Business Plan Template: How to Write a Business Plan in 10 Steps

Whether you’re a seasoned business owner or just beginning to think about starting a business, demands come at you fast. Amidst the rush of to-do lists and meetings, determining how to write a business plan—much less following a business plan template—often feels time-consuming and intimidating.

It’s more than the old cliche: A failure to plan is a plan to fail. In fact, a wealth of data now exists on the difference a written business plan makes, especially for small or growing companies.

In this article, we’ll cover everything you need to write a successful business plan step-by-step, and turn your idea into a reality. You will learn:

• What is a business plan?
• What is the purpose of a business plan? 
• Why do you need a business plan? 
• Identifying the audience for your business plan 
• Why you should use a business plan template 
• How to write a business plan in 10 steps 
• Top tips for writing a business plan 
• 3 tips to update your business plan

What is a business plan?

A business plan is a comprehensive road map for your small business’s growth, development, and its way forward. It communicates who you are, what you plan to do, and how you plan to do it. It also helps you attract talent and investors. 

In other words, a good business plan is the one that is:

• Simple to understand,
• Realistic,
• Delegates work,
• Sets milestones, and
• Gives results for your business.

But remember that a business idea or business concept is not a plan.

What is the purpose of a business plan?

Having a solid business plan is essential for setting and monitoring goals as your business expands. It allows you to plan for the future, distribute resources effectively, concentrate on crucial aspects of your business, and be prepared for potential obstacles and chances for growth. It also allows you to envision how your business concept will develop based on the product or service you offer, your chosen business strategy, and your target market.

Furthermore, a business plan will help you to identify critical cash flow challenges, get skilled candidates on board, and attract investors to put money into your business.

Why do you need a business plan?

Having a business plan is crucial as most venture capitalists (VCs) and all banking institutions require a well-structured, documented plan before investing in a new or small business. A business plan not only aids in setting clear goals, but it also provides reassurance to external parties that you have thoroughly considered all aspects of your business.

In 2018, the entrepreneurial resource centre, Bplans, worked with the University of Oregon to compile and analyse research around the benefits of business planning. Here’s what they found:

• Businesses with a business plan grow 30% faster than those without.
• Owners with business plans are twice as likely to grow, get investments, or secure loans than those without.
• Entrepreneurs with a business plan have a 129% increased likelihood of growing beyond the startup phase and a 260% increased likelihood of growing from “idea” to “new business.”

Perhaps the strongest evidence comes from the Journal of Business Venturing’s 2010 meta-analysis of 46 separate studies on 11,046 organisations: Its findings confirm that “business planning increases the performance of both new and established small firms.”

When do you need a business plan?

Before you leave a nine-to-five income, your business plan can tell you if you’re ready. Over the long term, it’ll keep you focused on what needs to be accomplished.

It’s also smart to write a business plan when you’re:

• Seeking funding, investments, or loans
• Searching for a new partner or co-founder
• Attracting, hiring, and retaining top talent
• Experiencing slow growth and need a change

Identifying the audience for your business plan

Prior to starting your business plan, it is crucial to assess the intended audience. This will help determine whether you should create an internal or external plan. Are you targeting angel investors in a conference room, or the venture funding department at your local bank? If so, an external plan is likely needed. Alternatively, if the audience is yourself, your team leaders, and employees, an internal plan is more appropriate.

Defining your audience helps you determine the language you’ll need to propose your ideas as well as the depth to which you need to go to help readers conduct due diligence.

Identifying your business plan audience is important because an external business plan will target investors and external stakeholders and provide them with information to consider when deciding if they will invest in your business. For example, an external business plan may address the following:

• Product-market fit: Have you done the research to determine the demand for your product or service?
• A solid team in place: Do you have the right people or team you need to support your goals and objectives?
• Scalability: Can you grow sales volume without proportional growth in headcount and fixed costs?

Why you should use a business plan template

A templated business plan gives employees and investors alike a blueprint of what to expect from your company or business and tells them about you as an employee or entrepreneur.

Even if you don’t plan on seeking investments early on, there are other important reasons to use a business plan template to write a great business plan. A well-structured business plan:

• Clarifies what you’re trying to accomplish
• Identifies opportunities to understand your market, like demographics and behaviours
• Establish the role of each team member
• Gives team members a benchmark to reference and stay on track
• Helps catch errors to make sure financial projections are accurate
• Helps you see the holes and blind spots that could cause future issues

A business plan template is important because it helps businesses:

• Identify your business objectives, set milestones, and the means to achieve them
• Convince investors to provide investment if you are seeking one
• Track performance and measure variance between planned and actual performance so that you can take the necessary steps
• Evaluate the feasibility of a business idea in case of a startup and new product or service line in case of an established business
• Identify new business opportunities
• Take decisions about expenditures like hiring employees, buying equipment, etc with confidence
• Identify key cash flow challenges early on to avoid any cash crunch
• Lay down your organisation’s business structure
• Attract desired executive candidates or partners for your business

Business plan template

Get your hands on this complimentary template to assist you in arranging pertinent details for an impressive business plan. Our template is user-friendly and straightforward, allowing you to stay on track and kickstart your plan. It serves as a solid foundation for creating a more extensive business plan. Feel free to make any necessary additions to customise it to your needs.

How to write a business plan in 10 steps

Now, let’s dive into the 10 key elements of your business plan.

1. Create an executive summary

Even though it appears first in the plan, write your executive summary last so you can condense essential ideas from the other nine sections. For now, leave it as a placeholder.

What is an executive summary?

The executive summary is an outline of your business plan and lays out all the vital information about your business within a relatively short space, typically one page or less. The objective of the executive summary is to provide a high-level look at the key points of your business plan to encourage readers to go through the remaining elements of a business plan. 

Some readers read only the executive summary. Therefore, make sure that you keep it precise and clear.

Elements of an executive summary

Following are the key parts that must be included in the executive summary of your business plan:

• Business name, place, and contact information
• Products or services that you intend to sell together with their value proposition
• Your target market
• Purpose of writing a business plan
• Your competitive advantage, that is, important factors responsible for your business success
• Marketing and sales plan
• Financial projections for at least three to four years
• Brief background of owners, their expertise and experience
• Ways in which you plan to execute your business plan, that is, processes, responsibilities, deadlines, milestones, etc.

How do I write an executive summary?

Below, you’ll find an example from a fictional business, Laura’s Landscapers (we’ll use that same company throughout this guide to make each step practical and easy to replicate).

This executive summary focuses on what’s often called the value proposition or unique selling point: an extended motto aimed at customers, investors, and employees.

You can follow a straightforward “problem, solution” format, or a fill-in-the-blanks framework:

• For [target customers]
• Who are dissatisfied with [current solutions]
• Our [product or service] solves [key customer problems]
• Unlike [competing product], we have [differentiating key features]

This framework isn’t meant to be rigid, but instead to serve as a jumping-off point.

This falls under ‘What do we do’ in the template.

2. Compose your company summary

You need to include a company summary in the business plan if you are drafting an external business plan for external stakeholders and investors. These outsiders are keen to know about various aspects of your business to get a better understanding.

A good company summary provides readers with important company information. Accordingly, the key components that form a part of the company summary section include:

• Your company name
• Type of ownership such as sole proprietorship, partnership, corporation, or LLP
• Your business location
• The products or services it intends to provide and their benefits
• The mission statement or business value proposition, that is, the value your business would create for its customers
• Company objectives including goals based on the value proposition
• Competitor analysis including competitive advantage, that is, how your company is better than the competition
• Company numbers like past performance, and 
• Important events in the company’s history

These elements give context to the bigger picture in your business plan, letting investors know the purpose behind your company so the goals make sense as well. Below we will look at key elements of a company summary in more detail.

What is a mission statement?

A mission statement is your business’s reason for existing. It’s more than what you do or what you sell. It's about why exactly you do what you do. Effective mission statements should be:

• Inspirational to make others believe in your vision
• Emotional to captivate readers and grab their interest

It is important to know that throughout every part of your plan, less is more. Nowhere is that truer than your mission statement. Think about what motivates you, what causes and experiences led you to start the business, what problems you aim to solve, and the wider social issues you care about.

Tip: Review your mission statement often to make sure it matches your company’s purpose as it evolves with time. A statement that doesn’t fit your core values or what you actually do can undermine your marketing efforts and credibility.

How do you describe a company’s history?

Don’t worry about making your company history a dense narrative. Instead, write it like you would a profile:

• Founding date
• Major milestones
• Location(s)
• Number of employees
• Executive leadership roles
• Flagship products or services
• Then, translate that list into a few short paragraphs (like the example below).

Why do business objectives matter?

Business objectives give you clear goals to focus on, like the North Star. These goals must be SMART, which stands for:

• Specific
• Measurable
• Achievable
• Realistic
• Time-bound

Additionally, they need to be connected to important outcomes. If your goals are not clearly outlined, it can be challenging for employees and team members to strive towards a shared objective. This can also result in a lack of trust from investors and a lack of profitability for your company.

This falls under the how and why in the business plan template.

3. Summarise market research and potential

The next step is to outline your ideal potential customer as well as the actual and potential size of the targeted market. This is because you need a clear understanding of the requirements of your potential customers.

You first need to identify your customers’ needs and then design a product or service to solve that need. Then, you need to understand if there exists a good number of customers within your target market who can buy such a product or service.

Target markets—also known as personas—identify demographic information like:

• Location
• Income
• Age
• Gender
• Education
• Profession
• Hobbies

By getting specific, you’ll illustrate expertise and generate confidence. If your target market is too broad, it can be a red flag for investors.

• Example: If your product is perfect for people with money to hire landscape architects, listing “anyone with a garden” as your target market might not go over so well.

The same is true with your market analysis when you estimate its size and monetary value. In addition to big numbers that encompass the total market, drill down into your business’s addressable market—meaning, local numbers or numbers that apply the grand total to your specific segments. You may even map your customer’s journey to get a better understanding of their wants and needs.

This falls under Who in the business plan template.

4. Conduct competitive analysis

To start your competitive research, you must first identify businesses that are currently operating in the market you wish to enter. Although it may seem daunting to devote enough time to studying all potential competitors, doing so can be highly beneficial. This process allows you to assess your business's unique qualities, such as pricing, features, and service, that set you apart from your competitors.

Answer these additional questions after you’ve identified your most significant competitors:

• Where do they invest in advertising?
• What kind of press coverage do they get?
• How good is their customer service?
• What are their sales and pricing strategies?
• How do they rank on third-party rating platforms? 

If your idea is truly novel, be prepared to explain the customer pain points your business aims to solve. If your business doesn’t have any direct competition, research other companies that provide a similar product or service.

Next, create a table or spreadsheet listing your competitors to include in your plan, often referred to as a competitor analysis table.

This falls under Competition in the business plan template.

5. Describe your product or service

This section describes the benefits, production process, and life cycle of your products or services, and how what your business offers is better than your competitors.

It is important to provide thorough explanations of the products or services you plan to include in your business plan for outside readers. Be sure to clearly outline how these offerings will benefit your customers.

Furthermore, highlight the crucial aspects that set your offerings apart. This will aid readers in comprehending your competitive advantage in the market.

Writing about the need that your products or services solve also helps you to come across other pain points of your customers.

When describing benefits, focus on:

• Unique features
• Translating features into benefits
• Emotional and practical payoffs to your customers
• Intellectual property rights or any patents that protect differentiation

For the production process, answer how you:

• Create existing and new products or services
• Source raw materials or components
• Assemble them through manufacturing
• Maintain quality control and quality assurance
• Receive and deliver them (supply chain logistics)
• Manage your daily operations, like bookkeeping and inventory

Within the product life cycle portion, map elements like:

• Time between purchases
• Up-sells, cross-sells, and down-sells
• Future plans for research and development

You can include this as an extra section in the template, or weave into the What + How + Why section of the business plan template.

6. Develop a marketing and sales strategy

Your marketing strategy or marketing plan can be the difference between selling so much that growth explodes or getting no business at all. 

Your marketing and sales strategy should include your plan for creating awareness of your business idea and should outline:

• Your launch plan to attract new business
• How you plan to position your business
• How you plan to price your product or service
• A website development plan to build your online presence
• Growth tactics for established businesses to expand
• Retention strategies like customer loyalty or referral programs
• The ways in which you would convert leads into customers
• The pricing tactics for converting prospects into customers
• Advertising and promotion channels such as search engines, social media, print, television, YouTube, and word of mouth
• Your training plan for the sales personnel
• Ways can you adapt to create awareness of your business idea

This portion of your business plan can also be utilised to emphasize your unique selling proposition, preferred target audiences, current customer demographics, areas of expertise, and distinguishing factors from competitors. It is important to demonstrate your past accomplishments, future plans within your current capabilities, and anticipated outcomes from your endeavors.

This falls under Marketing in the business plan template.

7. Compile your business financials

If you’re just starting out, your business may not yet have financial data, financial statements, or comprehensive reporting. However, you’ll still need to prepare a budget and a financial plan. 

Our budget template can help you stay on the right track when it comes to your finances. 

If your company has been around for a while and you’re seeking investors, be sure to include:

• Income statements
• Profit and loss statements
• Cash flow statements
• Balance sheets

Other figures that can be included are:

• How much of your revenue you retain as your net income
• Your ratio of liquidity to debt repayment ability
• How often you collect on your invoices

Ideally, you should provide at least three years’ worth of reporting. Make sure your figures are accurate and don’t provide any profit or loss projections before carefully going over your past statements for justification.

Avoid underestimating business costs

The relationship between costs, profit margins, and sale prices is significant, and numerous business owners establish sale prices without considering all expenses. This error is particularly common among new business owners. It is crucial to factor in all costs, including overhead expenses, when determining the cost of your product or service. Otherwise, it will be difficult to determine a sale price that will generate the desired level of profit.

Underestimating costs can catch you off guard and eat away at your business over time. Therefore, you need to consider the items in the income statement and the balance sheet that impact your cash flows.

This falls under Revenue in the business plan template.

8. Describe your organisation and management

The success of your business is dependent on the quality of your team. It is essential to identify your team members and emphasize their ability to bring your business idea to life and facilitate its growth. This section of your business plan should showcase the expertise and qualifications of your management team, who are the stars that will lead your business to success.

Make sure to include

• Structure of management
• Roles and responsibilities including roles you still need to hire to grow your company
• Experience
• Skill and education
• Personnel cost attached including the cost of hiring experts to assist operations
• Employee benefits

To make informed business decisions, you may need to budget for a bookkeeper, a CPA, and an attorney. CPAs can help you review your monthly accounting transactions and prepare your annual tax return. Or try QuickBooks Accounting Software to help your small business track expenses, manage cash flow, send custom invoices, and create financial reports. An attorney can help with client agreements, investor contracts (like shareholder agreements), and any legal disputes that may arise.

You could include this at the top or your template.

9. Explain your funding request

When outlining how much money your small business needs to external stakeholders and investors, try to be as realistic as possible. You can provide a range of numbers if you don’t want to pinpoint an exact number. However, include a best-case scenario and a worst-case scenario.

Since a new business doesn’t have a track record of generating profits, it’s likely that you’ll sell equity to raise capital in the early years of operation. Equity means ownership—when you sell equity to raise capital, you are selling a portion of your company.

• Remember: An equity owner may expect to have a voice in company decisions, even if they do not own a majority interest in the business.

Most small business equity sales are private transactions. The investor may also expect to be paid a dividend, which is a share of company profits, and they’ll want to know how they can sell their ownership interest. Additionally, you can raise capital by borrowing money, but you’ll have to repay creditors both the principal amount borrowed and the interest on the debt.

If you look at the capital structure of any large company, you’ll see that most firms issue both equity and debt. When drafting your business plan, decide if you’re willing to accept the trade-off of giving up total control and profits before you sell equity in your business.

• Tip: Put together a timeline so your potential investors have an idea of what to expect. Some customers may not pay for 30 days or longer, which means the business needs a cash balance to operate.

The founder can access cash by contributing their own money into the business by securing a line of credit (LOC) at a bank. If you raise cash through a LOC or some other type of loan, it needs to be paid off ASAP to reduce the interest cost on debt.

This falls under Funding in the business plan template.

10. Compile an appendix for official documents

Finally, assemble a well-organised appendix for anything and everything readers will need to supplement the information in your plan. Consider any info that:

• Helps investors conduct due diligence
• Gives context and easy access to you or your employees

Useful details to cover in an appendix include:

• Deeds, local permits, and legal documents
• Certifications that bolster your credibility
• Business registries, and professional licenses pertaining to your legal structure or type of business
• Patents and intellectual properties
• Industry associations and memberships
• State and federal identification numbers or codes
• Key customer contracts and purchase orders 

Your appendix should be a living section of the business plan, whether the plan is a document for internal reference only or an external call for investors.

• Tip: As you include documents in the appendix, create a miniature table of contents and footnotes throughout the rest of the plan linking to or calling attention to them.

Top tips for writing a business plan

Investors have little patience for poorly written documents. You want your business plan to be as attractive and readable as possible, follow these points to save yourself from any trouble or disappointment:

• Keep it brief: A typical business plan can range from 10 to 20 pages. As long as you cover the essentials, less is more.
• Make it easy to read: Divide your document into distinct sections, so that investors can quickly flip between key pieces of information.
• Know your margins: List every cost your business incurs, and make sure that you’re assigning those costs to each product or service that you sell.
• Proofread: Double-check for typos and grammatical errors. Then, triple-check. Otherwise, you might risk your credibility.
• Invest in quality design and printing: Proper layout, branding, and decent printing or bookbinding give your business plan a professional feel.
• Be prepared in advance: Have everything ready to go at least two weeks ahead so you have time to make revisions in case of a last-minute change.

3 tips to update your business plan

It’s a good idea to periodically revisit your business plan, especially if you are looking to expand. Conducting new research and updating your plan could also provide answers when you hit difficult questions.

Mid-year is a good time to refocus and revise your original plans because it gives you the opportunity to refocus on any goals for the second half of the year. Below are three ways to update your plan.

1. Refocus your productivity

When you wrote your original business plan, you likely identified your specific business and personal goals. Take some time now to assess if you’ve hit your targets.

• Example: If you planned to launch a new tips and trends video series and it hasn’t happened yet, what’s stopping you? Put a timeline together and set a launch date.

If you only want to work a set number of hours per week, you must identify the products and services that deliver the returns you need to make that a reality. Doing so helps you refocus your productivity on the most lucrative profit streams.

Also, use what you’ve achieved and the hard lessons you’ve learned to help you re-evaluate what is and isn’t working.

2. Realign with your goals

Do a gut check to determine whether all of your hard work is still aligned with your original goals and your mission statement. Ask yourself these questions:

• Are my goals still relevant?
• Am I still focused on the big picture?
• Where do I want to be a year from now?
• Will my existing plan still take me where I want to go?

These questions may be tough to answer at first glance, but they reveal your ties to your goals and what most likely needs to change to achieve new wins.

3. Repurpose your offerings

If your time has become more focused on small projects rather than tangible growth and building a valuable client list, consider packaging your existing products or services differently. Can you bundle a few things together?

• Example: Laura’s Landscapers might be able to offer a special pool and patio package. Doing so might help them bring in fewer yet higher-paying projects. Perhaps they can offer a maintenance package as well to keep that customer long-term.

You must deliberately manage your revenue streams, and that might require shuffling things around a little to focus on what is working for you.

Business plan template

Even if you don’t plan on seeking investments early on, there are other important reasons to use a business plan template to write a great business plan:

• Clarifies what you’re trying to accomplish
• Identifies opportunities to understand your market, like demographics and behaviours
• Establish the role of each team member
• Gives team members a benchmark to reference and stay on track
• Helps catch errors to make sure financial projections are accurate
• You’ll see the holes and blind spots that could cause future issues

Download the following template to build your business plan from the ground up, considering all the important questions that will help your investors and employees.

The old cliche is still true today: A failure to plan is a plan to fail. Your business plan is crucial to the growth of your business, from giving direction, motivation, and context to employees, to providing thoughtful reassurance and risk mitigation to financers. Before you get your small business up and running, put down a plan that instills confidence and sets you up for success.

QuickBooks for small business

Now that you have your business plan ready to go, take advantage of QuickBooks accounting software for small businesses to automate your accounting, invoicing, and financial reporting. Save time with QuickBooks and spend more time running your business. Try a free 30-day trial today and see how QuickBooks can help you grow your small business.

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