How to Write a Business Plan Outline [2022 Guide & Format]
When starting a business, having a well-thought-out business plan prepared is necessary for success. It serves as the foundation of your business, helps guide your strategy, and prepares you to overcome the obstacles and risks associated with entrepreneurship. In short, a business plan makes you more like to succeed.
However, like everything in business, starting is often the hardest part. What information do you need? How in-depth should each section be? How should the plan be structured?
All good questions that you can answer by following this business plan outline.
What is a business plan outline?
Starting with a business plan outline helps ensure that you’re covering all of the necessary information to complete your plan. A traditional business plan typically includes—an executive summary, an overview of your products and services, thorough market and industry research, a marketing and sales strategy, operational details, financial projections, and an appendix.
Depending on what you intend to do with your plan, you may not need all of this information right away. If you’re going to speak with investors or pursue funding, then yes, you’ll need to include everything from this outline. But, if you’re using your plan to test an idea or help you run your business, you may want to opt for a lean plan. This is a simpler and faster method that is designed to be updated and used day-to-day.
If you’re unsure of which plan is right for you, check out our guide explaining the differences and use cases for each .
What are the 7 essential parts of a business plan?
No matter the type of business plan you create, these are the seven basic sections you should include. Be sure to download your free business plan template so that you can start drafting your own plan as you work through this outline.
1. Executive summary
While it may appear first, it’s best to write your executive summary last. It’s a brief section that highlights the high-level points you’ve made elsewhere in your business plan.
Summarize the problem you are solving for customers, your solution, the target market, the founding team, and financial forecast highlights. Keep things as brief as possible and entice your audience to learn more about your company.
Keep in mind, this is the first impression your plan and business will make. After looking over your executive summary, your target reader is either going to throw your business plan away or keep reading. So make sure you spend the time to get it just right.
2. Product and services
This is really the opportunity section of your business plan, with the products and services being how you plan to take advantage of the opportunity. You’ll need to describe the problem that you solve for your customers and the solution that you are selling.
Lastly, if there are any major competitive products or services already in the market, it may be valuable to mention them here. Detail how you differ, what your strengths and weaknesses are in comparison, and how you’ll differentiate from what is already available. If you have any intellectual property or patents that help strengthen your position list them here as well.
3. Market analysis
You need to know your target market —the types of customers you are looking for—and how it’s changing, and your market analysis summary will help you get clear on it.
Use this business plan component to discuss your customers’ needs, where your customers are, how to reach them and how to deliver your product to them.
You’ll also need to know who your competitors are and how you stack up against them—why are you sure there’s room for you in this market?
4. Marketing and sales
Use this business plan section to outline your marketing plan, your sales plan, and the other logistics involved in actually running your business.
You’ll want to cover your sales channels, broad marketing activities, your pricing strategy, as well as your intended market position. This will likely evolve over time, but it’s best to include anything that clearly details how you will sell and promote your products and services.
5. Organization and management
The company and management section is an overview of who you are.
It should describe the organization of your business, and the key members of the management team . It should also provide any historical background about your business. When your company was founded, who is/are the owner(s), what state your company is registered in and where you do business, and when/if your company was incorporated for example.
Be sure to include summaries of your managers’ backgrounds and experience—these should act like brief resumes—and describe their functions with the company. You should also include any professional gaps you intend to fill, as well as projected milestones for your business.
6. Financial projections and metrics
At the very least this section should include your projected sales forecast , profit and loss , cash flow projections, and balance sheet , along with a brief description of the assumptions you’re making with your projections.
Finally, if you are raising money or taking out loans, you should highlight the money you need to launch the business. This part should also include a use of funds report—basically an overview of how the funding will be used in business operations.
And while it’s not required, it may be wise to briefly mention your exit strategy. This doesn’t need to be overly detailed, just a general idea of how you may eventually want to exit your business.
7. Appendix
The end of your business plan should include any additional information to back up specific elements of your plan. More detailed financial statements, resumes for your management team, patent documentation, credit histories, marketing examples, etc. Basically, include anything that can promote your credibility as a business owner.
Business plan outline template
If you’re looking for greater insight into what goes into specific planning sections, check out the following outline. It can help you develop a detailed business plan or provide guidance as to what may be missing in your current plan.
Keep in mind that each business plan will look different depending on numerous factors , including the type of business and what you will be using the plan for. Consider the following outline to be a master version to reference and consider. Just be sure to focus on the plan type and sections that are most beneficial to your business, pitch, or overall strategic planning .
1.0 Executive Summary
1.1 problem.
A summary of the problem you are solving and an identifiable need in the market you are filling.
1.2 Solution
A description of the product or service you will provide to solve the problem.
1.3 Target Market
A defined customer base who will most likely purchase the product or service. For info on how to define your target market, check out our guide on the subject.
1.4 Competition
The current alternatives or substitutes in the market that you and your business will be competing against.
1.5 Financial Summary
Key highlights of your financial plan that covers costs, sales, and profitability.
1.6 Funding Requirements
A brief outline of the amount of money you will need to start your business. Include this if you plan on pitching to investors.
1.7 Milestones and Traction
A roadmap of where you currently are and specific milestones you plan to hit.
2.0 Product and services
2.1 problem worth solving.
A thorough description of the problem or pain point you intend to solve for your customer base.
2.2 Our Solution
A thorough description of your proposed product or service that alleviates the problem of your customer base.
2.3 Validation of Problem and Solution
Any data or relative information that supports your solution. If you’ve already run tests that verify your idea , this is the place to include your results.
2.4 Product Overview
A description of your product and/or service that explains what it does, who its for, and how it benefits your customers.
2.5 Competition
Any information explaining current competitive offerings and how your product differs from them.
2.6 Roadmap/Future Plans
A list of steps taken so far, along with an outline of steps you plan to take in establishing or growing your business.
3.0 Market Analysis
3.1 market segmentation.
Potential groups of customers separated by specific characteristics.
3.2 Target market segment strategy
Your ideal customer who would most likely benefit from your business.
3.2.1 Market needs
A description of how your target market is not effectively served and how your business fulfills a need.
3.2.2 Market trends
How consumers in your target market tend to act including purchasing habits, financial trends, and any other relevant factors.
3.2.3 Market growth
The perceived potential increase or decrease in the size of your target market.
3.3 Key customers
Your ideal customer archetype who will be the main advocate for your business.
3.4 Future markets
A snapshot of the potential market based on the last few sections and how your business strategy works within it.
3.5 Competition
A list of potential competitors. Identifying the competition isn’t always obvious and it may take some digging on your part .
3.5.1 Competitors and alternatives
A list of potential indirect competitors that provide products or services that are alternatives to your business.
3.5.2 Competitive advantage
The strategic advantage(s) that makes your target market more likely to choose you over the competition.
4.0 Marketing and Sales
4.1 marketing plan.
An outline of your marketing and advertising strategy including costs, advertising channels, and goals.
4.2 Sales plan
An estimate of the number of sales you anticipate based on market conditions, capacity, pricing strategy, and other factors.
4.3 Location and facilities
Details of your physical business location (if necessary) including location and costs of operation.
4.4 Technology
An explanation of any new technology that defines your business.
4.5 Equipment and tools
Any required production equipment or tools and the cost associated with purchasing or renting them.
5.0 Organization and management
5.1 organizational structure.
An overview of the structure of your business including roles and responsibilities of specific employees and the flow of information between levels of the organization.
5.2 Management team
A list of potential candidates you anticipate taking on high-level management roles within your company.
5.3 Management team gaps
Any positions or areas of expertise that you currently do not have candidates ready to fill those roles.
5.4 Personnel plan
A list of potential positions that you expect to require in order to run your business effectively.
5.5 Company history and ownership
A summary of your company’s history and how it relates to planning your business.
5.6 Milestones
A detailed roadmap of specific goals and objectives you plan to achieve that will help you manage and steer your business.
5.7 Key metrics
Performance measurements that help you gauge the overall performance and health of your business.
6.0 Financial projections and metrics
Standard financial documentation that showcases the current and projected health of your business.
6.1 Revenue and sales forecast
Expected revenue and sales for the next 1-3 years, broken down into month-by-month increments for at least the first year.
6.2 Expenses
Expected or incurred costs necessary to start and operate your business.
6.3 Projected profit and loss
How much money you will bring in by selling products and/or services and how much profit you will make or lose after accounting for production costs.
6.4 Projected cash flow
Money that is expected to cycle in and out of your business. This can also include your overall cash position and cash runway.
6.5 Projected balance sheet
Expected balances for business assets, liabilities, and equity.
6.6 Personnel plan
Outline of how and who you intend to hire, what compensation will be, and how employees will fit into business operations.
6.7 Use of funds
Explanation of how funds were or will be used. This is typically meant to be shared with investors or lenders.
6.8 Exit strategy
A brief description of how you intend to eventually exit from your business. Acquisition, selling, passing along to a family member/employee, etc.
7.0 Appendix
A repository for any additional information , including charts and graphs, to support your business plan.
How to organize your business plan
There’s no real established order to business plans, aside from keeping the Executive Summary at the top. As long as you have all of the main business plan components, then the order should reflect your goals .
If this is meant solely for your personal use, lay it out as a roadmap with similar sections grouped together for easy reference. If you’re pitching this to potential investors, lead with the stronger sections to emphasize the pitch. Then if you’re unsure of what order makes sense, then just stick to the outline in this article.
Should you include tables and charts in your business plan?
Every business plan should include bar charts and pie charts to illustrate the numbers. It’s a simple way for you, your team, and investors to visualize and digest complex financial information.
Cash flow is the single most important numerical analysis in a business plan, and a standard cash flow statement or table should never be missing. Most standard business plans also include a sales forecast and income statement (also called profit and loss), and a balance sheet .
How long should your business plan be?
There’s no perfect length for a business plan . A traditional business plan can be anywhere from 10 to 50 pages long depending on how much detail you include in each section. However, as we said before unless you intend to pursue funding, you likely don’t need a lengthy business plan at first.
Instead, you can start with a lean plan that can be completed in as little as 30-minutes. This one-page business plan is designed to help you get the core information down about your business. It encourages you to focus on your financials and functions moreso as a long-term management tool that’s easy to review and update regularly.
So, if you’re pursuing funding check out our full guide on how to write a traditional business plan . If you’re looking for a faster, easier, and more effective long-term planning method, check out this guide from LivePlan on how to write a lean plan in under an hour .
Tim Berry is the founder and chairman of Palo Alto Software and Bplans.com. Follow him on Twitter @Timberry .
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How To Write the Management Section of a Business Plan
Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.
:max_bytes(150000):strip_icc():format(webp)/SusanWardLaptop2crop1-57aa62eb5f9b58974a12bac9.jpg "which section of the business plan details and outlines the authority structure")
Ownership Structure
Internal management team, external management resources, human resources, frequently asked questions (faqs).
When developing a business plan , the 'management section' describes your management team, staff, resources, and how your business ownership is structured. This section should not only describe who's on your management team but how each person's skill set will contribute to your bottom line. In this article, we will detail exactly how to compose and best highlight your management team.
Key Takeaways
- The management section of a business plan helps show how your management team and company are structured.
- The first section shows the ownership structure, which might be a sole proprietorship, partnership, or corporation.
- The internal management section shows the department heads, including sales, marketing, administration, and production.
- The external management resources help back up your internal management and include an advisory board and consultants.
- The human resources section contains staffing requirements—part-time or full-time—skills needed for employees and the costs.
This section outlines the legal structure of your business. It may only be a single sentence if your business is a sole proprietorship. If your business is a partnership or a corporation, it can be longer. You want to be sure you explain who holds what percentage of ownership in the company.
The internal management section should describe the business management categories relevant to your business, identify who will have responsibility for each category, and then include a short profile highlighting each person's skills.
The primary business categories of sales, marketing , administration, and production usually work for many small businesses. If your business has employees, you will also need a human resources section. You may also find that your company needs additional management categories to fit your unique circumstances.
It's not necessary to have a different person in charge of each category; some key management people often fill more than one role. Identify the key managers in your business and explain what functions and experience each team member will serve. You may wish to present this as an organizational chart in your business plan, although the list format is also appropriate.
Along with this section, you should include the complete resumés of each management team member (including your own). Follow this with an explanation of how each member will be compensated and their benefits package, and describe any profit-sharing plans that may apply.
If there are any contracts that relate directly to your management team members, such as work contracts or non-competition agreements, you should include them in an Appendix to your business plan.
While external management resources are often overlooked when writing a business plan , using these resources effectively can make the difference between the success or failure of your managers. Think of these external resources as your internal management team's backup. They give your business credibility and an additional pool of expertise.
Advisory Board
An Advisory Board can increase consumer and investor confidence, attract talented employees by showing a commitment to company growth and bring a diversity of contributions. If you choose to have an Advisory Board , list all the board members in this section, and include a bio and all relevant specializations. If you choose your board members carefully, the group can compensate for the niche forms of expertise that your internal managers lack.
When selecting your board members, look for people who are genuinely interested in seeing your business do well and have the patience and time to provide sound advice.
Recently retired executives or managers, other successful entrepreneurs, and/or vendors would be good choices for an Advisory Board.
Professional Services
Professional Services should also be highlighted in the external management resources section. Describe all the external professional advisors that your business will use, such as accountants, bankers, lawyers, IT consultants, business consultants, and/or business coaches. These professionals provide a web of advice and support outside your internal management team that can be invaluable in making management decisions and your new business a success .
The last point you should address in the management section of your business plan is your human resources needs. The trick to writing about human resources is to be specific. To simply write, "We'll need more people once we get up and running," isn't sufficient. Follow this list:
- Detail how many employees your business will need at each stage and what they will cost.
- Describe exactly how your business's human resources needs can be met. Will it be best to have employees, or should you operate with contract workers or freelancers ? Do you need full-time or part-time staff or a mix of both?
- Outline your staffing requirements, including a description of the specific skills that the people working for you will need to possess.
- Calculate your labor costs. Decide the number of employees you will need and how many customers each employee can serve. For example, if it takes one employee to serve 150 customers, and you forecast 1,500 customers in your first year, your business will need 10 employees.
- Determine how much each employee will receive and total the salary cost for all your employees.
- Add to this the cost of Workers' Compensation Insurance (mandatory for most businesses) and the cost of any other employee benefits, such as company-sponsored medical and dental plans.
After you've listed the points above, describe how you will find the staff your business needs and how you will train them. Your description of staff recruitment should explain whether or not sufficient local labor is available and how you will recruit staff.
When you're writing about staff training, you'll want to include as many specifics as possible. What specific training will your staff undergo? What ongoing training opportunities will you provide your employees?
Even if the plan for your business is to start as a sole proprietorship, you should include a section on potential human resources demands as a way to demonstrate that you've thought about the staffing your business may require as it grows.
Business plans are about the future and the hypothetical challenges and successes that await. It's worth visualizing and documenting the details of your business so that the materials and network around your dream can begin to take shape.
What is the management section of a business plan?
The 'management section' describes your management team, staff, resources, and how your business ownership is structured.
What are the 5 sections of a business plan?
A business plan provides a road map showing your company's goals and how you'll achieve them. The five sections of a business plan are as follows:
- The market analysis outlines the demand for your product or service.
- The competitive analysis section shows your competition's strengths and weaknesses and your strategy for gaining market share.
- The management plan outlines your ownership structure, the management team, and staffing requirements.
- The operating plan details your business location and the facilities, equipment, and supplies needed to operate.
- The financial plan shows the map to financial success and the sources of funding, such as bank loans or investors.
SCORE. " Why Small Businesses Should Consider Workers’ Comp Insurance ."
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Use This Business Plan Format to Expertly Write Your Plan
Written by Dave Lavinsky
In this guide, you’ll learn how to format your business plan professionally. Business plan structure and format helps readers look beyond distracting style to the real meat of your idea.
Download our Ultimate Business Plan Template here >
How to Format Your Business Plan: The Cover Sheet
Every business plan should begin with a simple business plan cover page including the business name, your name and contact information. An easy to read table of contents should follow.
Example Business Plan Table of Contents
I: Executive Summary a. Business Overview b. Success Factors c. Financial Highlights
II: Company Overview a. Who is [Company Name]? b. [Company Name]’s History c. [Company Name]’s Products & Services
III: Industry Analysis a. Industry Trends
IV: Customer Analysis a. Customer Segmentation
V: Competitive Analysis a. Direct & Indirect Competitors b. Competitive Advantage
VI: Marketing Plan a. The [Company Name] Brand b. Promotions Strategy c. Pricing Strategy
VII: Operations Plan a. Functional Roles b. Goals and Milestones
VIII: Management Team a. Management Team Members b. Hiring Plan
IX: Financial Plan a. Revenue and Cost Drivers b. Revenue and Cost Drivers c. Key Assumptions & Forecasts
X: Appendix
The cover sheet should leave no question for readers to be able to identify the business plan when it is in a stack with dozens of others on their desk. The table of contents allows them to easily refer to sections within the plan. For example, after reading the executive summary , some investors with an eye for numbers may turn directly to the financial plan and statements. Proper business plan format allows readers to quickly get the information they want.
Example Business Plan Format
There are 10 business plan components or sections that every entrepreneur and business owner must include in their plan. These include:
- Executive summary
- Company overview
- Industry analysis
- Customer analysis
- Competitive analysis
- Marketing plan
- Operations plan
- Management team
- Financial plan
You should recognize these if you’ve ever worked with a business plan template .
Formatting your business plan with charts and graphs is welcomed to break up long blocks of text. However, charts and graphs shouldn’t be used for their own sake. They must make the information easier to pass on than text would.
The business plan format that investors and lenders expect includes the following 10 sections. We’ve included important notes in each section specific to business plan formatting to help you as you write your plan.
1. Start with Your Executive Summary
An executive summary gives readers a crisp overview of your business at the start of your plan. This section should not be more than two pages long and should include the following:
- What is the business about?
- Where and why did the idea of the business originate?
- Who are the owners?
- Which industry is it operating in?
- What is its core function?
- Where is it located?
- How is it going to make money?
- How much money (if any) is it already making?
- What are its financial projections?
The best format for your executive summary is paragraphs. Utilizing bullets and headings is also useful formatting within an executive summary, as it aids the reader in scanning the content on the page.
2. Company Overview Section
The company overview is the perfect place to highlight the strengths of your business. This section gives the reader additional information about your products and/or services and describes your company’s past accomplishments.
Including the below in this section will provide further clarity about your business:
- What type of business you are (e.g., C-Corporation, sole proprietor)
- When your business started
- Business’ accomplishments to date
The best formatting to use in this section is paragraphs to describe your company’s strengths and products/services. You should also include a chart that outlines your company’s achievements to date.
3. Industry or Market Analysis
The industry or market analysis gives the reader a clear understanding of your industry and the audience it serves. It includes a detailed explanation of your market size and trends.
Typically, the format of this section should be paragraphs. Feel free to include charts and graphs to best convey the information to the reader.
4. The Customer Analysis States Who Your Customers Are and What They Need
In this section of your plan, explain who your target customers are and identify their specific needs. Doing this will help you better target and attract customers.
5. Competitive Analysis
The Competitive Analysis section identifies your direct and indirect competitors. It discusses who they are and their strengths and weaknesses. It then details your areas of competitive advantages.
Whether your competitors are small or large businesses, describe them. Telling investors there are no competitors (big or small) often gives the impression that a market does not exist for your company.
With regards to formatting, use paragraphs to describe each competitor. As appropriate, adding a competitor matrix to show similarities and differences between your company and the competition can be very powerful.
6. Your Marketing Plan is a Key Section
The marketing & sales section of your business plan should outline how you plan to attract new customers and retain old ones. This section should outline the ways customers can be introduced to and engage with your offerings and describe how you will convert these prospects into paying customers.
Set marketing objectives that include the following (if applicable):
- Introducing new products
- Extending the market reach
- Exploring new markets
- Boosting sales
- Cross-selling
- Creating a long-term partnership with clients
- Increasing prices without affecting sales
- Creating a content marketing strategy
Organize your Marketing Plan into the 4 P’s – Price, Product, Promotions and Place. If you have multiple products or services, include a menu with each key item and its price.
7. The Operations Plan Format
Your Operations Plan identifies your key operational processes and milestones you expect to accomplish. Using a Gantt chart is a great way to show your expected future milestones. You can also format this section with tables that document the dates of future milestones.
8. You Need to Prove Your Management Team Can Execute
“A company is only as good as the people it keeps.” – Mary Kay Ash, American Entrepreneur and Businesswoman
The Management Team section of your business plan focuses on the people who run the business.
Who are the decision-makers, who is the product expert, who is the operations head, and who is running the entire show? A glimpse into the expertise and capabilities of your team members and how their experiences will help grow your business will boost stakeholder confidence.
To improve the formatting and best convey your management team to readers, consider adding an organizational chart that shows your team members and reporting structure.
9. Format Your Financial Plan
The goal of this section is to convince the reader that your business is stable and will be financially successful. Arm this section with past and/or forecasted cash flow statements, balance sheets, profit & loss statements, expense budgeting and sales forecasts.
If you run an operational business, include 3 years of historical data to help investors gain an understanding of how feasible your funding request is and if your business is capable of generating good returns.
Also include your funding request, if applicable, in this section. You should mention how much investment is required to take your business to the next significant milestone and how the money will be spent. You should also define if you are seeking debt or equity funding. If you are seeking debt financing like an SBA loan, ensure your financial projections include the debt and show steady repayments of both the principal and return under reasonable loan terms.
If you are seeking equity financing, you don’t need to include your valuation expectations in the business plan, but you should be aligned within your ownership team on the amount of equity you are willing to exchange before you pitch investors.
10. Appendix
This section includes supporting documentation of your business case. This could include renderings of a planned store location, market research reports referenced in the plan, key supplier or buyer contracts that substantiate your financial projections or historical marketing and sales data.
Formatting Your Business Plan
Overall, business plans should use simple and standard formatting. Twelve point font size in a standard font like Arial or Times New Roman is best, as well as the standard margin size of one inch on each side. Pages should be numbered, and the name of the company should appear on each page in the header or footer.
Use charts whenever possible as it makes it much easier for readers to consume the information in your plan.
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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.
- Business plan template examples
- Writing tips to ace your 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:
- Ask yourself why you’re writing an outline. Having a clear goal for your outline can help keep you on track as you write. Everything you include in your plan should contribute to your goal. If it doesn’t, it probably doesn’t need to be in there.
- Keep it clear and concise. Whether you’re writing a traditional or lean format business plan, your outline should be easy to understand. Choose your words wisely and avoid unnecessary preambles or padding language. The faster you get to the point, the easier your plan will be to read.
- Add visual aids. No one likes reading huge walls of text! Make room in your outline for visuals, data and charts. This keeps your audience engaged and helps those who are more visual learners. Psst, infographics are great for this.
- Make it collaborative. Have someone (or several someones) look it over before finalizing your outline. If you have an established marketing / sales / finance team, have them look it over too. Getting feedback at the outline stage can help you avoid rewrites and wasted time down the line.
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!
Business Plan
A summary document that outlines how and why a new business is being created
What is a Business Plan?
A business plan is a summary document that outlines how and why a new business is being created. New entrepreneurial ventures must prepare formal written documents to outline their long-term objectives and the means to be employed to reach said objectives. The business plan underlines the strategies that need to be adopted in order to reach organizational goals, identify potential problems, and devise custom solutions for them.
In addition, potential investors look at business plans to evaluate the risk exposure of a particular entrepreneurial venture. Startups that try to attract employees and investors use business plans to solidify their claims regarding the potential profitability of a particular business idea. Existing companies may use business plans to deal with suppliers or manage themselves more effectively.
- A business plan is a summary document that outlines how and why a new business is being created.
- New entrepreneurial ventures must prepare formal written documents to outline their long-term objectives and the means to be employed to reach said objectives.
- Existing companies may use business plans to deal with suppliers or manage themselves more effectively.
Why Use a Business Plan?
Owing to the following benefits of a well-researched and comprehensive business plan, preparing one is highly recommended, but not a mandate.
1. Feasibility
Entrepreneurs use a business plan to understand the feasibility of a particular idea. It is important to contextualize the worth of the proposed product or service in the current market before committing resources such as time and money. It helps to expand the otherwise limited view of a passionate innovator-turned-entrepreneur.
2. Focusing device
Formulating a concrete plan of action enables an organized manner of conducting business and reduces the possibility of losses due to uncalculated risks. Business plans act as reference tools for management and employees as they solidify the flow of communication, authority, and task allocation.
3. Foresight
The process of preparing a business plan often creates many unintended yet desired results. It functions on the principle of foresight as it helps one realize future hurdles and challenges that aren’t explicit. It also brings a variety of perspectives on the forefront, eventually leading to a more comprehensive future plan of action.
4. Raising capital
A business plan is an effective way of communicating with potential investors, and the level of expertise and time used in preparing a business plan also gives professional credibility to entrepreneurs . It analyzes and predicts the chances of success for the investor and helps to raise capital.
Features of a Good Business Plan
1. executive summary.
The executive summary functions as a reading guide, as it highlights the key aspects of the plan and gives structure to the document. It must describe ownership and history of formation. It is an abstract of the entire plan, describes the mission statement of the organization, and presents an optimistic view about the product/service/concept.
2. Business Description
This section presents the mission and vision of an organization. Business descriptions provide the concept of one’s place in the market and its benefits to future customers. It must include key milestones, tasks, and assumptions, popularly known as MAT. Big ideas are redundant without specifics that can be tracked. Fundamental questions to be answered include:
- Who are you?
- What is the product or service, and what are its differentiating characteristics?
- Where is the opportunity located?
- When will you start implementing your plan and expects cash flows or profits?
- Why should customers choose your company?
- How do you plan to run the business in terms of structure and regulatory compliance?
3. Market Strategies
The market strategies section presents the target consumer group and the strategies needed to tap into it. It requires meticulous analysis of all aspects of the market, such as demography, cultural norms, environmental standards, resource availability, prices, distribution channels , etc.
4. Competitive Analysis
The competitive analysis section aims to understand the entry barriers one could face due to other companies in the same or complementary sectors. The strengths of existing companies could be co-opted into one’s strategy, and the weaknesses of existing product development cycles could be exploited to gain a distinct advantage.
5. Design and Development Plan
It outlines the technical details of the product and its development cycle within the realm of production. In the sphere of circulation, it focuses on marketing and the overall budget required to reach organizational objectives.
6. Operations and Management Plan
The operations and management plan describes the cycle of business functions needed for survival and growth. It includes management functions such as task division, hierarchy, employee recruitment, and operational functions such as the logistics of the value chain , distribution, and other capital and expense requirements. The managers’ backgrounds must also be briefly included.
7. Financial Factors
The financials section should include the company’s balance sheet and cash flow projections. Financial data is imperative to provide credibility to any assertions or claims made about the future profitability of the business. The aim is to provide an accurate idea of the company’s value and ability to bear operational costs and earn profits.
Common Mistakes to Avoid While Writing a Business Plan
- The plan must not begin by stressing the superiority of one’s product or service, but instead by identifying a genuine problem faced by the consumer. The plan should then be presented as a way of bridging that gap between consumer expectations and industry offerings.
- A team’s expertise is displayed not by listing their academic achievements and employment history, but by stressing how the team’s experience is best suited for a particular industry sector or product. Often, teams with members who have failed in a past venture are successful in attracting capital.
- The most common mistake is to offer an excessively optimistic view of the opportunity. There is no market without competition and no venture without some degree of risk, and a business plan must portray the objective truth with sincerity.
Additional Resources
CFI is the official provider of the Financial Modeling and Valuation Analyst (FMVA)™ certification program, designed to transform anyone into a world-class financial analyst.
In order to help you become a world-class financial analyst and advance your career to your fullest potential, these additional CFI resources will be very helpful:
- 5 P’s of Marketing
- Business Model Canvas Template
- Profit Model
- Value Proposition
- See all commercial lending resources
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Blog / Small business tips / How to create a business plan: A complete guide to writing your company roadmap
How to create a business plan: A complete guide to writing your company roadmap
A business plan is a roadmap that outlines what your business does, how it’s going to work and how you’re going to achieve your goals.
According to Bplans , who worked with the University of Oregon to analyse academic research around planning, entrepreneurs who take the time to create a plan for their business idea are 152% more likely to start that business.
Further, 129% are more likely to push forward with it beyond the start-up phase. And companies that strategically plan grow 30% faster than those that don’t.
In this guide, we’re going to walk you through how to write a business plan that helps your company start, build and achieve success.
Table of contents
What is a business plan and why do you need one, the nine key components of a business plan and how to write them.
- Five top tips for writing a compelling business plan
📹 Masterclass video: How to write the perfect business plan
Wrapping up.
A business plan is a document that guides you through the various stages of building, launching and running your business. Essentially, it helps you put the building blocks in place to make your company a success.
If you’re bringing a new small business to market, a business plan will be crucial in:
- Securing funding or loans
- Achieving investment or raising venture capital
- Attracting talent or business partners
- Guiding your go-to-market strategy
All banks and most investors and venture capitalists will only invest in a business if they can see that they’ll get their money back. They want to know that you have the business idea, team, scalability and planned sales growth to succeed. A business plan gives financiers the details they need to make informed decisions.
Similarly, for talent or prospective partners, a business plan is your assurance to them that your business matches their short and long-term career ambitions.
A business plan also keeps you focused on what you need to do to accomplish your goals. If you’re not meeting your targets, you can turn to your business plan to help guide you on changes that need to be made. It’s the drawing board you can always go back to.
Because of this, having a business plan is as important for existing businesses as it is for start-ups.
Top Tip: Business plans also apply to side hustles. Even if you have a full-time job or already run a small business, a side hustle can be a great way to pull in extra income or capitalise on a hobby. But just because it doesn’t take up all of your time doesn’t mean it should lack structure. To learn more about how to effectively run a side business, read our guide to 5 side businesses you can start quickly and affordably 💡
How long should a business plan be?
According to Growthink surveys, 15 to 25 pages is the optimum business plan length. But the number of pages isn’t the ideal way to measure length.
As Bplans points out: “A 20-page business plan with dense text and no graphics is much longer than a 35-page plan broken up into readable bullet points, useful illustrations of locations or products, and business charts to illustrate important projections.”
Instead, Bplans says that your business plan should:
- Take no longer than 15 minutes to skim read . Make sure that key information in each section is easy for readers to find.
- Mirror the length of its audience . The length is directly tied to the intent. If the purpose is for outsiders who know nothing about your business to gain a deeper understanding, it must include detailed executive summaries and team descriptions. If the intent is to procure investment, it must be built to withstand legal scrutiny and include any information a bank would look for in a business loan application. Know your audience, and work backwards to create the ideal business plan to match that scenario (we’ll dive into exactly how to do this in a later section).
How to present your business plan?
Your business plan is designed to evolve as your business grows. It’s a living document that should be consistently tweaked to match the health and goals of your company. Because of this, it’s best to keep your plan as a digital document that can be easily updated and sent to third parties as a PDF.
That said, there may be times when your plan needs to be presented to investors or bank managers in person, so it should always be print-ready with a front cover that includes your:
- Company name
- Company logo and colour scheme
- Business name and date
- Contact information
It should also have a contents page, with numbered pages and sections so that readers can easily find what they’re looking for.
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A business plan features nine main sections related to your business operations, structure and finances:
- Executive summary
- Company description
Market analysis
- Management and company structure
- Service or product information
- Marketing and sales strategy
- Funding information
- Financial projections
Let’s take a closer look at each.
1. Executive summary
The executive summary is a top-level look at your business that summarises the detailed information found in the rest of the sections.
It’s also your elevator pitch—a chance for you to immediately captivate the reader by portraying your mission, vision, goals, product, leadership, finance information and growth plans.
Picture yourself in a lift for 45 seconds with a potential investor. How would you sell your business? Think about that when writing this section. Be concise and compelling with your words.
Because it is a summary, it’s often easier to write this section last after you’ve fleshed out the finer details of your business plan .
Writing your executive summary
Start with the basic information:
- Your company name
- Company address
- Names of all owners and partners
Then, get into the business information.
- Value proposition . Describe in one sentence what your company does and why it’s great. This is your value proposition. For example, Uber’s value proposition is “The smartest way to get around”. For email marketing platform MailChimp it’s “Send Better Email”. For Dollar Shave Club it’s “A great shave for a few bucks a month”.
- Problem and solution . In a paragraph, briefly explain the problem customers are facing and how your product or service solves it.
- Target customers. Who is your ideal customer? Be extremely specific. For example, if you’re selling men’s suits, your audience won’t simply be every man because every man wears suits. That doesn’t hold true. It’s more likely to be targeted towards ‘fashion-conscious men’ or ‘businessmen’.
- Competitors . List other companies that are solving the same problems you are and how they’re solving them.
- Team . A sentence or two on why your team is the best team to bring your product or service to market.
- Finances . Focus on the key aspects of your financial plan–your planned costs and how you will make money.
- Funding . Details of your start-up costs and how much you need to raise to get your business off the ground.
- Milestones . Briefly mention what you’ve achieved so far and what goals you plan to achieve. This lets potential investors, talent or partners know how serious you are in building a successful business.
As mentioned above, before you can write this section you have to flesh out all of your company details, including who you are, who you’re selling to, how you’re going to sell your product or service, what your financial goals are, how you will reach those financial goals, and so on.
The rest of this article will inform you on how to do just that.
2. Company description
The company description is your story. It digs deeper into your value proposition, looking at how you came to be and what you intend to achieve.
Break your description down into three sections:
Mission statement
Company profile, business objectives.
Your mission statement is a sentence or short paragraph that describes why your business exists.
To create your mission statement, answer the following questions:
- What does my business do?
- How do we do it?
- Who do we do it for?
- What value are we bringing to customers?
For example, Patagonia’s mission statement is “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”
In a single sentence, they get across their aims and ambitions, their value to the market (safe, quality products) and their value to people and the world (helping the environment).
Use this as inspiration to come up with a statement that captures the heart and soul of your business.
Top Tip: Your company description will also help to inform your business culture. You will carry these core values throughout all of your business behaviours and they will also influence how you make future business decisions. Because of this, it’s crucial to devote the necessary time and energy to get this right. To learn exactly how to do that, read our guide on why business culture matters & how to get it right from the start ☀️
In a paragraph or two, your company profile should detail your:
- Founding date
- Company location
- Products or services
- Number of employees
- Details of company leaders and their roles
- Company milestones
The information is the most important thing here, so approach it like a business profile and stick to the facts and figures.
In a paragraph or two explain what you want to achieve as a business. This needs to be a realistic aim that investors can get behind and your team members can work towards.
The SMART goals method can help you to ensure your goals are practical.
SMART stands for: Specific, Measurable, Attainable, Relevant, and Timely.
Use graphs to add weight to your objectives. For example, if you aim to increase revenue from £100,000 in year one to £500,000 by year five, create a chart that plots your growth. The visual aspect helps to grab attention whilst providing readers with key information they may miss if skim reading.
This chart from an example business plan does just that:
You’re immediately drawn to the planned-growth projections and want to learn about how they’ll reach such high goals. We will get into the specifics of how to create accurate sales and revenue forecasts in a later section.
Top Tip: To learn more about how to establish practical SMART goals that will inform your business strategy and help you effectively market your brand, read our beginners guide to digital marketing strategy .
3. Market analysis
Marketing analysis focuses on three areas:
- Your target market (the industry your selling in)
- Your customers (who you’re selling to)
- Your competitors (who you’re selling against)
By detailing information about the themes and trends within your industry, you’ll be able to show that the appetite for your product or service exists. Outlining information about your ideal customer helps you to identify the marketing and sales tactics you can use to attract them. And highlighting your competitor’s strengths and weaknesses gives you a chance to showcase what you do better than the rest.
Market analysis should identify the market as a whole, as well as your addressable market and your share of the market. From this information, you can begin to get an idea of your target market, which informs your messaging, positioning and unique selling point (USP).
Start by researching the current state of your industry and where the market is heading in terms of size, trends and projected growth.
Your approach here will depend on your business. For example, if you’re opening a small local shop, you should assess the market around your shop. If you’re starting an ecommerce business and selling UK-wide, you’ll need to analyse the market at a national level.
When estimating market size, look at:
- Volume . The number of potential customers
- Value . The value of the market
You can find this information by searching for publicly available data or by commissioning a market research report. If you’re searching on a national level, you may find figures published online. On a local level, data might not be as easy to come by, which is where you’ll need to carry out your own research.
Top Tip: Conducting market research takes time, but it’s important that you get a full picture of your audience to ensure your message and USP resonates. To learn more, read our detailed guide on how to conduct market research for your business idea ⚡️
Once you have the information, you can use TAM SAM SOM to work out your business’ relationship to the market size.
- TAM stands for Total Addressable Market
- SAM stands for Serviceable Addressable Market
- SOM stands for Serviceable Obtainable Market
- To calculate your TAM, work out how many people have a need for your business. For example, let’s say you’re opening a shop selling custom-designed women’s clothes in a town of 100,000 people. Market research shows that 50% (50,000) of residents are women. Your total addressable market would be 50,000 people.
- To calculate your SAM, take your TAM and discount all the people that fall outside of your target market. Let’s say your target market is women between 18 and 35, with disposable income. This discounts 30,000 people, which means your serviceable addressable market is 40% (20,000) of your total addressable market.
- To calculate your SOM, work out how many of your SAM you can realistically serve. Your shop offers a measuring service and design consultation but only to people in a five-mile radius, which means you can serve 200 people a month. That would mean serving 2,400 people a year, which makes your SOM around 12% of your SAM.
Ideal customer
Your ideal customer is the person your product or service is aimed at. In the above example of the women’s clothes shop, the ideal customer is between 18 and 35, with disposable income.
Customer analysis digs deeper than this, looking at your target customers’ education, income, job, relationship, buying concerns, interests and more.
You’ll find methods to help you discover your ideal customer and create customer personas in our guide on how to create a go-to-market strategy .
Competitors
Competitive analysis is the process of identifying gaps in the market that your product or service can fill. It’s about finding out what the competition does so you gain a competitive advantage.
In our guide on how to run a competitive analysis , we walk you through the process of analysing the finer details of your rivals in five steps:
Step 1: Identify & segment your competitors
Step 2: Analyse their market positioning
Step 3: Review their content & social media
Step 4: Check out what their customers are saying
Step 5: Walk through their customer journey
Use this information to show potential investors and talent that your business is going places. Our competitive analysis matrix template is a great starting point.
Once complete, take it a step further and create a simple visual that clearly shows where your company outperforms the competition. Here is a basic example of how to build out this visual.
It’s hard to ignore a chart that checks all of the boxes.
4. Management and company structure
This section goes into detail on how your company is structured and who is running it.
The structure here means two different things:
Team structure
Company structure.
First, you need to show your management structure: what each leader’s role is within the company.
The simplest way to show your company hierarchy is with an organisational chart like this example:
For each member of your team, give details on their background and credentials with a bio that includes their:
- Professional background
- Achievements
Including this information gives readers assurances that the team you have in place is well-positioned to take the company forward.
If there are any roles yet to be filled, give details on those positions.
Company structure is your legal structure. For example, limited company or limited liability partnership.
Top Tip: If you’re yet to decide on a company structure, you can weigh up the pros and cons for setting up as a sole trader, limited company, or business partnership, as well as the costs and requirements involved, in our guide on how to register a business in the UK 🔍
If you plan on changing the structure of your company in the future, include details on this as well. For example, you may start as a private limited company (Ltd), but grow to become a public limited company with shares offered to members of the public.
5. Service or product information
Here is where you get to wax lyrical about your offer and why it’s better than anything currently on the market.
This section should include:
- A description of your product or service . Details on what it is and what it does.
- How your product or service will be priced . Do you offer tiered pricing or a subscription model, for example.
Top Tip: Choosing the right pricing strategy is another key part of your go-to-market strategy. Will you price higher, lower, or similar to your competitors? What does the market demand? How does your pricing strategy reflect the value of your products and services? To learn more about how to answer these questions, read our 6-step guide on how to price a product and achieve profitable markups 💷
- How your products compare to competitors . List several competitor products along with their pros and cons.
- The production process . Details on how your products are created, how your source materials, quality control management, supply chain, inventory and bookkeeping.
- Product lifecycle . Details on upsells and cross-sells, research and development plans and time between purchases.
- Orders . Details on how you process and fulfil orders.
- Legal aspects . Details on any intellectual property or trademarks you own.
- Future products or services . If you plan on expanding your offer, give details on the offer and any research and development plans.
While there are formal and practical details to get across, the main point of this section is to get the reader excited about your product. To do this:
- Focus on the benefits . Describe how features give value to the customer. Here are some examples of features turned into benefits:
- Highlight your features. Get across what features your product or service has that the competition doesn’t. For example, your product might be the cheapest on the market or your turnaround time might be quicker or your expertise might allow you to offer a better level of service.
- Get across why you’re needed . Shine the light on why your product or service is important to the market. This will be especially crucial if your startup is bringing a new invention to the market, or you’re creating an entirely new market.
6. Marketing and sales strategy
If your business is going to be a success, you need a marketing strategy and sales plan that takes customers on a journey from awareness to purchase.
This section of your business plan should include:
- Your target market . Reiterating the information from the market analysis section.
- Which marketing channels you’ll use and which you’ll prioritise . For example, social media, word of mouth, Google Ads, print or radio advertising, exhibition stands or fairs, or referrals.
- Your plan to attract customers at launch . For example, you might run an opening discount offer to people who share your post on social media. Or give a voucher to every customer who refers a friend.
- Your plan to retain customers . For example, you may offer reward programs that allow customers to collect points for every purchase that can be redeemed for free or discounted products.
- Your expected results . What you hope to achieve from your marketing and how it will help you grow your business in terms of sales and visibility. If you’ve already started marketing your business, give details on what you’ve done and how it’s benefited the business.
7. Funding information
Funding information is all about how much money you need to start your business, why you need it and how you’ll use any capital.
The most critical part of this is your startup costs, which detail:
- The cost of producing your product or service
- Your fixed outgoings
- The cost of equipment, premises, supplies, insurance and other necessities required to run your business
Top Tip: If you’re yet to work out how much capital you need, check out our guide on how much it costs to start a business in the UK 📌
If you have the figures in place, you can set out presenting them.
This section should be broken down into three parts:
Current and future funding requirements
How funds will be used, current and future financial plans.
Include how much money you need to get your business off the ground, along with any funding you’ll need in the foreseeable future (up to five years). Be clear about why you’re requesting a loan or investment and outline what your needs are based on in your financial forecasts (we’ll get onto those soon).
If you’re offering equity in exchange for investment, provide details on how an investor will be paid, as well as how and when they can cash out. For most small businesses, investors are paid in dividends (a share of company profits).
This part should explain how you plan to use the funds so that investors can determine if your business is a worthwhile investment. If you plan on using capital for several things, list and provide costs for each.
Again, putting these numbers into a visual format will help to more clearly outline your vision.
Finally, if applicable, provide information on any current investments and/or outstanding loan repayment plans.
If you’re seeking investment or a loan for the first time, most lenders will have their own repayment schedules. However, you should detail any factors that may affect lenders, such as any plans to relocate or sell the business.
Unlike other sections, funding information will need to be tailored to each financier. Investors will be interested in return on investment (ROI), whereas lenders will be interested in loan repayments. Create separate reports so that information is relevant to the reader.
Top Tip: Investors and banks will also be interested in your business credit report (if you have one). To learn more about why your business credit score is important and how it’s determined, read our guide to everything you need to know about your business credit score (and how to improve it) 🙌
8. Financial projections
Financial projections supplement your funding information by showing potential lenders and investors that your business has a positive financial outlook.
This section should include the following key information:
- Sales forecast. The amount of money you expect to raise from sales.
- Cash flow statement. Your cash flow balance and monthly cash flow patterns–how much is coming in and going out of your business every month.
- Balance sheet. An overview of the financial health of your business.
- Profit and loss statement . Your profit level and how much you expect to make based on projected sales, minus the cost of overheads and providing goods or services.
Top Tip: Unless you’re an accountant, this part of the business plan can be overwhelming. To learn more about the fundamentals of accounting and how to create each of the aforementioned statements, read our complete guide to accounting for startups 📣
If your business is already established, you’ll need to include financial figures from the last three years (or however long you’ve been trading if it’s less than three years) for all of the above, other than your sales forecast.
If you’re a new business, your financial figures need to be predicted.
We’ve built several spreadsheet templates to help you generate the below financial reports:
- Three main financial statements (balance sheet, profit and loss statement, cash flow statement)
- Cash flow forecast
- Estimated sales
Forecasting your finances
Sales forecast.
Use your market analysis and knowledge of industry trends to estimate your future sales. For the first year, break these figures down into monthly sales, detailing what you’re selling, price points and how much you expect to sell. Moving into the second and third year of business, reduce forecasting to quarterly sales.
Cash flow statement
As a startup, your cash flow statement becomes a cash flow forecast based on your sales forecast, minus your expenses. Your expenses are the:
- Fixed costs . Expenses that are the same or close the same every month (e.g. rent, insurance and utilities).
- Variable costs . Expenses that vary every month depending on demand (e.g.costs for raw materials, production costs, shipping and advertising).
Provide monthly cash flow patterns for the first 36 months. Keep in mind that, depending on your business, you may need to account for a lag in revenue. For example, if you provide a service to a client, their payment terms might dictate the invoice is paid 60 days after being sent.
Top Tip: To learn more about the various types of expenses and how to manage them, read our guide to small business expense management 🙌
Balance sheet
Create a balance sheet by calculating company assets, minus company liabilities.
Company assets include:
- Property you own
- Equipment you own
- Unsold inventory
- Company vehicles you own
- Outstanding invoices
Company liabilities include:
- The amount you owe on a business loan
- The amount you owe unpaid invoices
Your balance is the difference between your assets total and your liabilities total.
Profit and loss statement
Use the figures from your sales forecast, expenses and cash flow statement to forecast how much you expect in profit and losses for your first three years in business.
Your statement needs profit and loss projections for each year, as well as a total figure for the three years and should include a breakdown of:
- Sales . Based on figures from your sales forecast.
- Cost of goods sold (COGS) . The total cost of selling your product or service. If you need help with this, check out our guide on everything you need to know about cost of sales .
- Gross margin . Your sales minus your COGS. This is usually listed as a percentage, which you can calculate as:
Gross margin (total revenue – COGS / total revenue x 100
For example, £500,000 total revenue, minus £300,000 leaves a gross margin of £200,000.
£200,000 / £500,000 x 100 = 40%
- Operating expenses . A list of all your expenses, minus COGS (which you’ve already included), tax, amortisation and depreciation. List each expense individually and include a total sum.
- Operating income statement . Your total operating expenses minus your COGS, before interest, tax, amortisation and depreciation.
- Total expenses . Your expenses including interest, tax, amortisation and depreciation.
- Net profit . Your monthly and yearly bottom line.
List financial figures using bullet points and include graphs to show how you predict your business will grow over your first three years of trading.
9. Appendix
The appendix is the place to include any supporting documents. If a lender or investor hasn’t requested additional documentation, you can choose to leave this section out. But it’s a good place to strengthen your business plan, by including:
- Reference letters
- Credit reports
- Permits and licences
- Client contracts or customer purchase orders
- Legal documents
- Associations and memberships
Format the appendix with a clear table of contents and sections that correspond to the business plan section.
5 top tips for writing a compelling business plan
- Keep it concise . Say what you need to say using simple language (no jargon) in as few words as possible. Your business plan only needs to get the key information across. The intricacies can come later.
- Make it easy on the eye . Most lenders and investors will skim read your business plan, picking out relevant information as they go. Use headings to define sections and make key data stand out on each page by using bullet points for lists, bolding important sentences and using graphs and charts to add weight to financial figures.
- Think about your audience . Consider who your business plan is aimed at and write with them in mind. If it’s an internal plan, think about what your team would want to gain from reading the document. If it’s for a lender or investor, think about the questions they might ask and which information is of particular interest to them.
- Get the figures right. If you’re forecasting costs, sales and expenses, numbers will never be 100% accurate and it’s better to overestimate than underestimate. However, figures must be realistic and they must add up. Expect lenders and investors to scrutinise your calculations. Always double and triple check the numbers.
- Proofread and proofread again . Don’t let your hard work be undone by something as simple as a typo or grammar mistake. Proofread your document from start to finish and then finish to start. Have someone you trust look over it too.
You now know what goes into a strong business plan, but you might be wondering what tools and frameworks you can use to bring it to life.
In this Tide Masterclass, our Events Manager Cuan Hawker is joined by Tom Horbye , Head of Campaigns Development at Seedrs .
Seedrs connects investors and businesses. They help startups raise capital and grow a supportive community. As they put it, it’s “equity crowdfunding done properly”. It’s unlikely anyone has seen and improved more business plans than Tom!
Tom will explain:
- Why you need a business plan 📘
- How to structure your plan 📃 Two tried-and-tested structures that work.
- What to include in your plan 📋 And what to leave out.
- Tools, help and next steps 🛠
This Masterclass is useful for anyone thinking about starting their own business in the UK.
A business plan is the cornerstone of your company. By clearly detailing your business objectives, strategies, marketing and sales plans, and financial forecasts you’ll be able to set out your business goals and keep track of your progress.
Use this guide to complete the key components and put together a plan that a) brings clarity to your team, and b) provides assurances to lenders and investors that your business is a safe bet.
Read more from our business startup series :
Starting Up
1.1 How to start a business in the UK: 10 steps to build from scratch 1.2 How to find the perfect name for your small business 1.3 How to register a business? A simple guide 1.4 How to start a business without capital 1.5 10 ways to fund your business 1.6 How to create a business plan: 9 things to consider when starting
Business Ideas
2.1 15 business ideas you can get started with today 2.2 How to start a business online
Business Funding
3.1 How much does it cost to start a business in the UK? 3.2 How to raise capital for your business: Everything you need to know
Business Mindset
4.1 How to make your first year in business a success 4.2 How to combat loneliness when becoming a solo-founder 4.3 How to employ someone: hiring your first employees
Photo by William Ivan, published on Unsplash
Valentine Hutchings
Head of Community and small business enthusiast
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How to structure an effective business plan
What are the essential parts of a business plan template?
Understanding and creating different types of marketing plans and knowing when they are needed is essential to creating a thriving business. But it can be difficult to know which type of plan to use when and how best to structure them. In this article, we look at the essential parts of a business plan and show how to lay it out.
Our new, free PDF download detailing the different types of marketing plans will help you structure different types of plan and gives recommendations on how to make them effective.
Download our free PDF download – Understanding different types of marketing plan guide
This download and our other free templates is for anyone who wants to improve their knowledge of marketing planning with a few to gaining more senior roles.
Access the Understanding different types of marketing plans for your business
What is a business plan?
A business plan is a formal document that outlines organizational objectives and the strategies required to achieve those objectives. It identifies how you drive your organization’s future. It aims to answer the question: How do we plan to make our business a success? It is a written record of goals, coupled with a track record of delivering against those goals.
As outlined in the Smart Insights Quick Win Guide and Template – Create a Multi-Channel Marketing Plan , the purpose of a business plan is to define strategies for growing profitability over a long-term period. The scope of a Business Plan is typically 12 months to three years and content usually includes:
- New product development
- Revenue sources
- Means of cost management
The purpose of a business plan is to match targeted opportunities with resources, focused activity, and strategies. It supports in guiding and directing different areas of your organization to ensure that you are all working towards the same objectives.
If you're looking to optimize your business plan, integrate your digital activities, or just need some help prioritizing next steps to grow your business, why not book a free 1-2-1 consultation call with the team?
Need a winning marketing strategy?
Book your free 1-2-1 consultation to develop your new strategy with the RACE Framework
When to use a business plan?
A business plan is used by organizations for establishing and monitoring continuous business growth, remaining competitive, and in achieving specific goals. Business plans are typically utilized by organizations when:
- Gaining initial investment as a new business or startup
- Planning market expansion for an existing company
- Undertaking product development
- Preparing for acquisition
- Planning divestment
- Gaining or sustaining a competitive advantage
- Evaluating resource allocation and strategic goals
Organizations seeking funding require business plans to demonstrate the strength of the business and its future to investors.
What should be included? / How should the plan be structured?
A business plan typically defines how an organization will change to become more competitive in the future. It typically includes:
- A review of existing financial performance
- Value proposition (products and services)
- Marketing tactics including the 7Ps of the marketing mix
- Financial forecasting
- Potential threats and challenges
A business plan is an effective way of monitoring progress as it establishes targets in all areas of your business; from sales and expenses to staff recruitment and financial requirements. Once established, these targets translate into performance goals.
A solid business plan has:
- Clear, realistic goals which you can be confident of hitting
- The best strategy to achieve these goals against your competition
- Sufficient details of the tactics and actions needed to translate the strategy into action
- A method to check you are on track with your plans
Optimize your business marketing plan
To make sure your business plan has all the essential features, I recommend the SOSTAC® structure developed by PR Smith—Dave Chaffey’s co-author of the printed book Digital Marketing Excellence .
PR Smith’s SOSTAC® is a great template for structuring a business, marketing or digital marketing plans since it’s relatively simple and logical, so it’s easy to remember and to explain to colleagues or agencies. SOSTAC® is a strategic planning process framework that gives you a clear structure to work through to create and manage your plan.
Here’s a summary of how different multichannel marketing activities map to different sections of SOSTAC®. Smart Insights premium members can download PR Smith's SOSTAC® guide to your Perfect Digital Marketing Plan .
So, what does SOSTAC® stand for?
Situation analysis means ‘ Where are we now? ’ For business planners, questions include:
- What industry are we operating in?
- What are our products and/or services?
- What is our current business structure?
- What do our cash flow statement, balance sheet, and financial ratios look like?
- Are we measuring results accurately?
- Who and where are our customers?
- What are our competitors doing?
- What’s working for them?
Objectives mean ‘ Where do we want to be ?’ What is the growth forecast? What are the top-level goals 5 Ss (Sell, Serve, Speak, Save, and Sizzle)? Here we can build specific and measurable business plan targets. Good objectives are quantified against timescales.
Strategy means ‘ How do we get there? ’ Strategy summarizes how to fulfill the objectives. It is the shortest part of the plan, but arguably, the most important, as it gives direction to all the subsequent tactics. It answers questions including: how do we position ourselves to gain a competitive advantage? How will business plan targets be achieved?
Tactics are the details of the strategy . They highlight in a business plan exactly which tactics occur when. To recruit new staff, for example, we would include what methods we will implement to improve our employer brand.
Action is the detailed planning of tactics . Who does what, when, and how? What processes and activities are required to make things happen?
Control identifies what you need to measure when, a review process and corrective action when you’re not hitting your targets. The Control section of the plan ensures you know if you are succeeding or failing – and you can make adjustments – before it is too late.
Which type of business is it most suited for?
A common perception is that business plans are formulated by cash-starved start-ups seeking investment to launch a new venture, but a business plan can and should be utilized by businesses of any size, type, and at any stage of existence.
Even though the techniques for business planning may vary between different sizes and types of organization, the objective is always the same: to define targeted opportunities to become more competitive with resources, focused activity, and strategies.
In smaller organizations, the business planning process may be more straightforward than for larger organizations with distinct business areas and who may need to make some difficult decisions regarding resource allocations and strategic priorities. This may lead to internal uncertainty and conflict. The business planning process, however, can also be a good opportunity to gather employee feedback on potential ideas and improvements. You could hold a brainstorming session to gather knowledge and get your employee’s support, for example. They will value the opportunity to contribute to the business.
For already established businesses, a business plan will enable you to objectively look at what is working well and areas for improvement. Many business plans are formulated by organizations that are long past the start-up stage. There may be a need for a formalized plan to manage rapid growth, stakeholder expectations, or to secure funding for growth.
How does it relate to other plans?
A business plan outlines the long-term corporate strategy of a business, which informs and influences other plans within an organization. It is at the top of the business planning hierarchy, covering systems, procedures, resources,
and structure. A marketing plan, however, covers the sales, distribution, communications, and delivery of a product or service, intending to achieve the corporate objectives set out in the business plan.
Integrated with a business plan may be, for example, a marketing plan, a digital marketing plan, multi-channel marketing plan, and/or a campaign plan. The business plan informs these plans and vice-versa.
Different organizations will utilize differing plans, covering different areas and timeframes. What is crucial in a business is that the plans being utilized, the timeframes allocated, and how they integrate are collectively established.
To find out more about how different types of marketing plans and how to structure them, download our free Understanding different marketing plans guide , which includes campaign planning, digital transformation plans, and multichannel plans.
By Sarah Lindley
Thanks to Sarah Lindley for sharing their advice and opinion in this post. Sarah, Managing Director at The Yorkshire Marketing Agency, is an award-winning Chartered Marketer. Sarah holds over 10 years’ experience in implementing results-driven marketing and communications strategies, plans and campaigns. You can connect with her on LinkedIn .
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The management plan provides an outline of the company's legal structure, its management team, and internal and external human resource requirements. It should list the number of employees that will be needed and the remuneration to be paid to each of the employees.
Which section of the business plan details and outlines the authority structure that exists inside the company? management plan The section of the business plan that is designed to initially captivate and energize a potential financial investor would be the executive summary
Use this business plan section to outline your marketing plan, your sales plan, and the other logistics involved in actually running your business. You'll want to cover your sales channels, broad marketing activities, your pricing strategy, as well as your intended market position.
When writing a business plan, it is important to: analyze the competition and calculate how much money you need to start. A business plan is a detailed written statement that describes: the target market and the resources and qualifications of its owner (s) Kayla wanted to open her own dress design business.
Which section of the business plan details and outlines the authority structure that exists inside the company? Multiple Choice marketing plan management plan organizational chart introduction The section of the business plan that is designed to initially captivate and energize a potential financial investor would be the Multiple Choice
This is usually made up of one or more people which work together to achieve a common purpose. Organizational chart is the section of the business plan details and outlines the authority structure that exists inside the company through outlined ranks and responsibilities in the diagram.
Executive summary. Briefly tell your reader what your company is and why it will be successful. Include your mission statement, your product or service, and basic information about your company's leadership team, employees, and location. You should also include financial information and high-level growth plans if you plan to ask for financing.
based on the sections of the business plan as well as what is outlined in the . Build Your Business Plan tool. Use the checklist to measure where you are in the process of collecting the necessary material. As you progress, refer to the Build Your Business Plan tool for additional business plan writing support as needed.
The five sections of a business plan are as follows: The market analysis outlines the demand for your product or service. The competitive analysis section shows your competition's strengths and weaknesses and your strategy for gaining market share.
Parts of a Business Plan: 7 Essential Sections Select one or more filters to access resources for your specific needs. Open Function Finance & Accounting Human Resources Technology Insurance Legal Marketing Strategy Retail Format Article Infographic Video Webinar
They must make the information easier to pass on than text would. The business plan format that investors and lenders expect includes the following 10 sections. We've included important notes in each section specific to business plan formatting to help you as you write your plan. 1. Start with Your Executive Summary.
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.
This section of your business plan explores the details of your business's management and organization strategy. Introduce your company leaders and their qualifications and responsibilities within your business. You can also include human resources requirements and the legal structure of your company.
Business plans act as reference tools for management and employees as they solidify the flow of communication, authority, and task allocation. 3. Foresight The process of preparing a business plan often creates many unintended yet desired results.
A business plan gives financiers the details they need to make informed decisions. Similarly, for talent or prospective partners, a business plan is your assurance to them that your business matches their short and long-term career ambitions. A business plan also keeps you focused on what you need to do to accomplish your goals.
A solid business plan has: Clear, realistic goals which you can be confident of hitting. The best strategy to achieve these goals against your competition. Sufficient details of the tactics and actions needed to translate the strategy into action. A method to check you are on track with your plans.