Why create a business plan?

A business plan is a strategic guide that helps prioritize projects and determine an effective way to use your company’s resources. You may also use a business plan to apply for a loan or line of credit. Lenders often rely on the information in this document to determine if you meet their financing requirements.

How to write a business plan

You may want to follow these steps when writing your business plan.

1. Start with the executive summary

The executive summary gives readers a concise explanation of your company, its goals and the purpose of the plan. Although it appears first, writing it after completing the remaining sections can make it easier to identify the most important points.

• Mission statement
• Brief description of products or services offered
• Names and short bios of company officials, such as the chief executive officer (CEO) and chief financial officer (CFO)
• Number of employees
• Company contact information
• Overview of finances
• Future aspirations

Keep the summary focused on the information a reader needs to understand the opportunity. For example:

Ready Grocery provides locally sourced grocery delivery in three metropolitan areas. The company is seeking $300,000 to expand its delivery fleet, hire additional drivers and enter two new markets over the next 18 months.

2. Include your company description

Use your business description to establish your company’s identity and purpose. Explain whether you serve consumers, other businesses or both and describe the problem your products or services address.

This section focuses on the company itself rather than providing a detailed analysis of the broader market. You might include:

• Business name, location and history
• Industry and business model
• Primary products or services
• General customer type
• Short- and long-term objectives
• Competitive advantages, such as proprietary technology or specialized expertise

For example, a bakery may identify busy professionals and local families as its primary customers. The market analysis would then examine the size, needs and purchasing behavior of those groups in greater detail.

3. Highlight your market analysis

The market analysis evaluates your competitors and highlights your market advantages. You can research your industry, key trends in the market and other information about your competitors before you write this section. A market analysis usually includes:

• Names of competitors
• Brief description of what they offer
• Sales data and customer demographics
• Brief conclusions summarizing what your company can do better

You can use the information in your market analysis to create marketing or advertising campaigns, improve customer service or expand into a new market segment.

4. Describe your company structure and management team

The organization and management section outlines your company’s internal structure and operational procedures. Consider including the following:

• Formal business structure (e.g., limited liability company, sole proprietorship or corporation).
• An organizational chart that outlines who is responsible for making decisions.
• Names of corporate officers, a summary of their backgrounds and a list of duties for each.

Provide short summaries of the backgrounds and responsibilities of founders, managers or corporate officers. Focus on experience that supports the plan, such as financial management, operations, sales or product development.

If you expect to add leadership roles, identify the gaps and explain when you plan to fill them.

5. Describe your services or products

Explain what you sell, why customers purchase it and how it generates revenue. Readers typically need enough detail to understand your offering without technical information that belongs in the appendix.

You can cover:

• Key product or service features
• Customer problems the offering addresses
• Pricing approach and revenue model
• Production or delivery process
• Product development stage
• Patents, trademarks or other intellectual property
• Planned additions or improvements

Connect each offering to a clear customer need. For example, rather than stating that your company sells project management software, explain that the platform helps small construction teams assign work, share updates and track deadlines from mobile devices.

6. Present your marketing and sales goals

Use the marketing and sales section to explain how you plan to reach customers and turn interest into revenue and a strong brand identity. Connect each strategy to a measurable goal rather than listing general promotional ideas.

Choose key performance indicators that align with your business model, such as:

• Number of qualified leads
• Lead-to-customer conversion rate
• Customer acquisition cost
• Average order value
• Repeat purchase rate
• Monthly recurring revenue
• Sales by location or product category

For example, a subscription company might aim to generate 500 trial registrations per quarter and convert 20% of trial users into paying customers. Clear targets help readers understand how you will evaluate the strategy and adjust spending.

7. Request funding

Include a funding request when you plan to share the business plan with lenders or investors. State how much funding you’re seeking, whether you prefer debt or equity and how you expect to use the money.

Break the request into specific categories. For example:

• $150,000 for equipment
• $75,000 for inventory
• $50,000 for hiring and training
• $25,000 for marketing

Explain how each investment supports the company’s goals. If you’re requesting a loan, describe the expected repayment source. For an equity investment, outline the proposed ownership arrangement and the growth opportunity.

Avoid presenting a funding amount without showing how you calculated it. Connecting the request to your operating plan and financial projections can make the proposal easier to evaluate.

8. Reveal your financial projections

Financial projections show how your strategy may affect revenue, expenses and cash over time. Base each forecast on documented assumptions, such as expected sales volume, pricing, staffing costs and customer growth.

An established company can include historical statements alongside its projections. A new business can use market research, supplier quotes and comparable operating costs to support its estimates.

Common financial documents include:

• Profit and loss statement: projects revenue, expenses and profit over a defined period.
• Cash flow statement: shows when money enters and leaves the business.
• Balance sheet: summarizes assets, liabilities and owner equity.
• Sales forecast: estimates the number and value of future sales.
• Break-even analysis: estimates when revenue may cover operating costs.

Explain the assumptions behind the numbers. For example, if you project a 15% increase in sales, connect that increase to a new location, added sales capacity or documented customer demand.

You can also define conservative, expected and high-growth scenarios. Comparing multiple outcomes helps readers understand the risks and shows how your business may respond if results differ from the primary forecast.

9. End with the appendix

The appendix keeps supporting information available without interrupting the main plan. Label each item clearly so readers can find relevant evidence quickly.

Depending on your business, the appendix may contain:

• Licenses and permits
• Resumes or CVs for company leaders
• Product photographs
• Contracts or letters of intent
• Patent or trademark records
• Detailed market research
• Historical financial statements
• Credit information
• Property leases or equipment quotes

Only include documents that support the claims or projections in the business plan. You can provide sensitive records separately when a lender or investor requests them.

Business plan outlines

Here are some templates you can use to create your own business plan.

Lean startup business

Lean startup business plans offer a quick and simple approach for those just starting a business. Here, you can outline the main components of your business and expand or change your plan to fit your business as you learn more about what it takes to succeed.

Use these prompts to build your plan:

• Partnerships: Identify suppliers, contractors, distributors or manufacturers that help the business operate.
• Business activities: Describe the work that creates value, such as manufacturing products, developing software or delivering services.
• Resource allocation: List the people, equipment, technology, intellectual property or funding the company relies on.
• Value proposition: Summarize why customers may choose your company. Example: Twelfth Avenue Bake Shop delivers fresh, locally made baked goods to offices before the workday begins.
• Customer relationships: Explain how you attract, support and retain customers through personal service, automated communication or account management.
• Customer segments: Identify the distinct groups you serve and the needs each group shares.
• Channels: List where customers discover, purchase and receive your products or services.
• Cost structure: Identify the highest fixed and variable costs.
• Revenue streams: Explain how the company earns money, such as product sales, subscriptions, service fees or licensing.

Growth business plan

A growth plan helps an established company prepare for expansion over the next one or two years. Keep the outline focused on the proposed change and the resources required to achieve it.

Include:

• Expansion opportunity: Describe the new location, product, service or customer segment you plan to pursue.
• Performance goals: Set quarterly and annual targets for revenue, profit, customer growth or market reach.
• Financial requirements: Summarize current financial performance, expansion costs, funding sources and expected cash flow.
• Marketing approach: Explain how you will reach the new market and which metrics will measure progress.
• Staffing plan: Identify the roles, skills and departments needed to support the expansion.
• Implementation timeline: Assign milestones, owners and target completion dates.
• Risk planning: Identify factors that could affect the strategy and describe potential responses.

Business plan templates for PDF & Word

Use these business plan templates to direct your company’s daily operations effectively.