A good business plan guides you through each stage of starting and managing your business. You’ll use your business plan as a roadmap for how to structure, run, and grow your new business. It’s a way to think through the key elements of your business.

Business plans can help you get funding or bring on new business partners. Investors want to feel confident they’ll see a return on their investment. Your business plan is the tool you’ll use to convince people that working with you — or investing in your company — is a smart choice.

A business plan is more than a document. It’s a guide that helps you outline and achieve your goals. It’s also a management tool that allows you to analyze results, make strategic decisions, and showcase how your business will operate, and grow.

In short, if you’re thinking of starting a business or plan to pitch your business to investors, writing a business plan can improve your chances of success. This article will show you how to get your plan done without any complexity or frustration.

• What Are The 5 Elements of a Business Plan?
• What Are The 10 Steps to Writing a Business Plan?
• How do I Write a Business Plan For Myself?
• What Are The 4 Types of Business Plans?
• Simple Business Plan Example
• Business Plan Example For Students
• Business Plan Template
• Business Plan Format
• Free Business Plan
• What Are The 7 Parts of Business Plan?
• What Are The 12 Components of a Business Plan?

What Are The 5 Elements of a Business Plan?

Different companies require different types of business plan. Depending on your business model, your revenue structure and many other factors.

However, there are 5 elements of a business plan that are absolutely key to making sure that the reader understands how your company works and plans on growing.

1. Executive Summary

The Executive Summary is the first section of your business plan, and also the last one you should write. It represents the reader’s first impression of your business. As a result, it will likely define their opinion as they continue reading the business plan.

Read Also: How to Write a Business Proposal

A good Executive Summary includes key facts about your business such as:

• Business & product description;
• Current positioning & targeting;
• Financial outlook & requirements;
• Past and future achievements & goals.

However, the most important function that a great Executive Summary serves is communicating to the reader why they should read the rest of the business plan, and why you want them to.

2. Business Overview

After the Executive Summary, a business plan starts with a comprehensive explanation of what your business proposition is and how it relates to the market where your company operates.

In this section of the business plan, you should explain precisely:

• what your company does;
• what are its products or services;
• in which market it operates;
• who are its customers.

When describing your business, you should make sure to that the reader knows what kind of market environment your business operates in, but also how it can thrive in such an environment from a competitive point of view.

For some very niche or particularly innovative sectors, this may mean that you need to inform the readers about specific market dynamics.

In these cases, make sure that you clarify what is considered ‘the industry standard‘ in your sector, the selling points that current players are competing on and how your business is positioned relative to them.

Make sure to include:

• Your mission statement;
• The philosophy, vision and goals of your company;
• Your industry and target audience;
• The structure of your business, detailing your customers, suppliers, partners and competitors;
• Your products and services and the problem they solve;
• Unique Selling Point(s).

If the company already has a well-defined product or service, this section can be divided into Company Description and Products & Services.

3. Sales & Marketing Strategy

This section of the business plan requires a deep understanding of your market space and how your business positions itself within its niche and competes with existing players.

Within your Sales & Marketing strategy, you should outline:

• A definition of your target market – include its size, existing and emerging trends and your projected market share;
• An assessment of your market – this should summarise how attractive your target market is to your company and why, Porter’s Five Forces or the more recent Six Forces Model are useful tools to define this;
• Threats & Opportunities – you can use a SWOT Analysis to present these;
• Product/Service Features – once you have thoroughly described your product/service, make sure to highlight its Unique Selling Points, as well as any complementary offerings and after-sale services;
• Target Consumers – whether you’re a B2B or B2C company, it’s a good idea to include an ideal customer profile to describe exactly what niche(s) you are going to target;
• Key Competitors – research and analyse any other players inside or outside your market whose offering might compete with you directly or indirectly;
• Positioning – explain in a short paragraph how your company differentiates from your competitors and how it presents itself to your target niche;
• Marketing Plan & Budget – outline the marketing and advertising tactics you will use to promote your business, giving an overview of your brand and of the communication elements that support it;
• Pricing – explain how your pricing strategy fits within the competition and how it relates to your positioning;

A very common mistake that should be avoided is writing that you have no competition. Instead, you should show your efforts in researching your competitors and assessing how they could threaten your business.

4. Operations & Management

This section gives you the opportunity to explain to the reader how your company does things differently.

The people and processes that allow your business to operate on a daily basis are the keys to your competitive advantage. In fact, they help you build a better product, deliver it more efficiently or at a lower cost. Your Operations & Management must be able to successfully realize what you ‘promised’ in the previous sections.

Here, you must demonstrate how much you know about your business, so don’t leave out any relevant detail. Be concise but thorough, focus on two main points:

1. Operational Plan – this section outlines all the day-to-day operations of the business. It involves detailing all the processes and resources that the company requires for each of its activities. You should include:
   • Production or Service Delivery;
   • Quality Control;
   • Inventory;
   • Suppliers;
   • Credit policies;
   • Legal environment;
   • Location.
2. Organizational Structure – this is an overview of all the people involved in your business and their position in relation to each other. You should detail the experience of the existing team, as well as the roles that haven’t been filled yet. Include advisors and non-executive directors.
   Investors and banks will also look at this section to get an idea of salary costs. As these are normally a significant cost center, don’t overestimate your staff needs.

5. Financial Plan

Your Financial Plan is possibly the most important element of your business plan. This is especially true if the business plan is aimed at investors or lenders.

This section includes projections, budgets and goals that are unique to each business. In particular, you should focus on explaining the assumptions on which you based your forecasts, more than on the forecasts themselves. Every good Financial Plan will include:

• 12-month Profit & Loss Projection – A month-by-month forecast of sales, operating costs, tax and profits for the following year. Sometimes three years.
• Cash Flow Statement & Forecast – This financial statement tracks the amount of cash that leaves or enters the business at any given time.
• Breakeven Analysis – This is a cornerstone of your business plan. Here you should show what level of projected sales allows the business to cover its costs.
• Capital Requirements – This point is fundamental as it shows investors what their money will be spent on. It should contain a summary of all the expenses for big purchases and day-to-day running costs.

What Are The 10 Steps to Writing a Business Plan?

1. Cover Page

Just like those essays you used to write for school, you’ll need a cover page for your business plan. Include your logo, the title of your plan, business name, contact information (including address), the date you completed the plan, and a confidentiality statement.

Your confidentiality statement needs to state that they should not share the business plan with a third party, nor should it be reproduced.

2. Introduction

Now it’s time to set the scene. Write a detailed overview that includes your business’s name, its purpose, and your target market. You should also explain your sources of revenue and anticipated funding. Your introduction should be no more than a page. Keep your words simple and professional, and sentences concise.

3. The Executive Summary

Consider this page a summary of what your entire business plan is all about. Some investors may not have the time to go through your entire document, so this page should give them a pretty good picture of your business and all the important numbers. Make your business sound like it’s too good of an opportunity to pass up.

4. The Strategy, Mission, and Vision

Now, write your vision statement. A vision statement answers the who, what, why, and how of your business briefly. It should only be about a paragraph long.

On a new line, write your mission statement. It will be shorter than the vision statement. It should state your business’s intent and how it accomplishes this intent.

Present your strategy, as well. How will you get your business to head in a certain direction? State briefly how your team plans to lead your business.

5. SWOT Analysis

A SWOT analysis lists the key strengths, weaknesses, opportunities, and threats that will affect your business. You will typically create a SWOT matrix (a table with four separate headings) and brainstorm with your team. Format a clean, typed version of your matrix for your business plan.

Explain how you came to your conclusions. Even though you want to highlight your strengths and opportunities, part of being a good business owner is knowing where you lack.

Providing those who read your business plan a thorough SWOT analysis will show them that you understand the business market that you are going into. A potential investor will see that you are not going into the business blindly.

6. Marketing Strategies

After identifying your strengths, weaknesses, opportunities, and threats, present a marketing strategy to address each issue. A marketing strategy outlines how you will stand up against the competition and break into the market. You also need to write a well-thought-out marketing budget in this section of your business plan.

7. Business Structure

No matter what your venture is, you need a business structure. A business structure determines how the IRS will treat you come tax season and what should happen in case of legal issues. The common structures are Sole Proprietorship, Partnership, and Limited Liability Company (LLC).

Once you have established your business structure, write in your business plan:

• The rights of each team member/investor and their positions
• Management style
• Communication chain
• Process for filing customer complaints

…and whatever else is relevant to your business structure.

8. Operational and Management Plan

The operational plan will give a detailed account of how you plan to carry out your daily business. It also gives details such as where your business’s address, its infrastructure, your supply chain, methods of distribution, and quality control.

Your management plan goes into detail about each team member’s role. It also includes the cost of running the business via the management team. Be sure to list the board members, any advisory team that will oversee your business and their remuneration.

9. Conclusion & Exit Strategy

This part of your business plan should summarize the highlights of your plan. Should anyone skip right to the last page — and they very well may — you need to give them a decent overview of what the business plan covers.

It should also include an exit strategy for your business if things fall through with a partner or you decide to shut down your business. Investors are just as interested in your exit as they are in your entrance.

10. Review

Review your plan thoroughly. Consider having someone read it through and give you recommendations for edits. Take this feedback and make amendments.

The more organized your business plan, the better you and your audience can visualize your business. It may seem like a bother to put together, but it is a key document. Take it step-by-step. Soon enough, you’ll see that it’s all ready for you to present!

How do I Write a Business Plan For Myself?

Creating a plan can clarify your objectives for the coming year but don’t just shove it in drawer. It is something that should become weekly, if not daily, reading material.

1. Start with a simple brainstorming list. 

Break down your role in the company into small parts and be sure it’s comprehensive. This could mean taking each department that you oversee or are involved in, and breaking it down into further segments.

For instance, for your company’s graphic design department, you would create separate objectives for its leadership development, equipment and software needs, anticipated hiring, the continued education plan, and efficiency.

2. Prioritize objectives. 

Your brainstorming list probably contains an overwhelming number of potential starting points. The key is narrowing them down into a manageable and realistic number of goals. Since you’ll review the finished personal business plan often, don’t  write a novel.

 A user-friendly one- to a two-page document will do the trick. Take your brainstorming list and organize it according to the biggest potential impact. You’ll also have some must-dos (if not tackled business will fall apart). Then you’ll have some items that aren’t necessary or don’t require much of your focus and perhaps can be delegated.  

CEO, Duane Hixon, does a wonderful job of narrowing down his list into what he refers to as his “rocks.” These are the biggest areas of impact, the areas to which a person should offer most of his or her attention. These will make up the heart of the personal business plan. 

3. Be specific.

Once you’ve narrowed things down to a handful of rocks, be sure the plan includes specifics that will allow you to measure and track progress. For this year’s plan, one of my rocks was maintaining company culture while building the team.

Obviously, this is a broad, difficult-to-measure objective. For your plan, you might develop a strategy for accomplishing the mission by including more details such as creating a company culture slide show and a plan for both current employees and new hires.  

4. Set challenges but be realistic. 

A goal that doesn’t take much effort to accomplish isn’t really a goal. Setting an objective that has a slim chance of realization, however, amounts to little more than a hope and can leave you feeling discouraged. Aim for a perfect balance between the two — something that stretches you but doesn’t break you. 

5. Set deadlines.

The beautiful thing about your personal business plan is that it’s yours. You don’t have to wait until the start of a new year to create one. While I create a plan annually, that doesn’t mean that each objective has a deadline that’s one year out. Set a deadline no matter what it is to keep you focused and provide a call to action (as opposed to adopting an open-ended objective). 

6. Share the plan.

We recommend that you show your plan to a colleage whom you respect. Ask for feedback. This individual may think of an angle you have not.  Equally important, this person will hold you accountable.

It’s a lot tougher to hit the eject button on a plan after you’ve shared it with someone you respect. And everyone can use a cheerleader in the workplace from time to time.  

It’s good when an employee shares a plan. It shows initiative and forward-thinking. There are few things more impressive than when an employee has clear-cut objectives and works hard to meet them.  

7. Revisit the plan weekly. 

Creating the plan is just the first step. Put the plan in a prominent spot where you’re going to remember to review it or place reminders in your calendar.If you’ve got a great plan, it can and will inspire you every time you see it.

What Are The 4 Types of Business Plans?

Business plans can be divided roughly into four distinct types. There are very short plans, or miniplans, presentation plans or decks, working plans, and what-if plans. They each require very different amounts of labor and not always with proportionately different results.

That is to say, a more elaborate plan isn’t guaranteed to be superior to an abbreviated one. Success depends on various factors and whether the right plan is used in the right setting. For example, a new hire may not want to read the same, elaborate version of your plan that might be important to a potential investor.

The Miniplan

The miniplan is preferred by many recipients because they can read it or download it quickly to read later on their iPhone or tablet. You include most of the same ingredients that you would in a longer plan, but you cut to the highlights while telling the same story.

For a small-business venture, it’s typically all that you need. For a more complex business, you may need the longer version.

The Presentation Plan

The advent of PowerPoint presentations changed the way many, if not most, plans are presented. And while the plan is shorter than its predecessors, it’s not necessarily easier to present. Many people lose sleep over an upcoming presentation, especially one that can play a vital role in the future of their business.

But presenting your plan as a deck can be very powerful. Readers of a plan can’t always capture your passion for the business nor can they ask questions when you finish. But in 20 minutes, you can cover all the key points and tell your story from concept and mission statement through financial forecasts.

Remember to keep your graphics uncluttered and to make comments to accentuate your ideas rather than simply reading what’s in front of your audience.

While a presentation plan is concise, don’t be fooled: It takes plenty of planning. The pertinent questions who, what, where, why, when and how all need to be answered.

The Working Plan

A working plan is a tool to be used to operate your business. It has to be long on detail but may be short on presentation. As with a miniplan, you can probably can afford a somewhat higher degree of candor and informality when preparing a working plan.

In a plan you intend to present to a bank loan committee, you might describe a rival as “competing primarily on a price basis.” In a working plan, your comment about the same competitor might be “When is Jones ever going to stop this insane price-cutting?”

A plan intended strictly for internal use may also omit some elements that you need not explain to yourself. Likewise, you probably don’t need to include an appendix with resumes of key executives. Nor would a working plan especially benefit from product photos.

Internal policy considerations may guide the decision about whether to include or exclude certain information in a working plan. Many entrepreneurs are sensitive about employees knowing the precise salary the owner takes home from the business. To the extent such information can be left out of a working plan without compromising its utility, you can feel free to protect your privacy.

This document is like an old pair of khakis you wear to the office on Saturdays or that one ancient delivery truck that never seems to break down. It’s there to be used, not admired.

The What-If Plan

When you face unusual circumstances, you need a variant on the working plan. For example, you might want to prepare a contingency plan when you’re seeking bank financing.

A contingency plan is a plan based on the worst-case scenario that you can imagine your business surviving—loss of market share, heavy price competition, the defection of a key member of your management team. A contingency plan can soothe the fears of a banker or investor by demonstrating that you have indeed considered more than a rosy scenario.

Your business may be considering an acquisition, in which case a pro forma business plan (some call this a what-if plan) can help you understand what the acquisition is worth and how it might affect your core business. What if you raise prices, invest in staff training and reduce duplicative efforts?

Such what-if planning doesn’t have to be as formal as a presentation plan. Perhaps you want to mull over the chances of a major expansion. A what-if plan can help you spot the increased needs for space, equipment, personnel and other variables so you can make good decisions.

What sets these kinds of plans apart from the working and presentation plans is that they aren’t necessarily describing how you’ll run the business. They’re essentially more like an addendum to your actual business plan.

If you decide to acquire that competitor or grow dramatically, you’ll want to incorporate some of the thinking already invested in these special purpose plans into your primary business plan.

Simple Business Plan Example

The business plan template below is divided into sections as described in the table of contents. Each section can be copied into a document of your own; you may need to add or delete sections or make adjustments to fit your specific needs.

Once complete, be sure to format it attractively and get it professionally printed and bound. You want your business plan to convey the best possible impression. Make it engaging, something people will to want to pick up and peruse.

Title Page

Enter your business information, including the legal name and address. If you already have a business logo, you can add it at the top or bottom of the title page.

• Business Plan for “Business Name”
• Date
• Business address
• Phone
• Email
• Website URL

If you’re addressing it to a company or individual, include:

• Presented to “Name”
• At “Company”

Table of Contents

1. Executive Summary…………………………………………Page #
2. Business/Industry Overview……………………………Page #
3. Market Analysis and Competition…………………….Page #
4. Sales and Marketing Plan…………………………………Page #
5. Ownership and Management Plan…………………..Page #
6. Operating Plan………………………………………………….Page #
7. Financial Plan……………………………………………………Page #
8. Appendices and Exhibits………………………………….Page #

Section 1: Executive Summary

The executive summary introduces the plan, but it is written last. It provides a concise and optimistic overview of your business and should capture the reader’s attention and create a desire to learn more. The executive summary should be no more than two pages long, with highlights or brief summaries of other sections of the plan.

• Describe your mission—what is the need for your new business? Sell your vision.
• Introduce your company briefly, sticking to vital details such as size, location, management, and ownership.
• Describe your main product(s) and/or service(s).
• Identify the customer base you plan to target and how your business will serve those customers.
• Summarize the competition and how you will get market share. What is your competitive advantage?
• Outline your financial projections for the first few years of operation.
• State your startup financing requirements.

Section 2: Business/Industry Overview

This section provides an overview of the industry and explains in detail what makes your business stand out.

• Describe the overall nature of the industry, including sales and other statistics. Note trends and demographics, as well as economic, cultural, and governmental influences.
• Explain your business and how it fits into the industry.
• Mention the existing competition, which you’ll expand upon in the following section.
• Identify what area(s) of the market you will target and what unique, improved, or lower-cost products and/or services you will offer.

Many business plans cover their products/services in a standalone section to add more detail or emphasize unique aspects.

Section 3: Market Analysis and Competition

This section focuses on the competitive factor of your business and justifies it with financial models and statistics. You need to demonstrate that you have thoroughly analyzed the target market, assessed the competition, and concluded that there is enough demand for your products/services to make your business viable.

• Define the target market(s) for your products/services in your geographic locale.
• Explain the need for your products/services.
• Estimate the overall size of the market and the units of your products/services that the target market might buy. Include forecasts of potential repeat-purchase volume and how the market might be affected by economic or demographic changes.
• Estimate the volume and value of your sales in comparison with any existing competitors. Highlight any key strengths over the competition in easily digestible charts and tables.
• Describe any helpful barriers to entry that may protect your business from competition, such as access to capital, technology, regulations, employee skill sets, or location.  

You may opt to split the target market description and competitive analysis into two separate sections, if either (or both) portray your business especially favorably.

Section 4: Sales and Marketing Plan

Here’s where you dive into profits, giving detailed strategic view of how you intend to entice customers to buy your products and/or services, including advertising or promotion, pricing, sales, distribution, and post-sales support.

Product or Service Offerings

If your products and/or services don’t take up a standalone section earlier in the plan, here is where you can answer the question: What is your unique selling proposition? Describe your products and/or services, how they benefit the customer and what sets them apart from competitor offerings.

Pricing Strategy

How will you price your products/services? Pricing must be low enough to attract customers, yet high enough to cover costs and generate a profit. You can base pricing decisions on a number of financial models, such as markup from cost or value to the buyer, or in comparison with similar products and/or services in the marketplace.

Sales and Distribution

For products, describe how you plan to distribute to the customer. Will you be selling wholesale or retail? What type of packaging will be required? How will products be shipped? If you offer a service, how will it be delivered to the customer? What methods will be used for payment?

Advertising and Promotion

List the various forms of media you will use to get your message to customers (e.g., website, email, social media, or newspapers). Will you use sales promotional methods such as free samples and product demonstrations? What about product launches and trade shows? Don’t forget more everyday marketing materials such as business cards, flyers, or brochures. Include an approximate budget.

Section 5: Ownership and Management Plan

This section describes the legal structure, ownership, and (if applicable) management and staffing requirements of your business.

• Ownership structure: Describe the legal structure of your company (e.g., corporation, partnership, LLC, or sole proprietorship). List ownership percentages, if applicable. If the business is a sole proprietorship, this is the only section required.
• Management team: Describe managers and their roles, key employee positions, and how each will be compensated. Include brief résumés.
• External resources and services: List any external professional resources required, such as accountants, lawyers, or consultants.
• Human resources: List the type and number of employees or contractors you will need, and estimate the salary and benefit costs of each.
• Advisory board: Include an advisory board as a supplemental management resource, if applicable.

Section 6: Operating Plan

The operating plan outlines the physical requirements of your business, such as office, warehouse, or retail space; equipment; supplies; or labor. This section will vary greatly by industry; a large manufacturer, for instance, should provide full details about supply chain or specialty equipment, while a therapist’s office can get by with a much shorter list.

If your business is a small operation (like a one-person, home-based consulting firm), you might choose to eliminate the operating plan section altogether and include the operating essentials in the business overview.

• Development:Explain what you have done to date to identify possible locations, sources of equipment, supply chains, and other relevant relationships. Describe your production workflow.
• Production:For manufacturing, explain how long it takes to produce a unit and when you’ll be ready to start production. Include factors that may affect the time frame of production and how you’ll deal with potential problems, such as rush orders.
• Facilities:Describe the physical location of the business. Include geographical or building requirements; square footage estimates (with room for expansion if expected); mortgage or leasing costs; and estimates of maintenance, utilities, and related overhead costs. Include zoning approvals and other permissions that are necessary in order to operate.
• Staffing:Outline expected staffing needs and the main duties of staff members, especially the key employees. Describe how the employees will be sourced and the employment relationship (i.e., contract, full-time, part-time) as well as any training needs and how these will be provided.
• Equipment:Include a list of any specialized equipment needed, along with cost, whether it will be leased or purchased, and sources.
• Supplies:If your business is, for example, manufacturing, retail, or food services, include a description of the materials needed, reliable sources, major suppliers, and how you will manage inventory.

Section 7: Financial Plan

The financial plan is the most important section for lenders or investors. The goal is to demonstrate that your business will grow and be profitable. To do this, you will need to create realistic predictions or forecasts.

To avoid inflated expectations, a prudent financial plan underestimates revenues and overestimates expenses.

• Income statements: The income statement displays projected revenues, expenses, and profit. Do this on a monthly basis for at least the first year for a startup business.
• Cash-flow projections: The cash-flow projection shows your monthly anticipated cash revenues and disbursements for expenses. To be considered a good credit risk, it is important to demonstrate that you can manage your cash flow.
• Balance sheet: The balance sheet is a snapshot summary of the assets, liabilities, and equity of your business at a particular point in time. For a startup, this would be on the day the business opens.
• Breakeven analysis: Including a breakeven analysis will demonstrate to lenders or investors what level of sales you need to achieve to make a profit.

Section 8: Appendices and Exhibits

The appendices and exhibits section contains any detailed information needed to support other sections of the plan.  

Possible Appendix or Exhibit items include:

• Credit histories for the business owners
• Detailed market research and analysis of competitors
• Résumés of the owners and key employees
• Diagrams and/or research about your products and/or services
• Site, building, or office plans
• Copies of mortgage documents or equipment leases (or quotes)
• Marketing brochures and other materials
• References from business colleagues
• Links to your business website
• Any other material that may impress potential lenders or investors

Business Plan Example For Students

Choose a sample plan from a similar type of company

You don’t need to find a sample business plan that’s an exact fit for your business. Your business location, target market, and even your particular product or service may not match exactly to the plans in our gallery. But, you don’t need an exact match for it to be helpful. Instead, look for a plan that’s related to the type of business you’re starting.

For example, if you want to start a vegetarian restaurant, a plan for a steakhouse can be a great match. While the specifics of your actual startup will differ, the elements you’d want to include in your restaurant’s business plan are likely to be very similar.

Use a sample as a guide

Every startup and small business is unique, so you’ll want to avoid copying a sample plan word for word. It just won’t be as helpful, since each business is unique. You want your plan to be a useful tool for starting a business—and getting funding if you need it.

One of the key benefits of writing a business plan is simply going through the process. When you sit down to write, you’ll naturally think through important pieces, like your startup costs, your target market, and any market analysis or research you’ll need to do to be successful.

You’ll also look at where you stand among your competition (and everyone has competition), and lay out your goals and the milestones you’ll need to meet. Looking at a sample plan’s financials section can be helpful because you can see what should be included, but take them with a grain of salt. Don’t assume that financial projections for a sample company will fit your own small business.

If you’re looking for more resources to help you get started, this guide on how to write a business plan is a good place to start. You can also download our free business plan template, or get started right away with LivePlan.

Think of business planning as a process, instead of a document

Think about business planning as something you do often, rather than a document you create once and never look at again. If you take the time to write a plan that really fits your own company, it will be a better, more useful tool to grow your business. It should also make it easier to share your vision and strategy so everyone on your team is on the same page.

Adjust your plan regularly to use it as a business management tool

Keep in mind that businesses that use their plan as a management tool to help run their business grow 30 percent faster than those businesses that don’t. For that to be true for your company, you’ll think of part of your business planning process as tracking your actual results against your financial forecast on a regular basis.

If things are going well, your plan will help you think about how you can re-invest in your business. If you find that you’re not meeting goals, you might need to adjust your budgets or your sales forecast. Either way, tracking your progress compared to your plan can help you adjust quickly when you identify challenges and opportunities—it’s one of the most powerful things you can do to grow your business.

Business Plan Template

While there are benefits to using a business plan template, depending on your situation it may not be the absolute best way to complete your plan. There is still going to be a lot of work involved—for instance, not only do you have to complete the financial spreadsheets, but you have to do all the math yourself.

You’ll also have to know enough about the process to be sure you’re getting all the numbers in the right places. And typically, there are limited instructions to go along with a free template, so if you don’t already know what you’re doing with the numbers, the process of writing your business plan isn’t going to be that much easier with a template.

Finally, merging data from Excel spreadsheets into your Word document is harder than it looks. It’s not easy to keep everything completely up-to-date as you make changes to your numbers, and integrating the right charts and graphs into your business plan is harder than it seems.

However, if you’re new to business planning and just want to get a sense of what a plan looks like and want to get the process started quickly (and cheaply!), then downloading a free template is a great way to get started.

The template:

The outline of our business plan template appears below. It is simplified a bit for this page, so we encourage you to download the Word version to get instructions for each section, as well as a cover page, table of contents, legal disclaimer, and more.

1. Executive Summary
   1. Opportunity
      1. Problem Summary
      2. Solution Summary
      3. Market Summary
      4. Competition
      5. Overview
      6. Why Us?
   2. Expectations
      1. Forecast
      2. Financial Highlights by Year [chart]
      3. Financing Needed
2. Opportunity
   1. Problem & Solution
      1. Problem Worth Solving
      2. Our Solution
   2. Target Market
   3. Competition
      1. Current Alternatives
      2. Our Advantages
3. Execution
   1. Marketing & Sales
      1. Marketing Plan
      2. Sales Plan
   2. Operations
      1. Locations & Facilities
      2. Technology
      3. Equipment & Tools
   3. Milestones & Metrics
      1. Milestones Table
      2. Key Metrics
4. Company
   1. Overview
   2. Team
      1. Management Team
      2. Advisors
5. Financial Plan
   1. Forecast
      1. Key Assumptions
      2. Revenue by Month [chart]
      3. Expenses by Month [chart]
      4. Net Profit (or Loss) by Year [chart]
   2. Financing
      1. Use of Funds
      2. Sources of Funds
   3. Statements
      1. Projected Profit & Loss
      2. Projected Balance Sheet
      3. Projected Cash Flow Statement
6. Appendix
   1. Monthly Financial Forecasts
   2. Additional Documentation

Business Plan Format

When it comes to a business plan format, there are ten basic elements that must be covered when writing a business plan.

The standard contents of a business plan includes:

• an overview
• executive summary
• general company description
• the opportunity
• industry and market
• your strategy
• the team
• a marketing plan
• operational plan
• financial plan
• an appendix.

Before you physically start writing your business plan, you need to spend some time doing in-depth research into your industry and market. This is important regardless of whether you have previous experience in that particular industry.

You can use the Internet, industry experts and associations, suppliers and existing competitors for the information. Your research will help you in putting the business plan together as it will give you an understanding of the dynamics and forces affecting the industry.

All sections in the business plan format are interrelated, and cannot be written in isolation. Each should be written by people who are fully aware of the contents and intricacies of the other areas of the plan so that the different sections are all integrated.

Free Business Plan

Check out these comprehensive business plan templates you can download for free to get you started:

1. Score’s Business Plan Template for Startups

Score is an American nonprofit dedicated to helping entrepreneurs get their companies off the ground. Its template, available as a PDF or Word download, asks a whopping 150 questions and is generic enough to customize for most types of businesses. The Refining the Plan resource that comes with it is helpful, especially if this is your first crack at writing a business plan.

2. U.S. Small Business Administration Business Plan Engine

The SBA’s template is available to fill out online and then download as a PDF. You can go back in and edit it as needed, so don’t worry about having everything ready the first time you sit down to tackle it.

Even broken into sections, it’s a long document and a bit of a slog to get through, but it produces a professional-looking and useful business plan. This is particularly helpful if your idea isn’t fully fleshed out and you know you have homework to do–it prompts you for information.

3. The $100 Startup’s One-Page Business Plan

Who said a business plan has to be a long, complicated document? Some funders are going to want to see a lot of detail, but you can provide that in appendices. The $100 Startup, the website for the best-selling book of the same name, has a ton of stripped-down resources for entrepreneurs, including this super simplified business plan template.

4. LawDepot’s WYSIWYG Business Plan Template

This one says you just have to answer a few simple questions and will be “done before you know it!” Don’t believe it. A business plan should take time and a lot of homework, but if you’ve already done that, LawDepot’s template is a decent choice.

It walks you through getting started, marketing, product, competitive analysis, SWOT, and more, with a window below the input fields to show you the plan as you work away at it. You can download it free with a trial subscription, but you’ll have to remember to cancel it within the week if you don’t plan to continue using it.

5. SME Toolkit Business Plan Samples

The SME Toolkit, jointly offered by IFC and IBM, offers a simple two-page outline of what should be included in your business plan to meet the minimum requirements of funders and tax authorities (in the U.S.).

It contains 10 broad sections, including market analysis, management and organization, etc., with a one-paragraph explanation of each. A second download on the same page is an Excel file to help with your financial projections.

What Are The 7 Parts of Business Plan?

Here are the seven key components your plan needs.

1. Executive Summary

The first and most important part of the business plan is the executive summary. It lets potential investors know whether the project looks viable or not, and should be clear and compelling. This section also outlines the points in the plan and describes how the business will present its offerings to the public. The executive summary should include:

• Mission statement: a brief summary of the business and its objectives.

• Company information: introduces the founders, with their biographies.

• Growth projections: outlines and quantifies the earning potential of the business.

• Products or services: describes what products and services are offered by the business.

• Financial information: outlines current capital for the company, including any current investors.

2. Company Description

While the first section describes what is being offered, and how it is going to be offered, potential investors will want to see more detail. The company description provides much of this additional information. This is the section where you highlight the clientele you foresee, the advantages you have over the competition, and the void your business will fill.

3. Market Analysis

The market analysis outlines how your chosen industry functions. For example, if you were selling office supplies, you would explain the supply needs of office workers in your target market. Describe how large your market is, how your prices are structured, and how you will remain competitive in your industry.

4. Organization and Management

Here you focus on the structure of your business. How many owners does the company have? Who will operate the business? How are responsibilities delegated? What will your promotion and incentive structures be? Many people use charts and graphs to give a visual representation of these factors.

5. Goods and Services

In this section you give a more detailed description of your offerings. Describe how they differ from your competitors’ products and the benefits they offer your customers.

6. Marketing

Your growth strategy is described here. How do you intend to increase your business in the near and distant future? Discuss expansion plans in this section, as well as plans to market to prospective clients. What marketing media will you use? What’s your budget? Do you have an offline plan as well as an online plan?

7. Financial Projections

Here you express the financial goals for your business. Outline how the marketing and sales ultimately equate to a profit. Basically, you make earnings and cost predictions in this section. This is another part of the plan where graphical representation of the information can really help.

Your business plan is the first serious step toward starting a new business. A large majority of businesses fail in the early stages, but you can increase the odds for success if you properly plan your objectives and strategies. Take the time to devise a plan that is right for your business and looks good to investors.

What Are The 12 Components of a Business Plan?

A business plan has fixed components. The 12 main components shall be introduced in the following passages.

1. Executive Summary

The executive summary is the summary of the entire business plan. It can only be compiled when the business plan is finished. It provides a short overview over the basic contents of the plan. The most important details should be easily comprehendible.

2. Founder (team) and business leadership

An important component of the business plan is the introduction of the founder(s). It is important to point out why this person should lead the business to success. You should make a distinction between professional qualifications and entrepreneurial ones, meaning between education and job experience, and leadership experience and the ability to work as part of a team.

3. Product or Service

The product (or the service) is the heart of any company. Characteristics and stages of development should be listed in the business plan. What makes the product one-of-a-kind, what is its so-called unique selling proposition? The product description should be easily understandable, even for laypersons. The question of what you want toaccomplish should be answered.

This includes short-term and long-term goals and how you want the product to develop. Should you be producing complex products, the individual stages of production need to be listed. Is the product new or unusual, the functionality should be described in detail.

4. Market and sector

A competent business founder should have a keen sense of the market and the competition. If you only see as far as your own nose, you will not get far. A market analysis is indispensible. Not only should you be aware of your competitors, you should also know your customers well.

The easiest method of getting to know your potential customers is a survey or the questioning of other businesses of the sector. For almost every sector, there are current analyses. In most cases, you can attain the results from banks or view the corresponding theses at universities.

The business plan should show how you expect your business to develop in comparison to other businesses in the sector.  It is usually easy to find out, who your competition is: Google search, Yellow Pages, in forums, from experts of the corresponding chambers. The situation on the market also determines the site selection.

Internet-based companies or freelancers, who work from home, clearly have the advantage here. They can work anywhere, or where salary and rental costs are lowest. Otherwise, the choice of location depends on the proximity to distributors and customers. There could also be regulatory requirements. It is important for the business plan that the choice of location justifies the costs.

5. Distribution and marketing

This is one of the most important points of the business plan. You can therefore divide distribution and marketing into offer strategy, price strategy, distribution strategy, and marketing strategy.

The product offer is critical and presents an opportunity to set yourself apart from your competitors. The business plan should stress the difference between you and your competition and what makes your product special. Your strategy for further development should not be missing here.

The chosen price strategy is also of importance. Did you opt for high or low prices, or even a threshold price strategy? Your business plan should demonstrate how your price strategy secures cost recovery and at the same time sets you apart from your competitors.

You should therefore list the prices of your competitors for comparison. The price needs to be competitive, which should be visible in the business plan. You should also elaborate on the composition of your price, how high your profit margin is, and the minimum price of the product.

The distribution concept should be visible as an entity. Naturally, it has to match the product, which should be demonstrated in the business plan. Every chosen channel of distribution should be explained. Those that were not selected should also be listed, explaining why they were not chosen. This shows that you have considered all options and weighed the advantages and disadvantages of each choice.

Publicity is needed for making your product known. Which strategy is to be pursued and why, is also part of the business plan

Some products and services can gain a high profile with the help of clever PR-strategies. This should not be underestimated.

6. Co-workers and business coordination

Your business plan should outline your overall orientation regarding organization: is there a strict hierarchy or do you prefer project teams? Where lie the responsibilities? The choice of co-workers and the suitable job description needs to follow accordingly. It may be better to employ part-time workers or consult external experts for individual projects.

The business plan should also show the planned development of the employment situation. With the growth of the company, the number of employees may also need to be increased. You may, however, plan not to hire employees and rather commission external service providers for individual projects. This is useful in the area of bookkeeping

7. Legal form

A good business plan should also contain explanations about the chosen legal form of the company. Which person or other coporation holds a part of the company? Why is the current legal form the suiting the best? Are there any changes planned when growth is coming? This is part of the business plan.

8. Chances and risks

The risks, but also the chances are the most interesting parts of the business plan for investors, loan creditors, and bankers. Risks are naturally a delicate topic. However, if you are honest and mature about them (and they are listed in your business plan), they should not present a problem.

Worst-case scenarios and best-case scenarios can be helpful to make your point. The appropriate numbers should be listed as well.

9. Capital requirement

Theseed capital has to come from somewhere. No one founds a business withoutany resources. In most cases, the equity capital is not enough. The business plan should therefore show, which capital goes where and for what it is used.

The reserve capital is also of importance. Self-employed people or freelancers have to budget for their personal needs. Current as well as prospective loans should not be forgotten.

10. Finance plan

The finance plan is likely the most complex component of the business plan, because it is not easy to show where the money comes from, where it goes, and for what it is used.

The equity capital is one component of the finance plan. The amount you contribute should be noted in the business plan, as banks appreciate it when personal resources support new-business loans.

External funds and their amount and distribution are an important part of the finance plan. Often the funding occurs through capital providers, such as investors or banks as loan providers. (Public) subsidies are also external funds. Should you plan to claim such funds you should include it in your business plan.

Read Also: How to Build Business Credit

The so-called liquidity projection demonstrates financial solvency over a planned period. There are benchmarks for every sector, which can help you orientate yourself. Here, you should also mention the break-even point, meaning the point in time when you move from the red into the black. Your business plan should also point out how you intend to get by until then.

The profitability statement or earnings forecast demonstrates, which proceeds a customer generates with which product (should there be more than one). Of course, these are only estimations but they can be well-founded. The profit and loss statement shows how the capital and value is expected to increase. The turnovers are contrasted with the expenses.

11. Further documents

You should complete your business plan with other relevant documents, such as a CV, surveys, or drawings.

12. The right measure

Many business plans are too extensive, as the authors (the business founders) believe they need to describe every small detail extensively. You should not lose yourself in flowery phrases, but make precise statements. It is helpful to let friends, who are strangers to your line of business, read your business plan.

If they can understand everything, the plan is comprehensible. You should be able to recount your business plan by heart and know the numbers in your sleep. This ensures that a presentation, or a visit with the bank or other investors will go smoothly.