How to Write a Business Plan? 10 Essential Steps To Make a Successful Plan

Everything starts with a plan—even a business. There is a long and twisted journey from a business idea to the launching party, so you must have everything sorted out and well-organized. And a business plan is the best way to build a strong foundation, outlining your goals, actions, and marketing strategies. Especially if you have a small business in mind with few employees, you need an efficient business plan to prove you are a strong competitor with achievable goals and innovative business methods.

We do offer a 10-step formula for writing a business plan and a free template you can use whenever needed.

What Is a Business Plan?

A business plan is a comprehensive document that describes your business idea in detail. The business plan outlines these aspects of an idea:

  • Who will be shaping the business idea
  • What is your offer and competitive advances
  • Why you're doing the business and customers should choose you. 

It is a financial roadmap for the business' next few years. That's because you need to prove that your idea is economically viable, fits the market needs, brings something new, and has the potential to become a successful business.

Furthermore, the business plan includes details about your business methods, resources (e.g., employees, materials, equipment, office space, logistics, etc.), operating model, and expected revenue.

Overall, a business plan should cover the following elements:

  1. The executive summary
  2. Company overview
  3. Market analysis
  4. The product or service
  5. The operations plan
  6. Sales and marketing plan
  7. The financial plan
  8. The management plan
  9. The funding request
  10. Appendix.

If we must answer from the investor's point of view, a business plan should demonstrate the following:

  1. There is a solid team in place that can bring the idea to results and executives over the long run.
  2. There is a demand for the product you're aiming to sell (product-market-fit)
  3. Scalability of sales. Your business's outcome can scale proportionally and generate good revenues.

Why You Need to Write a Business Plan?

Probably the first reason for writing a business plan is securing funding. Investors and potential business partners need to understand the value of your business and how you intend to pay back their investments. And the best way to win their trust is to present a clear and straightforward plan that addresses all their concerns and demonstrates you deserve the money. Moreover, they will ask for it if you don't initially present your business plan.

Another reason for focusing on a business plan is your own clarity. A good business plan doesn't guarantee success, but it's the best thing you can do in that direction. It helps you avoid failure by clarifying challenges and risks. When you put on paper all you need to make this business work, you have an overall perspective over how much capital you need, the expected price of your products or services, the market's receptivity, and so on. Your business becomes predictable and manageable. 

In short, the benefits of a good business plan are:

  • Clarity of vision and goals - A business plan forces you to articulate your business vision, mission, objectives, and goals. This helps ensure all stakeholders are aligned and working towards the same targets.
  • Identifies risks and opportunities - Developing a business plan requires researching your industry, competitors, and market. This helps you identify potential risks, challenges, and opportunities for your business.
  • Guides strategic decisions - Your business plan is a roadmap to guide strategic decisions and resource allocation. It gives you a framework to evaluate new ideas and options.
  • Attracts investment and funding - Potential investors and lenders will likely require a business plan to assess your business idea, market opportunity, and financial projections before financing.
  • Serves as an internal document - Your business plan can be used internally to communicate your strategy to employees, managers, and partners. It can provide direction and set performance goals.
  • Measures success - Your financial projections and key performance indicators in the business plan can serve as benchmarks to measure your business's actual performance against your plans. This helps you course correct in a timely manner.
  • Builds credibility - A thorough, well-researched business plan helps demonstrate to stakeholders that you have a solid understanding of your business idea, industry, and market. This builds credibility for your venture.
Important statistics

Owners with a company plan see growth 30% more quickly than those without, and 71% of businesses that are scaling have business plans.

Source: Burke, A., Fraser, S., & Greene, F. J. (2010). The multiple effects of business planning on new venture performance. Journal of Management Studies, 47(3), 391-415.

When Do You Need a Business Plan?

A business plan is a critical document that outlines a business's goals, strategies, and financial projections. While the exact timing can vary depending on the nature of the business and its stage of development, there are several key instances when having a business plan is essential:

  • Starting a new business: If you're launching a new venture, a business plan is essential to help you define your business idea, target market, competition analysis, marketing and sales strategies, operational plan, and financial projections. It serves as a roadmap to guide your initial steps and secure funding if needed.
  • Seeking funding: Whether you're approaching investors, banks, or other sources of financing, a well-prepared business plan is crucial to demonstrate the viability of your business and how you plan to achieve profitability. Lenders and investors often require a business plan to evaluate your business's potential risks and returns.
  • Expanding an existing business: When you're looking to grow your current business, a business plan can help you assess the feasibility of expansion plans, identify potential challenges, and outline the strategies to overcome them. This can be especially important when seeking additional funding or partnerships.
  • Attracting partners or co-founders: If you're considering bringing on board partners or co-founders, a business plan can be the right method to share your vision, goals, and how their involvement will contribute to the business's success.
  • Navigating challenging times: During economic uncertainty or significant changes in the market, having a business plan can provide a structured approach to adapt and stay on course.
  • Exit strategy: If you're planning to sell your business or merge with another company in the future, having a well-documented business plan can add value and make the transition smoother for potential buyers or partners.

Remember that a business plan isn't a static document; it should be periodically reviewed and updated to reflect changes in the market, your business goals, and other relevant factors.

How to Write a Business Plan?

To write an efficient business plan, you need structure. Start with the big picture and go into details step by step. Remember that your readers are busy and don't want to spend too much time reviewing introductions and non-essential paragraphs. A business plan is not literature but an informative document. Note that depending on the use of the business plan, the way it's structured might change: think that a traditional business is different than a non-profit, while a tech startup has different challenges than a franchise.

Therefore, start by drafting the business plan outline and write each section accordingly. Here are the most important sections of a business plan, with details on what each one of them should contain:

Step 0: The Title

The title needs to be explicit and catchy. And it has to be on the first page. Alongside the title, you should give your contact information (e.g., title, name, address, telephone number, email address, etc.) and your brand's information if you already know them (e.g., company's name and logo). Don't crowd the first page with anything else.

Step 1: The Executive Summary

The executive summary includes the essential information in your business plan and presents it concisely. The summary section is for the super-busy readers and needs to be catchy and informative. Include here 

  • a brief presentation of your idea, 
  • the goals and purposes behind your business, 
  • details about your products or services and 
  • the target market, 
  • a brief financial presentation of the initial capital and expected revenue, and 
  • a call to action for your investors. 

After reading the summary, the investors and potential business partners should know what you need from them, what is the operational model of your future business, and what they will gain from being part of this project.

In the realm of fast-growth startups, you might have heard about the business model canvas, where practically, on one page, you go through the key elements of how your business works.

Business model canvas by Strategyzer

Tip: If this is the first time you're writing such a document, this might be a bit overwhelming, so don't hesitate to ask for some help from a friend who is running a business successfully or someone who has graduated from a business school to help you to advance with these key sections.

Step 2: The Company Overview

Within the company overview, you can provide details such as a business description, the value proposition, the mission and vision statement, business goals, and company history if the company is already established. Let's discover each one of them: 

The company description

A company description is an overview of your business. It should convey what you do, who you serve, and what makes you unique. The description helps set the stage for the rest of your business plan by introducing potential investors or lenders to your business at a high level.

Here's an example of a company description:

"NYStar LLC is a woman-owned small business based in New York City. We provide marketing, branding, and digital strategy services primarily to small businesses in the hospitality and retail industries. Our data-driven approach and customized solutions leveraging the latest digital tools differentiate us from larger agencies.

Founded in 2019 by Joanna Fitch, a marketing expert with over 15 years of experience serving small businesses, NYStar aims to empower entrepreneurs to build powerful brands. The founding team also includes Edward Klein, Director of Digital Strategy, a tech industry veteran. NYStar's mission is to help small businesses grow and thrive by developing marketing strategies that capture the power of storytelling."

Business goals

Business goals in a business plan context refer to the specific, measurable targets a business aims to achieve within a certain time frame. They should be SMART (Specific, Measurable, Achievable, Realistic, and Time-bound). Learn the essential details about SMART goals.

Some examples of common business goals in a plan are:

  • Financial goals - e.g., reach $1 million in revenue in 2 years
  • Market share goals - e.g., capture 15% of the market within 5 years
  • Sales goals - e.g., acquire 5,000 new customers in the first year
  • Production goals - e.g., produce 500 units per day within 3 years
  • Profitability goals - e.g., achieve 30% profit margins in year 3
  • Customer satisfaction goals - e.g., maintain a Net Promoter Score above 80
  • Workforce goals - e.g., add 10 new skilled employees every year for 5 years.

Business goals in a plan should be:

  • Aligned with the company's mission, vision, and strategy
  • Specific enough to guide actions and decisions
  • Measurable using key performance indicators (KPIs)
  • Achievable but challenging enough to drive performance improvements
  • Realistic, given the business's resources and capabilities
  • Time-bound with specific deadlines.

Mission statement

This is a short statement that defines the overall purpose and goals of the business. It clarifies the organization's objectives and primary functions. A good mission statement is clear, concise, and focuses on the present - what the business does now to achieve its goals.

Example: "To provide customers with high-quality, eco-friendly clothing at affordable prices."

Vision statement

The vision statement describes the desired future state of the company. It outlines what the business aspires to become or achieve in the long run. A vision statement is broader, forward-looking, and more inspirational. It provides direction and guides strategic planning.

Example: "To become the world's most sustainable and socially responsible fashion brand."

Check our article on the topic for more examples of mission and vision.

Company history

For the company history, reflect on the major milestones, changes in the headcount, and product releases. You can present the company history in a visual format using a timeline. In this way, this section will be more compelling, and you will make your document more alive removing the monotonous text blocks.

Step 3: The Market Analysis

Show you know the market by providing a well-researched market analysis with business indicators and predictors. Your business plan should demonstrate a thorough analysis of the business environment and how your business will flourish. Don't forget to refer to your main competitors and customers. This section answers questions such as:

  • What are your main competitors? 
  • What is your target market? 
  • What are the demographics of your model customer? 
  • How will you be better than the competition? 
  • What demand are you basing your business on?

You can have a single section for market analysis, competition, and customers or smaller individual sections for each. Try to include relevant statistics and data that support your market research.

In this section, you can provide a brief overview of the industry your business operates in. It covers key trends, drivers, size, and industry growth prospects. It identifies the major players and competitors as well as the threats and opportunities in the industry landscape.

For a complete market analysis, you should reflect on writing a SWOT analysis where you look at your competitors' strengths, weaknesses, and threats and the opportunities your business has in the market. Conducting competitive research will answer questions such as: where do your competitors promote their business, what customers are saying about their products, and what are their key channels for driving sales? What do their pricing strategies look like? Such information will help to create a more compelling offer and distinguish yourself in a competitive market.

When creating the business plan, you can also reflect on a go-to-marketing strategy, where you clarify the possible risks and make your proposalmore engaging. You must enter a validated market that is not oversaturated and seek the right amount of financing to get things going. In the following section, we will expand on these details. 

Tip: If your target market is too broad, it might signal to your investors that you haven't done your analysis correctly.

Step 4: The Product or Service Offered

This section is dedicated to your products or services. List all of them and provide brief descriptions outlining why your products are better than the competition's and what unique features they have.

Key elements covered in this product description:

  • High-level summary of the product category
  • Details of a flagship product with specific features
  • Summary of other complementary products or product lines
  • Explanation of the educational and developmental benefits
  • The higher purpose the products aim to achieve for customers.

Tip: You might use the Value Proposition Canvas as a model that will help in positioning a product or service around what the customer values and needs. The tool created by Alexander Osterwalder, Yves Pigneur, and Alan Smith, is used extensively in startup workshops by coaches and mentors to help founders better define their products, and adjust towards solving real needs in the market.

Value Proposition Canvas by Strategyzer

Here is an example of how you can describe a product or service within a business plan:

"Our main offering is high-quality educational toys and games for children ages 3 to 8. We specialize in Montessori-inspired products that foster creative, hands-on learning in a self-directed manner.

Our flagship product is the Geoblock Building Set, an 82-piece wood block construction set. The interlocking blocks are designed to teach children geometry, spatial reasoning, and physics concepts through free play. The blocks come in different shapes, sizes, and colors, with shapes like circles, triangles, rectangles, and cubes. Children can use their imagination to build anything from buildings and vehicles to abstract structures.

We also offer a Nature Discovery Kitwhich includes Jr. Botanist kits, bug viewers, magnifying lenses, and guidebooks to help children explore the natural world through collecting, observing, and identifying plants, insects, and small animals.

In addition, we sell puzzles, arts and crafts sets, science experiment kits, and storytelling toys that develop skills like cognitive thinking, creativity, fine motor skills, and language development in an entertaining way.

By fulfilling the innate drive-in children to explore, experiment and construct, our products aim to nurture inquisitive minds and foster a lifelong love of learning."

Step 5: The Operations Plan

The operations plan briefly describes the practical aspects of your business. In this section, you describe your resources (staff, materials, equipment, etc.), suppliers, the production process, logistics and delivery procedures, safety, and security procedures, etc. Don't forget to outline what you already have and what you need to acquire. Investors will want to know your starting point and what you bring to the table, such as industry experience and previous achievements, a dedicated team, office spaces, equipment, or a list of interested clients.

The operations plan may also include standard procedures, HR processes, risk management, reporting methods, and any other practical aspect of your business. You can also show what hardware and software you intend to use for project and people management.

Step 6: Sales and Marketing Plan

This section details how you plan to attract customers, promote, and sell your products/services. It covers your pricing strategy, sales targets, marketing channels (digital, inbound, outbound, etc.), tactics (SEO, content, social media, events, etc.), and the budgets for each. The objectives are customer acquisition, lead generation, and revenue growth.

In this section, you can expand on your growth tactics, pricing strategy, and sales forecast and rationale for these assumptions. 

Find below an example of a marketing strategy for a business plan:

"Our marketing strategy will focus on generating brand awareness, building an engaged audience, and driving qualified leads to foster long-term customer relationships.

We will develop using a mix of online and offline tactics, including:

  • Website: Our user-friendly, mobile-responsive website will be the hub for all our marketing initiatives. It will feature educational content, product descriptions, customer reviews, and an online store.
  • SEO: We will implement an ongoing SEO strategy to improve our ranking for target keywords related to our products. This includes optimizing pages, creating relevant content, and building backlinks.
  • Content marketing: We will publish blog posts, how-to guides, checklists, and videos to establish ourselves as experts and thought leaders in the field. This content will promote organically via SEO and social channels.
  • Social media: We will maintain active profiles on Facebook, Instagram, and Pinterest to engage with parents, share our content and drive traffic to our website. We aim to build a community of parents around our brand.
  • Trade shows and exhibitions: We will exhibit at 2-3 key industry events annually to launch new products, network, gain customer insights, and acquire new leads.
  • Email marketing: We will build an email list and send periodic newsletters to share new products, promotions, and tips to nurture customer relationships.

Our first-year marketing budget is $25,000, allocated as follows: content creation - 30%, social media - 25%, SEO - 20%, trade shows - 15%, and email marketing - 10%."

The above mentioned example covers the key elements of an effective marketing strategy:

  • A mix of online (digital) and offline marketing tactics
  • Explanations of specific tactics and channels to be used
  • Targets or objectives for each tactic
  • Some kind of budget allocation to demonstrate your priorities
  • Overall budget with breakdown of costs allocated to each tactic.

Step 7: The Financial Plan

When you're going to an investor seeking funding, and you're about to launch your business (new venture), you need to prove that you have an idea about how much capital you need and how you will be using it, this is why a budget and a financial plan is needed.

If your business has been already in business for some years now (established business), and you're looking for expansion capital, then you will need to prove it is financially viable and will return its investment. It is also your chance to show you are trustworthy and have no unmet financial obligations. You can add:

  • bank statements, 
  • guarantees, 
  • balance sheets, 
  • income statements if your business
  • cash-flow statements
  • profit and loss statements.

A financial outlook for the next 3-5 years would be very important. Remember that your business operations costs play a significant role in your financial operations, so have a clear monthly and annual spending budget, plus other costs such as marketing and sales.  

Step 8: Management Plan

The management section includes a short presentation of the company, outlining its legal structure, organizational chart, team structures, and ongoing HR processes. It's your chance to prove you are reliable and have excellent management skills. If you use external experts or subcontract other companies, here is the place to mention them, define their relationship with the company, and state how they will be involved in the management process.

The management section should include a list of the executive team, stakeholders, advisory board, and any other management team. You must highlight the expertise of your executive team and the roles you plan to hire.

Tip: This section is the place where you can explain who you are, why you exist, and what makes you different. Also, in our experience in working with investors, the team is probably the most important part of your business plan, so put extra effort into assembling a balanced team.

Step 9: The funding request

The funding request of the investment needs is a crucial section of a business plan where you outline the amount of money you need to start or grow your business and explain how you plan to use the funds. This section is particularly important when seeking financing from investors, lenders, or potential partners.

In the funding request section, you should include the following key elements:

  • Amount of funding needed: Clearly state the specific amount of money you are requesting. Be as accurate as possible in calculating your funding needs based on your business's requirements.
  • Use of funds: Provide a breakdown of how you intend to use the requested funds. Outline the various expenses and investments the funding will cover, such as equipment purchase, marketing, hiring staff, research, and development, or working capital.
  • Timeline: Specify the time frame for which you need the funds and when you expect to receive them. This helps potential investors or lenders understand the urgency and how their investment aligns with your business timeline.
  • Justification: Explain why the requested amount of funding is necessary and how it will contribute to achieving your business goals. Emphasize the potential return on investment for the funders and why your business is a worthwhile opportunity.
  • Funding structure: If applicable, outline the type of funding you seek, such as equity investment, debt financing, or a mix of both. Include any terms and conditions associated with the funding, such as interest rates, repayment schedules, or ownership shares.
  • Financial projections: Supporting your funding request with financial projections can strengthen your case. Include details like sales forecasts, expense estimates, and cash flow projections to demonstrate that you have thoroughly considered your business's financial needs.
  • Exit strategy: While not always required, mentioning your exit strategy can show potential investors that you have a plan for them to realize their returns, either through an IPO, acquisition, or other means.

It's essential to be realistic and specific in your funding request, providing a clear and well-justified explanation of how the funds will be utilized to drive the growth and success of your business. Remember that investors and lenders will carefully evaluate your funding request, so backing it up with solid data, market research, and a compelling business case is crucial.

Here is how you could explain your funding needs in a business plan:

Based on our financial projections and operating expenses, we will require initial funding of $350,000 to launch the business and cover costs for the first 12 months of operations.

The breakdown of funding requirements is as follows:

Product development - $100,000

  • Prototype development
  • Manufacturing tooling and molds

Inventory - $50,000

  • Initial stock of raw materials and components
  • Finished goods for first sales

Operating expenses - $100,000

  • Rent and utilities
  • Hardware and software costs
  • Salaries for 2 full-time employees
  • Marketing and advertising

Contingency fund - $50,000

  • To cover any unforeseen startup costs

Working capital - $50,000

  • To cover expenses before generating revenue

The funding will be used as an equity investment in exchange for 15% ownership of the company. We have identified several angel investors and venture capital firms interested in participating in our seed funding round.

Optional: We are seeking $350,000 in the current funding round. However, based on our 3-year financial projections, we anticipate requiring an additional $1 million in Series A funding within 18-24 months to support our growth plans."

By writing in this way the financial need section, you outline:

  • Total funding required and time frame
  • Breakdown of funding into specific expense categories
  • Type of funding sought (equity, debt, grants, etc.)
  • Details of funding sources (if available)
  • Any future funding anticipated (if relevant)

Step 10: Appendix

A business plan's appendix contains supplementary information supporting the plans and projections outlined in the main document. Though optional, an appendix can be important to provide additional details and evidence to back up your business idea.

Some common items you may include in an appendix are:

  • Resumes of the management team - Shows the qualifications and experience of those running the business and the leaders that are part of it.
  • Financial statements - Past income statements, balance sheets, and cash flow statements provide a financial track record (if an established business)
  • Prototype images - Visual aids to demonstrate your product concept (if relevant)
  • Market research and feasibility studies - Supplementary data and analyses to strengthen your market assessment
  • Patents, trademarks, licenses - Documents proving exclusive rights to intellectual property (if applicable)
  • Letters of intent or support - Correspondence indicating potential partnerships, contracts, or clients
  • Surveys and questionnaires - Raw data from customer or stakeholder research

The appendix allows you to provide further depth and substantiate claims you make in the main document without distracting from the core narrative. Investors and lenders often review the appendix for additional details and reassurance about your business prospects.

While the appendix is not mandatory, including relevant supporting materials can strengthen your business plan by:

  • Providing evidence of your team's experience and capabilities
  • Demonstrating thorough research and feasibility studies were conducted
  • Substantiating your market and sales forecasts
  • Showing you have intellectual property protections in place (if relevant)
  • Indicating early customer traction or partnerships.

In summary, an appendix gives you a place to include valuable supplementary materials that can validate key elements of your business plan and give stakeholders more confidence in your venture.

Tips for Creating A Simple Business Plan

  • Know your goals and make them as clear and practical as possible
  • Know your target market and underline the benefits your products or services will bring
  • Know your readers and adjust the business plan to meet their expectations (and make them feel the main focal point of your communication)
  • Provide accurate data and statistics from trustworthy sources (include references)
  • Know your strong points and use them in your favor (experience, a solid and motivated team, an innovative idea, etc.)
  • Keep the overall document simple. Consider that this is a forecast of how your business is expected to work.
  • Use standard language and proofread your document. Explain new concepts.

Business Plan Template

Suppose you don't want to start your business plan from zero (and we understand why). Download our free business plan template and customize it to match your idea and investors. It doesn't matter if you plan a small or big business. The template is versatile and easily adjustable.

Download our Business Plan Template


Knowing how to communicate your ideas and plans is essential as an entrepreneur. You deal with investors, business partners, managers, and customers daily. You can't afford to create confusion and misunderstandings. So set up templates for important documents and tailor them for each situation. When drafting your business plan, make the reader feel at the center of attention, and remember your first draft will be wrong; however, after the fifth edit, your document will be much more credible, accurate, and correct. Good luck!

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