how to write an outline for business plan

"If you look at all our older major corporations—U.S. Steel, General Electric, IBM, American Airlines—and then you look at our newer companies like Amazon, Apple, Facebook, Microsoft, none of these companies ever had a business plan before they got started."

The U.S. Small Business Administration takes a middle-of-the-road approach, recognizing that not all businesses need a comprehensive plan. Instead, it suggests that smaller businesses and startups use a "leaner" and more streamlined version to outline the essentials and highlight strengths. Lean or long, your business plan should cover the basics.

The outline below offers a brief overview of what each section of your business plan should cover. It is not a definitive guide, as you may wish to expand or combine sections, or add extra detail in a way that is customized to your particular venture. Keep in mind the idea is to present your venture in the most attractive and professional way possible.

Executive Summary

Though it appears first in the business plan, the executive summary is a section that is usually written last, as it encapsulates the entire plan. It provides an introduction and high-level overview of your business, including your mission statement and details about what product(s) and/or service(s) you offer.

Since the executive summary is your business's first impression, it's critical that it be outstanding, especially if you're seeking funding.

Business Description

Provide information about the business you're starting, including what sort of problem your products/services solve and your most likely buyers. You can also expand this description by offering an overview of the industry that your business will be a part of, including trends, major players, and estimated sales. This section should give a positive perspective on your place within the industry. Set your business apart from the competition by describing your or your team's expertise, as well as your competitive advantage.

Market Analysis

The market analysis is a crucial section of the business plan, as it identifies your best customers or clients. To create a compelling market analysis, thoroughly research the primary target market for your products/services, including geographic location, demographics, your target market's needs, and how these needs are currently being met. Your purpose here is to demonstrate that you have a solid and thorough understanding of the people you are planning to sell your products/services to so that you can make informed predictions about how much they might buy, and convince other interested parties.

Competitive Analysis

In preparing to write the competitive analysis section, you'll learn how successful your direct and indirect competitors are in the marketplace. This section of your business plan includes an assessment of your competition's strengths and weaknesses, any advantages they may have, and the unique qualities that make your business stand out from the competition. It also includes an analysis of how you will overcome any barriers to entry in your chosen market.

The primary goal here is to distinguish your business from the competition, but a strong competitive analysis will be able to persuade potential funding sources that your business can compete in the marketplace successfully . A useful tool to help articulate this section of the plan is sometimes referred to as a SWOT analysis, or a "Strengths, Weaknesses, Opportunities, and Threats" assessment.

Sales and Marketing Plan

The sales and marketing section offers a detailed explanation of your sales strategy, pricing plan, proposed advertising and promotion activities, and all the benefits of your products/services. This is where to outline your business's unique selling proposition, describe how you plan to get your products/services to market, and how you'll persuade people to buy them.

When developing your unique selling proposition, your goal is to answer the question: Why should people buy from me over my competition?

Ownership and Management Plan

This section outlines your business's legal structure and management resources, including the internal management team, external management resources, and human resources needs. Include any experience or special skills that each person in your management team brings to the business. If the goal of your business plan is to get funding, it's wise to include an advisory board as a management resource.

Operating Plan

The operating plan offers detailed information about how your business will be run. It provides your business's physical location, descriptions of facilities and equipment, types of employees needed, inventory requirements, suppliers, and any other applicable operating details that pertain to your precise type of business, such as a description of the manufacturing process, or specialty items needed in day-to-day operations.

Financial Plan

Starting a business is usually about making a profit, so it's important to demonstrate that you have a solid sense of your current finances, funding needs, as well as projected income. In the financial section , provide a description of your funding requirements, your detailed financial statements, and a financial statement analysis. This part of the business plan is where you present the three main financial documents of any business: the balance sheet, the income statement, and the cash flow statement, or in the case of a new business, a cash flow projection.

Appendices and Exhibits

In addition to the sections outlined above, at the end of your business plan, include any additional information that will help establish the credibility of your business idea, or bolster your potential success. You may choose to include marketing studies, photographs of your product, permits, patents and other intellectual property rights, credit histories, résumés, marketing materials, and any contracts or other legal agreements pertinent to your business.

How to Organize Your Business Plan

There is no set order to your business plan, the only exception being that the executive summary should always come first. Beyond that, the order depends on your goals.

If your purpose for writing a business plan is to help you organize, gather information, and create a roadmap, organize it in the way that is most intuitive to your process. You might group similar content together, such as all the material relating to markets (industry overview, marketing analysis, competitive analysis, and marketing plan).

If your goal is to seek funding, organize the plan based on what your audience values, and lead with the best, most convincing material first. If you have a stellar group of people serving on your new business's advisory board, put that section directly after the executive summary. Highlighting your new business's strengths will encourage your reader to continue reading your plan.

Add a Title Page and Table of Contents

After completing all the sections, don't forget to insert a title page at the beginning of the plan followed by a table of contents listing each section with page numbers.

The Appearance of Your Business Plan Matters

If you're writing a business plan as an organizational exercise—for your eyes only—feel free to get loose with the style and organization; the simple act of putting all your ideas into a practical template may be a valuable brainstorming tool. However, if you're looking for funding or investors, the business plan is a formal document, so it should look like one. Every aspect of your business plan should impress your potential funding source.

Pay attention to margins and formatting; make sure it's spell-checked and grammatically sound. If you're not good at this, pay a professional to do it.

Hiring a professional to design, edit, or review your business plan may be a good idea, regardless of how skilled you are; a fresh pair of eyes can often spot issues that the original writer missed.

If you need printed copies, get them professionally printed and bound. Keep in mind that you may only have a short amount of time to sell your idea, and first impressions pack a powerful punch.

How Long Should a Business Plan Be?

A good business plan can't be pinned to a minimum or maximum page count. This is because the right length depends on your business. Your business plan should be brief enough to convey the essentials without redundancy or fluff content, yet long enough to demonstrate to your audience that your business is well-researched and fully considered. A simple plan for a modest startup might be around 40 pages, while a more complex business plan may need 100 pages to convey an ambitious financing strategy, product diagrams, industry data, or the full scope of the venture. The goal is to allow for a full explanation of the pertinent information about your business, presented in a concise and well-organized fashion.

Knowledge@Wharton. " Why Creating a Business Plan Is a ‘Waste of Time’ ."

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

Corporate Finance Institute. " Barriers to Entry ."

U.S. Small Business Administration. " SBA Recommended Business Plans and Length ."

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Practical example of a business plan outline

This article provides a detailed business plan outline as well as a step by step guide to writing a business plan.

I encourage you to read this article in relation to our series of articles on how to write a business plan .

Business plan outline

Below is our recommended business plan outline. Every company is different and the business plan needs to be tailored to reflect that, therefore this is more a guideline than a strict template.

Our business plan outline is structured so that each section answers a specific set of investor questions about your business. It also offers a natural progression making it suitable for both the investor who wants to read the plan cover to cover and the one who wants to simply jump into specific parts to clarify particular points.

Structure & Ownership

Management team.

Products and Services

Demographics and Segmentation

Target market, market need, competition, barriers to entry, competitive edge, marketing plan.

Risks and Mittigants

Personnel Plan

Key assets and ip, start-up funding, important assumptions, sales forecast, cost structure.

Let me walk you through each section and get into the details of what to write and where to find the information.

1. Executive Summary

The first section, the executive summary, is the most important one. It is only if they find this section attractive enough that potential investors will dive into the other sections of your plan to get more details.

Because this section is a summary of the rest of the plan this is the one you will write last.

The executive summary is all about getting your investor excited in 5 minutes. Do not try to tell everything about your business. Keep it short and to the point.

There are four things that you must cover:

The objective of this section is to introduce the company and its management. The content of this section will vary slightly depending on if you already have a business or if you are starting a new venture.

This is a purely descriptive part, the key questions you need to answer here are:

If you are writing a business plan for an existing company this is where you would present the key highlights to date. The idea here is to build your credibility and show to your reader that you have a viable business. The main points you want to touch on are:

If you are writing a plan for a business for which location is important (for example a shop or a restaurant) or if you are managing a large business with multiple stores or factories this is where you would describe (ideally using a map) the main location(s) of your business.

This is one of the most important section of your business plan. You must demonstrate that your team has strong experience in your sector and the skills to run this business.

If there are any important skill gaps in your team, you need to address them and mitigate them here. It could be that you are looking for someone with these skills or that you have a board member or a non-executive director that can fill the gap.

Try to put some pictures if you can. It is always better when one can put a face on a name! And it helps if you are due to meet your investors at some point.

Now that you have introduced the company it is time to dive into what it does.

3. Products and Services

The key to writing a good product and services section is to be precise about the product or service you sell, the client you are targeting, and the channel you are targeting him through.

After this section, your reader will start thinking about how big, how crowded and how profitable your market is and try to guess what the overall strategy is going to be. You want to send him in the right direction! So be ultra-precise, don't say for example "I sell shoes" but "I sell leather boots targeted at women aged 16-25 who buy online".

If you can try to include pictures of your products.

By now your reader knows who you are and what business you are in. It is time you show him why this is a good opportunity.

4. Market Analysis

This part is a summary of our article on how to do a market analysis, please refer to the article for more details

The objectives of the market analysis section are to show the investors that:

The first step of the analysis consists of assessing the size of the market.

The way you look at the market will depend on your type of business. If it is a small business, such as a coffee shop for example, then you need to look at the market on a local basis (your town, your street). If you are targeting a wider audience, then you need to evaluate the market at a national or an international level.

When assessing the size of your market, you need to come up with two variables: the number of potential customers and the value of the market.

The idea here is to get a sense of how atomised your market is. If you are in a market where there is a small set of high-value customers then it might be complicated to compete against more established players and your business is likely to be dependent on a handful of customers meaning that losing one would potentially threaten your business. Now if you are in a market with lots of low-value customers it might be complicated and costly to reach enough of them to get to the minimum volume for your business to be profitable. Ideally, you want to be in a market with a high number of medium value customers meaning that there are enough customers to leave room for a few players and that each customer brings a decent amount of revenues.

Once you have estimated the market size you need to explain to your reader which segment(s) of the market you view as your target market.

The target market is the type of customers you target within the market. You need to identify the different segments in your market and explain who you are going after and why. One way to identify the segments is to group customers by buying pattern or demographics. For example in the fashion market you could have:

This section is where you demonstrate that you have insight into your market. You know what makes people buy!

You need to describe the buying pattern of your target customers. What triggers a purchase? Is it something they need such as food? Is it a value associated with the product or a brand perception? Etc.

Later in your plan, you will use this analysis to justify your market positioning.

Here you have to explain who your competitors are, how they are positioned on the market, and what their strength and weaknesses are. Some of the items you need to cover are

You should write this part in parallel with the Competitive Edge part of the Strategy section, as the idea here is to find a weakness in your competitors' positioning that your company will be able to use in its own market positioning.

Here, the objective is to show to investors that the risk of having new competitors entering the market is fairly remote. Hence if you are writing your business plan for a start-up then this section is a bit tricky as you need to show that you will succeed where others will fail!

Once again, you can find more details on this section in our market analysis article .

In this section, you need to details which regulation is applicable to your sector and how you are going to comply with it.

5. Strategy

Until now all the sections of the business plan outline we covered were very descriptive, this is where things get a bit more interesting.

Strategy is a big word for what is really just explaining your view of the market, how you want to attack it, and why it should work.

The first part of the strategy section is the Competitive Edge sub-section which is where you explain your market positioning.

The competitive edge part is where you answer investors' favourite question: "what makes you different from the competition?"

Hopefully, you will have laid the groundwork for this section in the previous ones and orientated your analysis of the market in a way that prepares the reader to embrace your positioning.

In order to explain and justify your pricing strategy you must touch on the following points:

I won't touch on the two first points which are pretty obvious but I think the third one deserves a bit more explanation. Setting a price is not easy but there are a couple of techniques you can use to guide you.

The first thing to do is to assess if you have control over your prices. It could very well be that you have limited control over your prices. If you are in a price a driven market where all your competitor's price at £9.90 it can be complicated to justify a higher price to your customers.

Now if you have control over your prices you then need to come up with a figure. Here are the two main strategies that you can use to do so:

Cost-plus pricing: this consist of adding a percentage margin to the cost of the good or service you are selling. The advantage of this strategy is that you are guaranteed to earn your margin on every sale. The disadvantage is that your price could be below or above what customers are willing to pay for a product or service.

Benefit driven pricing: this consist of estimating the gain procured by your good or service to the customer and set the price as a fraction of this gain. It is easier to do when your product or service procure a hard benefit (i.e. when you can quantify the money your customer will save) than when your product procures a soft benefit (i.e. when you cannot easily quantify the value of the benefit as for example if it makes your customer save time). The advantage of this technique is that it allows you to maximise the price of your goods and services. The disadvantage is that it usually requires trying different price points in order to find the right market price.

It is always a good thing to test different prices. Do one week with price A and one week with price B and compare the results in terms of sales and volume.

Ok, so now we know who you will target and how you will price your products. It is time to explain how you are going to reach those customers.

This is the first section where we start to leave aside the helicopter view of the market to really dive into the implementation and execution strategy of your plan. Therefore you need to show your investor that not only you know your market inside-out but that you also have a credible plan to conquer that market.

The best way to show that your business plan is realistic is to get into the specifics of the implementation. Your reader needs to feel that you are ready to go and that he just has to push on a button (write you a check) to make it happen.

In the marketing plan section, you need to show that you have identified the best channels to use to target your customers.

By channel, I mean both the distribution network (online, owned stores, third party network, door to door, etc.) and the means of communication (flyers, print advertising, online marketing, etc.).

You want to start by listing all the different options and then start diving into the ones you picked and explain why you think they are the most relevant in terms of:

This section is where you set the goals for your company. This is a commitment you are making to your investors and you will be judged on your ability to achieve these goals. It is therefore important that you take time to identify goals that are:

Here you will be judged on your ability to identify and focus on the key objectives to bring your business to the next level. This will help build your credibility towards your investor and ultimately play a part in his investment decision.

From a relationship perspective, being able to over-achieve these objectives will be key if you are to raise more money in the future.

Risks and Mitigants

The risks and mitigants section has one key objective: enable you to anticipate any objection or doubt an investor might have on your plan or your ability to deliver it and give you an opportunity to show that:

It is very important to be transparent in this section. If an investor spots a key risk in your plan that you haven't disclosed he is going to think "well I am not sure he knows this market as well as he claims", and that looks bad. You want to do everything to build credibility and trust with your investors because the moment they start doubting you they will start doubting the investment.

6. Operations

This section is where you get into the details of how your company will operate. It usually starts with the personnel plan.

In the personnel plan section, you must explain how many people you will employ and what will be their roles. If your staff is planned to increase over the duration of your business plan, it is recommended to explain what will be the driver. It could be that you plan a new shop opening or that you will increase support staff with sales.

If you have a shop or a restaurant it is also recommended to put the staff plan in perspective with the opening hours.

The idea behind this section is to identify or dismiss any operational risks that could arise on the asset side.

You need to explain which are the assets and intellectual property without which the company could not operate (for example a delivery truck or a licence) and the steps you took to protect them.

In this section, your investor will want to check that you intend to do business with respectable counterparties and that you are not dependent on a single supplier. Therefore you need to explain who will be your main suppliers, the relationship you have with them (if any) and what is your backup plan if one was to be replaced.

You also need to mention the main terms you have negotiated with your suppliers (price, days of credit, delivery schedule, etc.).

Now that you have explained how your company will be operated it is time to dive into the numbers.

7. Financial Plan

This is the most crucial part of your business plan. The tone of this section will depend on who the recipient of your business plan is.

If the recipient of your business plan is a lender you need to show that your business is going to be stable, profitable and cash generative and that you are not going to take too many risks. If it is an equity investor you need to show that your business can become big and cash generative enough to make it easy to sell and enable him to reach his target return.

As a minimum, you will need to show a full set of financial statements (P&L, cash flow statement and balance sheet) over three years and a monthly cash flow statement. It is also good practice to show a monthly P&L and balance sheet for the first year.

The reason why investors like to see monthly numbers for the first year is that it is going to be the most critical year as:

If you don't have a finance background it is recommended that you use a professional tool to help you with the financial forecast. The Business Plan Shop offers an easy to use online solution that can help you easily produce your financial statements as well as a professional-looking business plan exportable in PDF. In our application, you will find most of the tips included in this guide along with precise examples for each section of the plan. You can learn more about our solution here .

In this section, you will list the sources and uses of funds required to start your business.

The investor will look at how much is needed and how much money is brought to the table by the shareholders. If you are writing your plan for a retail bank it is important that you isolate the assets, inventory and VAT on a separate line as they often offer specific loans adapted to each of these categories.

This section is a disclaimer section. You must identify the key assumptions underlying your financial forecasts. These are the assumptions the investor will stress (i.e. run scenarios on) to test the viability of your plan and estimate the potential downsides and upsides.

Try to identify both assumptions on the revenue and on the cost side of the business. Let's take an example and look at an e-commerce site.

If you are operating an e-commerce site there are usually two main things your business profitability will depend on:

The first item is revenue related and has the most significant impact on your plan. This assumption has a 1:1 impact on your sales forecast and even a greater impact on your profit. The second one is also crucial as it impacts your profitability and your ability to scale.

Let's look at a numerical example in order to get a better understanding of the impacts of these two drivers:

As you can see from the table above a 10% deviation on price will have a 30% impact on profit, a 10% deviation in the customer acquisition cost would cost you 20% of your profit and both impacts would reduce your profit by 50%!

And these are not remote possibilities. Let's say that your acquisition costs are related to pay per click advertising on the internet and that your average cost per click is £0.4. An £8 cost per customer means that you have a conversion rate of 5%: it takes 20 clicks to make one sale. Now a £8.8 cost per customer means that it takes you 22 clicks to make one sale. As little as 2 more clicks can cost you 20% of your profit!

Now the positive thing is that if you built a complete financial model and identified these key drivers you can closely monitor these two elements. Chances are that you will get these wrong in your first plan but if you monitor them you will be able to quickly update your plan and get a revised financial projection. This will enable you to get a better view of how much cash your business will generate or need. And give you the ability to anticipate any upcoming difficulties with your investors or plan what to do with the excess cash flow if things go better than expected.

Note that in my example I did not take the number of customers as a key assumption. This is because I made the assumption that 100% of the traffic was coming from advertising. This is specific to e-commerce sites: chances are your site in its first year will rank on page 20 of Google and that you will have to acquire the main part of your traffic.

The sales forecast section is probably the second most important one in your business plan. This section relates directly to the market analysis, competitive edge, marketing plan and pricing sections. The objective here is to build and justify your sales estimate for the next three years.

Building a sales forecast is a double exercise. You first need to build the numbers using a bottom-up approach and then sanity checks them using a top-down approach. For a complete how-to guide, we encourage you to read our sales forecast article .

Once you have built a realistic top line, you need to focus on the costs.

This part is all about analysing the operational risk of a business. The analysis resides in two fundamental notions: operating leverage and breakeven point.

Let's start with the breakeven point which is the level of sales required to reach profitability.

Every business has 2 types of costs: fixed and variable costs. The fixed costs as their name indicates are the costs that will be incurred independently from the level of sales. For example the rent of a shop. The variable costs are the costs that depend on the level of activity. For example the cost of the goods sold in a shop.

The breakeven point is then computed by dividing the total amount of fixed costs by the margin of variable costs.

Let's take an example. If the only fixed cost of a shop is its rent of £2,000/month and if the shop sells goods it buys at £30/item at a price of £50/item. Then the shops make 50 - 30 = £20 of profit over variable costs per item. This means it needs to sell 2,000 / 20 = 100 items to cover the cost of the rent. The breakeven point of this shops is therefore 100 items.

The direct conclusion of this is that the higher the fixed costs, the more sales are required to cover them, and therefore the higher the risk of the business is. In plain English variable costs are great fixed costs are bad!

Operating leverage

What about operating leverage then? Well, operating leverage has to do with operating profit elasticity, which is the impact of a difference of 1% in sales on the operating profit. This seems complex but it is in fact really simple. There are two dimensions in the operating leverage: the level of fixed vs. variable costs and the margin on variable costs.

As we just saw above the more fixed costs a business has the more sales it needs in order to start making a profit. But this is not the whole story. Consider two businesses in the same industry. Business A is manufacturing its goods in the house while business B is outsourcing the manufacture to a supplier. As a result business A has higher fixed costs than business B (the cost of the factory), but at the same time business A is earning more on each sale than business B because it doesn't have to pay the supplier's margin. Therefore there is an expectation that a more operationally leveraged business will generate higher returns past its breakeven point.

The second aspect of operating leverage is the level of contribution (or margin on variable costs). If your contribution is high then it takes only a few sales to cover your fixed costs and start making a profit. The flip side of this is that a small forecasting error will have a huge impact on your level of profit and cash flows.

The key takeaways here are that investors will look at the level of fixed vs. variable costs in your business to evaluate its operating risk. They will expect to see the calculation of your breakeven point either expressed in units or days of sales.

Investors will also judge you on your ability to use operating leverage to your advantage. If you are starting up in a niche where the market is uncertain they will expect you to focus on sales and to have outsourced as many services as possible. You will make less profit but will require fewer sales to make a profit hereby de-risking the cost side of your business to balance with the risks on the revenue side. Now if you are an established business in a price-driven market, investors will expect you to do the exact opposite: outsource services only if it makes you save money and try to limit margin frictions to the maximum by using economies of scale to either increase your margin or reduce your price to increase market share.

Financial Statements

This section is where you present your financial statements. You can have the yearly statements here along with the monthly cash flow projections and put the monthly balance sheet and P&L in the appendix.

You need to walk the reader through the key items of each statement:

Your funding needs to be balanced (positive cash position) and you need to break even during the course of your plan. You might also want to touch on some additional ratios. In particular, if your business has a significant working capital requirement, you can mention the working capital ratios (WC / sales, days of payables and receivables). You can also mention either some credit ratios if the plan is for a bank (debt/EBITDA, net debt/EBITDA, interest coverage ratio) or some more equity-focused ratios (operating cash flow / capital employed, revenues / total assets, dividend yield and dividend per share if relevant).

This is where you add any detailed piece of data or backup materials you might have. The objective of the appendix section is to serve as a reserve of materials that the investor can use either to investigate certain areas of your business plan in more details or as a starting point to do his due diligence.

Congratulations, you now know the basics of writing a business plan. Now let's get to work!

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The Perfect Business Plan Layout & Outline for a Great Plan

Written by Dave Lavinsky

The layout of a business plan is not an area where great imagination and creativity is needed or recommended. It should be a more or less straightforward task to layout or outline your plan, using industry standard practices which funders have become familiar with through thousands of business plans. Use the following steps to implement this standard layout and save creativity for your business idea within the plan.

Download our Ultimate Business Plan Template here >

Start by getting your hands on a good business plan template. This will speed your time to completing your plan. Business plans generally start with an executive summary and company overview, move through background research and market analysis, customers, and competition, describe the company’s intended methods in the marketing plan and operation plan, show who’s on the management team , and conclude with the financial plan and appendices featuring full financial statements.

Use the business plan template to guide your understanding of each section and to see how they relate to each other. Don’t assume that any one example should dominate your understanding unless it comes from an extremely trusted source with a reputation for business plan expertise and success.

Business Page Layout Tips

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Sample Business Plan Outline

1. executive summary.

Your executive summary is the most important part of your plan. It comes at the beginning and is the first thing investors or lenders will read. If they aren’t excited by what they see, they’ll unfortunately stop reading. So make sure your executive summary gives a quick overview of what your company does and explains, in an exciting tone, why your company will be successful.

2. Company Description

In your Company Description, provide background on your company. When did you incorporate? What have you accomplished to date? Here you will let readers know the history of your business.

3. Market Analysis

In the Market Analysis section of your business plan provide background on the industry in which you operate. Conduct market research to make this section concrete and compelling. Answer questions such as: how big is your industry? what trends are affecting it?

4. Customer Analysis

Here you will document your target market. How are they? How many are there? What are their likes and dislikes? Ideally you can provide comprehensive demographic and psychographic profiles of your target customers and show how your company’s product or service are ideally suited to their needs.

5. Competitor Analysis

In this section of your business plan, document your key competitors. Explain their strengths and their weaknesses. Remember that investors and lenders expect you to have direct competitors. They just want to feel confident that despite them, you can still achieve lasting success.

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6. Marketing Plan

Your marketing strategy should primarily focus on the promotional methods you will use to attract new customers. Will you use search engine marketing? Will you employ radio ads? Document each of the promotional methods you will use.

7. Operations Plan

This section of your plan should discuss the key roles that your company must expertly perform and your strategies for operational excellence. You must also outline the long-term milestones your company plans to accomplish and the key dates for each.

8. Management Team

In your Management Team section, detail the key members of your team. Document their backgrounds and how their past experiences make them well suited to succeed in your organization.

9. Financial Plan

Here you will layout the key assumptions used in creating your financial model and then provide topline results from your income statement, balance sheet and cash flow projections. If you are seeking funding, document the amount of funding you seek and the key uses for it.

10. Appendix

In your Appendix, you will provide supporting information such as employee or customer agreements, store layouts, etc. You must also include your full, five-year financial model and projections.

By following the above business plan outline, you will ensure your plan is in the format investors and lenders expect. If you would like to quickly and easily finish your business plan, read and click on our suggested business resources below.

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Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.

Click here to see how Growthink’s business plan consulting services can create your business plan for you.

Business Page Layout FAQs

How do i lay out a business plan.

Laying out a business plan is not, and should not, be complicated. You can lay out your business plan using our sample business plan outline discussed here .

What is a business plan outline?

A business plan outline allows you to organize your plan and present it in the format that’s most compelling to readers. Also, by starting with your outline, it’s easier to add the required information into the right sections of your business plan.

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How To Write the Perfect Business Plan in 9 Steps (2023)

How to write a business plan: everything you need to know

A great business plan can help you clarify your strategy, identify potential roadblocks, decide what you’ll need in the way of resources, and evaluate the viability of your idea or your growth plans before you start a business .

Not every successful business launches with a formal business plan, but many founders find value in taking time to step back, research their idea and the market they’re looking to enter, and understand the scope and the strategy behind their tactics. That’s where writing a business plan comes in.

Table of Contents

What is a business plan?

Why write a business plan, business plan formats, how to write a business plan in 9 steps, tips for creating a small business plan, common mistakes when writing a business plan, prepare your business plan today, business plan faq.

A business plan is a document describing a business, its products or services, how it earns (or will earn) money, its leadership and staffing, its financing, its operations model, and many other details essential to its success.

We had a marketing background but not much experience in the other functions needed to run a fashion ecommerce business, like operations, finance, production, and tech. Laying out a business plan helped us identify the “unknowns” and made it easier to spot the gaps where we’d need help or, at the very least, to skill up ourselves. Jordan Barnett, Kapow Meggings

Investors rely on business plans to evaluate the feasibility of a business before funding it, which is why business plans are commonly associated with getting a loan. But there are several compelling reasons to consider writing a business plan, even if you don’t need funding.

If you’re looking for a structured way to lay out your thoughts and ideas, and to share those ideas with people who can have a big impact on your success, a business plan is an excellent starting point.

Free: Business Plan Template

Business planning is often used to secure funding, but plenty of business owners find writing a plan valuable, even if they never work with an investor. That’s why we put together a free business plan template to help you get started.

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Business plans can span from one page to multiple pages with detailed graphs and reports. There’s no one way to create a business plan. The goal is to convey the most important information about your company for readers.

Common types of business plans we see include, but are not limited to, the following:

Check out real-world examples of different business plans by reading The Road to Success: Business Plan Examples to Inspire Your Own .

Few things are more intimidating than a blank page. Starting your business plan with a structured outline and key elements for what you’ll include in each section is the best first step you can take.

Since an outline is such an important step in the process of writing a business plan, we’ve put together a high-level overview you can copy into your blank document to get you started (and avoid the terror of facing a blank page). You can also start with a free business plan template and use it to inform the structure of your plan.

Once you’ve got your business plan outline in place, it’s time to fill it in. We’ve broken it down by section to help you build your plan step by step.

1. Draft an executive summary

A good executive summary is one of the most crucial sections of your plan—it’s also the last section you should write.

The executive summary’s purpose is to distill everything that follows and give time-crunched reviewers (e.g., potential investors and lenders) a high-level overview of your business that persuades them to read further.

Again, it’s a summary, so highlight the key points you’ve uncovered while writing your plan. If you’re writing for your own planning purposes, you can skip the summary altogether—although you might want to give it a try anyway, just for practice.

Screenshot of an executive summary by FIGS

An executive summary shouldn’t exceed one page. Admittedly, that space constraint can make squeezing in all of the salient information a bit stressful—but it’s not impossible. Here’s what your business plan’s executive summary should include:

2. Describe your company

This section of your business plan should answer two fundamental questions: who are you, and what do you plan to do? Answering these questions with a company description provides an introduction to why you’re in business, why you’re different, what you have going for you, and why you’re a good investment bet. For example, clean makeup brand Saie shares a letter from its founder on the company’s mission and why it exists.

Clarifying these details is still a useful exercise, even if you’re the only person who’s going to see them. It’s an opportunity to put to paper some of the more intangible facets of your business, like your principles, ideals, and cultural philosophies.

Here are some of the components you should include in your company description:

Some of these points are statements of fact, but others will require a bit more thought to define, especially when it comes to your business’s vision, mission, and values. This is where you start getting to the core of why your business exists, what you hope to accomplish, and what you stand for.

This is where you start getting to the core of why your business exists, what you hope to accomplish, and what you stand for.

To define your values, think about all the people your company is accountable to, including owners, employees, suppliers, customers, and investors. Now consider how you’d like to conduct business with each of them. As you make a list, your core values should start to emerge.

Once you know your values, you can write a mission statement . Your statement should explain, in a convincing manner, why your business exists, and should be no longer than a single sentence.

As an example, Shopify’s mission statement is “Making commerce better for everyone.” It’s the “why” behind everything we do and clear enough that it needs no further explanation.

What impact do you envision your business having on the world once you’ve achieved your vision?

Next, craft your vision statement: what impact do you envision your business having on the world once you’ve achieved your vision? Phrase this impact as an assertion—begin the statement with “We will” and you’ll be off to a great start. Your vision statement, unlike your mission statement, can be longer than a single sentence, but try to keep it to three at most. The best vision statements are concise.

Finally, your company description should include both short- and long-term goals. Short-term goals, generally, should be achievable within the next year, while one to five years is a good window for long-term goals. Make sure all your goals are SMART: specific, measurable, attainable, realistic, and time-bound.

3. Perform a market analysis

No matter what type of business you start, it’s no exaggeration to say your market can make or break it. Choose the right market for your products—one with plenty of customers who understand and need your product—and you’ll have a head start on success. If you choose the wrong market, or the right market at the wrong time, you may find yourself struggling for each sale.

Market analysis is a key section of your business plan, whether or not you ever intend for anyone else to read it.

This is why market research and analysis is a key section of your business plan, whether or not you ever intend for anyone else to read it. It should include an overview of how big you estimate the market is for your products, an analysis of your business’s position in the market, and an overview of the competitive landscape. Thorough research supporting your conclusions is important both to persuade investors and to validate your own assumptions as you work through your plan.

How big is your potential market?

The potential market is an estimate of how many people need your product. While it’s exciting to imagine sky-high sales figures, you’ll want to use as much relevant independent data as possible to validate your estimated potential market.

Since this can be a daunting process, here are some general tips to help you begin your research:

Some sources to consult for market data include government statistics offices, industry associations, academic research, and respected news outlets covering your industry.

SWOT analysis

A SWOT analysis looks at your strengths, weaknesses, opportunities, and threats. What are the best things about your company? What are you not so good at? What market or industry shifts can you take advantage of and turn into opportunities? Are there external factors threatening your ability to succeed?

These breakdowns often are presented as a grid, with bullet points in each section breaking down the most relevant information—so you can probably skip writing full paragraphs here. Strengths and weaknesses—both internal company factors—are listed first, with opportunities and threats following in the next row. With this visual presentation, your reader can quickly see the factors that may impact your business and determine your competitive advantage in the market.

Here’s an example:

Free: SWOT Analysis Template

Get your free SWOT Analysis Template. Use this free PDF to future-proof your business by identifying your strengths, weaknesses, opportunities, and threats.

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Competitive analysis.

There are three overarching factors you can use to differentiate your business in the face of competition:

To understand which is the best fit, you’ll need to understand your business as well as the competitive landscape.

You’ll always have competition in the market, even with an innovative product, so it’s important to include a competitive overview in your business plan. If you’re entering an established market, include a list of a few companies you consider direct competitors and explain how you plan to differentiate your products and business from theirs.

You’ll always have competition in the market, even with an innovative product.

For example, if you’re selling jewelry, your competitive differentiation could be that, unlike many high-end competitors, you donate a percentage of your profits to a notable charity or pass savings on to your customers.

If you’re entering a market where you can’t easily identify direct competitors, consider your indirect competitors—companies offering products that are substitutes for yours. For example, if you’re selling an innovative new piece of kitchen equipment, it’s too easy to say that because your product is new, you have no competition. Consider what your potential customers are doing to solve the same problems your product solves.

4. Outline management and organization

A woman does research on a laptop sitting on the floor

The management and organization section of your business plan should tell readers about who’s running your company. Detail the legal structure of your business. Communicate whether you’ll incorporate your business as an S corporation or create a limited partnership or sole proprietorship.

If you have a management team, use an organizational chart to show your company’s internal structure, including the roles, responsibilities, and relationships between people in your chart. Communicate how each person will contribute to the success of your startup.

5. List your products and services

Your products or services will feature prominently in most areas of your business plan, but it’s important to provide a section that outlines key details about them for interested readers.

If you sell many items, you can include more general information on each of your product lines; if you only sell a few, provide additional information on each. For example, bag shop BAGGU sells a large selection of different types of bags, in addition to home goods and other accessories. Its business plan would list out those bags and key details about each.

Screenshot of BAGGU reusable bags on its website

Describe new products you’ll launch in the near future and any intellectual property you own. Express how they’ll improve profitability.

It’s also important to note where products are coming from—handmade crafts are sourced differently than trending products for a dropshipping business, for instance.

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6. perform customer segmentation.

Your ideal customer, also known as your target market, is the foundation of your marketing plan , if not your business plan as a whole. You’ll want to keep this person in mind as you make strategic decisions, which is why an overview of who they are is important to understand and include in your plan.

To give a holistic overview of your ideal customer, describe a number of general and specific demographic characteristics. Customer segmentation often includes:

This information will vary based on what you’re selling, but you should be specific enough that it’s unquestionably clear who you’re trying to reach—and more importantly, why you’ve made the choices you have based on who your customers are and what they value.

For example, a college student has different interests, shopping habits, and pricing sensitivity than a 50-year-old executive at a Fortune 500 company. Your business plan and decisions would look very different based on which one was your ideal customer.

7. Define a marketing plan

A screenshot of a tweet about a marketing plan

Your marketing efforts are directly informed by your ideal customer. Your marketing plan should outline your current decisions and your future strategy, with a focus on how your ideas are a fit for that ideal customer.

If you’re planning to invest heavily in > Instagram marketing , for example, it might make sense to include whether Instagram is a leading platform for your audience—if it’s not, that might be a sign to rethink your marketing plan.

Most marketing plans include information on four key subjects. How much detail you present on each will depend on both your business and your plan’s audience.

Promotion may be the bulk of your plan since you can more readily dive into tactical details, but the other three areas should be covered at least briefly—each is an important strategic lever in your marketing mix.

8. Provide a logistics and operations plan

Brown boxes stacked to the ceiling in a warehouse

Logistics and operations are the workflows you’ll implement to make your ideas a reality. If you’re writing a business plan for your own planning purposes, this is still an important section to consider, even though you might not need to include the same level of detail as if you were seeking investment.

Cover all parts of your planned operations, including:

This section should signal to your reader that you’ve got a solid understanding of your supply chain and strong contingency plans in place to cover potential uncertainty. If your reader is you, it should give you a basis to make other important decisions, like how to price your products to cover your estimated costs, and at what point you plan to break even on your initial spending.

9. Make a financial plan

A laptop sits open with numbers and graphs on the screen

No matter how great your idea is, and regardless of the effort, time, and money you invest, a business lives or dies based on its financial health. At the end of the day, people want to work with a business they expect to be viable for the foreseeable future.

The level of detail required in your financial plan will depend on your audience and goals, but typically you’ll want to include three major views of your financials: an income statement, a balance sheet, and a cash-flow statement. It also may be appropriate to include financial data and projections.

Here’s a spreadsheet template that includes everything you’ll need to create an income statement, balance sheet, and cash-flow statement, including some sample numbers. You can edit it to reflect projections if needed.

Income statement

Your income statement is designed to give readers a look at your revenue sources and expenses over a given time period. With those two pieces of information, they can see the all-important bottom line or the profit or loss your business experienced during that time. If you haven’t launched your business yet, you can project future milestones of the same information.

Balance sheet

Your balance sheet offers a look at how much equity you have in your business. On one side, you list all your business assets (what you own), and on the other side, all your liabilities (what you owe). This provides a snapshot of your business’s shareholder equity, which is calculated as:

Assets - Liabilities = Equity

Cash flow statement

Your cash flow statement is similar to your income statement, with one important difference: it takes into account when revenues are collected and when expenses are paid.

When the cash you have coming in is greater than the cash you have going out, your cash flow is positive. When the opposite scenario is true, your cash flow is negative. Ideally, your cash flow statement will help you see when cash is low, when you might have a surplus, and where you might need to have a contingency plan to access funding to keep your business solvent .

It can be especially helpful to forecast your cash-flow statement to identify gaps or negative cash flow and adjust operations as required. Here’s a full guide to working through cash-flow projections for your business.

Download your copy of these templates to build out these financial statements for your business plan.

Know your audience

When you know who will be reading your plan—even if you’re just writing it for yourself to clarify your ideas—you can tailor the language and level of detail to them. This can also help you make sure you’re including the most relevant information and figure out when to omit sections that aren’t as impactful.

Have a clear goal

You’ll need to put in more work and deliver a more thorough plan if your goal is to secure funding for your business versus working through a plan for yourself or even your team.

Invest time in research

Sections of your business plan will primarily be informed by your ideas and vision, but some of the most crucial information you’ll need requires research from independent sources. This is where you can invest time in understanding who you’re selling to, whether there’s demand for your products, and who else is selling similar products or services.

Keep it short and to the point

No matter who you’re writing for, your business plan should be short and readable—generally no longer than 15 to 20 pages. If you do have additional documents you think may be valuable to your audience and your goals, consider adding them as appendices.

Keep the tone, style, and voice consistent

This is best managed by having a single person write the plan or by allowing time for the plan to be properly edited before distributing it.

Use a business plan software

Writing a business plan isn’t the easiest task for business owners. But it’s important for anyone starting or expanding a business. Fortunately, there are tools to help with everything from planning, drafting, creating graphics, syncing financial data, and more. Business plan software also have templates and tutorials to help you finish a comprehensive plan in hours, rather than days.

A few curated picks include:

For a more in-depth look at the available options, read Get Guidance: 6 Business Plan Software to Help Write Your Future .

Other articles on business plans would never tell you what we’re about to tell you: your business plan can fail. The last thing you want is for time and effort to go down the drain. Avoid these common mistakes:

Read through the following business plan example. You can download a copy in Microsoft Word or Google Docs and use it to inspire your own business planning.

Download sample business plan example (.doc)

A business plan can help you identify clear, deliberate next steps for your business, even if you never plan to pitch investors—and it can help you see gaps in your plan before they become issues. Whether you’ve written a business plan for a new online business idea , a retail storefront, growing your established business, or purchasing an existing business , you now have a comprehensive guide and the information you need to help you start working on the next phase of your own business.

Illustrations by Rachel Tunstall

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How to Write a Business Plan, Step by Step

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1. Write an executive summary

2. describe your company, 3. state your business goals, 4. describe your products and services, 5. do your market research, 6. outline your marketing and sales plan, 7. perform a business financial analysis, 8. make financial projections, 9. add additional information to an appendix, business plan tips and resources.

A business plan is a document that outlines your business’s financial goals and explains how you’ll achieve them. A strong, detailed plan will provide a road map for the business’s next three to five years, and you can share it with potential investors, lenders or other important partners.

Here’s a step-by-step guide to writing your business plan.

» Need help writing? Learn about the best business plan software .

This is the first page of your business plan. Think of it as your elevator pitch. It should include a mission statement, a brief description of the products or services offered, and a broad summary of your financial growth plans.

Though the executive summary is the first thing your investors will read, it can be easier to write it last. That way, you can highlight information you’ve identified while writing other sections that go into more detail.

» MORE: How to write an executive summary in 6 steps

Next up is your company description, which should contain information like:

Your business’s registered name.

Address of your business location .

Names of key people in the business. Make sure to highlight unique skills or technical expertise among members of your team.

Your company description should also define your business structure — such as a sole proprietorship, partnership or corporation — and include the percent ownership that each owner has and the extent of each owner’s involvement in the company.

Lastly, it should cover the history of your company and the nature of your business now. This prepares the reader to learn about your goals in the next section.

» MORE: How to write a company overview for a business plan

The third part of a business plan is an objective statement. This section spells out exactly what you’d like to accomplish, both in the near term and over the long term.

If you’re looking for a business loan or outside investment, you can use this section to explain why you have a clear need for the funds, how the financing will help your business grow, and how you plan to achieve your growth targets. The key is to provide a clear explanation of the opportunity presented and how the loan or investment will grow your company.

For example, if your business is launching a second product line, you might explain how the loan will help your company launch the new product and how much you think sales will increase over the next three years as a result.

In this section, go into detail about the products or services you offer or plan to offer.

You should include the following:

An explanation of how your product or service works.

The pricing model for your product or service.

The typical customers you serve.

Your supply chain and order fulfillment strategy.

Your sales strategy.

Your distribution strategy.

You can also discuss current or pending trademarks and patents associated with your product or service.

Lenders and investors will want to know what sets your product apart from your competition. In your market analysis section , explain who your competitors are. Discuss what they do well, and point out what you can do better. If you’re serving a different or underserved market, explain that.

Here, you can address how you plan to persuade customers to buy your products or services, or how you will develop customer loyalty that will lead to repeat business.

» MORE: R e a d our complete guide to small business marketing

If you’re a startup, you may not have much information on your business financials yet. However, if you’re an existing business, you’ll want to include income or profit-and-loss statements, a balance sheet that lists your assets and debts, and a cash flow statement that shows how cash comes into and goes out of the company.

You may also include metrics such as:

Net profit margin: the percentage of revenue you keep as net income.

Current ratio: the measurement of your liquidity and ability to repay debts.

Accounts receivable turnover ratio: a measurement of how frequently you collect on receivables per year.

This is a great place to include charts and graphs that make it easy for those reading your plan to understand the financial health of your business.

» NerdWallet’s picks for setting up your business finances:

The best business checking accounts .

The best business credit cards .

The best accounting software .

This is a critical part of your business plan if you’re seeking financing or investors. It outlines how your business will generate enough profit to repay the loan or how you will earn a decent return for investors.

Here, you’ll provide your business’s monthly or quarterly sales, expenses and profit estimates over at least a three-year period — with the future numbers assuming you’ve obtained a new loan.

Accuracy is key, so carefully analyze your past financial statements before giving projections. Your goals may be aggressive, but they should also be realistic.

List any supporting information or additional materials that you couldn’t fit in elsewhere, such as resumes of key employees, licenses, equipment leases, permits, patents, receipts, bank statements, contracts and personal and business credit history. If the appendix is long, you may want to consider adding a table of contents at the beginning of this section.

Here are some tips to help your business plan stand out:

Avoid over-optimism: If you’re applying for a business loan at a local bank, the loan officer likely knows your market pretty well. Providing unreasonable sales estimates can hurt your chances of loan approval.

Proofread: Spelling, punctuation and grammatical errors can jump off the page and turn off lenders and prospective investors, taking their mind off your business and putting it on the mistakes you made. If writing and editing aren't your strong suit, you may want to hire a professional business plan writer, copy editor or proofreader.

Use free resources: SCORE is a nonprofit association that offers a large network of volunteer business mentors and experts who can help you write or edit your business plan. You can search for a mentor or find a local SCORE chapter for more guidance.

The U.S. Small Business Administration’s Small Business Development Centers , which provide free business consulting and help with business plan development, can also be a resource.

More From Forbes

Business plan outline - 23 point checklist for success.

If you’re looking for funding for a new or existing business, you need a business plan. Your business plan gives lenders and investors the information they need to determine whether or not they should consider your company.

Your business plan outline is the first step in organizing your thoughts. And, when you follow the outline below, you ensure your business plan is in the format that prompts investors and lenders to take action.

In the business plan outline below, you will see the ten (10) sections common to business plans, and the twenty-three (23) sub-sections you must complete. Also, to help you out, here is my proven business plan template , that allows you to quickly and easily complete all the sections of your business plan.

Section I - Executive Summary

1 - Executive Summary

The Executive Summary is the most important part of your business plan. Because if it doesn’t interest readers, they’ll never even get to the rest of your plan.

Start your Executive Summary with a brief and concise explanation of what your company does. Next, explain why your company is uniquely qualified to succeed. For example, does your management team have unique competencies? Do you have any patents? Are you the first mover in your market? Does a huge, unmet market opportunity exist? Etc.

Finally, include a synopsis of your financial projections in your Executive Summary. Specifically, include your expected revenues, expenses and profits for each of the next five years, how much funding you are seeking, and the key uses of these funds.

Section II - Company Overview

2 - Company Overview

The Company Overview section provides a brief history of your company.

Here you will answer questions such as when and how your organization was formed, what type of legal entity you are, and accomplishments to date.

Importantly, your past accomplishments are perhaps the best indicator of potential future success, so be sure to identify and include all key milestones your company has achieved to date.

Section III - Industry Analysis

Your Industry Analysis section has two sub-sections as follows:

3 - Market Overview

The Market Overview section discusses the size and characteristics of your market. For example, if you are a restaurant, you would include the size of the restaurant market, a brief discussion of sectors (e.g., fast food versus fine dining) and market trends.

4 - Relevant Market Size

The relevant market size is a much more specific calculation of your market size. It is the annual revenue your company could attain if it attained 100% market share. Your relevant market size is calculated by multiplying 1) the number of customers who might be interested in purchasing your products and/or services each year and 2) the amount these customers might be willing to spend, on an annual basis, on your products and/or services.

Section IV - Customer Analysis

Your Customer Analysis section has two sub-sections as follows:

5 - Target Customers

Your Target Customers section precisely identifies your current and/or intended customers. Include as much demographic data on your target customers as possible, such as their gender, age, salary, geography, marital status and education.

6 - Customer Needs

In this section of your business plan, specify why customers want or need your products and/or services. For example, do customers care most about speed, quality, location, reliability, comfort, price, value, etc.?

Section V - Competitive Analysis

Your Competitive Analysis section has three sub-sections as follows:

7 - Direct Competitors

Direct competitors are companies that fill the same customer need you fill with the same solution. For example, if you operate an Italian restaurant, other Italian restaurants would be direct competitors.

In this section of your business plan, outline who your direct competitors are, and their strengths and weaknesses.

8 - Indirect Competitors

Indirect competitors are companies that fill the same customer need you fill with a different solution. For example, if you operate an Italian restaurant, a French restaurant would be an indirect competitor.

In this section of your business plan, outline who your indirect competitors are, and their strengths and weaknesses.

9 - Competitive Advantages

Importantly, identify your Competitive Advantages in this section. Specifically, state what is it about your company that will allow you to effectively compete (and win) against both direct and indirect competitors.

Section VI - Marketing Plan

Your Marketing Plan section has four sub-sections as follows:

10 - Products & Services

Here is where you give the details of the products and/or services your company offers.

11 - Pricing

Detail your pricing here. In particular, discuss how your pricing relates to competition. For example, are you the premium brand? The low cost brand?

Discuss your expected branding based on your chosen pricing model.

12 - Promotions Plan

Your promotions plan details the tactics you will use to attract new customers. For example, you might choose radio advertising, or online pay-per-click ads, or press releases, and so on. In this section, detail each form of promotions you will use.

13 - Distribution Plan

Your Distribution Plan outlines the ways in which customers can buy from you. In many cases, they can only buy directly from you, perhaps at your physical location or web address. In other cases, you might have distributors or partners who sell your products or services. In such a case, detail this structure.

Section VII - Operations Plan

Your Operations Plan section has two sub-sections as follows:

14 - Key Operational Processes

Your Key Operational Processes are the daily functions your business must conduct. In this section, you will detail these functions. For example, will you maintain a Customer Service department? If so, what specific role will it fill?

By completing this section, you’ll get great clarity on the organization you hope to build.

15 - Milestones

In this section of your business plan, list the key milestones you hope to achieve in the future and the target dates for achieving them.

Here is where you set goals for specific and critical undertakings, such as when a new product will be created and launched, by when you plan to execute new partnerships, etc.

Section VIII - Management Team

Your Management Team section has three sub-sections as follows:

16 - Management Team Members

This section details the current members of your management team and their backgrounds.

17 - Management Team Gaps

Particularly if you’re a startup venture, you will have holes in your team; roles that you’d like to fill later. Identify such roles here, and the qualifications of the people you will seek later to fill them.

18 - Board Members

If you maintain a Board of Advisors or Board of Directors, detail your Board members and their bios in this section.

Section IX - Financial Plan

Your Financial Plan section has four sub-sections as follows:

19 - Revenue Model

As simple as it seems, this section of your business plan gives clarity on how you generate revenues. Do you sell products? Do you sell advertising space? Do you sell by-products, like data? Do you sell all of the above?

20 - Financial Highlights

Your full financial model (income statement, balance sheet and cash flow statement) belong in your Appendix, but in this section you’ll include the highlights. For instance, include your revenues, key expenses, and projected net income for the next five years.

21 - Funding Requirements/Use of Funds

If you are seeking funding for your company, detail the amount here, and importantly for what you will use the funds.

22 - Exit Strategy

Particularly if you are seeking equity funding, detail your expected exit strategy. The most likely exit strategy is to sell your company to a larger firm. If so, detail the types of firms that might be interested in purchasing you and why. List the specific names of potential acquirers if applicable.

Section X - Appendix

23 - Supporting Documentation

As mentioned above, your full financial model (income statement, balance sheet and cash flow statement) belong in your appendix.

Likewise, include any supporting documentation that will help convince readers your company will succeed. For example, include customer lists, awards, and patents received among others.

I hope this business plan outline has helped you organize your thoughts and answer the key questions needed to start and grow a successful business. While twenty-three sections seems like a lot, if you complete them one at a time, you can make progress and finish your entire plan quickly and effectively. Likewise, feel free to use my proven business plan template to complete your business plan.

How to Write a Winning Business Plan

The business plan admits the entrepreneur to the investment process. Without a plan furnished in advance, many investor groups won’t even grant an interview. And the plan must be outstanding if it is to win investment funds. Too many entrepreneurs, though, continue to believe that if they build a better mousetrap, the world will beat […]

The Idea in Brief

You’ve got a great idea for a new product or service—how can you persuade investors to support it? Flashy PowerPoint slides aren’t enough; you need a winning business plan. A compelling plan accurately reflects the viewpoints of your three key constituencies: the market , potential investors , and the producer (the entrepreneur or inventor of the new offering).

But too many plans are written solely from the perspective of the producer. The problem is that, unless you’ve got your own capital to finance your venture, the only way you’ll get the funding you need is to satisfy the market’s and investors’ needs.

Here’s how to grab their attention.

The Idea in Practice

Emphasize Market Needs

To make a convincing case that a substantial market exists, establish market interest and document your claims.

Establish market interest. Provide evidence that customers are intrigued by your claims about the benefits of the new product or service:

Document your claims. You’ve established market interest. Now use data to support your assertions about potential growth rates of sales and profits.

Address Investor Needs

Cashing out. Show when and how investors may liquidate their holdings. Venture capital firms usually want to cash out in three to seven years; professional investors look for a large capital appreciation.

Making sound projections. Give realistic, five-year forecasts of profitability. Don’t skimp on the numbers, get overly optimistic about them, or blanket your plan with a smog of figures covering every possible variation.

The price. To figure out how much to invest in your offering, investors calculate your company’s value on the basis of results expected five years after they invest. They’ll want a 35 to 40% return for mature companies—up to 60% for less mature ventures. To make a convincing case for a rich return, get a product in the hands of representative customers—and demonstrate substantial market interest.

Too many entrepreneurs, though, continue to believe that if they build a better mousetrap, the world will beat a path to their door. A good mousetrap is important, but it’s only part of meeting the challenge. Also important is satisfying the needs of marketers and investors. Marketers want to see evidence of customer interest and a viable market. Investors want to know when they can cash out and how good the financial projections are. Drawing on their own experiences and those of the Massachusetts Institute of Technology Enterprise Forum, the authors show entrepreneurs how to write convincing and winning business plans.

A comprehensive, carefully thought-out business plan is essential to the success of entrepreneurs and corporate managers. Whether you are starting up a new business, seeking additional capital for existing product lines, or proposing a new activity in a corporate division, you will never face a more challenging writing assignment than the preparation of a business plan.

Only a well-conceived and well-packaged plan can win the necessary investment and support for your idea. It must describe the company or proposed project accurately and attractively. Even though its subject is a moving target, the plan must detail the company’s or the project’s present status, current needs, and expected future. You must present and justify ongoing and changing resource requirements, marketing decisions, financial projections, production demands, and personnel needs in logical and convincing fashion.

Because they struggle so hard to assemble, organize, describe, and document so much, it is not surprising that managers sometimes overlook the fundamentals. We have found that the most important one is the accurate reflection of the viewpoints of three constituencies.

1. The market, including both existing and prospective clients, customers, and users of the planned product or service.

2. The investors, whether of financial or other resources.

3. The producer, whether the entrepreneur or the inventor.

Too many business plans are written solely from the viewpoint of the third constituency—the producer. They describe the underlying technology or creativity of the proposed product or service in glowing terms and at great length. They neglect the constituencies that give the venture its financial viability—the market and the investor.

Take the case of five executives seeking financing to establish their own engineering consulting firm. In their business plan, they listed a dozen types of specialized engineering services and estimated their annual sales and profit growth at 20%. But the executives did not determine which of the proposed dozen services their potential clients really needed and which would be most profitable. By neglecting to examine these issues closely, they ignored the possibility that the marketplace might want some services not among the dozen listed.

Moreover, they failed to indicate the price of new shares or the percentage available to investors. Dealing with the investor’s perspective was important because—for a new venture, at least—backers seek a return of 40% to 60% on their capital, compounded annually. The expected sales and profit growth rates of 20% could not provide the necessary return unless the founders gave up a substantial share of the company.

In fact, the executives had only considered their own perspective—including the new company’s services, organization, and projected results. Because they had not convincingly demonstrated why potential customers would buy the services or how investors would make an adequate return (or when and how they could cash out), their business plan lacked the credibility necessary for raising the investment funds needed.

We have had experience in both evaluating business plans and organizing and observing presentations and investor responses at sessions of the MIT Enterprise Forum. We believe that business plans must deal convincingly with marketing and investor considerations. This reading identifies and evaluates those considerations and explains how business plans can be written to satisfy them.

The MIT Enterprise Forum

Organized under the auspices of the Massachusetts Institute of Technology Alumni Association in 1978, the MIT Enterprise Forum offers businesses at a critical stage of development an opportunity to obtain counsel from a panel of experts on steps to take to achieve their goals.

In monthly evening sessions the forum evaluates the business plans of companies accepted for presentation during 60- to 90-minute segments in which no holds are barred. The format allows each presenter 20 minutes to summarize a business plan orally. Each panelist reviews the written business plan in advance of the sessions. Then each of four panelists—who are venture capitalists, bankers, marketing specialists, successful entrepreneurs, MIT professors, or other experts—spends five to ten minutes assessing the strengths and weaknesses of the plan and the enterprise and suggesting improvements.

In some cases, the panelists suggest a completely new direction. In others, they advise more effective implementation of existing policies. Their comments range over the spectrum of business issues.

Sessions are open to the public and usually draw about 300 people, most of them financiers, business executives, accountants, lawyers, consultants, and others with special interest in emerging companies. Following the panelists’ evaluations, audience members can ask questions and offer comments.

Presenters have the opportunity to respond to the evaluations and suggestions offered. They also receive written evaluations of the oral presentation from audience members. (The entrepreneur doesn’t make the written plan available to the audience.) These monthly sessions are held primarily for companies that have advanced beyond the start-up stage. They tend to be from one to ten years old and in need of expansion capital.

The MIT Enterprise Forum’s success at its home base in Cambridge, Massachusetts has led MIT alumni to establish forums in New York, Washington, Houston, Chicago, and Amsterdam, among other cities.

Emphasize the Market

Investors want to put their money into market-driven rather than technology-driven or service-driven companies. The potential of the product’s markets, sales, and profit is far more important than its attractiveness or technical features.

You can make a convincing case for the existence of a good market by demonstrating user benefit, identifying marketplace interest, and documenting market claims.

Show the User’s Benefit

It’s easy even for experts to overlook this basic notion. At an MIT Enterprise Forum session an entrepreneur spent the bulk of his 20-minute presentation period extolling the virtues of his company’s product—an instrument to control certain aspects of the production process in the textile industry. He concluded with some financial projections looking five years down the road.

The first panelist to react to the business plan—a partner in a venture capital firm—was completely negative about the company’s prospects for obtaining investment funds because, he stated, its market was in a depressed industry.

Another panelist asked, “How long does it take your product to pay for itself in decreased production costs?” The presenter immediately responded, “Six months.” The second panelist replied, “That’s the most important thing you’ve said tonight.”

The venture capitalist quickly reversed his original opinion. He said he would back a company in almost any industry if it could prove such an important user benefit—and emphasize it in its sales approach. After all, if it paid back the customer’s cost in six months, the product would after that time essentially “print money.”

The venture capitalist knew that instruments, machinery, and services that pay for themselves in less than one year are mandatory purchases for many potential customers. If this payback period is less than two years, it is a probable purchase; beyond three years, they do not back the product.

The MIT panel advised the entrepreneur to recast his business plan so that it emphasized the short payback period and played down the self-serving discussion about product innovation. The executive took the advice and rewrote the plan in easily understandable terms. His company is doing very well and has made the transition from a technology-driven to a market-driven company.

Find out the Market’s Interest

Calculating the user’s benefit is only the first step. An entrepreneur must also give evidence that customers are intrigued with the user’s benefit claims and that they like the product or service. The business plan must reflect clear positive responses of customer prospects to the question “Having heard our pitch, will you buy?” Without them, an investment usually won’t be made.

How can start-up businesses—some of which may have only a prototype product or an idea for a service—appropriately gauge market reaction? One executive of a smaller company had put together a prototype of a device that enables personal computers to handle telephone messages. He needed to demonstrate that customers would buy the product, but the company had exhausted its cash resources and was thus unable to build and sell the item in quantity.

The executives wondered how to get around the problem. The MIT panel offered two possible responses. First, the founders might allow a few customers to use the prototype and obtain written evaluations of the product and the extent of their interest when it became available.

Second, the founders might offer the product to a few potential customers at a substantial price discount if they paid part of the cost—say one-third—up front so that the company could build it. The company could not only find out whether potential buyers existed but also demonstrate the product to potential investors in real-life installations.

In the same way, an entrepreneur might offer a proposed new service at a discount to initial customers as a prototype if the customers agreed to serve as references in marketing the service to others.

For a new product, nothing succeeds as well as letters of support and appreciation from some significant potential customers, along with “reference installations.” You can use such third-party statements—from would-be customers to whom you have demonstrated the product, initial users, sales representatives, or distributors—to show that you have indeed discovered a sound market that needs your product or service.

You can obtain letters from users even if the product is only in prototype form. You can install it experimentally with a potential user to whom you will sell it at or below cost in return for information on its benefits and an agreement to talk to sales prospects or investors. In an appendix to the business plan or in a separate volume, you can include letters attesting to the value of the product from experimental customers.

Document Your Claims

Having established a market interest, you must use carefully analyzed data to support your assertions about the market and the growth rate of sales and profits. Too often, executives think “If we’re smart, we’ll be able to get about 10% of the market” and “Even if we only get 1% of such a huge market, we’ll be in good shape.”

Investors know that there’s no guarantee a new company will get any business, regardless of market size. Even if the company makes such claims based on fact—as borne out, for example, by evidence of customer interest—they can quickly crumble if the company does not carefully gather and analyze supporting data.

One example of this danger surfaced in a business plan that came before the MIT Enterprise Forum. An entrepreneur wanted to sell a service to small businesses. He reasoned that he could have 170,000 customers if he penetrated even 1% of the market of 17 million small enterprises in the United States. The panel pointed out that anywhere from 11 million to 14 million of such so-called small businesses were really sole proprietorships or part-time businesses. The total number of full-time small businesses with employees was actually between 3 million and 6 million and represented a real potential market far beneath the company’s original projections—and prospects.

A realistic business plan needs to specify the number of potential customers, the size of their businesses, and which size is most appropriate to the offered products or services. Sometimes bigger is not better. For example, a saving of $10,000 per year in chemical use may be significant to a modest company but unimportant to a Du Pont or a Monsanto.

Such marketing research should also show the nature of the industry. Few industries are more conservative than banking and public utilities. The number of potential customers is relatively small, and industry acceptance of new products or services is painfully slow, no matter how good the products and services have proven to be. Even so, most of the customers are well known and while they may act slowly, they have the buying power that makes the wait worthwhile.

At the other end of the industrial spectrum are extremely fast-growing and fast-changing operations such as franchised weight-loss clinics and computer software companies. Here the problem is reversed. While some companies have achieved multi-million-dollar sales in just a few years, they are vulnerable to declines of similar proportions from competitors. These companies must innovate constantly so that potential competitors will be discouraged from entering the marketplace.

You must convincingly project the rate of acceptance for the product or service—and the rate at which it is likely to be sold. From this marketing research data, you can begin assembling a credible sales plan and projecting your plant and staff needs.

Address Investors’ Needs

The marketing issues are tied to the satisfaction of investors. Once executives make a convincing case for their market penetration, they can make the financial projections that help determine whether investors will be interested in evaluating the venture and how much they will commit and at what price.

Before considering investors’ concerns in evaluating business plans, you will find it worth your while to gauge who your potential investors might be. Most of us know that for new and growing private companies, investors may be professional venture capitalists and wealthy individuals. For corporate ventures, they are the corporation itself. When a company offers shares to the public, individuals of all means become investors along with various institutions.

But one part of the investor constituency is often overlooked in the planning process—the founders of new and growing enterprises. By deciding to start and manage a business, they are committed to years of hard work and personal sacrifice. They must try to stand back and evaluate their own businesses in order to decide whether the opportunity for reward some years down the road truly justifies the risk early on.

When an entrepreneur looks at an idea objectively rather than through rose-colored glasses, the decision whether to invest may change. One entrepreneur who believed in the promise of his scientific-instruments company faced difficult marketing problems because the product was highly specialized and had, at best, few customers. Because of the entrepreneur’s heavy debt, the venture’s chance of eventual success and financial return was quite slim.

The panelists concluded that the entrepreneur would earn only as much financial return as he would have had holding a job during the next three to seven years. On the downside, he might wind up with much less in exchange for larger headaches. When he viewed the project in such dispassionate terms, the entrepreneur finally agreed and gave it up.

Investors’ primary considerations are:

Cashing out

Entrepreneurs frequently do not understand why investors have a short attention span. Many who see their ventures in terms of a lifetime commitment expect that anyone else who gets involved will feel the same. When investors evaluate a business plan, they consider not only whether to get in but also how and when to get out.

Because small, fast-growing companies have little cash available for dividends, the main way investors can profit is from the sale of their holdings, either when the company goes public or is sold to another business. (Large corporations that invest in new enterprises may not sell their holdings if they’re committed to integrating the venture into their organizations and realizing long-term gains from income.)

Venture capital firms usually wish to liquidate their investments in small companies in three to seven years so as to pay gains while they generate funds for investment in new ventures. The professional investor wants to cash out with a large capital appreciation.

Investors want to know that entrepreneurs have thought about how to comply with this desire. Do they expect to go public, sell the company, or buy the investors out in three to seven years? Will the proceeds provide investors with a return on invested capital commensurate with the investment risk—in the range of 35% to 60%, compounded and adjusted for inflation?

Business plans often do not show when and how investors may liquidate their holdings. For example, one entrepreneur’s software company sought $1.5 million to expand. But a panelist calculated that, to satisfy their goals, the investors “would need to own the entire company and then some.”

Making Sound Projections

Five-year forecasts of profitability help lay the groundwork for negotiating the amount investors will receive in return for their money. Investors see such financial forecasts as yardsticks against which to judge future performance.

Too often, entrepreneurs go to extremes with their numbers. In some cases, they don’t do enough work on their financials and rely on figures that are so skimpy or overoptimistic that anyone who has read more than a dozen business plans quickly sees through them.

In one MIT Enterprise Forum presentation, a management team proposing to manufacture and market scientific instruments forecast a net income after taxes of 25% of sales during the fourth and fifth years following investment. While a few industries such as computer software average such high profits, the scientific instruments business is so competitive, panelists noted, that expecting such margins is unrealistic.

In fact, the managers had grossly—and carelessly—understated some important costs. The panelists advised them to take their financial estimates back to the drawing board and before approaching investors to consult financial professionals.

Some entrepreneurs think that the financials are the business plan. They may cover the plan with a smog of numbers. Such “spreadsheet merchants,” with their pages of computer printouts covering every business variation possible and analyzing product sensitivity, completely turn off many investors.

Investors are wary even when financial projections are solidly based on realistic marketing data because fledgling companies nearly always fail to achieve their rosy profit forecasts. Officials of five major venture capital firms we surveyed said they are satisfied when new ventures reach 50% of their financial goals. They agreed that the negotiations that determine the percentage of the company purchased by the investment dollars are affected by this “projection discount factor.”

The Development Stage

All investors wish to reduce their risk. In evaluating the risk of a new and growing venture, they assess the status of the product and the management team. The farther along an enterprise is in each area, the lower the risk.

At one extreme is a single entrepreneur with an unproven idea. Unless the founder has a magnificent track record, such a venture has little chance of obtaining investment funds.

At the more desirable extreme is a venture that has an accepted product in a proven market and a competent and fully staffed management team. This business is most likely to win investment funds at the lowest costs.

Entrepreneurs who become aware of their status with investors and think it inadequate can improve it. Take the case of a young MIT engineering graduate who appeared at an MIT Enterprise Forum session with written schematics for the improvement of semiconductor-equipment production. He had documented interest by several producers and was looking for money to complete development and begin production.

The panelists advised him to concentrate first on making a prototype and assembling a management team with marketing and financial know-how to complement his product-development expertise. They explained that because he had never before started a company, he needed to show a great deal of visible progress in building his venture to allay investors’ concern about his inexperience.

Once investors understand a company qualitatively, they can begin to do some quantitative analysis. One customary way is to calculate the company’s value on the basis of the results expected in the fifth year following investment. Because risk and reward are closely related, investors believe companies with fully developed products and proven management teams should yield between 35% and 40% on their investment, while those with incomplete products and management teams are expected to bring in 60% annual compounded returns.

Investors calculate the potential worth of a company after five years to determine what percentage they must own to realize their return. Take the hypothetical case of a well-developed company expected to yield 35% annually. Investors would want to earn 4.5 times their original investment, before inflation, over a five-year period.

After allowing for the projection discount factor, investors may postulate that a company will have $20 million annual revenues after five years and a net profit of $1.5 million. Based on a conventional multiple for acquisitions of ten times earnings, the company would be worth $15 million in five years.

If the company wants $1 million of financing, it should grow to $4.5 million after five years to satisfy investors. To realize that return from a company worth $15 million, the investors would need to own a bit less than one-third. If inflation is expected to average 7.5% a year during the five-year period, however, investors would look for a value of $6.46 million as a reasonable return over five years, or 43% of the company.

For a less mature venture—from which investors would be seeking 60% annually, net of inflation—a $1 million investment would have to bring in close to $15 million in five years, with inflation figured at 7.5% annually. But few businesses can make a convincing case for such a rich return if they do not already have a product in the hands of some representative customers.

The final percentage of the company acquired by the investors is, of course, subject to some negotiation, depending on projected earnings and expected inflation.

Make It Happen

The only way to tend to your needs is to satisfy those of the market and the investors—unless you are wealthy enough to furnish your own capital to finance the venture and test out the pet product or service.

Of course, you must confront other issues before you can convince investors that the enterprise will succeed. For example, what proprietary aspects are there to the product or service? How will you provide quality control? Have you focused the venture toward a particular market segment, or are you trying to do too much? If this is answered in the context of the market and investors, the result will be more effective than if you deal with them in terms of your own wishes.

An example helps illustrate the potential conflicts. An entrepreneur at an MIT Enterprise Forum session projected R&D spending of about half of gross sales revenues for his specialty chemical venture. A panelist who had analyzed comparable organic chemical suppliers asked why the company’s R&D spending was so much higher than the industry average of 5% of gross revenues.

The entrepreneur explained that he wanted to continually develop new products in his field. While admitting his purpose was admirable, the panel unanimously advised him to bring his spending into line with the industry’s. The presenter ignored the advice; he failed to obtain the needed financing and eventually went out of business.

Once you accept the idea that you should satisfy the market and the investors, you face the challenge of organizing your data into a convincing document so that you can sell your venture to investors and customers. We have provided some presentation guidelines in the insert called “Packaging Is Important.”

Packaging Is Important

A business plan gives financiers their first impressions of a company and its principals.

Potential investors expect the plan to look good, but not too good; to be the right length; to clearly and cisely explain early on all aspects of the company’s business; and not to contain bad grammar and typographical or spelling errors.

Investors are looking for evidence that the principals treat their own property with care—and will likewise treat the investment carefully. In other words, form as well as content is important, and investors know that good form reflects good content and vice versa.

Among the format issues we think most important are the following:

The binding and printing must not be sloppy; neither should the presentation be too lavish. A stapled compilation of photocopied pages usually looks amateurish, while bookbinding with typeset pages may arouse concern about excessive and inappropriate spending. A plastic spiral binding holding together a pair of cover sheets of a single color provides both a neat appearance and sufficient strength to withstand the handling of a number of people without damage.

A business plan should be no more than 40 pages long. The first draft will likely exceed that, but editing should produce a final version that fits within the 40-page ideal. Adherence to this length forces entrepreneurs to sharpen their ideas and results in a document likely to hold investors’ attention.

Background details can be included in an additional volume. Entrepreneurs can make this material available to investors during the investigative period after the initial expression of interest.

The Cover and Title Page

The cover should bear the name of the company, its address and phone number, and the month and year in which the plan is issued. Surprisingly, a large number of business plans are submitted to potential investors without return addresses or phone numbers. An interested investor wants to be able to contact a company easily and to request further information or express an interest, either in the company or in some aspect of the plan.

Inside the front cover should be a well-designed title page on which the cover information is repeated and, in an upper or a lower corner, the legend “Copy number______” provided. Besides helping entrepreneurs keep track of plans in circulation, holding down the number of copies outstanding—usually to no more than 20—has a psychological advantage. After all, no investor likes to think that the prospective investment is shopworn.

The Executive Summary

The two pages immediately following the title page should concisely explain the company’s current status, its products or services, the benefits to customers, the financial forecasts, the venture’s objectives in three to seven years, the amount of financing needed, and how investors will benefit.

This is a tall order for a two-page summary, but it will either sell investors on reading the rest of the plan or convince them to forget the whole thing.

The Table of Contents

After the executive summary include a well-designed table of contents. List each of the business plan’s sections and mark the pages for each section.

Even though we might wish it were not so, writing effective business plans is as much an art as it is a science. The idea of a master document whose blanks executives can merely fill in—much in the way lawyers use sample wills or real estate agreements—is appealing but unrealistic.

Businesses differ in key marketing, production, and financial issues. Their plans must reflect such differences and must emphasize appropriate areas and deemphasize minor issues. Remember that investors view a plan as a distillation of the objectives and character of the business and its executives. A cookie-cutter, fill-in-the-blanks plan or, worse yet, a computer-generated package, will turn them off.

Write your business plans by looking outward to your key constituencies rather than by looking inward at what suits you best. You will save valuable time and energy this way and improve your chances of winning investors and customers.

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Blog Business

How to Write a Business Plan Outline [Examples + Templates]

By Letícia Fonseca , Jul 18, 2022

When it comes to writing a business plan, getting started is the biggest challenge.

So how can you avoid staring at a blank page for hours on end? Start with a business plan outline.

With anything in life, an outline can give you the clarity you need to tackle an overwhelming task. This is especially true when drafting crucial documents for your success, like a business plan .

In fact, businesses with clear plans are 16% more likely to succeed , showing more focus and commitment than businesses without plans.

But I know, a business plan is a huge document and it can be confusing to create an outline, too. That’s why I’ve gathered all the information you’ll need to write a business plan outline. No sweat.

Read on for answers to all your business plan outline questions or jump ahead for some handy templates.

Click to jump ahead:

What is a business plan outline (and why do you need one), what format should you choose for your business plan outline, what are the key components of a business plan outline.

A business plan outline is the backbone of your business plan. It contains all the most important information you’ll want to expand on in your full-length plan.

Think of it this way: your outline is a frame for your plan. It provides a high-level idea of what the final plan should look like, what it will include and how all the information will be organized.

Why would you do this extra step? Beyond saving you from blank page syndrome, an outline ensures you don’t leave any essential information out of your plan — you can see all the most important points at a glance and quickly identify any content gaps.

It also serves as a writing guide. Once you know all the sections you want in your plan, you just need to expand on them. Suddenly, you’re “filling in the blanks” as opposed to writing a plan from scratch!

Incidentally, using a business plan template like this one gives you a running head start, too:

Perhaps most importantly, a business plan outline keeps you focused on the essential parts of your document. (Not to mention what matters most to stakeholders and investors.) With an outline, you’ll spend less time worrying about structure or organization and more time perfecting the actual content of your document.

If you’re looking for more general advice, you can read about how to create a business plan here . But if you’re working on outlining your plan, stick with me.

Return to Table of Contents

Most business plans fit into one of two formats.

The format you choose largely depends on three factors: (1) the stage of your business, (2) if you’re presenting the plan to investors and (3) what you want to achieve with your business plan.

Let’s have a closer look at these two formats and why you might choose one over the other.

Traditional format

Traditional business plans are typically long, detailed documents. In many cases, they take up to 50-60 pages, but it’s not uncommon to see plans spanning 100+ pages.

Traditional plans are long because they cover every aspect of your business. They leave nothing out. You’ll find a traditional business plan template with sections like executive summary, company description, target market, market analysis, marketing plan, financial plan, and more. Basically: the more information the merrier.

This business plan template isn’t of a traditional format, but you could expand it into one by duplicating pages:

Due to their high level of detail, traditional formats are the best way to sell your business. They show you’re reliable and have a clear vision for your business’s future.

If you’re planning on presenting your plan to investors and stakeholders, you’ll want to go with a traditional plan format. The more information you include, the fewer doubts and questions you’ll get when you present your plan, so don’t hold back.

Traditional business plans require more detailed outlines before drafting since there’s a lot of information to cover. You’ll want to list all the sections and include bullet points describing what each section should cover.

It’s also a good idea to include all external resources and visuals in your outline, so you don’t have to gather them later.

Lean format

Lean business plan formats are high level and quick to write. They’re often only one or two pages. Similar to a business plan infographic , they’re scannable and quick to digest, like this template:

This format is often referred to as a “startup” format due to (you guessed it!) many startups using it.

Lean business plans require less detailed outlines. You can include high-level sections and a few lines in each section covering the basics. Since the final plan will only be a page or two, you don’t need to over prepare. Nor will you need a ton of external resources.

Lean plans don’t answer all the questions investors and stakeholders may ask, so if you go this route, make sure it’s the right choice for your business . Companies not yet ready to present to investors will typically use a lean/startup format to get their rough plan on paper and share it internally with their management team.

Here’s another example of a lean business plan format in the form of a financial plan:

Your business plan outline should include all the following sections. The level of detail you choose to go into will depend on your intentions for your plan (sharing with stakeholders vs. internal use), but you’ll want every section to be clear and to the point.

1. Executive summary

The executive summary gives a high-level description of your company, product or service. This section should include a mission statement, your company description, your business’s primary goal, and the problem it aims to solve. You’ll want to state how your business can solve the problem and briefly explain what makes you stand out (your competitive advantage).

Having an executive summary is essential to selling your business to stakeholders , so it should be as clear and concise as possible. Summarize your business in a few sentences in a way that will hook the reader (or audience) and get them invested in what you have to say next. In other words, this is your elevator pitch.

2. Product and services description

This is where you should go into more detail about your product or service. Your product is the heart of your business, so it’s essential this section is easy to grasp. After all, if people don’t know what you’re selling, you’ll have a hard time keeping them engaged!

Expand on your description in the executive summary, going into detail about the problem your customers face and how your product/service will solve it. If you have various products or services, go through all of them in equal detail.

3. Target market and/or Market analysis

A market analysis is crucial for placing your business in a larger context and showing investors you know your industry. This section should include market research on your prospective customer demographic including location, age range, goals and motivations.

You can even include detailed customer personas as a visual aid — these are especially useful if you have several target demographics. You want to showcase your knowledge of your customer, who exactly you’re selling to and how you can fulfill their needs.

Be sure to include information on the overall target market for your product, including direct and indirect competitors and how your industry is performing. If your competitors have strengths you want to mimic or weaknesses you want to exploit, this is the place to record that information.

4. Organization and management

You can think of this as a “meet the team” section — this is where you should go into depth on your business’s structure from management to legal and HR. If there are people bringing unique skills or experience to the table (I’m sure there are!), you should highlight them in this section.

The goal here is to showcase why your team is the best to run your business. Investors want to know you’re unified, organized and reliable. This is also a potential opportunity to bring more humanity to your business plan and showcase the faces behind the ideas and product.

5. Marketing and sales

Now that you’ve introduced your product and team, you need to explain how you’re going to sell it. Give a detailed explanation of your sales and marketing strategy, including pricing, timelines for launching your product and advertising.

This is a major section of your plan and can even live as a separate document for your marketing and sales teams. Here are some marketing plan templates to help you get started .

Make sure you have research or analysis to back up your decisions — if you want to do paid ads on LinkedIn to advertise your product, include a brief explanation as to why that is the best channel for your business.

6. Financial projections and funding request

The end of your plan is where you’ll look to the future and how you think your business will perform financially. Your financial plan should include results from your income statement, balance sheet and cash flow projections.

State your funding requirements and what you need to realize the business. Be extremely clear about how you plan to use the funding and when you expect investors will see returns.

If you aren’t presenting to potential investors, you can skip this part, but it’s something to keep in mind should you seek funding in the future. Covering financial projections and the previous five components is essential at the stage of business formation to ensure everything goes smoothly moving forward.

7. Appendix

Any extra visual aids, receipts, paperwork or charts will live here. Anything that may be relevant to your plan should be included as reference e.g. your cash flow statement (or other financial statements). You can format your appendix in whatever way you think is best — as long as it’s easy for readers to find what they’re looking for, you’ve done your job!

Typically, the best way to start your outline is to list all these high-level sections. Then, you can add bullet points outlining what will go in each section and the resources you’ll need to write them. This should give you a solid starting point for your full-length plan.

Business plan outline templates

Looking for a shortcut? Our business plan templates are basically outlines in a box!

While your outline likely won’t go into as much detail, these templates are great examples of how to organize your sections.

Traditional format templates

A strong template can turn your long, dense business plan into an engaging, easy-to-read document. There are lots to choose from, but here are just a few ideas to inspire you…

You can duplicate pages and use these styles for a traditional outline, or start with a lean outline as you build your business plan out over time:

Lean format templates

For lean format outlines, a simpler ‘ mind map ’ style is a good bet. With this style, you can get ideas down fast and quickly turn them into one or two-page plans. Plus, because they’re shorter, they’re easy to share with your team.

Writing tips to ace your business plan outline

Business plans are complex documents, so if you’re still not sure how to write your outline, don’t worry! Here are some helpful tips to keep in mind when drafting your business plan outline:

If this is your first time writing a business plan outline, don’t be too hard on yourself. You might not get it 100% right on the first try, but with these tips and the key components listed above, you’ll have a strong foundation. Remember, done is better than perfect.

Create a winning business plan by starting with a detailed, actionable outline

The best way to learn is by doing. So go ahead, get started on your business plan outline. As you develop your plan, you’ll no doubt learn more about your business and what’s important for success along the way.

A clean, compelling template is a great way to get a head start on your outline. After all, the sections are already separated and defined for you!

Explore Venngage’s business plan templates for one that suits your needs. Many are free to use and there are premium templates available for a small monthly fee. Happy outlining!

IMAGES

The Format Of A Business Plan : Free Startup Business Plan Templates
7+ Business Plan Outline Templates
Business Plan Outline in Word and Pdf formats
7+ Business Plan Outline Templates
Business plan outline
Free PDF Business Plan Templates

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How to Write a Business Plan
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How To Start Your Own Business

COMMENTS

How to Make a Financial Plan for Your Business
Preparing a financial plan for your business is important if you plan to pursue business finance options such as loans, according to Inc. Business finance companies look at the short-term viability as well as the long-term potential of a bu...
How to Make a Retirement Plan
There are a few simple things you can do to make planning for the future easier. Things like establishing a savings habit, making it automatic, and calculating how much you’ll need.
Writing a Business Plan
While it may be tempting to put off, creating a business plan is an essential part of starting your own business. Plans and proposals should be put in a clear format making it easy for potential investors to understand.
How to Write a Business Plan Outline [2022 Guide & Format]
A traditional business plan typically includes—an executive summary, an overview of your products and services, thorough market and industry
Write your business plan
Traditional business plan format · Executive summary · Company description · Market analysis · Organization and management · Service or product line · Marketing and
How to Write a Business Plan Outline
Business Plan Outline · Executive Summary · Note · Business Description · Market Analysis · Competitive Analysis · Sales and Marketing Plan · Note.
Practical example of a business plan outline
reach: why do you think you will be able to touch most of your potential customers through that channel? cost: why do you think this will be cost-effective?
The Perfect Business Plan Layout & Outline for a Great Plan
A business plan outline allows you to organize your plan and present it in the format that's most compelling to readers. Also, by starting with your outline
How To Write the Perfect Business Plan in 9 Steps (2023)
How to write a business plan in 9 steps. Draft an executive summary; Describe your company; Perform a market analysis; Outline the management
Sample Business Plan Outline
This business plan outline was created by Sharon James, Many Eagles Development
How to Write a Business Plan, Step by Step
1. Write an executive summary · 2. Describe your company · 3. State your business goals · 4. Describe your products and services · 5. Do your market
Business Plan Outline
1 - Executive Summary. The Executive Summary is the most important part of your business plan. · 2 - Company Overview · 3 - Market Overview · 4 -
How to Write a Winning Business Plan
It must describe the company or proposed project accurately and attractively. Even though its subject is a moving target, the plan must detail the company's or
How to Write a Business Plan Outline [Examples + Templates]
A business plan outline is the backbone of your business plan. It contains all the most important information you'll want to expand on in your