How to Write a Business Plan

A business plan may be the most important document you ever create for your business. It serves many purposes. It tells the story that will attract investors and funding. It can persuade key employees to join your team. It can help forge partnerships that will take your business to the next level. Most importantly, it provides the roadmap that will guide you through the launch, growth and eventual exit of your business.

Given the importance of a business plan, you should take the time to think through every step you will take to launch your company and position it for success. Identify the strengths and weaknesses of your business idea. Explore opportunities you may not have considered.

As you develop your plan, be real. Now is the time to be honest with yourself. Don’t ignore potential problems and foreseeable pitfalls. Identify the challenges that are likely to arise and explain how you will overcome them.

An effective business plan is clear, concise and easy to understand. Stay away from industry jargon and terminology that may confuse someone outside your industry. Be thorough. Be detailed. But keep it simple.

An effective business plan is substantive. Make sure your assumptions are supported with facts and sound analysis. Avoid unsubstantiated claims, sweeping statements or aggrandizement. Your plan should be a sales tool, but not a sales piece. Let your research, ideas and analysis sell themselves.

The template below includes instructions for each section of a comprehensive business plan. The template can be used and adapted for most business ideas. However, there is no one-size-fits-all template for the perfect business plan. The last section in the instructions, “Adapting Your Plan,” outlines modifications you may want to make to your plan for specific purposes, such as acquiring debt financing, or for specific industries, such as technology.

Business Plan

[Insert Date]

Company name
Street address 1
Street address 2
City, state, ZIP
Business phone
Website URL
Email address

Confidentiality Agreement

The undersigned reader acknowledges that the information provided by [Company’s Name] in this business plan is confidential and the reader agrees not to disclose any information in the business plan, other than information that is in the public domain, without the express written consent of [Business Owner’s Name]. The undersigned reader also acknowledges that any disclosure or use of same by the reader may cause serious harm or damage to [Company’s Name].

Upon request, this business plan document will be immediately returned to [Business Owner’s Name].

This is a business plan. It does not imply an offer of any securities.

_________________________
Signature

_________________________
Printed Name

_________________________
Date

Table of Contents

Confidentiality Agreement

I. Executive Summary
II. Company Description
III. Products & Services

  • Product & Service Description Worksheet

IV. Marketing Plan

  • SWOT Analysis Worksheet
  • Competitor Data Collection Plan
  • Competitive Analysis Worksheet
  • Marketing Expenses Strategy Chart
  • Pricing Strategy Worksheet
  • Distribution Channel Assessment Worksheet

V. Operational Plan
VI. Management & Organization

  • Management Worksheet
  • Organization Chart

VII. Startup Expenses & Capitalization
VIII. Financial Plan
IX. Appendices
X. Refining the Plan

I. Executive Summary

The Executive Summary is the most important section within the business plan. Prospective investors and lenders will often review the Executive Summary and quickly decide whether or not to read the rest of the plan. The Executive Summary should be impactful, convey your enthusiasm for your business venture and motivated readers to read the entire business plan.

While the Executive Summary is the first section in the business plan, it is the LAST section to be written. Writing the Executive Summary after the rest of the business plan has been completed, will allow you to think through all the elements of your plan and be prepared to summarize them.

The Executive Summary should include:

  1. A brief overview of your business idea (no more than a few sentences)
  2. A description your product offering. What problem are you solving? Where is there a need for your product?
  3. Your business goals and milestones. What are your one year, three year and five year projects?
  4. A description of your target market. Who are your target customers?
  5. A competitive overview. Who are your competitors? What differentiates you from your competitors? What is your competitive advantage?
  6. Overview of your management team. What competitive edge does management provide? What is their experience?
  7. Financial outlook for your business. If your business plan is intended to help you raise investment capital or debt financing, make sure to include the amount of financing you’re seeking, how it will be used, and the benefit it will provide your company.

After reading the Executive Summary readers should be intrigued to learn more about the opportunity. Keep your executive summary short, concise and powerful. It should be should be no longer than a page or two in length.

II. Company Description

The company description section of your business plan provides a basic overview of the elements of your business. It should include:

  1. Mission Statement
    A mission statement is a brief, one or two sentence, action-oriented statement the explains the purpose of your company. It summarizes how your company services its customers, employees, and owners. It also describes your organization, its core function, and its goals. A mission statement explains what you do and why you do it.
  2. Philosophy and Vision
    Sharing your company’s business philosophy helps prospective investors and employees understand what values your business lives by.

    Your company’s vision statement is exactly that, a statement of your vision for the direction of your company and what it aspires to be. What do you want to achieve with your business? What do you want it to ultimately become (e.g. national chain, multi-national corporation, industry leader, etc.)

  3. Goals
    Your goals break down your vision into measurable milestones and benchmarks for assessing progress. You should include both short- and long-term goals in this section of your business plan. Milestones should support your goals. For example, if one of your goals is to open 10 stores by 2025, milestones might include achieving profitability or a specific sales volume.
  4. Target Market
    Identify and briefly describe who your target customers are. A short paragraph will suffice since you’ll discuss your target market in-depth in the Marketing Plan section.
  5. Industry and Competition
    Describe your industry. Is it a growing industry? A mature industry? Or a stable industry? What is the short- and long-term outlook for the industry. What is your company’s competitive position within in the industry? How will your business successfully compete?
  6. Legal Structure
    What is your business legal structure? A sole proprietorship, partnership, limited liability company (LLC) or corporation? Why did you choose this business structure?

    Does you business have more than one owner? If so, how is ownership divided. Do have shareholders or investors? If so, explain how shares are apportioned. This information is particularly important to prospective investors and lenders.

After reading the Company Description section of your business plan, the reader should have a basic understanding of your business’s mission, vision, goals, target market, competition and legal structure.