How to write a business plan

In a world where 20% of small businesses fail within their first year, having the right plan can mean the difference between flourishing and floundering. Do you have a strategy in place for your company? If not, it’s never too late to start.

Choose a business plan template from one of the options we list below, or feel free to create your own with our step-by-step guide.

The importance of business planning

A successful business starts with the right plan. The best business plans provide a clear roadmap for the future, helping you flesh out your business ideas and create measurable goals as well as a plan to achieve them.

Writing a business plan can bring several benefits to your small business. They can help you to:

Articulate your strategic goals

First and foremost, a business plan can help you articulate your goals and create actionable steps to achieve them. This may be particularly helpful for small businesses that rely on a management team.

Having a shared business plan can keep your core staff on the same page about your company’s future direction, while also providing a shared definition of success.

Obtain financing

Small business owners may find themselves in need of financing or a small business loan as their company grows. In most cases, lenders will expect to see some documentation about the company prior to approving a loan. A business plan may prove necessary to obtain the funding your company needs.

Form business partnerships

A clear business plan can give your company a greater sense of legitimacy. As you seek new business partners and investors, your plan forms the basis from which to provide a clear description of your company, as well as an outline of the benchmarks you hope to meet on your journey toward success.

Free business plan templates

Thankfully, creating your own business plan doesn’t mean you have to start from scratch. There are many free templates available online that you can adapt to the unique needs of your company.

If you’re not sure where to begin, try using a free business plan template from the list below.

Microsoft Office

You can easily download a business plan template from the collection at Microsoft Office. There you’ll find several options to choose from — you can even download PowerPoint templates that can be used to create a business presentation.

U.S. Small Business Administration

The U.S. Small Business Administration provides a professional business plan template that can be filled out online and downloaded as a PDF document. The online template is a long document, but it could be a good business plan template for those looking to include detailed information about their company.

The SBA website allows you to save your progress as you go, so you don’t have to complete the plan in one sitting either!

Score PDF templates

Many entrepreneurs are already familiar with Score, a non-profit organization that focuses on helping small businesses get off the ground. Their website has  a business plan template PDF in addition to a Word document that can be downloaded and edited.

If this is your first time creating a business plan, you may especially appreciate the “Refining the Plan” resource that helps you to hone your business strategy and lay out a meaningful path for the future.

RocketLawyer

RocketLawyer offers a variety of free business plan templates, but their main advantage is that users can select their state before they even get started. This could be a great business plan template for users who need to tailor their plan to their state’s unique business requirements.

Santa Clara University’s My Own Business Institute

Santa Clara University features the My Own Business Institute (MOBI), an initiative of its Center for Entrepreneurship and Innovation at the Leavey School of Business.

You can download a free, simple template in the form of a Word document or download each of the 15 business plan sections individually. The MOBI website has additional resources for entrepreneurs, including tools for reviewing your final plan and sample financial worksheets.

SME Toolkit

The SME Toolkit is a joint project of IFC and IBM. This site can be used to craft a sample plan that can be adapted to meet the requirements of financial authorities in the U.S. It also has business resources for market analysis and management strategies.

These tools can streamline the entire planning process and make it easier to understand the various components that comprise a traditional business plan.

How to write your own business plan

Not every business owner will be satisfied with a simple template like the ones listed above. You may decide to write a business plan on your own — in which case we’re here to guide you.

Traditional business plans typically include the following key sections:

Executive summary

Your executive summary should briefly lay out what your company is and why it will be successful. You should make sure to include such information as:

• Official business name
• Mission statement
• Product or service
• Basic information about the key people in your organization

If your business plan includes a request for funding, you should also include any details on high-level growth strategies in your executive summary.

Company description

Describe your company in detail. What problems do you claim to solve? How does your business offer an advantage over its competitors?

This is the place where you want to brag a little. If you have any experts on your team, make it a point to describe their years of experience.

Market analysis

Next you’ll want to demonstrate that you’ve done your due diligence when it comes to market research. Who’s your target market? How do you intend to reach them?

This may also be a place where competitive analysis can be helpful, showing how your business addresses a need in a way that is superior to or unique from others in your industry.

Organization and management team

This is the section where you want to be clear about how your business is legally structured (a limited liability company, S-corporation, etc.).

It’s also important to clearly identify the key members of your leadership team. You can illustrate their relationship through some type of organizational chart.

Basically, this section goes into greater technical detail than your earlier company description and gives readers a better understanding of the “nuts and bolts” of your business.

Description of services

Your business plan also needs to include a list of your products or services. This should feature some basic information from your market research, showing how your company’s goods or services meet a particular customer niche.

What if your products are still in development? You can use this space to explain plans for any intellectual property (e.g., copyright or patent filings) or to communicate the research and development process for your service or product.

Marketing strategy

Earlier you identified your target market; now you’ll describe your plan for reaching them. A marketing plan is subject to change, but your immediate goal should be to visualize how you expect to make your initial sales. This will become important in a later section of your business plan, where you can use your marketing plan to create a sales forecast and strategize about your future success.

Funding request

Not every business plan will include a request for funding. But if you anticipate needing additional assets to cover your day-to-day operations or for your company’s immediate growth, you can put this request in writing in this section.

You’ll need to be as specific as possible. How much money do you anticipate needing? What key resources will be necessary to sustain your business?

Providing as much detail as possible can help potential investors feel confident in the health and longevity of your company.

Financial projections

Financial projections can enhance your business plan, regardless of whether you make a request for additional funding or not.

Here, your financial forecasts should demonstrate the strength of your company and your future success.

When you’re working within an established business, you should include data from the last five years, including:

• Income statements
• Balance sheet
• Cash flow statements
• Any collateral that could be used for a loan

Established businesses should also provide a projection for the next five years, explaining how the other aspects of your business plan will translate into tangible success. Charts and graphs can be particularly helpful in summarizing the history and trajectory of your company.

Appendix

Finally, some business plans can be enhanced by providing resources in an appendix. Use this section to include any additional data that may be relevant for your company or your target audience.

A recent income statement, for example, could enhance the historic data you’ve included in the previous sections of your business plan.

How to write a lean business plan

A traditional business plan is an extensive document, providing a detailed analysis of every aspect of your company. It may be worth investing time into writing this plan in order to refine your core strategy.

But some entrepreneurs find that their business planning process is ongoing and evolves as their business grows. If this sounds familiar, you may want to consider a lean business plan.

Unlike a traditional business plan, lean business plans present a brief overview of your company’s key activities and are sometimes short enough to fit on a single page.

This simple business plan should include the following features:

Key partnerships

When you write a business plan for your company, you’ll want to note the other businesses that you’ll be working with, such as:

• Suppliers
• Manufacturers
• Subcontractors

Essentially, all of your business relationships should be listed in this section. This includes any third-party contractors, including digital accounting or invoicing support.

Key activities

Summarize the ways your business offers a competitive advantage. Be specific, listing the things that set your company apart and enable you to connect with your target market.

Key resources

Business resources include anything that adds value to your customer base. This could refer to:

• Financial resources
• Staff and personnel
• Intellectual property 

Some entrepreneurs may also be able to take advantage of resources that are specifically provided for black or female entrepreneurs, for example.

Value proposition

Describe your company’s unique value to the market or industry. As before, you’ll want to be specific. What need does your business address that other companies do not? What makes your company unique when compared to similar businesses in your industry?

Customer relationships

How do you intend to have customers interact with your business? Will you offer in-person customer support or will your company be exclusively devoted to e-commerce? What automated features will customers interact with?

In essence, you’ll want to explain the customer experience from start to finish.

Customer segments

A summary of your market analysis belongs in this section. Whom do you intend to reach? Clearly identifying your customer base can help you refine your strategy later on, and it can also help with preliminary financial projections.

Channels

Communication is key. Once you’ve identified your customer base, how do you intend to reach them? This is partly related to your marketing plan, but more broadly, it refers to the diverse platforms that will be used to connect with your audience (email, social media, in-person events, etc.).

Cost structure

Some companies are focused on reducing costs, while others are aimed at maximizing value. Determine your strategy and then describe the costs you’ll encounter while pursuing your business objectives.

Revenue streams

Most importantly, you’ll need to explain how you intend to actually make money. This might include:

• Direct sales
• Membership fees
• Specific service
• Selling advertising space

Including this in your simple business plan can ensure that your strategy leads to specific, measurable growth.

Plan for your future

Writing a business plan isn’t necessarily a one-and-done event. In today’s modern fast-moving climate, entrepreneurs may find themselves continually refining their plan, honing their strategies to move closer to their goals. We’re here to help small business owners and freelancers every step of the way. Curious if we could benefit your business? Try Invoice2go free for 30 days.