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Whether you’re just starting your business or you’re looking to get serious about a business you’ve run for quite some time now, you need a business plan.
In many ways, your business plan is your map. It not only guides you and other key stakeholders as you grow your business, but it also shows investors, lenders, or potential partners where your business is going.
When you get down to it, a successful business doesn’t come without a well thought-out business plan. So if you’re ready to roll up your sleeves and hammer out a fantastic business plan, you’re at the right place.
Here’s your ultimate guide to writing a business plan, mapped out for you step-by-step.
Ready to start writing your business plan?
As the mastermind of your small business, you have all the ideas in your head and you want to get the ball rolling.
But let’s pace ourselves and take a broad look at the task you’re about to get yourself into.
A business plan is a strategic map.
It lays out where you and your business currently stand today—your resources, abilities, and goals—and maps out where you will be in the future, explaining how you’ll get there.
Think of it this way: A business plan shows how you’ll get from point A to point B in 3 to 5 years.
While the general gist of a business plan is pretty straightforward, writing a business plan isn’t so simple.
To explain how you’ll get from point A to point B—effectively, concisely, and convincingly—you’ll have to take a detailed look into the marketing, organizational, and financing strategies for your business.
A business plan can be broken into core sections.
If this is your first time writing a business plan, the easiest way to tackle the beast is to walk through each section, one at a time.
So when you’re wrapping your head around what kind of information needs to be in your business plan, here are the main sections you should include:
Eight steps to writing a business plan? You’ve got this, small business owner.
Let’s get to it.
Your executive summary is the first chapter and first step for writing a business plan.
The executive summary doesn’t need to be more than one or two pages in length.
But just because it’s a short section of your business plan doesn’t mean it’s unimportant. In fact, it might be the most important part of your business plan. (Some investors might only ask for your executive summary when deciding whether to work with your business—so you better hope it can stand on its own.)
Your executive summary should explain what your business does, where your business currently stands, where you want to take your business in 3 to 5 years, and why you’ll be successful.
Now, we know that you’re excited. If you’re just starting your business, you could talk a mile a minute about why it’s important and how you’ll reach your goals.
But the executive summary of your business plan should be short and to the point. Any information that doesn’t answer those four questions shouldn’t be in your executive summary.
In fact, to keep it as concise as possible, just think about including only these six pieces of information:
Remember—short and sweet. You can get into the details later, but for now you’re showing readers what they’re getting into.
Every word counts here—and if it’s clear that you haven’t put thought into your business plan, it’ll show.
As a pro tip, try writing your executive summary after you’re done writing a business plan from start to finish. That way, you’ll have a solid grasp of the details and will be better equipped to summarize them.
The second section of your business plan should be your company overview.
While this step of writing a business plan sounds a lot like what you just wrote in the executive summary, the company overview is a top-level look into the structure of your business and what you do.
When you’re writing your company overview, here’s how you can think about breaking it down:
Remember to keep your company overview short. There isn’t really a need to dive deep into the details here.
In its essence, a company overview gives a quick—but catchy—pitch of what you do, who you serve, and why you’ll be able to serve them.
After that, give a brief look into the existing legal and ownership structure of your business just so potential investors know what they’re getting into.
Moving further along the process of writing a business plan, your next step is to perform an in-depth analysis of your industry, market, and competitors.
Whereas the first two sections were high-level overviews, this is where you’ll get into the details.
Readers and investors want to come away from your market analysis section feeling confident that you, the business owner, have a solid understanding of the dynamics of your industry, market, and competitors.
To prove this to them, your market analysis should include the following sections:
When you’re writing a business plan, this section might take the longest.
It’s the most in-depth section of your business plan and requires the most research.
Next step in writing a business plan?
Your business’s organization and management structure.
This section explains who does what in your business, what’s everyone’s background, and what their past experiences bring to the team.
Here’s what you need to break down:
After you’ve laid out your business’s organizational structure, it’s time to dive into the product or service your business provides.
In this section, it’s all about laying out the plans for positioning your product.
Start off this part of writing a business plan by describing your service or product and who it’s intended for. What need does it specifically fulfill?
To break this down clearly, here’s exactly what this section should contain:
This is the section of your business plan for letting the core of your business—your product or service—shine.
Now that you’ve given all the crucial details of your core product offering, the next step in writing a business plan is to explain how you’ll market and sell your product or service.
Let’s start with the marketing side of things. How will you create customers and get them interested in your business?
In general, here’s what the marketing part of this section might look like:
Once you have a marketing framework explained, now dive into your sales plan:
You might not know exactly how this will play out just yet, or which marketing and sales channels will be most successful for you. But give a clear and concise overview of how you plan on selling your product.
While this section comes at the end of your business plan, it can be the most important part of the whole document.
The financial plan and projections section gives a look into the current state of your finances and maps out where you’d like to be financially in the future.
If you’ve been in business for a little while now, this section will use financial data from past performance. If you have previous data to show, include the following:
Even if you don’t have any previous financial data from your company, you need to include financial projections in this section.
Financial projections are either supported by your past data, or they’re projections determined by research and analysis on the industry and your top competitors.
And when you’re forecasting your business’s financials, here are the essential documents you should include:
A thorough business plan has financial projections for the first 12 months of business but also takes a longer outlook and plan for the next 3 to 5 years.
To get into the nitty-gritty of creating a financial projection, check out Bplan’s guide to financial planning.
The last part of your financial plan should include any funding needs your business has or will have in the future.
Whether this is through equity financing with angel investors or venture capital firms, or debt financing with small business loans, here’s what you need to include in a funding request:
This way, if your business plan is in the hands of a potential investor, they’ll know exactly how any financial contributions they make will impact the business.
The appendix gets attached to the end of your business plan, and it’ll hold all the supporting information you didn’t include in the meat of your document.
Specifically, if you have any data points, charts, footnotes, or further explanations that are essential to creating a complete business plan, put those in the appendix. That way your readers can refer to the appendix if they need more—but aren’t distracted by long text explanations or confusing numbers while parsing through the plan.
Logistically, the appendix should begin with a table of contents that breaks down the sections of your business plan. Then include the additional information that corresponds to each section.
There you have it, small business owner—your quick-and-dirty, 8-step guide to crafting a complete and comprehensive business plan.
It might seem like an overwhelming task, but when you break it down step-by-step, you can tackle each section accordingly.
And if all else fails, remember these three things as you’re writing a business plan:
And the last piece of advice? Dive right in.
This crucial business document won’t write itself, so it’s time to get going. Good luck!