how your product or service will benefit its intended audience?
• Do you know how much funding you need, and in what form?
• Have you included your latest financial projections?

This list is not necessarily exhaustive, but highlights some key things to pay attention to as you create your business plan.

Why should I write a business plan?

There are a range of reasons why you might consider writing a business plan, from clarifying your intentions to securing a business loan.

Clarify your business idea

By writing a business plan you can hone and sharpen your initial business idea, making it a stronger, more detailed proposition.

It will give you a top level overview of what you need to do and, importantly, how much money you need to do it.

Set out your goals

Going through the process of creating a business plan will help you set out tangible goals for different stages of your growth.

Where you want to be after year one will differ from what you want to have achieved by year five, and writing a plan will encourage you to engage with your targets on both a short- and long-term basis.

Spot potential problems

A business plan isn’t only about sharpening your idea and setting your goals. If done properly, it can help you spot potential problems that you may not have previously considered, or that were not obvious until you’d done the research a business plan requires.

Measure your progress

A business plan is only the beginning. Once it is in place, you will have a set of targets to measure your progress against.

These targets can act as points of reference to evaluate the various stages of your organisation’s development.

Securing funding

A business plan will be essential if you’re looking to secure a business loan or other form of credit from a bank. Potential investors will also want to see one before they consider partnering with you.

It can also help convince suppliers, customers and employees to support you in your endeavour.

How to write a traditional business plan

A traditional business plan is comprehensive and detail-oriented. For these reasons, it is the format most commonly requested by lenders and investors.

Let’s go through the sections you would expect to see in a traditional business plan – but remember, you don’t need to stick to an exact outline. Instead, use the sections that make the most sense to your business and its needs.

Step 1: Draft your executive summary

Outline briefly what your company is and why it will be a success. Include your mission statement, your product or service and basic information about your location, workforce and leadership team. And if you’re seeking funding, lay out your high-level growth plan and financial information.

Step 2: Write your company description

In this section, you can elaborate on the points laid out in your executive summary. Explain the problems your product or service solves, and list the specific organisations, businesses and consumers your company intends to serve.

Furthermore, lay out the competitive advantages that will help your business prosper. Perhaps you have industry experts on your team or have sourced the perfect location for your store.

There is no need to hold back on your company’s strengths.

Don’t be afraid to mention key risks to the business. Any lender or investor will likely identify them for themselves and will be reassured by the fact that you have identified them and have plans in place to protect the business.

Step 3: Detail your management and organisation structure

Who will be running your business? How will it be structured legally? Will it be a limited company, limited liability partnership, or partnership, or will you work as a sole trader ?

An organisational chart may help illustrate who will be in charge of what, and take the opportunity to describe how their credentials will contribute to your venture’s prosperity. You may even wish to include the CVs of key players.

Step 4: Carry out and explain your market analysis

You’ll need a solid understanding of both your target market and your industry outlook. Competitive research will shed light on trends and themes, as well as what other businesses are doing well, and how you could do it better.

Step 5: Define your marketing and sales strategy

There is no single way to approach your marketing strategy because it should evolve and adapt to your business’s individual needs as they arise. The goal in this section is to lay out how you will attract, and retain, a customer base. You’ll also need to describe how sales will actually happen.

You’ll likely need to refer to this section of your business plan later when you lay out your financial projections, so make sure your marketing and sales strategies are described in thorough detail.

» MORE: How to promote your small business online

Step 6: Describe your service or product line

Describe what you’re selling or what service you’re offering, as well as how it will benefit customers and what its life cycle will look like. If you have plans for intellectual property, such as patent filings or copyright, make sure that you share them. And if you’re conducting research and development for your product or service, explain it in detail.

Step 7: Detail your funding request

If you’re looking for funding as part of your small business plan, you’ll need to outline your requirements, preferably with a five-year projection and your future strategic financial plans, such as selling the business or paying off debt.

You’ll need to specify whether you require equity or debt, the terms you wish to be applied and the length of time your request will cover. Describe what your funds will go towards, such as paying salaries, purchasing materials and equipment or covering bills, until such time as revenue increases.

Step 8: Compile your financial projections

It’s a good idea to supplement your funding request with financial projections in order to convince readers that your business will be stable and successful.

If your business is already established, then include balance sheets, income statements and cash flow statements, preferably from at least the last three years, if not the last five. Be sure to list any other collateral you could secure against when applying for a business loan.

Provide a prospective financial outlook for the next five years, including forecast income statements, capital expenditure budgets and cash flow statements. For the first year, be even more specific, and break it down to quarterly, or even monthly, projections. Explain these clearly, and ensure they match your funding requests.

Your appendix can be filled with supporting documents and any other materials that have been specially requested. Items commonly added to the appendix include:

• product pictures
• credit histories
• letters of reference
• legal documents

How to write a lean start up business plan

This less traditional business plan format has a solely high-level focus. It is quick to write and contains only key elements. For these reasons, you may prefer a lean start-up business plan if you wish to explain or start your business in a short timeframe, or if your business is relatively simple.

It may also be a good format to use if you envisage regular change for your business or your business plan being regularly redefined.

These kinds of business plans are most applicable where you are building a business based on a new concept or product and people can understand that it is impossible to project exactly how it will develop at a more granular level of detail. However, many lenders will not consider such a high- level plan sufficient for the approval of a loan.

A lean start-up business plan is a useful summary of your infrastructure, value proposition, finances and customer base. As with the traditional business plan, it has commonly used elements, but they are not essential; you should mould your plan to your business’s particular needs.

Value proposition

You need to make a concise and compelling statement regarding the unique value that your company will deliver to customers, including the products and services you’ll be offering.will bring to the market.

Key partnerships

Make note of the other companies you’ll work alongside in bringing your business to fruition, be they suppliers, manufacturers, sub-contractors or other strategic partners.

Key activities

List the main ways your business will gain a competitive advantage in the market, from customer relations to revenue streams. highlighting It will highlight such factors as selling direct to consumers or leveraging tech to tap into the sharing economy.

Key resources

List any resource you’ll use to maximum advantage in creating value for your customers. Your key assets may include capital, staff and intellectual property.

Customer segments

Specify your target market and remember: your business won’t be for everyone. Who are your most important customers? Enter into your small business plan with a clear sense of who you will actually serve.

Customer relationships

Lay out how your customer base will interact with your business. Will it be automated, face -to -face or online? How will you grow your customer base and retain customers? Consider the customer experience from start to finish. Explain how you will find customers and retain them.

Cost structure

Will your company focus more on maximising value or reducing cost? Define your strategy, then list the key resources and most significant costs you’ll face.

Marketing and communication channels

How do you intend to talk to and communicate with your customers? How do your competitors communicate with their customers? And what are the most cost-efficient ways to do this? Most businesses make the most of a combination of marketing channels and optimise them over time.

Revenue streams

How will your company make money? What are your customers willing to pay for the value you’ll add? Will it be through direct sales, advertising space or membership fees? If you envisage multiple revenue streams, be sure to list them all.

» MORE: How to create a small business budget

Tips for writing a business plan

When writing your business plan, it is worth keeping the following tips in mind to ensure you get the most out of the process.

• Have a clear goal: since there are many reasons why you might be writing a business plan, it is best to know exactly what you hope to get out of it before starting, as it will inform how you go about creating your document. For example, your aim may be to get funding or to convince potential hires to join.
• Know your audience: just as there are different reasons why you might write a business plan, there are different audiences who will be reading it. By keeping a target audience in mind from the beginning, you can tailor your plan towards the right people.
• Do your research: this cannot be overstated. The more research you do, the more detailed your plan can be, creating a stronger foundation for your business to launch from.
• Keep things concise and consistent: while it is important to do your research, you don’t want to swamp your reader in unnecessary detail. Make sure your plan is to the point and consistent in tone throughout.
• Check your spelling and grammar: it sounds basic, but poor grammar and spelling may undermine your business plan in the eyes of potential investors and partners. So make sure to give it a thorough read through – you may even want to consider hiring an editor or proofreader to review your plan.

Get your small business off to a great start

A well-written small business plan can be critical in helping secure funding and bring on new business partners. Remember, investors need to feel confident that they will see returns. Your business plan is the perfect tool to convince people to work with you, so put in the time, research and effort that your business deserves.

Not only will a plan help you be taken more seriously if you’re starting a business with little funding, but it will also help you understand every element of your business, better preparing you for the market.

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About the Authors

Nic Redfern is Finance Director at NerdWallet and an accomplished business and finance strategist with over 26 years' experience. Nic has been instrumental in the growth of several regional and…

Connor is a lead writer and spokesperson for NerdWallet. Previously at Spreadex, his market commentary has been quoted in the likes of the BBC, The Guardian, Evening Standard, Reuters and…

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Equity finance allows your business to raise money by attracting investors to buy an ownership stake. It’s a way of funding growth without having to worry about loan repayments and eligibility.

How To Start A Jewellery Business In Five Steps

Now is a great time to start your own jewellery business, but how do you turn your gem of an idea into reality? There’s no need to get your bangles in a tangle, because our simple guide will walk you through the first steps.

How to Start a Baking Business

Starting a baking business means understanding your market, registering your business, understanding food and hygiene rules, and much more. NerdWallet’s five-step guide to setting up a baking business will help you to start your bakery, cafe, or home baking business.

Tips for Writing an Effective Application Essay

How to Write an Effective Essay

Writing an essay for college admission gives you a chance to use your authentic voice and show your personality. It's an excellent opportunity to personalize your application beyond your academic credentials, and a well-written essay can have a positive influence come decision time.

Want to know how to draft an essay for your college application ? Here are some tips to keep in mind when writing.

Tips for Essay Writing

A typical college application essay, also known as a personal statement, is 400-600 words. Although that may seem short, writing about yourself can be challenging. It's not something you want to rush or put off at the last moment. Think of it as a critical piece of the application process. Follow these tips to write an impactful essay that can work in your favor.

1. Start Early.

Few people write well under pressure. Try to complete your first draft a few weeks before you have to turn it in. Many advisers recommend starting as early as the summer before your senior year in high school. That way, you have ample time to think about the prompt and craft the best personal statement possible.

You don't have to work on your essay every day, but you'll want to give yourself time to revise and edit. You may discover that you want to change your topic or think of a better way to frame it. Either way, the sooner you start, the better.

2. Understand the Prompt and Instructions.

Before you begin the writing process, take time to understand what the college wants from you. The worst thing you can do is skim through the instructions and submit a piece that doesn't even fit the bare minimum requirements or address the essay topic. Look at the prompt, consider the required word count, and note any unique details each school wants.

3. Create a Strong Opener.

Students seeking help for their application essays often have trouble getting things started. It's a challenging writing process. Finding the right words to start can be the hardest part.

Spending more time working on your opener is always a good idea. The opening sentence sets the stage for the rest of your piece. The introductory paragraph is what piques the interest of the reader, and it can immediately set your essay apart from the others.

4. Stay on Topic.

One of the most important things to remember is to keep to the essay topic. If you're applying to 10 or more colleges, it's easy to veer off course with so many application essays.

A common mistake many students make is trying to fit previously written essays into the mold of another college's requirements. This seems like a time-saving way to avoid writing new pieces entirely, but it often backfires. The result is usually a final piece that's generic, unfocused, or confusing. Always write a new essay for every application, no matter how long it takes.

5. Think About Your Response.

Don't try to guess what the admissions officials want to read. Your essay will be easier to write─and more exciting to read─if you’re genuinely enthusiastic about your subject. Here’s an example: If all your friends are writing application essays about covid-19, it may be a good idea to avoid that topic, unless during the pandemic you had a vivid, life-changing experience you're burning to share. Whatever topic you choose, avoid canned responses. Be creative.

6. Focus on You.

Essay prompts typically give you plenty of latitude, but panel members expect you to focus on a subject that is personal (although not overly intimate) and particular to you. Admissions counselors say the best essays help them learn something about the candidate that they would never know from reading the rest of the application.

7. Stay True to Your Voice.

Use your usual vocabulary. Avoid fancy language you wouldn't use in real life. Imagine yourself reading this essay aloud to a classroom full of people who have never met you. Keep a confident tone. Be wary of words and phrases that undercut that tone.

8. Be Specific and Factual.

Capitalize on real-life experiences. Your essay may give you the time and space to explain why a particular achievement meant so much to you. But resist the urge to exaggerate and embellish. Admissions counselors read thousands of essays each year. They can easily spot a fake.

9. Edit and Proofread.

When you finish the final draft, run it through the spell checker on your computer. Then don’t read your essay for a few days. You'll be more apt to spot typos and awkward grammar when you reread it. After that, ask a teacher, parent, or college student (preferably an English or communications major) to give it a quick read. While you're at it, double-check your word count.

Writing essays for college admission can be daunting, but it doesn't have to be. A well-crafted essay could be the deciding factor─in your favor. Keep these tips in mind, and you'll have no problem creating memorable pieces for every application.

What is the format of a college application essay?

Generally, essays for college admission follow a simple format that includes an opening paragraph, a lengthier body section, and a closing paragraph. You don't need to include a title, which will only take up extra space. Keep in mind that the exact format can vary from one college application to the next. Read the instructions and prompt for more guidance.

Most online applications will include a text box for your essay. If you're attaching it as a document, however, be sure to use a standard, 12-point font and use 1.5-spaced or double-spaced lines, unless the application specifies different font and spacing.

How do you start an essay?

The goal here is to use an attention grabber. Think of it as a way to reel the reader in and interest an admissions officer in what you have to say. There's no trick on how to start a college application essay. The best way you can approach this task is to flex your creative muscles and think outside the box.

You can start with openers such as relevant quotes, exciting anecdotes, or questions. Either way, the first sentence should be unique and intrigue the reader.

What should an essay include?

Every application essay you write should include details about yourself and past experiences. It's another opportunity to make yourself look like a fantastic applicant. Leverage your experiences. Tell a riveting story that fulfills the prompt.

What shouldn’t be included in an essay?

When writing a college application essay, it's usually best to avoid overly personal details and controversial topics. Although these topics might make for an intriguing essay, they can be tricky to express well. If you’re unsure if a topic is appropriate for your essay, check with your school counselor. An essay for college admission shouldn't include a list of achievements or academic accolades either. Your essay isn’t meant to be a rehashing of information the admissions panel can find elsewhere in your application.

How can you make your essay personal and interesting?

The best way to make your essay interesting is to write about something genuinely important to you. That could be an experience that changed your life or a valuable lesson that had an enormous impact on you. Whatever the case, speak from the heart, and be honest.

Is it OK to discuss mental health in an essay?

Mental health struggles can create challenges you must overcome during your education and could be an opportunity for you to show how you’ve handled challenges and overcome obstacles. If you’re considering writing your essay for college admission on this topic, consider talking to your school counselor or with an English teacher on how to frame the essay.

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More From Forbes

How to start a business from scratch (in 5 doable steps).

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Entrepreneurial aspirations? Starting a business from scratch is easier than you might think.

The best way to start a business depends on the type of business you want and your individual situation. Ideal side hustles for college students are different than for stay-at-home parents . If you’re a talented baker, you’ll need a different plan if you want to open your own bakery, versus selling a few of your items at the weekend farmers’ market, versus building a national franchise to rival Mrs. Field’s Cookies or Baked By Melissa. If you have dreamed of owning a pastry-related business, but you don’t bake, then you’ll need a different plan than the talented baker for any of the three options above.

Since aspiring entrepreneurs vary so widely in their interests, ideas and talents, no one post can account for all situations, but here are five foundational steps to start a business from scratch.

1. Decide If You Will Buddy Up Or Go Solo

Going solo means that you have free rein to make all the decisions – but then you have to make all decisions, including who your customer is, what you’ll offer, what price you’ll charge, how you’ll market your business and more. Starting a business with one or more other people divides up the work — but it also divides up the rewards. If you’re not 100% in agreement with your partner(s), you may find that the business does not match your vision or live up to your quality standards.

As you can see, there are pros and cons to starting a business with others versus alone. Do a candid self-assessment about whether you have the risk appetite, stamina and desire to go it alone. One compromise could be to start your business solo, but rent a co-working space so you are surrounded by others. Or, join a mastermind group or entrepreneurs association so you have an ecosystem of colleagues on a similar journey.

2. Look At Your Unique Competitive Advantages For Ideas

Once you have answered the partner versus solo question, you still need a business idea. Your partner might have a strong opinion on this. If not, or if you don’t have a partner, one smart way to tilt the odds of business success in your favor is to pick an area where you have a unique competitive advantage.

Best High-Yield Savings Accounts Of 2024

Best 5% interest savings accounts of 2024.

For example, the talented baker who decides to open a pastry-related business has ability as their unique competitive advantage. Someone who worked for years in the food industry would have an experience advantage. Someone with culinary training has an education advantage. If you have a rabid interest in a subject — e.g., you might be an accountant by day but you frequent pastry shops every chance you get and read all about the industry — your enthusiasm can be your advantage.

3. Marshall Your Resources

In addition to an idea for your business, you’ll need to invest resources into it — not just money, but also your time. The amount of money you need to invest varies widely based on the type of business you’re starting. Product businesses where you need material and/or equipment to create your goods to sell are going to have much higher upfront costs than service businesses where you might be selling your knowledge and therefore have virtually zero upfront financial costs.

Time to get started also varies widely. If you need to build out a physical location (e.g., the bakery with kitchen) or retail store for your products, you will have a longer time investment before you can even make your first sale than the service entrepreneur who can start selling themselves with a relatively inexpensive, fast-build digital presence.

Calculate what money you need to invest to get your business started, as well as how long you’ll need to prepare before you can start selling. Compare this to your personal situation (e.g., do you already have a job, are you part of a dual-career couple or have other family commitments) to gauge how quickly and easily you will be able to get your business started. If you plan to leave your current job to start your business, include in your calculations the notice you’ll give to your current employer, as well as how you plan to meet the expenses that your paycheck used to cover.

4. Check The Legal Requirements Your Business Needs To Meet

A bakery business selling at a farmers’ market faces different food safety requirements than if they open a physical store or operate a mail-order business. If you have workers, there are labor requirements to meet. Even if you are a solo business owner offering services, you might need to have a license or certification for that service. Businesses also need to comply with insurance and tax requirements.

Because requirements vary, not only by business, but also by geography (e.g., bakers at farmers’ markets in Maine vs. Florida). Your local library, community business school or SCORE chapter ( SCORE is a national nonprofit that provides small business mentoring) can help you research the rules that apply to your business. As you’re researching the business you hope to start, your enthusiasm for digging into these details is a good test of how serious you are about your business idea!

5. Make Your First Sale

The best feedback on your business new idea comes from your customer’s wallet. If someone is willing to spend money on something, then you have uncovered a genuine need or desire for whatever you are selling. If you’re selling a service, start offering it as soon as you have bandwidth to deliver it. Making your first sale will prove your concept has a market, and it will also help you gauge firsthand if you like delivering this service. You can also start testing your prices and how to structure your offering.

If you have a more involved business — e.g., the baker planning to open a store — see if you can sell some of your products in advance. For example, you can cater events, and you can see people’s reactions to your creations firsthand. You might even get some testimonials for your ad campaign. Or, you can start by selling via other stores or at farmers’ markets — to gauge reactions, get testimonials, test product variety and test pricing. Focusing on early sales also gives your business some much-needed cash flow upfront.

Start As Cheaply As Possible

Notice that these first steps — focusing on sales, doing research using libraries or free providers like SCORE — are really focused on getting your business up to the first sale as cheaply as possible. It takes time for any new venture to gain traction, so by running a lean business, you give it more time to be successful. Starting a business is not about buying business cards (you can start with word-of-mouth) or building a website (use existing social platforms like Facebook or LinkedIn) or running ads (build a following on social media to build a following on social media). You can start a business without necessarily spending a lot of money.

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What the National Association of Realtors' settlement means for consumers and real estate brokers

A groundbreaking $418 million settlement announced Friday by the powerful National Association of Realtors is set to usher in the most sweeping reforms the American real estate market has seen in a century. It could dramatically drive down homebuyers’ costs — and push some real estate brokers out of business.

Here’s a look at how we got here and what to expect in the months ahead.

NAR already lost a big case

For decades, the NAR has required home sale listing brokers to provide an offer of compensation to a buyer’s agent up front. That usually comes out to about 6%, split between a seller’s broker and a buyer’s agent.

But that model has come under intensifying scrutiny from critics who have likened it to a cartel . Late last year, a jury in a Kansas City federal court found the longstanding practice to be a form of collusion that artificially inflated real estate fees, awarding a massive $1. 7 8 billion judgment against NAR .

What changes now for homebuyers and sellers

If the settlement announced Friday is approved by a federal court, the standard 6% commission goes away. Sellers would no longer have to make a compensation proposal to prospective buyers and their agents. Critics have said the encouraged brokers to push their clients toward more expensive properties.

Another new rule would see homebuyers having to sign an explicit deal with a broker before they start working with one — something experts say would lead many homebuyers to forgo using brokers entirely.

The new rules would kick in within months of approval, currently expected around mid-July.

What about the next few months?

Everyone involved in the market should expect “a certain amount of uncertainty for the coming months,” said Marty Green, principal at mortgage law firm Polunsky Beitel Green.

“The industry will be in transition as everyone digests the settlements and market forces begin working,” he predicted. “We will begin to see some creative buyer’s agent arrangements that may have been harder to get traction on before.”

Home buyers and their agents will need to decide on a commission and put it in writing. Sellers, likewise, will need to work carefully with their listing agents as the new rules come into effect.

U.S. consumers might save in the long run ...

The changes could mean buyers will save on commissions, eventually bringing U.S. fees more in line with the much lower transaction costs seen in other residential property markets around the world.

Some commissions could even be cut in half, Jaret Seiberg, housing policy analyst for TD Cowen Washington Research Group, told clients in a note Friday.

The new rules “should lead to commissions falling 25% to 50%, which we view as benefiting online real estate brokers,” Seiberg wrote, but he warned it’s too early to declare “the end of local real estate agents given their local expertise and reputation in neighborhoods. It is why we do not see this following the travel agency model in which online eclipsed local offices.”

... but buyers could face more confusion

Holden Lewis, a home and mortgage expert at NerdWallet, warned of a “potential negative trade-off”: “Buyer-seller negotiations will become more complex, and buyers with plenty of cash might navigate the process more easily than buyers who don’t have a lot of savings,” he said. Seiberg flagged a similar concern in his note, saying it could particularly affect first-time buyers with limited means to pay for an agent.

Brokers and agents have come out against the settlement, saying it will make the home-buying process more byzantine for consumers and discounts the important role agents play in helping them navigate it.

“I’m a full-service real estate agent, so when I go to list my client’s house, I align their goals with my goal, and that goal is selling for the highest amount possible,” said Roy Remick, a realtor based in Northern Virginia, who said he often pays thousands of dollars of his own for services like staging homes to aid the sale process.

“This is ultimately someone saying, ‘You guys make too much money,’ which I don’t think is right for someone to dictate,” he said.

Buyers’ agents will be left “flying blind” since they won’t know how much they’ll end up making from a given home, Remick warned. “We’ll have to make a bunch of phone calls, because now we don’t know what [the commission] is because we can’t see it in the MLS. But we’ve already got an agreement with buyer how much they’ll be able to compensate us.”

Christine Romans is the senior business correspondent at NBC News.

Rob Wile is a breaking business news reporter for NBC News Digital.

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Direct File officially opens in 12 pilot states following positive early reviews; eligible taxpayers can file online directly with the IRS for free

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Taxpayers encouraged to try innovative new option before April 15 deadline

IR-2024-68, March 12, 2024

WASHINGTON — The Internal Revenue Service announced today the full-scale launch of the innovative Direct File pilot and encouraged eligible taxpayers in 12 states to try the new service to file their tax returns online for free directly with the IRS.

The pilot effort has been in testing mode for several weeks, allowing early users to file their 2023 federal tax returns online for free and directly with the IRS. Thousands of taxpayers have successfully used the system, and early users are giving the new option positive reviews.

Following the initial Direct File success, the IRS is moving the pilot out of the test phase, allowing all eligible taxpayers in the 12 states – representing 19 million taxpayers – to use the system at any time. Taxpayers can log in to Direct File to start their return and complete it any time before the April filing deadline.

“The early results from Direct File have shown taxpayers like the ease and convenience of the tool, and moving into the full-scale launch of the pilot will give more taxpayers the chance to use this free option,” said IRS Commissioner Danny Werfel. “Expanding Direct File as the tax deadline approaches will provide more taxpayers a way to file directly with the IRS for free, and it will give us more valuable information to assess this pilot. For those who haven’t filed their taxes in these 12 states, we encourage them to visit IRS.gov and see if Direct File is the right option for them.”

Direct File is one of many options that taxpayers have to file their taxes, including tax software and tax professionals. For the pilot, the IRS worked on a streamlined way for people with simpler tax situations to file directly with the agency.

“A team of experts from across government built and tested the Direct File pilot to give taxpayers an easy, accurate free way to file their taxes online directly with the IRS,” Werfel added. “Our goal with the Direct File pilot is to help people meet their tax obligations as easily and quickly as possible. We developed Direct File from the beginning with taxpayers’ help, and we’ll continue to talk to taxpayers about their experience to learn more about what taxpayers want for future digital services.”

Direct File walks the taxpayer through the complexities of the nation’s tax code to complete their filing easily with an accurate calculation of their refund or tax owed. Direct File is designed to be easy for taxpayers to use. At every step, it shows the work behind the calculations, so users can be confident that the tax return is complete and accurate. Once taxpayers start their return on the Direct File site, they can pause and then securely sign in to finish any time before the April filing deadline.

Users can also get support from special IRS customer service representatives through Direct File’s live chat feature. Direct File, like other electronic filing options, allows taxpayers to typically get their refund in less than 21 days when the direct deposit is chosen.

“We’ve gotten great initial feedback from the thousands of taxpayers who used it during testing,” Werfel said. “Many taxpayers we’ve heard from filed their taxes in less than 30 minutes using Direct File and praised it as an easy, no cost tax filing experience.”

Who’s eligible?

Taxpayers in 12 pilot states who meet certain requirements can use Direct File through the April tax deadline. Pilot states include:

• Massachusetts
• New Hampshire
• South Dakota
• Washington State

After completing their federal returns, taxpayers in the states with a state-income tax – Arizona, California, Massachusetts and New York -- will be guided to a state-sponsored tool to complete their state tax return.

The IRS designed the pilot to follow the best practices for launching a new technology platform by starting small, making sure it works and then building from there. The pilot is purposefully limited to cover relatively straightforward tax situations.

The Direct File pilot is an option for taxpayers who fall into these categories:

• Report income earned from jobs that generate a Form W-2; including taxpayers with more than one job with W-2 wages;
• Claim Earned Income Tax Credit, Child Tax Credit and the Credit for Other Dependents;
• Claim the standard deduction and deductions for educator expenses and student loan interest;
• Lived in the same state for the entire calendar year 2023.

Interested taxpayers can go to directfile.irs.gov , where they can determine if they are eligible. Using Direct File requires identity verification through ID.me. Once their identity is verified and they’ve signed in securely to Direct File, they will be providing the tax information directly to the IRS, not a third party.

For taxpayers who visit Direct File but aren’t eligible for the pilot, they will be directed to Free File on IRS.gov . Now in its 22nd filing season, taxpayers across the nation can access free software products provided by IRS Free File trusted partners. Through this public-private partnership, tax preparation and filing software providers make their online products available to eligible taxpayers. Eight private-sector Free File partners provide online guided tax software products this year to any taxpayer with an Adjusted Gross Income (AGI) of $79,000 or less in 2023. Free access to online products is available by starting from IRS Free File.

Direct File pilot for filing season 2024

The IRS launched the Direct File pilot for the 2024 filing season. The Inflation Reduction Act mandated that the IRS study interest in and feasibility of creating a direct e-filing tool taxpayers could use to prepare and file their federal income tax return. The IRS commissioned an independent study, which indicated broad interest in such a system, which the IRS detailed in a Direct File Report to Congress in May 2023.

Shortly after that report, as directed by the Treasury Department, the IRS assembled a team of tax experts, technologists, engineers and strategists from across government to build the Direct File system. The IRS worked closely with the U.S. Digital Service and the General Services Administration’s technology office 18F to build and test Direct File.

Initial testing began in early February 2024 with a handful of federal and state government employees, followed by short open availability windows for more taxpayers to start their returns. On March 4, the IRS announced that Direct File would enter final testing, which included an allotment of available spaces with more spaces added every day. Direct File is now open to all eligible taxpayers in pilot states to decide if it is the right option for them to file their 2023 federal tax return online for free, directly with IRS.

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