Do You Really Need a Business Plan?

The art of storytelling, from net margin to sales.

Do You Really Need a Business Plan?

Why is a business plan important?

Four Reasons to Write a Business Plan

1. To raise money for your business

2. To make sound decisions

3. To help you identify any potential weaknesses

4. To communicate your ideas with stakeholders

Rich Longo

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How to Write a Business Plan for Your Small Business

How to Write a Business Plan for Your Small Business

Do I need a business plan? Your questions answered

why write business plan

If you're about to start your business, you have probably heard about business plans, and might be wondering: do I need a business plan? 

First things first, what is a business plan? To keep it simple, a business plan is a document that presents the business opportunity that your company is trying to seize. In this document, you'll explain how you intend to take action to make the most out of this opportunity and estimate its potential profitability. 

Ok, now let's take a look at why you need a business plan. 

#1: Do I need a business plan to serve as a road map?

The business plan is the document that will go over the strategic, commercial and financial objectives of your project for the next 3 years. 

3 years can seem like a long way away when creating your business, however, it's important to account for this time. There's a good chance your project will evolve in a different direction than what you had in mind at the start - as you will need to adapt to market trends, competitors and consumer needs, embrace yourself for your business to be constantly evolving. 

Your business plan, therefore, acts as a road map for the whole team. You will be able to have a document to come back to and reflect, making sure you've accomplished what you intended to, or understand why you didn't, and define new goals for your company.

#2: Do I need a business plan to convince investors?

Your business plan is an extremely effective tool when it comes to convincing potential collaborators. Suppliers and financial partners (lenders and investors) will also ask for a business plan to assess your project's viability.

Having a business plan will allow you to have a convincing document on hand, ready to be sent to banks or private investors.

You need a business plan to attract them to the business opportunity you're presenting.

Suppliers will look for how much they can get out of your project, and if the opportunity is worth their time. It's therefore essential for you to reflect on an enticing business opportunity, and make sure your business will be profitable so you can pay your suppliers on time.

Banks will evaluate your business opportunity by looking at different aspects such as payment fees and foreign currency transactions they can earn. They will also assess how much capital you will need at the start and how much funding you will put towards the project to estimate how much you will be able to borrow.

If you're getting a loan from your bank, it will be important to underline the stability and viability of your project and that's why you need a business plan. You will highlight the chances of success, along with how much capital debt you will have, and show you will generate enough cash flow to keep the business afloat.

When you're looking to send it to an equity investor, the business plan must highlight the potential return on investment. Investors need to be convinced that the project will be profitable enough to compensate for the risk they're taking, and make sure you will reach the plan's objectives.

Convincing all of them means getting them to read your document, however, they don't have time to spare, that's why you need a business plan to help you be clear and concise. 

Besides engaging content, your business plan should have a nice format that catches the eye. Clear and constructed presentations also mean having a good executive summary .

Once all of this is done, you can be pretty sure that they'll read your business plan with enthusiasm, and hopefully be convinced.

#3: Do I need a business plan when looking for funding? 

Yes, making a business plan is (admittedly) tedious and time-consuming, but you really need a business plan if you're looking for funding. The business plan is absolutely necessary.

Not only will it allow you to get a glimpse as to what the future holds for your business, but you will also have an idea of how profitable it could be.

No business plan means no lenders or investors. You need a concrete document in order to grab their attention.

No business plan also means that you are flying blind without knowing whether or not your business can be profitable - that's risky!

#4: Do I need to write a business plan by myself?

It can be difficult to pick the right solution for creating your business plan, but here are a couple worth looking at.

Create your business plan with Excel

Excel is the cheapest solution on the market, however, it might just the hardest one as well. Without any accounting, financial, or Excel knowledge, creating your business plan with Excel could turn out to be really tricky.

It might save you some money, but will take time and won't keep you from making mistakes.

Ask a professional to do it for you

A consultant or an accountant could be the help you need to put together a business plan.

However, their expertise comes at a price and this won't be the cheapest option.

If you opt for this solution, make sure that the person you choose is an expert in your industry, and therefore has the knowledge to critically analyse the business potential.

Use an online business plan software

Using an online business plan software could also be a great solution for the business plan you need.

Using  online business planning software will give you the necessary tools to write your business plan:

If this sounds ideal to you, The Business Plan Shop gives you the opportunity to trial its software for free by registering here .

Using a business plan software could be a good compromise between the other solutions, considering it's easier to use than Excel and cheaper than a professional.

We hope this article was useful in helping you understand why should write a business plan.

Please do not hesitate to get in touch if you have any questions, our team will be happy to help.

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Do I Need a Business Plan: Everything You Need to Know

There may be mixed answers to this question. However, if you are looking to raise funds through a bank loan, angel investment or venture capital. 3 min read

Do I need a business plan? There may be mixed answers to this question. However, if you are looking to raise funds through a bank loan, angel investment or venture capital, you will almost always need a business plan to present to the investors.

Even if you write down your business plan as a broad outline, you will have something to start with. Instead of having random ideas in your mind, putting down your ideas on paper can be effective in the long run.

When Do You Need a Business Plan?

Following are some of the main reasons for creating a business plan:

A business plan should provide all the essential information required for management, monitoring, review and revision of business operations.

If you are preparing a business plan for the purpose of raising a loan or investment, your business plan should show that you will have enough revenue to meet your expenses. You should include the important sections commonly found in a business plan. However, you can customize the plan to suit your audience.

Features of a Successful Business Plan

A good business plan typically bears the following features:

A business plan is an important management tool; it defines your business strategy, guides you through execution and helps monitor your progress. Whenever required, the plan document also helps you convince your investors that your business is well-planned for success.

Why Is It Important to Write a Business Plan?

Helps You Make Decisions - You cannot finish some of the sections of a traditional business plan with an undecided or half-committed mind. A business plan thus brings clarity to your ideas and simplifies the decision making process.

Acts as a Reality Check - In an excitement and enthusiasm to launch a new venture, a small business owner often forgets to double check his business idea. Putting down a business plan on paper forces the entrepreneur to do a reality check and discover any flaws in the idea.

Gives You New Ideas - We generally tend to procrastinate making tough decisions due to lack of clarity. Sitting down to write a business plan gets you many creative solutions to deal with several challenging situations. New ideas are especially helpful in designing your marketing strategy.

Creates an Action Plan - As they say, no idea works unless you work on the idea. A business plan outlines a clear action plan to execute your ideas so that you know the time and priority of things you should be doing to get the expected results.

How to Create a Business Plan for Your Business

If you need help with whether or not you need a business plan, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

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More From Forbes

Why you need a written business plan.

Forbes Finance Council

CFP®, CEPA®, CVGA®, at Heritage Investors, LLC, is a financial educator, wealth manager, author, and speaker. More at

Imagine setting out on a road trip without knowing where you wanted to go. There are immediate and inherent problems with this idea. First, without knowing where you’re going, you can’t possibly chart a course to arrive there. Likewise, without defining a clear destination, you would have no idea of how long your trip will be, how much fuel is required, or even what your necessary budget for food and lodging should be. With so many problems being raised by failing to clearly define your destination, why would you ever take such a trip? You wouldn’t. Yet, an alarming number of small-business owners are doing just that.

Many entrepreneurs are operating businesses with no formal business plan in place. Although you may know how to “run” a business, a fully developed and well-written business plan is an absolute necessity. But why? I mean, couldn’t the time spent developing a business plan be used to grow your business? Technically, yes. However, there are many reasons why taking the time to flesh out one of your organization’s most salient documents is helpful.

At some point, you’re probably going to need funding for your business. Whether this comes in the form of investors or securing a business loan from your bank, you likely won’t see a penny without showing a well-thought-out business plan. Bankers and investors alike need answers to questions surrounding profitability and revenue generation. But even before requesting funds from lenders and investors, a carefully crafted business plan will inform you of just how much capital you’ll need to raise for long-term viability.

Additionally, your business plan can assist with making sound business decisions. Ideally, you will have thought of every aspect of your business — including growth and upgrade scenarios — when writing out your business plan. If you did, your business plan can provide a step-by-step approach to all your major business decisions. However, even if you didn’t think of everything, you still have a basic guide to help you determine if and when you should expand to a new location or upgrade processes, systems and software, and whether it makes more sense to buy or lease. This also applies to handling management issues, human resources and creating value for your clients.

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Next, working through the process of drafting a fully developed business plan forces you to take an objective look at your business. As business owners, we’re often too emotionally invested in our businesses to truly see them as they are. Your business is your baby, and your baby is often ugly. As you write your business plan, you’ll begin to notice all of the weaknesses that exist in your company. I even encourage my clients to let others look at their business plans just so they can poke holes in them. The more clearly you see your business, the better equipped you are to improve it.

Finally, a written business plan is an excellent communication device. With this one document, you can effectively communicate exactly what your business is and how it functions to anyone. As I mentioned earlier, your plan tells financiers how much capital you need and how it can be repaid. But your business plan can also help you acquire new talent, gain inroads with vendors and suppliers, and even attract potential clients. 

Whether you’re just starting your business or if you’ve been operating for years, a business plan is your road map. A written business plan takes your vision and creates a clear path for making it a reality. If you’re thinking, “Well, I’ve made it this long without it,” you may be surprised to learn that a meta-analysis of studies on the growth of more than 11,000 companies found that planning actually improved company performance. In fact, it benefited businesses that were already on their feet even more so than it did startups.

One likely reason for this finding is that established companies have the benefit of knowing exactly who their customers are and what they need or want. On the other hand, startups are often making educated guesses. This is also the reason that business owners need to review and update their business plans from time to time.

If you don’t have a written business plan, now is the time to remedy that. Consider who will read your business plan and how you want them to respond, and write your plan accordingly. Let trusted friends and family review your plan throughout the process, looking for areas that can be improved upon. Once you’re able to effectively answer all questions about your business, then your business plan should be ready.

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How to Write a Business Plan, Step by Step

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1. Write an executive summary

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

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

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

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

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

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

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

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

Your business’s registered name.

Address of your business location .

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

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

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

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

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

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

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

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

You should include the following:

An explanation of how your product or service works.

The pricing model for your product or service.

The typical customers you serve.

Your supply chain and order fulfillment strategy.

Your sales strategy.

Your distribution strategy.

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

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

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

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

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

You may also include metrics such as:

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

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

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

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

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

The best business checking accounts .

The best business credit cards .

The best accounting software .

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

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

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

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

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

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

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

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

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

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Do I Need a Business Plan?

Whenever someone wants to start a business , they ask their friends and professionals what they should do. The standard answer is always, ‘You need a business plan’. Really, do you? If I do, what is it and how do I proceed?

To answer the question of whether you need a plan or not, first you need to understand what a business plan is.

Simply stated, it’s a written document defining the ‘who’, ‘what’, ‘where’, ‘when’, and ‘how’ of either starting a business or changing the dynamic of an existing business. Well, that was easy. Or is it that easy? Whether you purchase a template or develop the document from scratch, the plan answers the above:

• Who  – who are you, what is your background and why are YOU interested in doing this? In principle, the most important aspect of any plan is making the connection between your background and the business proposal. If you want to be a baker, then there should be some form of connecting the dots. You should have an education in the culinary arts or maybe have worked at a bakery for several years. But the key is there has to be some way of validating your credentials to the goal at hand. Without this connection then not only will you have personal difficulty with getting this going, but any outsider, and you will need many folks to help you, will have a lot of trouble believing and supporting you in this endeavor.

• What – this is obvious, keep it simple and direct. I want to open a bakery. Now you can throw in some details and answer who is your customer, retail or commercial. Will you be a single line item or some specific area? Like only bread loaves for sandwiches to be sold in grocery stores or a line of pastries etc. • Where  – identify the location and remember the basic economic principles involved here. If you are going retail, then obviously your outlet must be in a shopping center area serving what type of clientele. At this point you don’t need to get too deep into the details such as power requirements or access to fuel etc. But focus on the primary attribute, matching your function to the best suited facility to meet that function, i.e. the best location.

• When – often times timing is everything. You can’t expect to do this overnight. In our instant satisfaction society, many believe you can do just about anything in a short period of time. This isn’t one of those half hour comedy shows. This is real. You need to be realistic in nature. Look at what needs to get done and draft a timeline going backwards. This will answer the question of how long this will take. Whatever you derive, add several months and you’ll have a more realistic date as to when you may begin operations. • How – this is the more complicated section of the plan. You have to deal with a multitude of issues:

1) Who is going to help me? 2) What type of tooling do I need, where do I buy the tools? How long will this take? 3) Staff: what kind of education or skills are required, about when do I hire them? 4) How do I do this and still maintain my economic status, i.e. how do I continue to earn money? 5)  HOW MUCH MONEY DO I NEED? 6)  WHERE DO I GET THIS MONEY?

Now you understand the basic elements of a business plan. So, do you need one?

Note that I left the money issue for last. This is why you need to address the other sections of the plan first. Without those answers, then the big question of money doesn’t need to be addressed.

So a plan can be drafted on a napkin if need be. Answer the very first question and if you can’t make that connection as described, then you don’t need a plan, because honestly you are not going to get anyone to truly help. This includes the financial element of your operation.

If you make it past the ‘who’ then lets pull out a tablet and document the ‘who’ and proceed to the ‘what’ section. Keep it simple and straight forward.

Jot all this down on a piece of paper or in a tablet. You now have the ‘who’ and ‘what’ of an eventual plan. Go onto the other sections and answer the basic components of each. Oftentimes, the documentation process will define the ability of getting this done. Time tables may not match, there may not be enough qualified staff to support you, or you may not have access to the quality or quantity of supplies.

Notice that we are brainstorming and not jumping into writing a plan. Brainstorming has two positive benefits: First it allows you to free think and create questions, many of which you will not be able to answer. Secondly, it answers the primary question of “Can I do this?”

Now we are down to the money question. This is the number one reason plans are drafted. In 999 out of 1,000 plans, it’s the same old request. I need money to make this happen. So before you answer the question of ‘Do I need a plan’, go out and talk to folks to see if your thoughts are realistic. Again, the jotted down notes are all you need at this stage. Talk with your parents, siblings, friends, colleagues, and even the guy at the bar that you don’t know. The more folks you talk to the more likely you’ll be asked questions that you can’t answer. Don’t overlook the people you don’t know, they are most honest because they have no relationship to you and their truthfulness will answer a lot of questions for you.

Write those questions down. This is the beginning of developing a real plan. The key here is ‘Does this get overwhelming?’ If it seems that way, then you don’t need a plan. But if you still have the desire and you have come this far then a formalized document may be your next step.

At the end of the day, any financial support is going to have to come from folks that will ask these questions and they will want good answers. Not, “I don’t know yet”.

Back to the question at hand, ‘Do I need a business plan?’ Well, right now you have a bunch of organized notes with a lot of questions that need answering first.

My next article articulates how to go about answering those questions then maybe drafting a plan. From there, we’ll look at sources of money.  Act on Knowledge.

© 2012 – 2022, David J Hoare MSA . All rights reserved.

How to write a business plan in 7 steps

do i need to write a business plan

With this step-by-step guide, learn how to write a well-written professional business plan that can help you successfully start your business, apply for funding, and grow.

Writing a business plan doesn’t have to be complicated. You don’t need to have a business or accounting degree to put together a viable business plan. Business planning can be simple—even fun! 

This guide will show you how to get your plan done without any complexity or frustration. By the time you’re done, you’ll be better prepared to start, run, and grow your business. Here are the 7 steps to write a business plan:

Be sure to download our free business plan template to start writing your own business plan as you work through this guide. For a more detailed guide to writing a business plan, download our free ebook : The Easy Way to Write Your Business Plan.

What is a business plan?

A business plan is a document that describes your business, the products and services you sell, and the customers that you sell to. It explains your business strategy. How you’re going to build and grow your business, what your marketing strategy is, and who your competitors are. 

Most business plans also include financial forecasts for the future. Setting sales goals, expense budgets, and predictions for cash flow. 

Now, a business plan can be far more than just a static document that you write once and forget about. It’s also a guide that helps you outline and achieve your goals. A management tool to analyze results, make strategic decisions, and showcase how your business will operate and grow. In short, if you’re thinking of starting a business or plan to pitch to investors or venture capitalists, writing a business plan can improve your chances of success.  

Why do you need a business plan?

You likely already have a good idea of your business strategy in your head. So you may be wondering, “Why should I spend my time making a business plan?” Here are the top reasons why you should invest in planning:

Businesses that plan grow 30% faster.

A surprising amount of research has been done on business planning and has shown that companies that take the time to write a plan and review it regularly grow 30% faster than those businesses that don’t plan. Not only do these companies grow faster, but they perform better and are less likely to fail in the long run.

Lenders and investors need business plans

If you’re growing your business and plan on getting a business loan or raising money from investors, you’ll need a business plan. Most lenders and investors will ask for a plan, but even if they don’t want to see the actual document, they will ask you questions that only a solid business plan will be able to answer.

Business plans reduce risk

Starting and running a business is always risky. Instead of flying by the seat of your pants, you can use a plan to forecast potential cash flow issues and get ahead of any potential roadblocks so you aren’t caught off guard. A business plan will help you reduce your risk and help you navigate the future.

Business planning helps you make smart spending decisions 

Before you make a big spending decision for your business, you need to know the potential impacts on your finances. With a business plan in place, you can easily explore different scenarios and see what impacts a new hire or an expansion to a second location will have on your business.

Need more reasons for why you need a business plan? Read our full list of reasons why having a business plan is important for small businesses .

How to write a business plan step-by-step

Whether you’re building a business plan to raise money and grow your business or just need to figure out if your idea will work, every business plan needs to cover 6 essential sections. Here’s an overview of each section:

Free business plan template

1. Executive summary

The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally only one to two pages. Most people write it last, though. 

Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan. In fact, it’s very common for investors to ask for only the executive summary when they are evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation, and more in-depth financials.

Your executive summary should include a summary of the problem you are solving, a description of your product or service, an overview of your target market, a brief description of your team, a summary of your financials, and your funding requirements (if you are raising money).

Learn more about writing an effective executive summary .

2. Products & services

The products & services chapter of your business plan is where the real meat of your plan lives. It includes information about the problem that you’re solving, your solution, and how your product or service fits into the existing competitive landscape.

Start the products & services chapter by describing the problem that you are solving for your customers and what your solution is. This is a description of your product or service. 

Next, you should outline your competition . Who else is providing solutions that try to solve your customers’ pain points? What are your competitive advantages over other businesses?

If you happen to have any competitive advantages, such as specific intellectual property or patents that protect your product—this chapter is a great place to talk about those things.

Finally, review your milestones and metrics. This is an overview of the next steps that you need to accomplish to get your product or service ready to sell, with target dates. If you’ve already achieved some key milestones, such as landing a crucial customer or taking on pre-orders, discuss that here. 

3. Market analysis

This section is where you will showcase all of the information about your potential customers. You’ll cover your target market as well as information about the growth of your market and your industry.

First, describe your target market . Your target market is the group of people that you plan on selling to. Try to be as specific as possible. With a solid target market, it will be easier to create a sales and marketing plan that will reach your customers.

Next, provide any market analysis and market research that you have. You’ll want to explain how your market is growing over time and also explain how your business is positioned to take advantage of expected changes in your industry.

4. Marketing & sales

The marketing and sales plan section of your business plan details how you plan to reach your target market segments, how you plan on selling to those target markets, what your pricing plan is, and what types of activities and partnerships you need to make your business a success.

Some businesses that distribute their products and reach their customers through stores like, Walmart, Target, grocery store chains, and other retail outlets should review how this part of their business works. The plan should discuss the logistics and costs of getting products onto store shelves and any potential hurdles that the business may have to overcome.

The marketing & sales chapter of your business plan can also be a good place to include a SWOT analysis . This is purely optional but can be a good way to explain how your products and services are positioned to deal with competitive threats and take advantage of opportunities.

5. Company organization and management team

Investors look for great teams in addition to great ideas. Use this chapter to describe your current team and who you need to hire. You will also provide a quick overview of your legal structure, location, and history if you’re already up and running.

Include brief bios that highlight the relevant experiences of each key team member. It’s important here to make the case for why the team is the right team to turn an idea into a reality. Do they have the right industry experience and background? Have members of the team had entrepreneurial successes before?

Your company overview should also include a summary of your company’s current business structure. The most common business structures include:

Be sure to provide a review of how the business is owned as well. Does each business partner own an equal portion of the business? How is ownership divided? Potential lenders and investors will want to know the structure of the business before they will consider a loan or investment.

6. Financial projections

Last, but certainly not least, is your financial plan chapter. This is often what entrepreneurs find most daunting, but it doesn’t have to be as intimidating as it seems. Business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast. That said, if you need additional help, there are plenty of tools and resources out there to help you build a solid financial plan.

A typical financial plan will include:

Sales and revenue projections

A monthly sales and revenue forecast for the first 12 months, and then annual projections for the remaining three to five years. Three-year projections are typically adequate, but some investors will request a five-year forecast.

Profit and loss statement

An income statement , also known as the profit and loss (or P&L), is where your numbers all come together and show if you’re making a profit or taking a loss.

Cash flow statement

A cash flow statement . While the income statement calculates your profits and losses, the cash flow statement keeps track of how much cash (money in the bank) you have at any given point. 

Balance sheet

A balance sheet lists the assets, liabilities, and equity in your company. In short, it provides an overview of the financial health of your business. 

Optional sections to include when seeking funding

If you are raising money from investors, you should include a brief section of your business plan that details exactly how you plan on using your investors’ cash. This is typically just called, “Use of Funds.”

Investors will also want to see a short section on your exit strategy. An exit strategy is your plan for eventually selling your business, either to another company or to the public in an IPO. If you have investors, they will want to know your thoughts on this. If you’re running a business that you plan to maintain ownership of indefinitely, and you’re not seeking angel investment or VC funding, you can skip the exit strategy section. 

For more information, read our guide on the different types of exit strategies .

Finally, discuss any assumptions and important risks for your business. Knowing what your assumptions are as you start a business can make the difference between business success and business failure. When you recognize your assumptions, you can set out to prove that your assumptions are correct. The more that you can minimize your assumptions, the more likely it is that your business will succeed.

7. Appendix

An appendix to your business plan isn’t a required chapter by any means. However, it is a useful place to stick any charts, tables, definitions, legal notes, or other critical information that either felt too long or too out-of-place to include elsewhere in your business plan. If you have a patent or a patent-pending, or illustrations of your product, this is where you’d want to include the details. For more details, read about what to include in your business plan appendix .

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Business plan writing tips 

To help streamline the business plan writing process here are a few tips and key questions to answer to make sure you get the most out of your plan and avoid common mistakes .  

Determine why you are writing a business plan

Knowing why you are writing a business plan will determine your approach to your planning project. For example, if you are writing a business plan for yourself or just for use inside your own business, you can probably skip the section about your team and organizational structure. 

If you’re raising money, you’ll want to spend more time explaining why you’re looking to raise the money you want and exactly how you’re going to use those funds. So, before you start writing your plan, think about why you are writing a business plan and what you’re trying to get out of the process.

Keep things concise

Probably the most important tip is to keep your business plan short and simple . There are no prizes for long business plans. In fact, the longer your plan, the less likely it is to be read. 

So, focus on trimming things down to the essentials that your readers need to know. Skip the extended descriptions of your target market and instead focus on creating a plan that is easy to read.

Have someone review your business plan

Writing a business plan in a vacuum is never a good idea. It’s helpful to zoom out from time to time and make sure that your plan is logical and makes sense. You also want to make sure that it’s easy to read and understand. Don’t wait until your plan is “done” to get a second look, though. 

Start sharing your plan early and find out from your reader what questions the plan leaves unanswered. This early review cycle will help keep you on track. If you need a more detailed review, you may want to explore hiring a professional plan writer to give it a thorough examination.

Use a free business plan template to get started

Knowing what information you need to cover in a business plan sometimes isn’t quite enough. If you’re struggling to get started or need additional guidance, it may be worth using a business plan template. If you’re looking for a free downloadable business plan template to get you started, download the template that’s been used by more than 1 million businesses. 

Or, if you just want to see what a completed business plan looks like, check out our library of over 500 free sample business plans .

How do I write a simple business plan?

If you’re not ready to work on a detailed business plan and want to start with something shorter and simpler, we recommend starting with a simple one-page business plan . You’ll be able to put together an initial plan in less than 30 minutes. For many businesses, this is a great way to get started. And, if you’re not raising money from investors, this may be all the plan you need.

Next steps for writing your business plan

Whether you’re writing a plan to explore a new business idea, establishing steps to start a business, looking to raise money from investors, seeking a loan, or just trying to run your business better—a solid business plan will help get you there. 

Business planning is a continuous process that can help you validate your idea, set goals, manage, and successfully pitch your business. One of the most helpful things you can do to build a successful business is to jump in and start planning. If you’re looking for a more comprehensive step-by-step walkthrough for writing a business plan, check out our Business Planning Guide . 

If you need more than a template, we recommend exploring business planning software, such as LivePlan. It features step-by-step guidance that ensures you include only what you need in your plan and reduces the time you spend on formatting and presenting. 

You’ll also get help building solid financial models that you can trust, without having to worry about getting everything right in a spreadsheet. Finally, it will transform your plan into a management tool that will help you easily compare your forecasts to your actual results. This makes it easy to track your progress and make adjustments as you go.

Business plan FAQ

A business plan helps you understand where you want to go with your business and what it will take to get there. It reduces your overall risk, helps you uncover your business’s potential, attracts investor, and identify areas for growth. Having a business plan ultimately makes you more confident as a business owner and more likely to succeed for a longer period of time.

The seven steps to writing a business plan include: 1. Write a brief executive summary.  2. Describe your products and services. 3. Conduct market research and compile data into a cohesive market analysis. 4. Describe your marketing and sales strategy.  5. Outline your organizational structure and management team. 6. Develop financial projections for sales, revenue, and cash flow. 7. Add any additional documents to your appendix.

There are plenty of mistakes that can be made when writing a business plan. However, these are the 5 most common that you should do your best to avoid: 1. Not taking the planning process seriously. 2. Having unrealistic financial projections or incomplete financial information. 3. Inconsistent information or simple mistakes. 4. Failing to establish a sound business model. 5. Not having a defined purpose for your business plan.

Writing a business plan is all about asking yourself questions about your business and being able to answer them through the planning process. You’ll likely be asking dozens and dozens of questions for each section of your plan. However, these are the key questions you should ask and answer with your business plan: – How will your business make money? – Is there a need for your product or service? – Who are your customers? – How are you different from the competition? – How will you reach your customers? – How will you measure success?

The length of your business plan fully depends on what you intend to do with it. From the SBA and traditional lender point of view, a business plan needs to be whatever length necessary to fully explain your business. This means that you prove the viability of your business, show that you understand the market, and have a detailed strategy in place.  If you intend to use your business plan for internal management purposes, you don’t necessarily need a full 25-50 page business plan. Instead, you can start with a one-page plan or a 3-10 page Lean Plan to get all of the necessary information in place.

While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. Here are a few common business plan types worth considering. Traditional business plan: The tried-and-true traditional business plan is a formal document meant to be used when applying for funding or pitching to investors. This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix.  Business model canvas: The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea.  One-page business plan: This format is a simplified version of the traditional plan that focuses on the core aspects of your business. You’ll typically stick with bullet points and single sentences. It’s most useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business. Lean Plan: The Lean Plan is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance. It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.

A business plan covers the “who” and “what” of your business. It explains what your business is doing right now and how it functions. The strategic plan explores long-term goals and explains “how” the business will get there. It encourages you to look more intently toward the future and how you will achieve your vision.  However, when approached correctly, your business plan can actually function as a strategic plan as well. If kept lean, you can define your business, outline strategic steps, and track ongoing operations all with a single plan.

The core elements of business planning are the same for nonprofit organizations and for-profit businesses. The main difference between the two is that nonprofits are primarily driven by a specific mission or purpose. While a for-profit organization is typically driven by growth and improved performance. Additionally, nonprofit organizations will need to intently focus on their promotional, partnership, and fundraising strategies. While some of this is present in for-profit businesses, the need to thoroughly outline how and who you will continue to receive funding is far more important as a nonprofit.

AvatarNoah Parsons

Noah Parsons


Noah is currently the COO at Palo Alto Software, makers of the online business plan app LivePlan. You can follow Noah on Twitter .

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Why You Should Write 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.

do i need to write a business plan

To Test the Feasibility of Your Business Idea

To give your new business the best chance of success, to secure funding, to make business planning manageable and effective, to attract investors, frequently asked questions (faqs).

The Balance / Getty Images

A business plan  is the blueprint for your business. Starting a business without a business plan is like building a house without a blueprint. Yet, unlike a house, a business isn't static. We often make the mistake of thinking of a business plan as a single document that you put together once when you're starting out and never touch again. But as the business develops, so should its business plan. In fact, any particular business may have multiple business plans as its objectives change.

Writing a business plan is time-consuming, but it's essential if you want to have a successful business that's going to survive the startup phase.

Key Takeaways

Writing a business plan is the best way—other than going out and doing it—to test whether an idea for starting a business is feasible. In this sense, the business plan is your safety net. If working through a business plan reveals that your business idea is untenable, it will save you a great deal of time and money.

Often, an idea for starting a business is discarded at the marketing analysis or competitive analysis stage , freeing you to move on to a new (and better) idea.

Unfortunately, many prospective business owners are so convinced that their idea for a product or service is a can't-miss proposition, that they don't take the time to do the necessary research and work through a proper business plan. The more you know about your industry, your prospective customers, and the competition, the greater the likelihood that your business will succeed.

Writing a business plan will ensure that you pay attention to the broad operational and financial objectives of your new business and the small details, such as budgeting and market planning. The process will ultimately make for a smoother startup period and fewer unforeseen problems as your business gets up and running.

The exercise of budgeting and market planning will help you define your  target market , your unique selling proposition, optimum pricing strategies, and outline how you intend to sell and deliver your products to customers. In addition, developing a budget for implementation will assist with determining your startup and operating capital requirements.

According to the Small Business Administration, one of the most-cited reasons why businesses fail is inadequate planning. By starting too soon and without a sufficient plan, your business is setting itself up for failure.

Most new businesses need startup and operating capital to get off the ground. Without a well-developed business plan, there is no chance of getting  debt financing from established financial institutions such as banks or  equity financing  from angel investors.

Established businesses often need money, too, to buy new equipment or property, or because of market downturns. Having an up-to-date business plan gives you a much better chance of getting the money you need to keep operating or expand.

Even an angel investor will want to ensure their money is going to a business that knows what it's doing. The easiest way to prove this is via a well-developed business plan.

Investors and financiers are always looking at the risk of default, and word of mouth is no substitute for written facts and figures in a properly prepared business plan.

A business plan is essential if you're thinking of starting a business, but it's also an important tool for established businesses. Viable businesses are dynamic; they change and grow. Your company's original business plan needs to be revised as you set new goals .

Reviewing the business plan can also help you see what goals have been accomplished, what changes need to be made, or what new directions your company's growth should take.

Whether you want to shop your business to venture capitalists or attract angel investors , you need to have a solid business plan. A presentation may pique their interest, but they'll need a well-written document they can study before they'll be prepared to make any investment commitment.​​​

Be prepared to have your business plan scrutinized. Both venture capitalists and angel investors will want to conduct extensive background checks and competitive analyses to be certain that what's written in your business plan is indeed the case.

What are the sections of a business plan?

A comprehensive business plan should include the following sections:

What is the purpose of a business plan?

A business plan has four main purposes:

Small Business Administration. " Selecting a Business That Fits ."

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How to Write a Business Plan (Plus Examples & Templates)

Brandon Boushy

Woman working on a business plan

Have you ever wondered how to write a business plan step by step? Mike Andes, told us: 

This guide will help you write a business plan to impress investors.

Throughout this process, we’ll get information from Mike Andes, who started Augusta Lawn Care Services when he was 12 and turned it into a franchise with over 90 locations. He has gone on to help others learn how to write business plans and start businesses.  He knows a thing or two about writing  business plans!

We’ll start by discussing the definition of a business plan. Then we’ll discuss how to come up with the idea, how to do the market research, and then the important elements in the business plan format. Keep reading to start your journey!

What Is a Business Plan?

A business plan is simply a road map of what you are trying to achieve with your business and how you will go about achieving it. It should cover all elements of your business including: 

If you aren’t quite ready to create a business plan, consider starting by reading our business startup guide .

Get a Business Idea

Before you can write a business plan, you have to have a business idea. You may see a problem that needs to be solved and have an idea how to solve it, or you might start by evaluating your interests and skills. 

Mike told us, “The three things I suggest asking yourself when thinking about starting a business are:

Three adjoining circles about business opportunity

If all three of these questions don’t lead to at least one common answer, it will probably be a much harder road to success. Either there is not much market for it, you won’t be good at it, or you won’t enjoy doing it. 

As Mike told us, “There’s enough stress starting and running a business that if you don’t like it or aren’t good at it, it’s hard to succeed.”

If you’d like to hear more about Mike’s approach to starting a business, check out our YouTube video

Conduct Market Analysis

Market analysis is focused on establishing if there is a target market for your products and services, how large the target market is, and identifying the demographics of people or businesses that would be interested in the product or service. The goal here is to establish how much money your business concept can make.

Product and Service Demand

An image showing product service and demand

A search engine is your best friend when trying to figure out if there is demand for your products and services. Personally, I love using because it lets you directly search on a ton of different platforms including Google, Youtube, Twitter, and more. Check out the screenshot for the full list of search options.

With quick web searches, you can find out how many competitors you have, look through their reviews, and see if there are common complaints about the competitors. Bad reviews are a great place to find opportunities to offer better products or services. 

If there are no similar products or services, you may have stumbled upon something new, or there may just be no demand for it. To find out, go talk to your most honest friend about the idea and see what they think. If they tell you it’s dumb or stare at you vacantly, there’s probably no market for it.

You can also conduct a survey through social media to get public opinion on your idea. Using Facebook Business Manager , you could get a feel for who would be interested in your product or service.

 I ran a quick test of how many people between 18-65  you could reach in the U.S. during a week. It returned an estimated 700-2,000 for the total number of leads, which is enough to do a fairly accurate statistical analysis.

Identify Demographics of Target Market

Depending on what type of business you want to run, your target market will be different. The narrower the demographic, the fewer potential customers you’ll have. If you did a survey, you’ll be able to use that data to help define your target audience. Some considerations you’ll want to consider are:

Once you have this information, it can help you narrow down your options for location and help define your marketing further. One resource that Mike recommended using is the Census Bureau’s Quick Facts Map . He told us,  

“It helps you quickly evaluate what the best areas are for your business to be located.”

How to Write a Business Plan

Business plan development

Now that you’ve developed your idea a little and established there is a market for it, you can begin writing a business plan. Getting started is easier with the business plan template we created for you to download. I strongly recommend using it as it is updated to make it easier to create an action plan. 

Each of the following should be a section of your business plan:

SWOT Analysis

Pricing Strategy

We’ll look into each of these. Don’t forget to download our free business plan template (mentioned just above) so you can follow along as we go. 

How to Write a Business Plan Step 1. Create a Cover Page

The first thing investors will see is the cover page for your business plan. Make sure it looks professional. A great cover page shows that you think about first impressions.

A good business plan should have the following elements on a cover page:

Basically, think of a cover page for your business plan like a giant business card. It is meant to capture people’s attention but be quickly processed.

How to Write a Business Plan Step 2. Create a Table of Contents

Most people are busy enough that they don’t have a lot of time. Providing a table of contents makes it easy for them to find the pages of your plan that are meaningful to them.

A table of contents will be immediately after the cover page, but you can include it after the executive summary. Including the table of contents immediately after the executive summary will help investors know what section of your business plan they want to review more thoroughly.

Check out Canva’s article about creating a  table of contents . It has a ton of great information about creating easy access to each section of your business plan. Just remember that you’ll want to use different strategies for digital and hard copy business plans.

How to Write a Business Plan Step 3. Write an Executive Summary

A notepad with a written executive summary for business plan writing

An executive summary is where your business plan should catch the readers interest.  It doesn’t need to be long, but should be quick and easy to read.

Mike told us,

How long should an executive summary bein an informal business plan?

For casual use, an executive summary should be similar to an elevator pitch, no more than 150-160 words, just enough to get them interested and wanting more. Indeed has a great article on elevator pitches .  This can also be used for the content of emails to get readers’ attention.

It consists of three basic parts:

Example of an informal executive summary 

One of the best elevator pitches I’ve used is:

So far that pitch has achieved a 100% success rate in getting partnerships for the business.

What should I include in an executive summary for investors?

Investors are going to need a more detailed executive summary if you want to secure financing or sell equity. The executive summary should be a brief overview of your entire business plan and include:

Successful business plan examples

The owner of Urbanity told us he spent 2 months writing a 75-page business plan and received a $250,000 loan from the bank when he was 23. Make your business plan as detailed as possible when looking for financing. We’ve provided a template to help you prepare the portions of a business plan that banks expect.

Here’s the interview with the owner of Urbanity:

When to write an executive summary?

Even though the summary is near the beginning of a business plan, you should write it after you complete the rest of a business plan. You can’t talk about revenue, profits, and expected expenditures if you haven’t done the market research and created a financial plan.

What mistakes do people make when writing an executive summary?

Business owners commonly go into too much detail about the following items in an executive summary:

These are things that people will want to know later, but they don’t hook the reader. They won’t spark interest in your small business, but they’ll close the deal.

How to Write a Business Plan Step 4. Company Description

Every business plan should include a company description. A great business plan will include the following elements while describing the company:

Target market

Let’s take a look at what each section includes in a good business plan.

Mission Statement

A mission statement is a brief explanation of why you started the company and what the company’s main focus is. It should be no more than one or two sentences. Check out HubSpot’s article 27 Inspiring Mission Statement for a great read on informative and inspiring mission and vision statements. 

Company Philosophy and Vision

Writing the company philosophy and vision

The company philosophy is what drives your company. You’ll normally hear them called core values.  These are the building blocks that make your company different. You want to communicate your values to customers, business owners, and investors as often as possible to build a company culture, but make sure to back them up.

What makes your company different?

Each company is different. Your new business should rise above the standard company lines of honesty, integrity, fun, innovation, and community when communicating your business values. The standard answers are corporate jargon and lack authenticity. 

Examples of core values

One of my clients decided to add a core values page to their website. As a tech company they emphasized the values:

These values communicate how the owner and the rest of the company operate. They also show a value proposition and competitive advantage because they specifically focus on delivering business value from the start. These values also genuinely show what the company is about and customers recognize the sincerity. Indeed has a great blog about how to identify your core values .

What is a vision statement?

A vision statement communicate the long lasting change a business pursues. The vision helps investors and customers understand what your company is trying to accomplish. The vision statement goes beyond a mission statement to provide something meaningful to the community, customer’s lives, or even the world.

Example vision statements

The Alzheimer’s Association is a great example of a vision statement:

A world without Alzheimer’s Disease and other dementia.

It clearly tells how they want to change the world. A world without Alzheimers might be unachievable, but that means they always have room for improvement.

Business Goals

You have to measure success against goals for a business plan to be meaningful. A business plan helps guide a company similar to how your GPS provides a road map to your favorite travel destination. A goal to make as much money as possible is not inspirational and sounds greedy.

Sure, business owners want to increase their profits and improve customer service, but they need to present an overview of what they consider success. The goals should help everyone prioritize their work.

How far in advance should a business plan?

Business planning should be done at least one year in advance, but many banks and investors prefer three to five year business plans. Longer plans show investors that the management team  understands the market and knows the business is operating in a constantly shifting market. In addition, a plan helps businesses to adjust to changes because they have already considered how to handle them.

Example of great business goals

My all time-favorite long-term company goals are included in Tesla’s Master Plan, Part Deux . These goals were written in 2016 and drive the company’s decisions through 2026. They are the reason that investors are so forgiving when Elon Musk continually fails to meet his quarterly and annual goals.

If the progress aligns with the business plan investors are likely to continue to believe in the company. Just make sure the goals are reasonable or you’ll be discredited (unless you’re Elon Musk).

A man holding an iPad with a cup of coffee on his desk

You did target market research before creating a business plan. Now it’s time to add it to the plan so others understand what your ideal customer looks like. As a new business owner, you may not be considered an expert in your field yet, so document everything. Make sure the references you use are from respectable sources. 

Use information from the specific lender when you are applying for lending. Most lenders provide industry research reports and using their data can strengthen the position of your business plan.

A small business plan should include a section on the external environment. Understanding the industry is crucial because we don’t plan a business in a vacuum. Make sure to research the industry trends, competitors, and forecasts. I personally prefer IBIS World for my business research. Make sure to answer questions like:

Industry resources

Some helpful resources to help you establish more about your industry are:

Legal Structure

There are five basic types of legal structures that most people will utilize:



Each business structure has their pros and cons. An LLC is the most common legal structure due to its protection of personal assets and ease of setting up. Make sure to specify how ownership is divided and what roles each owner plays when you have more than one business owner.

You’ll have to decide which structure is best for you, but we’ve gathered information on each to make it easier.

Sole Proprietorship

A sole proprietorship is the easiest legal structure to set up but doesn’t protect the owner’s personal assets from legal issues. That means if something goes wrong, you could lose both your company and your home.

To start a sole proprietorship, fill out a special tax form called a  Schedule C . Sole proprietors can also join the American Independent Business Alliance .

Limited Liability Company (LLC)

An LLC is the most common business structure used in the United States because an LLC protects the owner’s personal assets. It’s similar to partnerships and corporations, but can be a single-member LLC in most states. An LLC requires a document called an operating agreement.

Each state has different requirements. Here’s a link to find your state’s requirements . Delaware and Nevada are common states to file an LLC because they are really business-friendly. Here’s a blog on the top 10 states to get an LLC.

Partnerships are typically for legal firms. If you choose to use a partnership choose a Limited Liability Partnership. Alternatively, you can just use an LLC.

Corporations are typically for massive organizations. Corporations have taxes on both corporate and income tax so unless you plan on selling stock, you are better off considering an LLC with S-Corp status . Investopedia has good information corporations here .

An iPad with colored pens on a desk

There are several opportunities to purchase successful franchises. has a list of companies in a variety of industries that offer franchise opportunities. This makes it where an entrepreneur can benefit from the reputation of an established business that has already worked out many of the kinks of starting from scratch.

How to Write a Business Plan Step 5. Products and Services

This section of the business plan should focus on what you sell, how you source it, and how you sell it. You should include:

Questions to answer about your products and services

Mike gave us a list  of the most important questions to answer about your product and services:

Make sure to use the worksheet on our business plan template .

How to Write a Business Plan Step 6. Sales and Marketing Plan

The marketing and sales plan is focused on the strategy to bring awareness to your company and guides how you will get the product to the consumer.  It should contain the following sections:

SWOT Analysis stands for strengths, weaknesses, opportunities, and threats. Not only do you want to identify them, but you also want to document how the business plans to deal with them.

Business owners need to do a thorough job documenting how their service or product stacks up against the competition.

If proper research isn’t done, investors will be able to tell that the owner hasn’t researched the competition and is less likely to believe that the team can protect its service from threats by the more well-established competition. This is one of the most common parts of a presentation that trips up business owners presenting on Shark Tank .

SWOT Examples

Business plan SWOT analysis

Examples of strengths and weaknesses could be things like the lack of cash flow, intellectual property ownership, high costs of suppliers, and customers’ expectations on shipping times.

Opportunities could be ways to capitalize on your strengths or improve your weaknesses, but may also be gaps in the industry. This includes:

Threats will normally come from outside of the company but could also be things like losing a key member of the team. Threats normally come from competition, regulations, taxes, and unforeseen events.

The management team should use the SWOT analysis to guide other areas of business planning, but it absolutely has to be done before a business owner starts marketing. 

Include Competitor Data in Your Business Plan

When you plan a business, taking into consideration the strengths and weaknesses of the competition is key to navigating the field. Providing an overview of your competition and where they are headed shows that you are invested in understanding the industry.

For smaller businesses, you’ll want to search both the company and the owners names to see what they are working on. For publicly held corporations, you can find their quarterly and annual reports on the SEC website .

What another business plans to do can impact your business. Make sure to include things that might make it attractive for bigger companies to outsource to a small business.

Marketing Strategy

The marketing and sales part of business plans should be focused on how you are going to make potential customers aware of your business and then sell to them.

If you haven’t already included it, Mike recommends:

“They’ll want to know about Demographics, ages, and wealth of your target market.”

Make sure to include the Total addressable market .  The term refers to the value if you captured 100% of the market.

Advertising Strategy

You’ll explain what formats of advertising you’ll be using. Some possibilities are:

You’ll want to define how you’ll be using each including frequency, duration, and cost. If you have the materials already created, including pictures or links to the marketing to show creative assets.

Mike told us “Most businesses are marketing digitally now due to Covid, but that’s not always the right answer.”

Make sure the marketing strategy will help team members or external marketing agencies stay within the brand guidelines .

An iPad with graph about pricing strategy

This section of a business plan should be focused on pricing. There are a ton of pricing strategies that may work for different business plans. Which one will work for you depends on what kind of a business you run.

Some common pricing strategies are:

HubSpot has a great calculator and blog on pricing strategies.

Beyond explaining what strategy your business plans to use, you should include references for how you came to this pricing strategy and how it will impact your cash flow.

Distribution Plan

This part of a business plan is focused on how the product or service is going to go through the supply chain. These may include multiple divisions or multiple companies. Make sure to include any parts of the workflow that are automated so investors can see where cost savings are expected and when.

Supply Chain Examples

For instance, lawn care companies  would need to cover aspects such as:

Examples of Supply Chains

These are fairly flat supply chains compared to something like a clothing designer where the clothes would go through multiple vendors. A clothing company might have the following supply chain:

There have been advances such as print on demand that eliminate many of these steps. If you are designing completely custom clothing, all of this would need to be planned to keep from having business disruptions.

The main thing to include in the business plan is the list of suppliers, the path the supply chain follows, the time from order to the customer’s home, and the costs associated with each step of the process.

According to BizPlanReview , a business plan without this information is likely to get rejected because they have failed to research the key elements necessary to make sales to the customer.

How to Write a Business Plan Step 7. Company Organization and Operational Plan

This part of the business plan is focused on how the business model will function while serving customers.  The business plan should provide an overview of  how the team will manage the following aspects:

Quality Control

Let’s look at each for some insight.

Production has already been discussed in previous sections so I won’t go into it much. When writing a business plan for investors, try to avoid repetition as it creates a more simple business plan.

If the organizational plan will be used by the team as an overview of how to perform the best services for the customer, then redundancy makes more sense as it communicates what is important to the business.

A wooden stamp with the words "quality control"

Quality control policies help to keep the team focused on how to verify that the company adheres to the business plan and meets or exceeds customer expectations.

Quality control can be anything from a standard that says “all labels on shirts can be no more than 1/16″ off center” to a defined checklist of steps that should be performed and filled out for every customer.

There are a variety of organizations that help define quality control including:

You can find lists of the organizations that contribute most to the government regulation of industries on Open Secrets . Research what the leaders in your field are doing. Follow their example and implement it in your quality control plan.

For location, you should use information from the market research to establish where the location will be. Make sure to include the following in the location documentation.

Legal Environment

The legal requirement section is focused on defining how to meet the legal requirements for your industry. A good business plan should include all of the following:

Your local SBA office can help you establish requirements in your area. I strongly recommend using them. They are a great resource.

Your business plan should include a plan for company organization and hiring. While you may be the only person with the company right now, down the road you’ll need more people. Make sure to consider and document the answers to the following questions:

One of the most crucial parts of a business plan is the organizational chart. This simply shows the positions the company will need, who is in charge of them and the relationship of each of them. It will look similar to this:

Organization chart

Our small business plan template has a much more in-depth organizational chart you can edit to include when you include the organizational chart in your business plan.

How to Write a Business Plan Step 8. Financial Statements 

No business plan is complete without financial statements or financial projections. The business plan format will be different based on whether you are writing a business plan to expand a business or a startup business plan. Let’s dig deeper into each.

Provide All Financial Income from an Existing Business

An existing business should use their past financial documents including the income statement, balance sheet, and cash flow statement to find trends to estimate the next 3-5 years.

You can create easy trendlines in excel to predict future revenue, profit and loss, cash flow, and other changes in year-over-year performance. This will show your expected performance assuming business continues as normal.

If you are seeking an investment, then the business is probably not going to continue as normal. Depending on the financial plan and the purpose of getting financing, adjustments may be needed to the following:

Financial modeling is a challenging subject, but there are plenty of low-cost courses on the subject. If you need help planning your business financial documentation take some time to watch some of them.

Make it a point to document how you calculated all the changes to the income statement, balance sheet, and cash flow statement in your business plan so that key team members or investors can verify your research.

Financial Projections For A Startup Business Plan

Unlike an existing business, a startup doesn’t have previous success to model its future performance. In this scenario, you need to focus on how to make a business plan realistic through the use of industry research and averages.

Mike gave the following advice in his interview:

Financial Forecasting Mistakes

One of the things a lot of inexperienced people use is the argument, “If I get one percent of the market, it is worth $100 million.” If you use this, investors are likely to file the document under bad business plan examples.

Let’s use custom t-shirts as an example.

Credence Research estimated in 2018 there were 11,334,800,000 custom t-shirts sold for a total of $206.12 Billion, with a 6% compound annual growth rate.

With that data,  you can calculate that the industry will grow to $270 Billion in 2023 and that the average shirt sold creates $18.18 in revenue.

Combine that with an IBIS World estimate of 11,094 custom screen printers and that means even if you become an average seller, you’ll get .009% of the market.

Here’s a table for easier viewing of that information.

A table showing yearly revenue of a business

The point here is to make sure your business proposal examples make sense.

You’ll need to know industry averages such as cost of customer acquisition, revenue per customer, the average cost of goods sold, and admin costs to be able to create accurate estimates.

Our simple business plan templates walk you through most of these processes. If you follow them you’ll have a good idea of how to write a business proposal.

How to Write a Business Plan Step 9. Business Plan Example of Funding Requests

What is a business plan without a plan on how to obtain funding?

The Small Business Administration has an example for a pizza restaurant that theoretically needed nearly $20k to make it through their first month.

In our video, How to Start a $500K/Year T-Shirt Business (Pt. 1 ), Sanford Booth told us he needed about $200,000 to start his franchise and broke even after 4 months.

Freshbooks estimates it takes on average 2-3 years for a business to be profitable, which means the fictitious pizza company from the SBA could need up to $330k to make it through that time and still pay their bills for their home and pizza shop.

Not every business needs that much to start, but realistically it’s a good idea to assume that you need a fairly large cushion.

Ways to get funding for a small business

There are a variety of ways to cover this. the most common are:

Keep reading for more tips on how to write a business plan.

How funding will be used

When asking for business financing make sure to include:

Mike emphasized two aspects that should be included in every plan, 

How to Write a Business Plan Resources

Here are some links to a business plan sample and business plan outline. 

It’s also helpful to follow some of the leading influencers in the business plan writing community. Here’s a list:

How to Write a Business Plan: What’s Next?

We hope this guide about how to write a simple business plan step by step has been helpful. We’ve covered:

In addition, we provided you with a simple business plan template to assist you in the process of writing your startup business plan. The startup business plan template also includes a business model template that will be the key to your success.

Don’t forget to check out the rest of our business hub .

Have you written a business plan before? How did it impact your ability to achieve your goals?


Brandon Boushy

Brandon Boushy started his company after years of working in customer service, engineering, and project management. After receiving his MBA, he turned his diverse skills into a business helping other small business owners find resources and strategies that further their business objectives. He focuses on assisting businesses with their marketing, communication, and research needs.

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What Is a Business Plan?

Understanding business plans, how to write a business plan, elements of a business plan, special considerations.

Business Plan: What It Is, What's Included, and How To Write One

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

do i need to write a business plan

Investopedia / Ryan Oakley

A business plan is a document that defines in detail a company's objectives and how it plans to achieve its goals. A business plan lays out a written road map for the firm from marketing , financial, and operational standpoints. Both startups and established companies use business plans.

A business plan is an important document aimed at a company's external and internal audiences. For instance, a business plan is used to attract investment before a company has established a proven track record. It can also help to secure lending from financial institutions.

Furthermore, a business plan can serve to keep a company's executive team on the same page about strategic action items and on target for meeting established goals.

Although they're especially useful for new businesses, every company should have a business plan. Ideally, the plan is reviewed and updated periodically to reflect goals that have been met or have changed. Sometimes, a new business plan is created for an established business that has decided to move in a new direction.

Key Takeaways

Want Funding? You Need a Business Plan

A business plan is a fundamental document that any new business should have in place prior to beginning operations. Indeed, banks and venture capital firms often require a viable business plan before considering whether they'll provide capital to new businesses.

Operating without a business plan usually is not a good idea. In fact, very few companies are able to last very long without one. There are benefits to creating (and sticking to) a good business plan. These include being able to think through ideas before investing too much money in them and working through potential obstacles to success.

A good business plan should outline all the projected costs and possible pitfalls of each decision a company makes. Business plans, even among competitors in the same industry, are rarely identical. However, they can have the same basic elements, such as an executive summary of the business and detailed descriptions of its operations, products and services, and financial projections. A plan also states how the business intends to achieve its goals.

While it's a good idea to give as much detail as possible, it's also important that a plan be concise to keep a reader's attention to the end.

A well-considered and well-written business plan can be of enormous value to a company. While there are templates that you can use to write a business plan, try to avoid producing a generic result. The plan should include an overview and, if possible, details of the industry of which the business will be a part. It should explain how the business will distinguish itself from its competitors.

Start with the essential structure: an executive summary, company description, market analysis, product or service description, marketing strategy, financial projections, and appendix (which include documents and data that support the main sections). These sections or elements of a business plan are outlined below.

When you write your business plan, you don’t have to strictly follow a particular business plan outline or template. Use only those sections that make the most sense for your particular business and its needs.

Traditional business plans use some combination of the sections below. Your plan might also include any funding requests you're making. Regardless, try to keep the main body of your plan to around 15-25 pages.

The length of a business plan varies greatly from business to business. Consider fitting the basic information into a 15- to 25-page document. Then, other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and included as appendices.

As mentioned above, no two business plans are the same. Nonetheless, they tend to have the same elements. Below are some of the common and key parts of a business plan.

Unique Business Plans Help

The best business plans aren't generic ones created from easily accessed templates. A company should entice readers with a plan that demonstrates its singularity and potential for success.

Types of Business Plans

Business plans help companies identify their objectives and remain on track to meet goals. They can help companies start, manage themselves, and grow once up and running. They also act as a means to attract lenders and investors.

Although there is no right or wrong business plan, they can fall into two different categories—traditional or lean startup. According to the Small Business Administration (SBA) , the traditional business plan is the most common. It contains a lot of detail in each section. These tend to be longer than the lean startup plan and require more work.

Lean startup business plans, on the other hand, use an abbreviated structure that highlights key elements. These business plans aren't as common in the business world because they're short—as short as one page—and lack detail. If a company uses this kind of plan, it should be prepared to provide more detail if an investor or lender requests it.

Financial Projections

A complete business plan must include a set of financial projections for the business. These forward-looking financial statements are often called pro-forma financial statements or simply the " pro-formas ." They include an overall budget, current and projected financing needs, a market analysis, and the company's marketing strategy.

Other Considerations for a Business Plan

A major reason for a business plan is to give owners a clear picture of objectives, goals, resources, potential costs, and drawbacks of certain business decisions. A business plan should help them modify their structures before implementing their ideas. It also allows owners to project the type of financing required to get their businesses up and running.

If there are any especially interesting aspects of the business, they should be highlighted and used to attract financing, if needed. For example, Tesla Motors' electric car business essentially began only as a business plan.

Importantly, a business plan shouldn't be a static document. As a business grows and changes, so too should the business plan. An annual review of the company and its plan allows an entrepreneur or group of owners to update the plan, based on successes, setbacks, and other new information. It provides an opportunity to size up the plan's ability to help the company grow.

Think of the business plan as a living document that evolves with your business.

A business plan is a document created by a company that describes the company's goals, operations, industry standing, marketing objectives, and financial projections. The information it contains can be a helpful guide in running the company. What's more, it can be a valuable tool to attract investors and obtain financing from financial institutions.

Why Do Business Plans Fail?

Even if you have a good business plan, your company can still fail, especially if you do not stick to the plan! Having strong leadership with focus on the plan is always a good strategy. Even when following the plan, if you had poor assumptions going into your projections, you can be caught with cash flow shortages and out of control budgets. Markets and the economy can also change. Without flexibility built in to your business plan, you may be unable to pivot to a new course as needed.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is an option when a company prefers a quick explanation of its business. The company may feel that it doesn't have a lot of information to provide since it's just getting started.

Sections can include: a value proposition, a company's major activities and advantages, resources such as staff, intellectual property, and capital, a list of partnerships, customer segments, and revenue sources.

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Building Your Business Plan

Quick Summary If you’re like most entrepreneurs, your business sprang from an idea or vision you had in your head. As a creative thinker, you probably had a pretty detailed concept of how you wanted your business to work. But if you expect other people, such as partners, investors, and loan officers, to understand your vision, you need to write it down as a strategic document. That’s where the business plan comes in.

The Basics of Writing a Business Plan

In This Section

Why do i need a written business plan, main components of a business plan, how to write a readable plan, revising and refining your plan.

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Picking Your Business Structure Building Your Business Plan Small Business Financing: What You Need to Know Your Business Loan: What Banks Need Beyond Banks: Alternative Funding for Startups How to Manage Your Cash Flow Accounting for Your Startup Being Accountable: Budgets, Books, and Statements Business Tax Basics for Beginners Understanding Business Taxes Special Incentives and Programs for New Businesses


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10 Reasons Not to Write a Business Plan

Writing a business plan isn't for everyone. Here are ten strategies you might be better off trying first.

By Martin Zwilling • Nov 6, 2013

Opinions expressed by Entrepreneur contributors are their own.

If you are one of the new age of entrepreneurs who hates the thought of doing a business plan as a first step in starting your new venture, you will love this message. More and more professionals agree that a better strategy is to explore and fine tune your assumptions before declaring a specific plan with financial projections based only on your dream and passion .

In the process, you may save yourself considerable re-work and money , or even decide that your dream needs more time to mature, before you commit your limited resources, or sign up with investors to a painful and unsatisfying plan.

I just finished a new book on this approach, Beyond the Business Plan , by Simon Bridge and Cecilia Hegarty, which outlines tradeoffs and recommends ten principles for every new venture explorer. Here is my edited summary of their ten principles, which might just convince you that you don't need a business plan at all, or at the very least, will help you write a better one later:

1. A new venture is a means, not an end. A new enterprise should be pursued primarily to help you achieve your goals , like providing a better life for others, satisfying a passion of yours, or enjoying the benefits of a technology you have invented. In that context, it could be a social enterprise, or even a hobby, in which case a business plan may not be beneficial.

2. Don't start by committing more than you can afford to lose. New ventures are usually exploratory and risky by nature, so don't let any business plan process convince you to commit more than you can risk as a person, should your exploration fail. Start with an effectual approach, which evaluates risk tolerance, and suggests a more affordable means to an end.

3. Pick a domain where you have some experience and expertise. Don't handicap yourself by starting something for which you have to build or acquire knowledge, skills and connections from scratch. No business plan will save you if you are just picking ideas at random or copying others, just because the story sounds attractive.

#insert related here#

4. Carry out reality checks and make appropriate plans. Before a business plan has any validity, some work is required to validate that your technology works, a real market exists and your assumptions for cost and price are reasonable. Don't be totally driven by your own passions, the emotional enthusiasm of friends or even third-party research.

5. The only reliable test is a real one. Market research techniques for trying to predict the market's response to a new venture can be costly and are often unreliable. Testing for real is the assumption behind approaches such as Lean Startup . It is also what explorers do -- they go and look, instead of trying to predict from a distance what they will find.

6. Get started and build momentum. Too much hesitation will kill any new venture, as markets move quickly and difficulties mount. Getting started helps generate momentum and creates a sense of accomplishment, which can carry your startup through many obstacles. Early perseverance pays off.

7. Accept uncertainty as the norm. You will never remove all uncertainties, so accept them, and plan your activities in an incremental fashion. Too often, a business plan is seen as a mechanism for eliminating uncertainty, lulling the founder into complacency. Eliminate major uncertainties before the plan and update any plan as you learn.

8. Look for new opportunities. Many useful opportunities are either created by what you do early, or are only revealed once you have started and can see out there. So keep your eyes open and respond to new customers, markets and partnerships. You will also find that looking hard helps eliminate opportunities that are not right for you.

9. Build and use social capital. Social capital is people and connections. No entrepreneur can survive as an island. Social capital is as important as financial capital for all ventures. As with all capital, you can use only as much as you have acquired to-date. If you have no social capital, no business plan will likely get you the financial capital you need.

10. Acquire the relevant skills. Three basic skill sets are required for successful delivery of almost every venture. These are financial management, production capabilities and marketing and sales. If you don't have the relevant skills and knowledge, take time to build them or find someone to partner with, before you attempt any business plan.

If you decide to continue building a conventional business after exploring these principles, especially with investors and employees other than yourself, I'm still convinced a business plan is a valuable exercise. You should do it yourself to make sure you understand all the elements of the plan and facilitate communication of the specifics to your team and investors.

In essence, building a complete and credible plan is the final test of whether your venture has legs. The entrepreneur lifestyle is all about doing something you enjoy without undue stress, uncertainty and risk. Are you having fun in your venture yet?

Veteran startup mentor, executive, blogger, author, tech professional, and Angel investor.

Martin Zwilling is the founder and CEO of  Startup Professionals , a company that provides products and services to startup founders and small business owners. The author of  Do You Have What It Takes to Be an Entrepreneur?  and  Attracting an Angel, he writes a daily  blog  for entrepreneurs and dispenses advice on the subject of startups.

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Microsoft 365 Life Hacks > Writing > Writing and Formatting a Successful Business Plan

Writing and Formatting a Successful Business Plan

Whether you’re an experienced business person or a first-time entrepreneur, a business plan presents an important opportunity to showcase your unique business ideas and make a plan for how it will it function and operate.

Because of its importance, it can sometimes appear to be an overwhelming task. However, with some guidance on business plan formatting and a breakdown of the plan’s most essential components, you can make the task more manageable and more easily get started on your own plan—bringing the possibility of your grand opening ever closer.

Business professionals discussing a blueprint at conference table in an office.

What Is a Business Plan?

A business plan usually serves either or both of two purposes: Sometimes it’s used to court potential investors in a business. Other times, it sets out guidelines and a strategy for initial members of a business’s team to follow as they get things up and running. In either case, this formal document maps out the purpose, goals, finances, and future plans of a new or existing business.

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Formatting Your Business Plan

Before you get started on writing your business plan, it’s useful to understand the formatting of a typical business plan. Not only will this help you make sure you ultimately deliver the information that potential investors or teammates are expecting, but it will also help you see where you might need to do more research or spend more time.

Typically, all business plans contain each of the following parts:

Executive Summary

Company description, business goals, market and opportunity analysis, competitive analysis, execution plan, marketing plan, financial analysis and projections.

Below, we sum up what these sections entail to help you craft each of them according to your own business’s needs.

Business plans usually open with what’s called an executive summary. Typically taking up no more than about half of a page, this summary should include the most essential information about your business and highlights from the plan that follows, including:

A company description should include both basic information about your organization—its registered name, physical location, and a short history of the company—as well as more detailed info about how your business intends to succeed. In other words, once you’ve touched on the very basics, this is your chance to hook readers of your business plan. To do so, it can be helpful to set the stage for your readers: consider the answers to questions like, “Why did you start this business?”, “What unique problems does your business solve?”, and “What makes your company different from others like it?”

Sometimes referred to as an “objective statement,” this section of your business plan should clearly outline your company’s goals—over both the short and long term. If you’re making an appeal to investors, this is also your chance to include some persuasive writing and describe to them how their investments are critical to helping you meet these goals.

This section requires keen research skills: Bring in all of your knowledge of the market your business is working in to show investors and potential partners where the opportunity lies. Show that you have an understanding of the market’s past, present, and future—and understand the unique risks that businesses in this space face. Additionally, you will want to show what typical types of customers in this market are like with information on key demographics and customer behaviors that your business will market itself to.

Moving past the broad view of the overall market, your business plan should include an analysis of the business models or examples of your closest competitors in the space. Showing how these other organizations operate, how they’ve fared over their histories, and how they market themselves to customers can help you make the case for how your business will do these things both differently and successfully.

The execution plan section should provide a window into how your business will operate behind the scenes: How will you and your employees be organized? Who will handle what tasks? Why are they the right people to do so? Answer these questions by providing thorough details on who will be doing the work and how they will be structured while getting it done.

Every business needs to have a plan on how they position and promote their offerings, as well as attract and retain customers. With this section of your business plan, explain to potential stakeholders and financiers what your initial marketing strategy is and how it will change and scale over time.

Especially for business owners seeking additional financing and investment, the financial portion of your business plan is critical in showing how your business has generated and managed income, plus deliver insight into how it will continue doing so.

This section should include a breakdown of your organization’s sales, expenses, and profits. If you’re applying for a loan or seeking investment, include an overview of what your company’s financials would look like over the next period of years if you were to receive that financial backing. In addition, you should outline a clear plan for how and when you will pay back these creditors.

Crafting a Business Plan That Succeeds

While the particulars of every business plan will be different, there are some aspects that should be common to all business plans:

Creating a successful business plan requires pulling together a lot of disparate information, which takes a diverse set of skills to pull off. Whether you’re new to new businesses or this is just your latest and greatest project, this can always be a tall order.

Make it easier on yourself by using all of the tools you have at your disposal to help. In addition to the guidelines above, explore a wide range of business plan templates available from Microsoft 365, including everything from complete business plans to individual components like revenue forecasts .

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do i need to write a business plan

Write a business plan

Download free business plan templates and find help and advice on how to write your business plan.

Business plan templates

Download a free business plan template on The Prince’s Trust website.

You can also download a free cash flow forecast template or a business plan template on the Start Up Loans website to help you manage your finances.

Business plan examples

Read example business plans on the Bplans website.

How to write a business plan

Get detailed information about how to write a business plan on the Start Up Donut website.

Why you need a business plan

A business plan is a written document that describes your business. It covers objectives, strategies, sales, marketing and financial forecasts.

A business plan helps you to:

You’ll need a business plan if you want to secure investment or a loan from a bank. Read about the finance options available for businesses on the Business Finance Guide website.

It can also help to convince customers, suppliers and potential employees to support you.

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Coffee Shop Business Plan Template

Are you dreaming of opening your own coffee shop but don't know where to start? Look no further! Our free coffee shop business plan template is the perfect tool to help you get started. This comprehensive guide will walk you through the process of creating a solid business plan that will set you up for success. With our customizable template, you'll be able to tailor your plan to your unique vision and goals, so you can confidently launch your coffee shop with the right foundation in place.

do i need to write a business plan

If you're looking to start a coffee shop and need a plan to get started, you're in the right place. This free business plan template is designed to help you create a comprehensive plan for your coffee shop that will guide you through the process of starting and growing your business.

Starting a coffee shop can be an exciting and rewarding venture, but it can also be challenging. With so many details to consider, it's easy to get overwhelmed. That's why a solid business plan is crucial for success. It will help you clarify your vision, outline your goals, and create a roadmap for achieving them.

Our coffee shop business plan template is designed to be easy to use, even if you have no previous business ownership experience. It includes all the sections you need to create a comprehensive plan, including:

Our coffee shop business plan template is completely customizable to fit your specific needs. You can add or remove sections as needed, and fill in the details that are most important to your business. The template includes helpful tips and guidance throughout, as well as examples of completed sections to help you get started.

To access the free coffee shop business plan template, simply enter your email address and name in the form provided. You will receive a link to download the template.

With this free coffee shop business plan template, you will have the tools you need to create a comprehensive plan for your shop. Whether you're just getting started or looking to take your business to the next level, a solid plan is the key to success. Get started today

Coffee Shop Business Plan Outline

I. Executive Summary

- Brief overview of the business idea, target market, and goals

II. Market Analysis

- Description of the coffee market, including trends and competitors

- Analysis of target customer demographics and their coffee habits

III. Business Concept

- Description of the coffee shop's unique selling proposition and concept

- Details of the menu offerings and any special features or services

IV. Marketing Strategy

- Overview of marketing and advertising efforts, including social media, promotions, and local events

- Analysis of pricing strategy and how it will attract customers

V. Operations Plan

- Description of the day-to-day operations, including staffing, scheduling, and inventory management

- Discussion of any technology or equipment needs and how they will be procured

VI. Financial Plan

- Projections for start-up costs, ongoing expenses, and revenue

- Breakdown of funding sources, such as loans or investments

- Discussion of the target profitability and growth potential for the business

VII. Management Team

- Brief descriptions of key management members and their experience

- Discussion of any partnerships or strategic relationships

VIII. Conclusion

- Summary of key points and future plans for the business

Get the free business plan template here!

Coffee shop business plan frequently asked questions, q: why do i need a coffee shop business plan.

A coffee shop business plan is a roadmap for your business. It helps you identify your target market, competitive landscape, and financial projections. By creating a business plan, you can gain a better understanding of your business and increase your chances of success.

Q: What should be included in a coffee shop business plan?

A coffee shop business plan should include an executive summary, company description, market analysis, product line, sales and marketing plan, financial projections, and funding request. Each of these sections should be tailored to your specific coffee shop.

Q: How long should a coffee shop business plan be?

A coffee shop business plan can vary in length, but it should typically be between 25 and 35 pages. It's important to include all the necessary details, but not to overwhelm the reader with too much information.

Q: Do I need to hire a professional to write my coffee shop business plan?

While it's not necessary to hire a professional to write your coffee shop business plan, it can be helpful if you're not experienced in creating business plans. You can also use templates and online resources to guide you through the process.

We Know a Good Business Plan When we See One

Collectively, our team has reviewed thousands of business plans and has nearly 20 years of experience making SBA loans. We've also helped more than 50,000 businesses create financial projections across many industries and geographies.

do i need to write a business plan

Adam served as Executive Director for a SBA microlender in Indiana for over 10 years helping businesses and reviewing thousands of business plans.

do i need to write a business plan

Grace has built hundreds of custom financial models for businesses as well as our projection templates which are used by thousands of businesses every year.

do i need to write a business plan

Kyle served as an SBA loan officer for 7 years working directly with startups and business owners to review their business plans, projections, and prepare their loan package.

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do i need to write a business plan

Home » Food

How to Start a Winery Without a Vineyard [Business Plan]

Anyone who has really enjoyed a wonderful glass of Chardonnay or visited a winery where there are made must have considered venturing into the wine business. Not only is wine one of life’s great pleasures, it is also an excellent marketable commodity. According to reports, the sales of wine in the U.S. amounted to approximately 435.1 million 9-liter cases in 2020.

However, anyone who is looking to start a winery will have to deal with certain hurdles along the way, including professional input, deep pockets, long-range vision, and a concrete belief in the process. Owning a winery can be a wonderful, romantic business, but that does not mean it is easy. If you are up for the challenge, here is a guide on how to start and run a winery business.

Steps on How to Start a Winery Business

Conduct market research.

No matter how eager you are to venture into the wine industry, it is recommended you carry out detailed research to ensure you know what you are getting into. You need to understand that keeping a winery business successful won’t be easy and you need to know what to expect before you make the commitment.

Aside from properly understanding what you are getting into, a detailed research will ensure that you make the right choices. You won’t want to start growing grapes, for instance, that aren’t suited for your climate.

a. Who is the Target Audience?

Note that you can properly identify the target market for your winery by carrying out market research. Most often, you will have three to four wines, and you may have different target audience for all, at different markets. And with very good market research, once one product fails to live up to expectations, you can adjust your offerings without incurring significant loss.

When carrying out this market research, it is also advisable you focus on markets you can geographically target, or those you intend to directly target in the near future. Have it in mind that wine consumption trends and target groups differ massively between countries.

Although most places have witnessed a huge uptake among Millennials, some still have a stable, well-rooted wine culture among other groups of the market, with some of the more traditional segments of wine consumers even growing.

In the western world, reports have it that Millennials spend more on quality foods and drinks than the previous generations did, and wine remains one of those desirable products. While Baby Boomers and Millennial tend to consume the most wine in the US, Baby Boomers still represent a greater percentage of wine consumption, however, the gap between them and Millennials is closing each year.

b. Is Winery Business a Profitable Business?

Yes. Although winery businesses struggle in the early stage of development, a good number of them that scale through the early stage of development will eventually become very profitable. However, it is imperative you realize that a winery business is not a get-rich-quick scheme.

c. Are There Existing Niches in the Industry?

d. Who are the Major Competitors?

e. Are There County or State Regulations or Zoning Laws for Winery Business?

Yes, the winemaking industry is heavily regulated; therefore licensing and permits can become quite complicated. Owing to the stress involved, have it in mind there are wine-compliance companies that do nothing else but only aid wineries navigate local and federal wine regulations.

Aside from the legal permit, you need to legally operate your winery, you also need to register your business with the FDA, comply with local and state laws, and even have your wine labels approved by the Alcohol and Tobacco Tax and Trade Bureau.

If you also intend to sell your products across state borders, it gets even more complicating, especially since some states have their own laws about direct shipment. After you must have scaled through the licensing and permit logistics stage, you’ll still have to stay on top of your state’s excise and sales taxes on wine, too.

If you feel burdened with all these processes, it is recommended that you consult a lawyer with experience in the winery industry.

f. Is There a Franchise for Winery Business?

g. What Do You Need to Start a Winery Business?

Memorable Winery Business Names

Register your Business

A. what type of business structure is best for winery business.

You have to understand that business structures come in several varieties, each with its pros and cons. Also note that the business structure you choose for your winery business will influence your taxes, personal liability, and business registration requirements, therefore make this choice wisely. However, most new business owners are advised to form an LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation.

b. Steps to Form an LLC

 c. What Type of License is Needed to Open a Winery Business?

d. What Type of Certification is Needed to Open a Winery Business?

e. What Documents are Needed to Open a Winery Business?

f. Do You Need a Trademark, Copyright, or Patent?

Being in the wine industry, there are numerous trademark and copyright laws to understand when building your brand. Ensure you carry out well-detailed research to ensure that your brand’s name, logo, bottle design, etc. are all unique to your brand and that you are not stepping on any other wineries’ toes. Note that the very last thing you’ll want as a new winery is to have to pay legal fees in addition to the costs of starting your business.

Do your Cost Analysis and Budgeting

A. how much does it cost to start a winery business.

Starting up a winery business will require a substantial initial investment of about $500,000 to more than $2 million, owing to the size of the winery and the production capacity.

b. What are the Cost Involved?

c. What Factors Determine the Cost of Opening a Winery Business?

d. Do You Need to Build a Facility?

At this point, you now understand how big your vineyard is, and you now need to start designing the interior and floor plan of your winery. The first thing to do is to consider what you need in your winery, such as equipment and storage space.

Note that if people will be allowed to visit your winery and taste your wine, they will need somewhere they can buy the wine they sampled. Also, consider if you will serve food with your wine or will it simply be a Winery. Most often, crackers and cheese are always a good pairing with wine, but you can also consider full meals. If you choose to offer food to complement your wine, you’ll definitely need an area specifically for this – and likely a kitchen as well!

e. What are the Ongoing Expenses for Running a Winery Business?

f. What is the Average Salary of your Staff?

g. How Do You Get Funding to Start a Winery Business?

A good number of people looking to start a winery, especially those just learning how to start a winery, can’t cough up around $600,000 – $1.5 million on their own, therefore they’ll need to turn to some form of outside financing. While there are many ways to raise capital, here are ways to consider for your winery business:

Write a Business Plan

A. executive summary.

Wine Capital will be a premium winery in Woodinville, Washington; a city in the heart of the Sammamish River Valley and a great day trip from Seattle. Our plan is to implement the best practices in all our processes, with particular emphasis on excellent customer service, production of assorted and quality inventory, and competitive pricing. At Wine Capital, we will ensure that we put the right structures in place that will support the kind of growth that we have in mind while setting up the business.

b. Products and Service

c. Mission Statement

At Wine Capital, our mission is to build a business that will be renowned for making the best wines in Washington, which will be measured by our growth in sales, and in opinions and ratings published in the media. Note that all our inventory and sales records will be computerized, to enable us to identify and leverage our best-selling products, match volumes and profitability to service levels, anticipate demand, manage cash flows, and assist with revenue growth plans.

Vision Statement

Our vision at Wine Capital is to build a reputation for great wines, appealing retail outlets, competitive prices, and excellent customer service. We will always strive to keep our staff focused, satisfied, and important in their roles–to help guarantee our productivity and customer service at the highest obtainable levels.

d. Goals and Objectives

e. Organizational Structure

Marketing Plan

A. swot analysis.


b. How Do Winery Businesses Make Money?

c. Payment Options

d. Sales & Advertising Strategies

Financial Projection

A. how much should you charge for your product/service.

Have it in mind that you will probably sell wine for $15-$20 per bottle for direct-to-consumer and tasting room sales.

b. How Much Profit Do Winery Business Owners Make a Year?

According to industry reports, annual pre-tax profits will range between $90,000 and $1.2 million, based on sales and capacity.

c. What Factors Determine the Amount of Profit to Be Made?

d. What is the Profit Margin of a Winery Business?

Although this will vary depending on certain factors, however, reports have it that the profit margin for wineries and vineyards is about 50%.

e. What is the Sales Forecast?

Set Up your Shop 

A. how do you choose a perfect location for winery business.

Have it in mind that where you choose to grow your grapes is a critical component in having a successful winery. Most often, your location either depends on the type of grape you plan to grow or the grape type depends on the location. Generally, grapes tend to flourish better in warm climates, and that is why there are many vineyards from California, South France, and Spain.

It’s is also common for wineries to locate near one another, especially since it’s less of a risk to grow a vineyard in the same climate as another successful vineyard. In addition, while you may think this would cause nothing but competition, it could also spark networking opportunities and local support.

Other considerations when picking the ideal location include size – how many wines are you planning to grow? – And any soil preferences and restrictions. Locations like Napa Valley, California in the US, Boudreaux in France, and Barossa in Australia remain some of the world’s most famous wine regions.

b. What State and City are Best to Open a Winery Business?

c. What Equipment is Needed to Operate?

Hire Employees

Note that when you’re starting out small from a home office, you may not need employees. However, as your business expands, you will most likely need workers to fill various roles. The exact number of employees you may need to hire will depend on the size and needs of your business.

You might also have to employ multiple workers for a single role or a single worker for multiple roles, all depending on your business needs. Nevertheless, free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or

Launch the Business Proper

Truth be told, you will need to let people know that you are open for business and there is no better way to do this than to host a launch party. As the opening day nears, get ready for launch by reviewing and improving certain crucial elements of your business.

a. What Makes a Winery Business Successful?

Irrespective of your winery business model, have it in mind that your business’s success will more or less depend on how extensively you see to the needs of your customer, like keeping up with their changing tastes, spending habits, and the industry at large.

It is also advisable you look into aspects of diversification before you get started. It is important to note that the revenue you make from wine production might not be enough, therefore you might have to plan for ways to diversify your income source.

For instance, you can decide to inculcate a small B&B type of service to your winery or offer tours for tourists on your farm. Aside from that, there are other ways you can put your winery into good use and ensure you have other sources of revenue while you also focus on your wine.

b. What Happens During a Typical Day at a Winery Business?

What happens during a typical day at a winery business will vary owing to the business model and the sort of services offered. However, a winery business owner may conduct the following transactions on any given day:

c. What Skills and Experience Do You Need to Build a Winery Business?

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