How to Write a Business Plan: A Step-by-Step Guide [2024]

Want to know how write a business plan? Not sure what needs to go in each section or how long it should be? Read on to find out.

How to Write a Business Plan

Every small business has a beginning. It’s an exciting time with a lot to look forward to.

But the launch of every small business is not created equal.

If you want to make sure your business gets started off on the right foot, you need to make sure that launch includes a critical element: a well-crafted business plan.

Creating a business plan is an integral part of starting a business. It’s an A-to-Z guide to running your business the way you want (and need, for it to be successful).

That’s why in this guide, we’ll show you everything you need to know about writing a business plan, including:

What is a business plan?
The 8 steps to writing your business plan
How long should a business plan be?
Business plan examples

So, let’s start with the obvious question:

What Is a Business Plan?

A business plan is a guide of sorts, both for you and those interested in your business (i.e. potential investors), that lays out your plan for growing and developing your business.

It tells the story of who you are as a company, what your goals are, and how you’re going to get there. And it does all that while being as thorough as possible.

Goals should have dates, a detailed marketing plan to back that up.

A product strategy that makes it clear why you’re selling what you’re selling and how you’re going to make it better.

And, finally, a financial plan that shows how you’re going to manage all that money your business is going to be making.

If there is any part of running a business that you’re unfamiliar with, this will be the point that you’ll want to start doing some research, as you’ll need a basic grasp of everything from marketing, product development, financials, and your organizational structure to create a good business plan.

What Needs to Be In a Business Plan? 8 Steps to Writing a Business Plan

Now that we’ve got that out of the way, what are you supposed to put into your business plan?

There are 8 things every good business plan should have.

They are:

Executive summary
Company overview
Market analysis
Organizational structure
Product strategy
Marketing strategy
Financial plan
Appendix

With a thorough description of each of these areas, you’ll have a detailed business plan in place that should not only guide you in your business’ development but make you look good with investors.

How to Write a Business Plan: A Step-by-Step Guide

Creating a business plan can seem a bit overwhelming when you consider everything that goes into one.

But if you take it one part at a time, you’ll find the plan coming together before you know it.

Now, let’s jump into those 8 steps we just talked about and do just that: break each part down into easy steps to follow.

And remember: If you’re unsure of anything right now, just write down what you do know about each section. Later, you can come back and flesh that section out.

With that said, here are the 8 parts of every business plan:

1. Write an executive summary

First, you’ll want to write your executive summary.

An executive summary is a summary of where your business is now and where you want it to go. If you’re trying to interest investors, this is also a good place to add a little bit about what makes you stand out as a company and why your company is going to be a success.

How long should it page? About a page is fine, though it could be longer.

If that feels impossible, consider that your executive summary is exactly that: a summary. It’s not a thorough breakdown.

Think of your executive summary as the prelude to the rest of your business plan. Later, you’ll go more into your product, marketing, positioning, and financials. For now, just give them an effective and concise summary of the most important parts.

What are those? The SBA recommends the executive summary of a business plan includes these 6 pieces of information:

Mission statement: Describe your business and its goals in a paragraph.
General company information: This includes the date of your company’s formation, the owners/founders, their roles, and how many employees you have.
Highlight successes: Place any notable data (in visual form such as a graph) regarding the growth of your business. Remember, your business plan should impress potential investors (unless you’re solely doing it for your own use, in which case this can be skipped), so you’ll want to offer something that signals you’re bound for success if you have it or other positive notes about why you’ll be successful if you don’t have that.
Products and/or services: Describe your product or service and your market.
Financials: This section is important if you’re looking for investors as you’ll list your funding goals as well as anyone you’ve already worked with in the past to secure funding.
Plans and goals: What are your goals for the future. The last part of your executive summary should mention what those goals or plans are.

This first section might seem like a doozy, but keep in mind that it’s arguably the most important section of your business plan because it summarizes everything that will come after it.

The great part about starting with this too is that it will help give you a better idea of what you’re going to put in each of the proceeding sections, making the rest of the business plan go smoothly.

2. Complete your company overview

Next is your company overview. Consider this the basic information that those interested in your business will need to know about how you function.

That includes:

What does your business do? You spent a lot of time selling your business in the previous section, now you need to make it crystal clear what your business does.
Your market: Who do you sell to? What is the need you’re serving? How are you serving that need?
Your business type (legal structure): Explain what business structure you are and why you’ve decided to choose that structure. Also, list how ownership is divided and managed.

Make sure your answers to these points are to the point. This is an overview, like the last section, so you don’t have to spill all the details (not until later).

However, you also want to make sure it paints an attractive view of your company if you’re preparing this to acquire funding.

3. Do a market analysis

Next on the list is a market analysis. This is an analysis of your industry, your competitors, and any other important information relative to your market.

Now is when we move from concise overviews to more detailed breakdowns of the major areas of a business, so you’re going to want to make sure to get into the nitty-gritty here and show that you understand the market you’re stepping into.

And if you’re just doing this for your own use, it’s a great exercise it making sure you know enough about your industry and market as a whole.

Make sure to include this information in your market analysis:

Industry summary: List the basic information about your industry: its size, growth, current health, and any data connected to it related to trends or anything else.
Target market demographics: Now focus in on your target market: who specifically are you selling to? Beyond that, you’ll want to talk about who your customers are, where they’re located, and any other information relative to demographics.
Target market size: How big is your target? How fast is it growing? These are also questions you’ll want to answer in this section.
Target market behavior: Where does your target market make purchases? When do they buy? List anything related to your market’s behavior.
Market share: How much market share do you predict being able to capture?
Pricing tolerance: You’ll also want to know everything you can about what you can and should be pricing your product at.
Market entry conditions: What barriers are there to entering your target market? You need to be aware of these before jumping in, whether it’s licensing, regulations, expertise in personnel, etc.
Competitors: Who are your competitors? What makes them stand out? How will you be better than them and/or stand apart? What are their strengths and weaknesses?

As you might be able to tell already, this is possibly the most research-intensive part of the entire business plan.

However, having said that, the research you’ll be doing to complete this section is invaluable, even necessary, to your business’ success.

Leave out even one of the above sections and you’ll be flying in dark without all the information you’ll need to make smart decisions as your business grows and is presented with challenges.

4. Define your organizational structure

Moving on from your market analysis, the next deep-dive is into your organizational structure.

This section is all about defining what kind of system your business uses to manage itself.

Who does what? Who reports to who? How do your teams break up? These are just some of the questions you’ll want to answer.

Here’s everything you’ll need to define:

Organizational structure: Create a visual document/chart of some kind that shows how your business is structured, including who has what role and who is in charge of managing what part of the business.
Ownership: If you have partners, how does ownership break down? Who is responsible for what?
Backgrounds: Detail the backgrounds of all notable team members including partners, managers, and your board of directors. This section can be quite long, and that’s okay. Make sure not to leave anyone out.
Future hires: How does your team need to expand in the future? What key roles do you need to fill on the way to accomplishing your goals?

5. Define your product strategy

Now let’s move on to your product strategy. This mostly has to do with product development and the research involved in positioning your product within your market.

Here’s everything to include in this section:

A general overview of the product and/or service: What product or service(s) do you offer? What need does it fill in your market for your target customer?
Product development stage: Is your product complete and ready to ship? Have you sold units/acquired customers already? Is it just in the ideation stage? If it’s the latter, describe what you’ll be doing to complete the product or service offering to have it ready to ship.
Patents / Intellectual property: If your product or service depends upon a patent or some kind of intellectual property, explain what where they stand.
Sourcing and fulfillment: Who is making the product? Where are you shipping it from? Make sure this is clear to you now there are no problems down the line when it’s time to start selling.

Remember that as you craft this section, like all the other sections, you want to show that you know what you’re talking to if you’re preparing your business plan for potential investors.

Make your product, service, or idea look good and explain why you believe it will be successful.

6. Define your marketing strategy

Next, with your market and product sections complete, you’re well-prepared to move on to defining your marketing strategy.

In this section, include any and all relevant information related to how you’re going to market your product or service.

This includes:

Advertising and promotion: How will you market your product or service? This section is likely to be on the longer end as you should be detailing not just how but why.
Positioning: How will you be positioning your product or service? What is your reasoning supporting this decision?
Sales strategy: How will your sales team function? Will you have one at all? How will they work with marketing? At what stage will they begin interacting with the customer and what kind of overall sales process will be implemented?
Validation markers: You should have several hypothesis or tests in place to validate your offering, it’s positioning, and marketing and sales efforts. Without these things in place, there’s no way to know if your product or service is a success or failure and no reference point to come back to to make improvements.

This is one of the main sections you may yet have quite a few question marks on. As we mentioned earlier, don’t worry. Just do your best to fill out as much of this section as possible, do the necessary research, then come back and finish it later if necessary.

7. Write your financial plan

The final step in terms of the written information you need to provide for your business plan, it’s time to dive into the financial side of things.

How much does your product cost to source? How much are you selling it for? How many units can you move in a month? What is your overhead and other costs? These are just some of the questions you’ll want to answer.

If your business has been around for a bit, the best place to start is your current financial reports. Things like your profit and loss report, income and revenue statements, accounts receivable and payable, and any other financial reports.

And if you don’t have anything, create something that shows projections for important financial figures such as sales and revenue. Just make sure you’re not making numbers up out of thin air. Support these projections with market and competitor research.

These are some of the documents you can include relevant to projecting future financials:

Cash flow forecast
Projected income
Capital expenditure budget

If including projections, make sure to include them for the next 12-month period as well as either 3 or 5 years at least for a more long-term view.

With those projections out of the way, you’ll also want to include a section on funding. If you’re looking to acquire investors or will be investing a portion of your own funds, here is where you’ll outline exactly what you’ll need.

Make sure to include:

How much funding you’ll need to get started
Projected future funding needs
And what those funds will be used for

After reading this section of your business plan, an investor should come away with a clear understanding of why you need funding and what acquiring that funding will allow you to do for the business.

8. Include an appendix

The final step in good a business plan is less new information as it is the place where you stuff all those things that are important but might not have fit anywhere else: an appendix.

In this appendix, you’ll want to stash any and all important data or other supporting information you didn’t include throughout your plan already.

That includes additional:

Data: Charts, graphs, you name it.
Details: Anything relevant to your business that may not have fit anywhere else.
Legal documents

Additional images: If you’re a restaurant, additional menu item images, you get the idea.
Resumes: If your plan may have been lacking in supporting data or you simply think it will help, you can include your resume and the resume of any of your founders or key managers as a supporting document.

Anything that you feel is important or valuable but just didn’t quite fit in the plan should go here. And since it’s a gathering of somewhat random items, make sure to include a table of contents to make this section easier to navigate.

How long should a business plan be?

At this point, one of the questions you might be left with is: exactly how long does my business plan need to be?

Fortunately, that’s an easy question to answer:

As long as it needs to be to succinctly outline or define each major aspect of your business.

The SBA suggests a business plan be no more than 50 pages. However, that all depends whether you’ll have investors reviewing that plan or not. If it’s just for your own personal use, even a few pages can suffice.

Your marketing plan might be a few detailed paragraphs. Then again, it might be a bit more involved and require several pages.

Ultimately how long each section will be will depend on what you need to say and your ability to break down that information as succinctly as possible (without leaving out any vital information).

Business plan examples: What does a business plan look like?

Now that you know how to write a business plan, let’s go over some business plan samples.

We know that was a lot of steps, and it might not be entirely clear what your business plan should look like, so we’ve gathered some great samples as additional resources that you can review to get a better idea of what your business can look like.

Keep in mind that if you use any kind of software that allows you to put together a business plan, such as:

then you won’t need to worry about looking over samples as they will guide you through the process. Still, it can be nice to see an example to make sure you’re creating your business plan right.

With that said, here are a few business plan examples to help you get a better idea of how your completed plan should look:

For the most part, business plans are the same across industries, with only small differences.

Keep in mind that once your business plan is complete, take some time to show it to everyone from your business partners to key personnel to get their feedback.

The more eyes who are directly connected to your company’s goings-on who look at it, the better it will be and the more buy-in you’ll be able to get right from the get-go in terms of your company mission and direction of each major moving part.

Get the Startup Capital Your Business Needs with Excel Capital

Now you know how to write a proper business plan, there’s only one thing left to do: create it.

Take the steps we’ve broken down here and start writing a business plan of your own one step at a time, making sure that each section is as comprehensive as possible.

After all, this is going to serve as a guidebook of sorts that will help direct your entire business’ dealings for years to come, so it’s worth taking some time to make it right.

Getting things right is also important with regards to funding.

With the right funding in hand, you can grow and establish your business faster and keep things running smoothly.

At Excel Capital, we offer a variety of business funding tools, many which you can be approved on with low or no credit and fund in as little as 24-48 hours.

Apply to get the funding your business needs with Excel Capital today:

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