Step-by-Step Guide to Writing a Simple Business Plan

By Joe Weller | October 11, 2021

  • Share on Facebook
  • Share on Twitter
  • Share on LinkedIn

Link copied

A business plan is the cornerstone of any successful company, regardless of size or industry. This step-by-step guide provides information on writing a business plan for organizations at any stage, complete with free templates and expert advice. 

Included on this page, you’ll find a step-by-step guide to writing a business plan and a chart to identify which type of business plan you should write . Plus, find information on how a business plan can help grow a business and expert tips on writing one .

What Is a Business Plan?

A business plan is a document that communicates a company’s goals and ambitions, along with the timeline, finances, and methods needed to achieve them. Additionally, it may include a mission statement and details about the specific products or services offered.

A business plan can highlight varying time periods, depending on the stage of your company and its goals. That said, a typical business plan will include the following benchmarks:

  • Product goals and deadlines for each month
  • Monthly financials for the first two years
  • Profit and loss statements for the first three to five years
  • Balance sheet projections for the first three to five years

Startups, entrepreneurs, and small businesses all create business plans to use as a guide as their new company progresses. Larger organizations may also create (and update) a business plan to keep high-level goals, financials, and timelines in check.

While you certainly need to have a formalized outline of your business’s goals and finances, creating a business plan can also help you determine a company’s viability, its profitability (including when it will first turn a profit), and how much money you will need from investors. In turn, a business plan has functional value as well: Not only does outlining goals help keep you accountable on a timeline, it can also attract investors in and of itself and, therefore, act as an effective strategy for growth.

For more information, visit our comprehensive guide to writing a strategic plan or download free strategic plan templates . This page focuses on for-profit business plans, but you can read our article with nonprofit business plan templates .

Business Plan Steps

The specific information in your business plan will vary, depending on the needs and goals of your venture, but a typical plan includes the following ordered elements:

  • Executive summary
  • Description of business
  • Market analysis
  • Competitive analysis
  • Description of organizational management
  • Description of product or services
  • Marketing plan
  • Sales strategy
  • Funding details (or request for funding)
  • Financial projections

If your plan is particularly long or complicated, consider adding a table of contents or an appendix for reference. For an in-depth description of each step listed above, read “ How to Write a Business Plan Step by Step ” below.

Broadly speaking, your audience includes anyone with a vested interest in your organization. They can include potential and existing investors, as well as customers, internal team members, suppliers, and vendors.

Do I Need a Simple or Detailed Plan?

Your business’s stage and intended audience dictates the level of detail your plan needs. Corporations require a thorough business plan — up to 100 pages. Small businesses or startups should have a concise plan focusing on financials and strategy.

How to Choose the Right Plan for Your Business

In order to identify which type of business plan you need to create, ask: “What do we want the plan to do?” Identify function first, and form will follow.

Use the chart below as a guide for what type of business plan to create:

Is the Order of Your Business Plan Important?

There is no set order for a business plan, with the exception of the executive summary, which should always come first. Beyond that, simply ensure that you organize the plan in a way that makes sense and flows naturally.

The Difference Between Traditional and Lean Business Plans

A traditional business plan follows the standard structure — because these plans encourage detail, they tend to require more work upfront and can run dozens of pages. A Lean business plan is less common and focuses on summarizing critical points for each section. These plans take much less work and typically run one page in length.

In general, you should use a traditional model for a legacy company, a large company, or any business that does not adhere to Lean (or another Agile method ). Use Lean if you expect the company to pivot quickly or if you already employ a Lean strategy with other business operations. Additionally, a Lean business plan can suffice if the document is for internal use only. Stick to a traditional version for investors, as they may be more sensitive to sudden changes or a high degree of built-in flexibility in the plan.

How to Write a Business Plan Step by Step

Writing a strong business plan requires research and attention to detail for each section. Below, you’ll find a 10-step guide to researching and defining each element in the plan.

Step 1: Executive Summary

The executive summary will always be the first section of your business plan. The goal is to answer the following questions:

  • What is the vision and mission of the company?
  • What are the company’s short- and long-term goals?

See our  roundup of executive summary examples and templates for samples. Read our executive summary guide to learn more about writing one.

Step 2: Description of Business

The goal of this section is to define the realm, scope, and intent of your venture. To do so, answer the following questions as clearly and concisely as possible:

  • What business are we in?
  • What does our business do?

Step 3: Market Analysis

In this section, provide evidence that you have surveyed and understand the current marketplace, and that your product or service satisfies a niche in the market. To do so, answer these questions:

  • Who is our customer? 
  • What does that customer value?

Step 4: Competitive Analysis

In many cases, a business plan proposes not a brand-new (or even market-disrupting) venture, but a more competitive version — whether via features, pricing, integrations, etc. — than what is currently available. In this section, answer the following questions to show that your product or service stands to outpace competitors:

  • Who is the competition? 
  • What do they do best? 
  • What is our unique value proposition?

Step 5: Description of Organizational Management

In this section, write an overview of the team members and other key personnel who are integral to success. List roles and responsibilities, and if possible, note the hierarchy or team structure.

Step 6: Description of Products or Services

In this section, clearly define your product or service, as well as all the effort and resources that go into producing it. The strength of your product largely defines the success of your business, so it’s imperative that you take time to test and refine the product before launching into marketing, sales, or funding details.

Questions to answer in this section are as follows:

  • What is the product or service?
  • How do we produce it, and what resources are necessary for production?

Step 7: Marketing Plan

In this section, define the marketing strategy for your product or service. This doesn’t need to be as fleshed out as a full marketing plan , but it should answer basic questions, such as the following:

  • Who is the target market (if different from existing customer base)?
  • What channels will you use to reach your target market?
  • What resources does your marketing strategy require, and do you have access to them?
  • If possible, do you have a rough estimate of timeline and budget?
  • How will you measure success?

Step 8: Sales Plan

Write an overview of the sales strategy, including the priorities of each cycle, steps to achieve these goals, and metrics for success. For the purposes of a business plan, this section does not need to be a comprehensive, in-depth sales plan , but can simply outline the high-level objectives and strategies of your sales efforts. 

Start by answering the following questions:

  • What is the sales strategy?
  • What are the tools and tactics you will use to achieve your goals?
  • What are the potential obstacles, and how will you overcome them?
  • What is the timeline for sales and turning a profit?
  • What are the metrics of success?

Step 9: Funding Details (or Request for Funding)

This section is one of the most critical parts of your business plan, particularly if you are sharing it with investors. You do not need to provide a full financial plan, but you should be able to answer the following questions:

  • How much capital do you currently have? How much capital do you need?
  • How will you grow the team (onboarding, team structure, training and development)?
  • What are your physical needs and constraints (space, equipment, etc.)?

Step 10: Financial Projections

Apart from the fundraising analysis, investors like to see thought-out financial projections for the future. As discussed earlier, depending on the scope and stage of your business, this could be anywhere from one to five years. 

While these projections won’t be exact — and will need to be somewhat flexible — you should be able to gauge the following:

  • How and when will the company first generate a profit?
  • How will the company maintain profit thereafter?

Business Plan Template

Business Plan Template

Download Business Plan Template

Microsoft Excel | Smartsheet

This basic business plan template has space for all the traditional elements: an executive summary, product or service details, target audience, marketing and sales strategies, etc. In the finances sections, input your baseline numbers, and the template will automatically calculate projections for sales forecasting, financial statements, and more.

For templates tailored to more specific needs, visit this business plan template roundup or download a fill-in-the-blank business plan template to make things easy. 

If you are looking for a particular template by file type, visit our pages dedicated exclusively to Microsoft Excel , Microsoft Word , and Adobe PDF business plan templates.

How to Write a Simple Business Plan

A simple business plan is a streamlined, lightweight version of the large, traditional model. As opposed to a one-page business plan , which communicates high-level information for quick overviews (such as a stakeholder presentation), a simple business plan can exceed one page.

Below are the steps for creating a generic simple business plan, which are reflected in the template below .

  • Write the Executive Summary This section is the same as in the traditional business plan — simply offer an overview of what’s in the business plan, the prospect or core offering, and the short- and long-term goals of the company. 
  • Add a Company Overview Document the larger company mission and vision. 
  • Provide the Problem and Solution In straightforward terms, define the problem you are attempting to solve with your product or service and how your company will attempt to do it. Think of this section as the gap in the market you are attempting to close.
  • Identify the Target Market Who is your company (and its products or services) attempting to reach? If possible, briefly define your buyer personas .
  • Write About the Competition In this section, demonstrate your knowledge of the market by listing the current competitors and outlining your competitive advantage.
  • Describe Your Product or Service Offerings Get down to brass tacks and define your product or service. What exactly are you selling?
  • Outline Your Marketing Tactics Without getting into too much detail, describe your planned marketing initiatives.
  • Add a Timeline and the Metrics You Will Use to Measure Success Offer a rough timeline, including milestones and key performance indicators (KPIs) that you will use to measure your progress.
  • Include Your Financial Forecasts Write an overview of your financial plan that demonstrates you have done your research and adequate modeling. You can also list key assumptions that go into this forecasting. 
  • Identify Your Financing Needs This section is where you will make your funding request. Based on everything in the business plan, list your proposed sources of funding, as well as how you will use it.

Simple Business Plan Template

Simple Business Plan Template

Download Simple Business Plan Template

Microsoft Excel |  Microsoft Word | Adobe PDF  | Smartsheet

Use this simple business plan template to outline each aspect of your organization, including information about financing and opportunities to seek out further funding. This template is completely customizable to fit the needs of any business, whether it’s a startup or large company.

Read our article offering free simple business plan templates or free 30-60-90-day business plan templates to find more tailored options. You can also explore our collection of one page business templates . 

How to Write a Business Plan for a Lean Startup

A Lean startup business plan is a more Agile approach to a traditional version. The plan focuses more on activities, processes, and relationships (and maintains flexibility in all aspects), rather than on concrete deliverables and timelines.

While there is some overlap between a traditional and a Lean business plan, you can write a Lean plan by following the steps below:

  • Add Your Value Proposition Take a streamlined approach to describing your product or service. What is the unique value your startup aims to deliver to customers? Make sure the team is aligned on the core offering and that you can state it in clear, simple language.
  • List Your Key Partners List any other businesses you will work with to realize your vision, including external vendors, suppliers, and partners. This section demonstrates that you have thoughtfully considered the resources you can provide internally, identified areas for external assistance, and conducted research to find alternatives.
  • Note the Key Activities Describe the key activities of your business, including sourcing, production, marketing, distribution channels, and customer relationships.
  • Include Your Key Resources List the critical resources — including personnel, equipment, space, and intellectual property — that will enable you to deliver your unique value.
  • Identify Your Customer Relationships and Channels In this section, document how you will reach and build relationships with customers. Provide a high-level map of the customer experience from start to finish, including the spaces in which you will interact with the customer (online, retail, etc.). 
  • Detail Your Marketing Channels Describe the marketing methods and communication platforms you will use to identify and nurture your relationships with customers. These could be email, advertising, social media, etc.
  • Explain the Cost Structure This section is especially necessary in the early stages of a business. Will you prioritize maximizing value or keeping costs low? List the foundational startup costs and how you will move toward profit over time.
  • Share Your Revenue Streams Over time, how will the company make money? Include both the direct product or service purchase, as well as secondary sources of revenue, such as subscriptions, selling advertising space, fundraising, etc.

Lean Business Plan Template for Startups

Lean Business Plan Templates for Startups

Download Lean Business Plan Template for Startups

Microsoft Word | Adobe PDF

Startup leaders can use this Lean business plan template to relay the most critical information from a traditional plan. You’ll find all the sections listed above, including spaces for industry and product overviews, cost structure and sources of revenue, and key metrics, and a timeline. The template is completely customizable, so you can edit it to suit the objectives of your Lean startups.

See our wide variety of  startup business plan templates for more options.

How to Write a Business Plan for a Loan

A business plan for a loan, often called a loan proposal , includes many of the same aspects of a traditional business plan, as well as additional financial documents, such as a credit history, a loan request, and a loan repayment plan.

In addition, you may be asked to include personal and business financial statements, a form of collateral, and equity investment information.

Download free financial templates to support your business plan.

Tips for Writing a Business Plan

Outside of including all the key details in your business plan, you have several options to elevate the document for the highest chance of winning funding and other resources. Follow these tips from experts:.

  • Keep It Simple: Avner Brodsky , the Co-Founder and CEO of Lezgo Limited, an online marketing company, uses the acronym KISS (keep it short and simple) as a variation on this idea. “The business plan is not a college thesis,” he says. “Just focus on providing the essential information.”
  • Do Adequate Research: Michael Dean, the Co-Founder of Pool Research , encourages business leaders to “invest time in research, both internal and external (market, finance, legal etc.). Avoid being overly ambitious or presumptive. Instead, keep everything objective, balanced, and accurate.” Your plan needs to stand on its own, and you must have the data to back up any claims or forecasting you make. As Brodsky explains, “Your business needs to be grounded on the realities of the market in your chosen location. Get the most recent data from authoritative sources so that the figures are vetted by experts and are reliable.”
  • Set Clear Goals: Make sure your plan includes clear, time-based goals. “Short-term goals are key to momentum growth and are especially important to identify for new businesses,” advises Dean.
  • Know (and Address) Your Weaknesses: “This awareness sets you up to overcome your weak points much quicker than waiting for them to arise,” shares Dean. Brodsky recommends performing a full SWOT analysis to identify your weaknesses, too. “Your business will fare better with self-knowledge, which will help you better define the mission of your business, as well as the strategies you will choose to achieve your objectives,” he adds.
  • Seek Peer or Mentor Review: “Ask for feedback on your drafts and for areas to improve,” advises Brodsky. “When your mind is filled with dreams for your business, sometimes it is an outsider who can tell you what you’re missing and will save your business from being a product of whimsy.”

Outside of these more practical tips, the language you use is also important and may make or break your business plan.

Shaun Heng, VP of Operations at Coin Market Cap , gives the following advice on the writing, “Your business plan is your sales pitch to an investor. And as with any sales pitch, you need to strike the right tone and hit a few emotional chords. This is a little tricky in a business plan, because you also need to be formal and matter-of-fact. But you can still impress by weaving in descriptive language and saying things in a more elegant way.

“A great way to do this is by expanding your vocabulary, avoiding word repetition, and using business language. Instead of saying that something ‘will bring in as many customers as possible,’ try saying ‘will garner the largest possible market segment.’ Elevate your writing with precise descriptive words and you'll impress even the busiest investor.”

Additionally, Dean recommends that you “stay consistent and concise by keeping your tone and style steady throughout, and your language clear and precise. Include only what is 100 percent necessary.”

Resources for Writing a Business Plan

While a template provides a great outline of what to include in a business plan, a live document or more robust program can provide additional functionality, visibility, and real-time updates. The U.S. Small Business Association also curates resources for writing a business plan.

Additionally, you can use business plan software to house data, attach documentation, and share information with stakeholders. Popular options include LivePlan, Enloop, BizPlanner, PlanGuru, and iPlanner.

How a Business Plan Helps to Grow Your Business

A business plan — both the exercise of creating one and the document — can grow your business by helping you to refine your product, target audience, sales plan, identify opportunities, secure funding, and build new partnerships. 

Outside of these immediate returns, writing a business plan is a useful exercise in that it forces you to research the market, which prompts you to forge your unique value proposition and identify ways to beat the competition. Doing so will also help you build (and keep you accountable to) attainable financial and product milestones. And down the line, it will serve as a welcome guide as hurdles inevitably arise.

Streamline Your Business Planning Activities with Real-Time Work Management in Smartsheet

Empower your people to go above and beyond with a flexible platform designed to match the needs of your team — and adapt as those needs change. 

The Smartsheet platform makes it easy to plan, capture, manage, and report on work from anywhere, helping your team be more effective and get more done. Report on key metrics and get real-time visibility into work as it happens with roll-up reports, dashboards, and automated workflows built to keep your team connected and informed. 

When teams have clarity into the work getting done, there’s no telling how much more they can accomplish in the same amount of time.  Try Smartsheet for free, today.

Discover why over 90% of Fortune 100 companies trust Smartsheet to get work done.

Business Plan: Everything You Need to Know

A business plan is a written description of your small business's future.It shows what you intend to do and the way you intend to do it. 3 min read updated on February 01, 2023

What Is a Business Plan?

A business plan is a written description of your small business's future. It shows what you intend to do and the way you intend to do it. Business plans are inherently strategic. Your plan reveals how you're going to start and grow your business.

Executive Summary

This defines the marketing strategy. The executive summary ought to inform the reader of what you plan to accomplish overall in your business. Clearly state what you are expecting. Typically, it's advisable that you simply write the executive summary after you have completed the rest of the document. Ideally, this section can act as a stand-alone page that covers the highlights of your detailed plan.

It’s quite common for investors to ask for only the executive summary when they're evaluating your small business. If buyers like what they see within the abstract, they’ll usually request the whole business plan , a pitch presentation, or additional information about your small business. Ideally, your abstract will be one to two pages at the most. It should be designed to give quick information that sparks curiosity and makes your investors interested in hearing more.

The Critical Components of a Winning Executive Summary

Create a one-sentence overview of your small business that sums up the essence of what you might be doing. Doing so is usually more practical if the sentence describes what your organization truly does. This is often known as your value proposition. Describe the issue you might be fixing for your intended customer.

Present a short overview of your staff or proposed staff, and include a brief clarification of why you and your staff are the best individuals to take your idea to market. If your small business method (i.e., “the way you generate income”) needs further clarification, then say you will describe it in more detail in later sections of the business plan. In case you are generating cash to start out or to further develop your small business, you could include a small statement of what you want within the main summary. Don’t include comments on possible additional  funding , however, since that can all be negotiated later.

Company Overview

The corporate overview will most certainly be the shortest part of your marketing strategy. The corporate overview should show your mission statement, an assessment of your organization’s structure and possessions, a short history of the business, if it’s an established one, and a mention of the business location. Your organization mission statement needs to be brief—one or two sentences at most—and it ought to embody what you are attempting to provide.

Business Structure

Your company overview also needs to embody a summary of your organization’s present  business structure . Are you an LLC ? A C-corp? An S-corp ? A sole proprietor? A partnership ? Potential investors will want to know the structure of the enterprise before they'll consider funding.

Business History

In case you are writing a plan or marketing strategy for an existing firm, it’s acceptable to  incorporate  a short history of the business and spotlight the main achievements. Keep the business history part brief, though. The business history section is very helpful in providing context for the remainder of your plan.

Business Description

The business description often begins with a brief description of the trade. When describing the trade, talk about the current outlook in addition to future prospects. You also need to give info on all the competitors and the market along with any new merchandise or developments that can bring profits or that can have a negative effect on your small business.

Products and Services

The products and services section is where the bulk of your plan should be. The services section is where you'll describe the issue that you are fixing, your resolution, and how your services or products match the present market. You’ll also use the services section to reveal what sets your business above others and how you intend to broaden your services or products later.

Using Your Plan

Your business plan is one thing you will use to pitch for funding, and you must keep it updated as your company develops.

If you need help with creating 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.

Hire the top business lawyers and save up to 60% on legal fees

Content Approved by UpCounsel

  • Example of a Good Executive Summary for Business Plan
  • Creating a Business Plan
  • How to Write An Executive Summary for a Business Plan
  • Business Plan Format: Everything you Need to Know
  • LLC Business Plan Template
  • Business Description Outline
  • Parts of Business Plan and Definition
  • Service Business Plan
  • Startup Business Plan Presentation Template
  • Contents of a Business Plan
  • Atlanta Business Lawyers
  • Austin Business Lawyers
  • Boston Business Lawyers
  • Chicago Business Lawyers
  • Dallas Business Lawyers
  • Houston Business Lawyers
  • Los Angeles Business Lawyers
  • New York Business Lawyers
  • Philadelphia Business Lawyers
  • San Francisco Business Lawyers
  • Seattle Business Lawyers
  • Charlotte Business Lawyers
  • Denver Business Lawyers
  • Jacksonville Business Lawyers
  • Las Vegas Business Lawyers
  • Phoenix Business Lawyers
  • Portland Business Lawyers
  • San Antonio Business Lawyers
  • San Diego Business Lawyers
  • San Jose Business Lawyers
  • View All Business Lawyers

Special sale for Gretta van Riel's Start & Scale. Get Ecommerce Masters free!

  • Skip to primary navigation
  • Skip to main content

A magazine for young entrepreneurs

how do you know a business plan

The best advice in entrepreneurship

Subscribe for exclusive access, how to write a business plan (tips, templates, examples).

how do you know a business plan

Written by Jesse Sumrak | May 14, 2023

Comments -->

Business plan graphic

Get real-time frameworks, tools, and inspiration to start and build your business. Subscribe here

Business plans might seem like an old-school stiff-collared practice, but they deserve a place in the startup realm, too. It’s probably not going to be the frame-worthy document you hang in the office—yet, it may one day be deserving of the privilege.

Whether you’re looking to win the heart of an angel investor or convince a bank to lend you money, you’ll need a business plan. And not just any ol’ notes and scribble on the back of a pizza box or napkin—you’ll need a professional, standardized report.

Bah. Sounds like homework, right?

Yes. Yes, it does.

However, just like bookkeeping, loan applications, and 404 redirects, business plans are an essential step in cementing your business foundation.

Don’t worry. We’ll show you how to write a business plan without boring you to tears. We’ve jam-packed this article with all the business plan examples, templates, and tips you need to take your non-existent proposal from concept to completion.

Table of Contents

What Is a Business Plan?

Tips to Make Your Small Business Plan Ironclad

How to Write a Business Plan in 6 Steps

Startup Business Plan Template

Business Plan Examples

Work on Making Your Business Plan

How to Write a Business Plan FAQs

What is a business plan why do you desperately need one.

A business plan is a roadmap that outlines:

  • Who your business is, what it does, and who it serves
  • Where your business is now
  • Where you want it to go
  • How you’re going to make it happen
  • What might stop you from taking your business from Point A to Point B
  • How you’ll overcome the predicted obstacles

While it’s not required when starting a business, having a business plan is helpful for a few reasons:

  • Secure a Bank Loan: Before approving you for a business loan, banks will want to see that your business is legitimate and can repay the loan. They want to know how you’re going to use the loan and how you’ll make monthly payments on your debt. Lenders want to see a sound business strategy that doesn’t end in loan default.
  • Win Over Investors: Like lenders, investors want to know they’re going to make a return on their investment. They need to see your business plan to have the confidence to hand you money.
  • Stay Focused: It’s easy to get lost chasing the next big thing. Your business plan keeps you on track and focused on the big picture. Your business plan can prevent you from wasting time and resources on something that isn’t aligned with your business goals.

Beyond the reasoning, let’s look at what the data says:

  • Simply writing a business plan can boost your average annual growth by 30%
  • Entrepreneurs who create a formal business plan are 16% more likely to succeed than those who don’t
  • A study looking at 65 fast-growth companies found that 71% had small business plans
  • The process and output of creating a business plan have shown to improve business performance

Convinced yet? If those numbers and reasons don’t have you scrambling for pen and paper, who knows what will.

Don’t Skip: Business Startup Costs Checklist

Before we get into the nitty-gritty steps of how to write a business plan, let’s look at some high-level tips to get you started in the right direction:

Be Professional and Legit

You might be tempted to get cutesy or revolutionary with your business plan—resist the urge. While you should let your brand and creativity shine with everything you produce, business plans fall more into the realm of professional documents.

Think of your business plan the same way as your terms and conditions, employee contracts, or financial statements. You want your plan to be as uniform as possible so investors, lenders, partners, and prospective employees can find the information they need to make important decisions.

If you want to create a fun summary business plan for internal consumption, then, by all means, go right ahead. However, for the purpose of writing this external-facing document, keep it legit.

Know Your Audience

Your official business plan document is for lenders, investors, partners, and big-time prospective employees. Keep these names and faces in your mind as you draft your plan.

Think about what they might be interested in seeing, what questions they’ll ask, and what might convince (or scare) them. Cut the jargon and tailor your language so these individuals can understand.

Remember, these are busy people. They’re likely looking at hundreds of applicants and startup investments every month. Keep your business plan succinct and to the point. Include the most pertinent information and omit the sections that won’t impact their decision-making.

Invest Time Researching

You might not have answers to all the sections you should include in your business plan. Don’t skip over these!

Your audience will want:

  • Detailed information about your customers
  • Numbers and solid math to back up your financial claims and estimates
  • Deep insights about your competitors and potential threats
  • Data to support market opportunities and strategy

Your answers can’t be hypothetical or opinionated. You need research to back up your claims. If you don’t have that data yet, then invest time and money in collecting it. That information isn’t just critical for your business plan—it’s essential for owning, operating, and growing your company.

Stay Realistic

Your business may be ambitious, but reign in the enthusiasm just a teeny-tiny bit. The last thing you want to do is have an angel investor call BS and say “I’m out” before even giving you a chance.

The folks looking at your business and evaluating your plan have been around the block—they know a thing or two about fact and fiction. Your plan should be a blueprint for success. It should be the step-by-step roadmap for how you’re going from Point A to Point B.

Button to visit the free training for starting a side hustle

How to Write a Business Plan—6 Essential Elements

Not every business plan looks the same, but most share a few common elements. Here’s what they typically include:

  • Executive Summary
  • Business Overview
  • Products and Services
  • Market Analysis
  • Competitive Analysis
  • Financial Strategy

Below, we’ll break down each of these sections in more detail.

1. Executive Summary

While your executive summary is the first page of your business plan, it’s the section you’ll write last. That’s because it summarizes your entire business plan into a succinct one-pager.

Begin with an executive summary that introduces the reader to your business and gives them an overview of what’s inside the business plan.

Your executive summary highlights key points of your plan. Consider this your elevator pitch. You want to put all your juiciest strengths and opportunities strategically in this section.

2. Business Overview

In this section, you can dive deeper into the elements of your business, including answering:

  • What’s your business structure? Sole proprietorship, LLC, corporation, etc.
  • Where is it located?
  • Who owns the business? Does it have employees?
  • What problem does it solve, and how?
  • What’s your mission statement? Your mission statement briefly describes why you are in business. To write a proper mission statement, brainstorm your business’s core values and who you serve.

Don’t overlook your mission statement. This powerful sentence or paragraph could be the inspiration that drives an investor to take an interest in your business. Here are a few examples of powerful mission statements that just might give you the goosebumps:

  • Patagonia: Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.
  • Tesla: To accelerate the world’s transition to sustainable energy.
  • InvisionApp : Question Assumptions. Think Deeply. Iterate as a Lifestyle. Details, Details. Design is Everywhere. Integrity.
  • TED : Spread ideas.
  • Warby Parker : To offer designer eyewear at a revolutionary price while leading the way for socially conscious businesses.

3. Products and Services

As the owner, you know your business and the industry inside and out. However, whoever’s reading your document might not. You’re going to need to break down your products and services in minute detail.

For example, if you own a SaaS business, you’re going to need to explain how this business model works and what you’re selling.

You’ll need to include:

  • What services you sell: Describe the services you provide and how these will help your target audience.
  • What products you sell: Describe your products (and types if applicable) and how they will solve a need for your target and provide value.
  • How much you charge: If you’re selling services, will you charge hourly, per project, retainer, or a mixture of all of these? If you’re selling products, what are the price ranges?

4. Market Analysis

Your market analysis essentially explains how your products and services address customer concerns and pain points. This section will include research and data on the state and direction of your industry and target market.

This research should reveal lucrative opportunities and how your business is uniquely positioned to seize the advantage. You’ll also want to touch on your marketing strategy and how it will (or does) work for your audience.

Include a detailed analysis of your target customers. This describes the people you serve and sell your product to. Be careful not to go too broad here—you don’t want to fall into the common entrepreneurial trap of trying to sell to everyone and thereby not differentiating yourself enough to survive the competition.

The market analysis section will include your unique value proposition. Your unique value proposition (UVP) is the thing that makes you stand out from your competitors. This is your key to success.

If you don’t have a UVP, you don’t have a way to take on competitors who are already in this space. Here’s an example of an ecommerce internet business plan outlining their competitive edge:

FireStarters’ competitive advantage is offering product lines that make a statement but won’t leave you broke. The major brands are expensive and not distinctive enough to satisfy the changing taste of our target customers. FireStarters offers products that are just ahead of the curve and so affordable that our customers will return to the website often to check out what’s new.

5. Competitive Analysis

Your competitive analysis examines the strengths and weaknesses of competing businesses in your market or industry. This will include direct and indirect competitors. It can also include threats and opportunities, like economic concerns or legal restraints.

The best way to sum up this section is with a classic SWOT analysis. This will explain your company’s position in relation to your competitors.

6. Financial Strategy

Your financial strategy will sum up your revenue, expenses, profit (or loss), and financial plan for the future. It’ll explain how you make money, where your cash flow goes, and how you’ll become profitable or stay profitable.

This is one of the most important sections for lenders and investors. Have you ever watched Shark Tank? They always ask about the company’s financial situation. How has it performed in the past? What’s the ongoing outlook moving forward? How does the business plan to make it happen?

Answer all of these questions in your financial strategy so that your audience doesn’t have to ask. Go ahead and include forecasts and graphs in your plan, too:

  • Balance sheet: This includes your assets, liabilities, and equity.
  • Profit & Loss (P&L) statement: This details your income and expenses over a given period.
  • Cash flow statement: Similar to the P&L, this one will show all cash flowing into and out of the business each month.

It takes cash to change the world—lenders and investors get it. If you’re short on funding, explain how much money you’ll need and how you’ll use the capital. Where are you looking for financing? Are you looking to take out a business loan, or would you rather trade equity for capital instead?

Read More: 16 Financial Concepts Every Entrepreneur Needs to Know

Startup Business Plan Template (Copy/Paste Outline)

Ready to write your own business plan? Copy/paste the startup business plan template below and fill in the blanks.

Executive Summary Remember, do this last. Summarize who you are and your business plan in one page.

Business Overview Describe your business. What’s it do? Who owns it? How’s it structured? What’s the mission statement?

Products and Services Detail the products and services you offer. How do they work? What do you charge?

Market Analysis Write about the state of the market and opportunities. Use date. Describe your customers. Include your UVP.

Competitive Analysis Outline the competitors in your market and industry. Include threats and opportunities. Add a SWOT analysis of your business.

Financial Strategy Sum up your revenue, expenses, profit (or loss), and financial plan for the future. If you’re applying for a loan, include how you’ll use the funding to progress the business.

What’s the Best Business Plan to Succeed as a Consultant?

5 Frame-Worthy Business Plan Examples

Want to explore other templates and examples? We got you covered. Check out these 5 business plan examples you can use as inspiration when writing your plan:

  • SBA Wooden Grain Toy Company
  • SBA We Can Do It Consulting
  • OrcaSmart Business Plan Sample
  • Plum Business Plan Template
  • PandaDoc Free Business Plan Templates

Get to Work on Making Your Business Plan

If you find you’re getting stuck on perfecting your document, opt for a simple one-page business plan —and then get to work. You can always polish up your official plan later as you learn more about your business and the industry.

Remember, business plans are not a requirement for starting a business—they’re only truly essential if a bank or investor is asking for it.

Ask others to review your business plan. Get feedback from other startups and successful business owners. They’ll likely be able to see holes in your planning or undetected opportunities—just make sure these individuals aren’t your competitors (or potential competitors).

Your business plan isn’t a one-and-done report—it’s a living, breathing document. You’ll make changes to it as you grow and evolve. When the market or your customers change, your plan will need to change to adapt.

That means when you’re finished with this exercise, it’s not time to print your plan out and stuff it in a file cabinet somewhere. No, it should sit on your desk as a day-to-day reference. Use it (and update it) as you make decisions about your product, customers, and financial plan.

Review your business plan frequently, update it routinely, and follow the path you’ve developed to the future you’re building.

Keep Learning: New Product Development Process in 8 Easy Steps

What financial information should be included in a business plan?

Be as detailed as you can without assuming too much. For example, include your expected revenue, expenses, profit, and growth for the future.

What are some common mistakes to avoid when writing a business plan?

The most common mistake is turning your business plan into a textbook. A business plan is an internal guide and an external pitching tool. Cut the fat and only include the most relevant information to start and run your business.

Who should review my business plan before I submit it?

Co-founders, investors, or a board of advisors. Otherwise, reach out to a trusted mentor, your local chamber of commerce, or someone you know that runs a business.

Ready to Write Your Business Plan?

Don’t let creating a business plan hold you back from starting your business. Writing documents might not be your thing—that doesn’t mean your business is a bad idea.

Let us help you get started.

Join our free training to learn how to start an online side hustle in 30 days or less. We’ll provide you with a proven roadmap for how to find, validate, and pursue a profitable business idea (even if you have zero entrepreneurial experience).

Stuck on the ideas part? No problem. When you attend the masterclass, we’ll send you a free ebook with 100 of the hottest side hustle trends right now. It’s chock full of brilliant business ideas to get you up and running in the right direction.

Launch your side hustle training

About Jesse Sumrak

Jesse Sumrak is a writing zealot focused on creating killer content. He’s spent almost a decade writing about startup, marketing, and entrepreneurship topics, having built and sold his own post-apocalyptic fitness bootstrapped business. A writer by day and a peak bagger by night (and early early morning), you can usually find Jesse preparing for the apocalypse on a precipitous peak somewhere in the Rocky Mountains of Colorado.

Related Posts

Shopify vs Wix: What’s Best for Your Brand?

Shopify vs Wix: What’s Best for Your Brand?

Shopify vs. Etsy: Pick an Online Store That Gives You More

Shopify vs. Etsy: Pick an Online Store That Gives You More

Shopify vs WooCommerce: Which Is Better for Building Your Online Store?

Shopify vs WooCommerce: Which Is Better for Building Your Online Store?

11 Proven Strategies to Increase Shopify Sales

11 Proven Strategies to Increase Shopify Sales

BigCommerce vs Shopify: Which Platform Is Better for Ecommerce Beginners?

BigCommerce vs Shopify: Which Platform Is Better for Ecommerce Beginners?

Shopify SEO Tools for Your New Store

Shopify SEO Tools for Your New Store

The 10 Best Shopify Apps of 2024

The 10 Best Shopify Apps of 2024

The Absolute Best Premium and Free Shopify Templates

The Absolute Best Premium and Free Shopify Templates

How to Set Up a Shopify Store in 8 Easy Steps

How to Set Up a Shopify Store in 8 Easy Steps

Crafting the Perfect Product Prototype Might Be Easier Than You Think

Crafting the Perfect Product Prototype Might Be Easier Than You Think

This Founder Believes Entrepreneurship is a Spiritual Practice

This Founder Believes Entrepreneurship is a Spiritual Practice

Recession-Proof Businesses: Become downturn-immune with these ideas

Recession-Proof Businesses: Become downturn-immune with these ideas

These Founders Bought Back Their Business: Chris Savage and Brendan Schwartz of Wistia

These Founders Bought Back Their Business: Chris Savage and Brendan Schwartz of Wistia

Types of Consulting That Pay in 2024

Types of Consulting That Pay in 2024

How to Price a Product: The Definitive Answer

How to Price a Product: The Definitive Answer

FREE TRAINING FROM LEGIT FOUNDERS

Actionable Strategies for Starting & Growing Any Business.

BUILD SOMETHING FOR YOU

Gretta van riel will help create your ecomm brand from scratch..

how do you know a business plan

How to Write a Business Plan: Step-by-Step Guide + Examples

Determined female African-American entrepreneur scaling a mountain while wearing a large backpack. Represents the journey to starting and growing a business and needing to write a business plan to get there.

Noah Parsons

24 min. read

Updated February 2, 2024

Writing a business plan doesn’t have to be complicated. 

In this step-by-step guide, you’ll learn how to write a business plan that’s detailed enough to impress bankers and potential investors, while giving you the tools to start, run, and grow a successful business.

  • The basics of business planning

If you’re reading this guide, then you already know why you need a business plan . 

You understand that planning helps you: 

  • Raise money
  • Grow strategically
  • Keep your business on the right track 

As you start to write your plan, it’s useful to zoom out and remember what a business plan is .

At its core, a business plan is an overview of 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. These set sales goals, budget for expenses, and predict profits and cash flow. 

A good business plan is much more than just a document that you write once and forget about. It’s also a guide that helps you outline and achieve your goals. 

After completing your plan, you can use it as a management tool to track your progress toward your goals. Updating and adjusting your forecasts and budgets as you go is one of the most important steps you can take to run a healthier, smarter business. 

We’ll dive into how to use your plan later in this article.

There are many different types of plans , but we’ll go over the most common type here, which includes everything you need for an investor-ready plan. However, if you’re just starting out and are looking for something simpler—I recommend starting with a one-page business plan . It’s faster and easier to create. 

It’s also the perfect place to start if you’re just figuring out your idea, or need a simple strategic plan to use inside your business.

Dig deeper : How to write a one-page business plan

What’s your biggest business challenge right now?

  • What to include in your business plan

Executive summary

The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally just one to two pages. Most people write it last because it’s a summary of the complete business plan.

Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan. 

In fact, it’s common for investors to ask only for the executive summary when 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 , or more in-depth financial forecasts .

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
  • Your funding requirements (if you are raising money)

Dig Deeper: How to write an effective executive summary

Products and services description

This is where you describe exactly what you’re selling, and how it solves a problem for your target market. The best way to organize this part of your plan is to start by describing the problem that exists for your customers. After that, you can describe how you plan to solve that problem with your product or service. 

This is usually called a problem and solution statement .

To truly showcase the value of your products and services, you need to craft a compelling narrative around your offerings. How will your product or service transform your customers’ lives or jobs? A strong narrative will draw in your readers.

This is also the part of the business plan to discuss any competitive advantages you may have, like specific intellectual property or patents that protect your product. If you have any initial sales, contracts, or other evidence that your product or service is likely to sell, include that information as well. It will show that your idea has traction , which can help convince readers that your plan has a high chance of success.

Market analysis

Your target market is a description of the type of people that you plan to sell to. You might even have multiple target markets, depending on your business. 

A market analysis is the part of your plan where you bring together all of the information you know about your target market. Basically, it’s a thorough description of who your customers are and why they need what you’re selling. You’ll also include information about the growth of your market and your industry .

Try to be as specific as possible when you describe your market. 

Include information such as age, income level, and location—these are what’s called “demographics.” If you can, also describe your market’s interests and habits as they relate to your business—these are “psychographics.” 

Related: Target market examples

Essentially, you want to include any knowledge you have about your customers that is relevant to how your product or service is right for them. With a solid target market, it will be easier to create a sales and marketing plan that will reach your customers. That’s because you know who they are, what they like to do, and the best ways to reach them.

Next, provide any additional information you have about your market. 

What is the size of your market ? Is the market growing or shrinking? Ideally, you’ll want to demonstrate that your market is growing over time, and also explain how your business is positioned to take advantage of any expected changes in your industry.

Dig Deeper: Learn how to write a market analysis

Competitive analysis

Part of defining your business opportunity is determining what your competitive advantage is. To do this effectively, you need to know as much about your competitors as your target customers. 

Every business has some form of competition. If you don’t think you have competitors, then explore what alternatives there are in the market for your product or service. 

For example: In the early years of cars, their main competition was horses. For social media, the early competition was reading books, watching TV, and talking on the phone.

A good competitive analysis fully lays out the competitive landscape and then explains how your business is different. Maybe your products are better made, or cheaper, or your customer service is superior. Maybe your competitive advantage is your location – a wide variety of factors can ultimately give you an advantage.

Dig Deeper: How to write a competitive analysis for your business plan

Marketing and sales plan

The marketing and sales plan covers how you will position your product or service in the market, the marketing channels and messaging you will use, and your sales tactics. 

The best place to start with a marketing plan is with a positioning statement . 

This explains how your business fits into the overall market, and how you will explain the advantages of your product or service to customers. You’ll use the information from your competitive analysis to help you with your positioning. 

For example: You might position your company as the premium, most expensive but the highest quality option in the market. Or your positioning might focus on being locally owned and that shoppers support the local economy by buying your products.

Once you understand your positioning, you’ll bring this together with the information about your target market to create your marketing strategy . 

This is how you plan to communicate your message to potential customers. Depending on who your customers are and how they purchase products like yours, you might use many different strategies, from social media advertising to creating a podcast. Your marketing plan is all about how your customers discover who you are and why they should consider your products and services. 

While your marketing plan is about reaching your customers—your sales plan will describe the actual sales process once a customer has decided that they’re interested in what you have to offer. 

If your business requires salespeople and a long sales process, describe that in this section. If your customers can “self-serve” and just make purchases quickly on your website, describe that process. 

A good sales plan picks up where your marketing plan leaves off. The marketing plan brings customers in the door and the sales plan is how you close the deal.

Together, these specific plans paint a picture of how you will connect with your target audience, and how you will turn them into paying customers.

Dig deeper: What to include in your sales and marketing plan

Business operations

The operations section describes the necessary requirements for your business to run smoothly. It’s where you talk about how your business works and what day-to-day operations look like. 

Depending on how your business is structured, your operations plan may include elements of the business like:

  • Supply chain management
  • Manufacturing processes
  • Equipment and technology
  • Distribution

Some businesses distribute their products and reach their customers through large retailers like Amazon.com, Walmart, Target, and grocery store chains. 

These businesses 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 the business may have to overcome.

If your business is much simpler than this, that’s OK. This section of your business plan can be either extremely short or more detailed, depending on the type of business you are building.

For businesses selling services, such as physical therapy or online software, you can use this section to describe the technology you’ll leverage, what goes into your service, and who you will partner with to deliver your services.

Dig Deeper: Learn how to write the operations chapter of your plan

Key milestones and metrics

Although it’s not required to complete your business plan, mapping out key business milestones and the metrics can be incredibly useful for measuring your success.

Good milestones clearly lay out the parameters of the task and set expectations for their execution. You’ll want to include:

  • A description of each task
  • The proposed due date
  • Who is responsible for each task

If you have a budget, you can include projected costs to hit each milestone. You don’t need extensive project planning in this section—just list key milestones you want to hit and when you plan to hit them. This is your overall business roadmap. 

Possible milestones might be:

  • Website launch date
  • Store or office opening date
  • First significant sales
  • Break even date
  • Business licenses and approvals

You should also discuss the key numbers you will track to determine your success. Some common metrics worth tracking include:

  • Conversion rates
  • Customer acquisition costs
  • Profit per customer
  • Repeat purchases

It’s perfectly fine to start with just a few metrics and grow the number you are tracking over time. You also may find that some metrics simply aren’t relevant to your business and can narrow down what you’re tracking.

Dig Deeper: How to use milestones in your business plan

Organization and management team

Investors don’t just look for great ideas—they want to find great teams. Use this chapter to describe your current team and who you need to hire . You should also provide a quick overview of your location and history if you’re already up and running.

Briefly highlight the relevant experiences of each key team member in the company. It’s important to make the case for why yours 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? 

If you still need to hire key team members, that’s OK. Just note those gaps in this section.

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

  • Sole proprietor
  • Partnership

Be sure to provide an overview 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.

Dig Deeper: How to write about your company structure and team

Financial plan

Last, but certainly not least, is your financial plan chapter. 

Entrepreneurs often find this section the most daunting. But, 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. 

A typical financial forecast in a business plan includes the following:

  • Sales forecast : An estimate of the sales expected over a given period. You’ll break down your forecast into the key revenue streams that you expect to have.
  • Expense budget : Your planned spending such as personnel costs , marketing expenses, and taxes.
  • Profit & Loss : Brings together your sales and expenses and helps you calculate planned profits.
  • Cash Flow : Shows how cash moves into and out of your business. It can predict how much cash you’ll have on hand at any given point in the future.
  • Balance Sheet : A list of the assets, liabilities, and equity in your company. In short, it provides an overview of the financial health of your business. 

A strong business plan will include a description of assumptions about the future, and potential risks that could impact the financial plan. Including those will be especially important if you’re writing a business plan to pursue a loan or other investment.

Dig Deeper: How to create financial forecasts and budgets

This is the place for additional data, charts, or other information that supports your plan.

Including an appendix can significantly enhance the credibility of your plan by showing readers that you’ve thoroughly considered the details of your business idea, and are backing your ideas up with solid data.

Just remember that the information in the appendix is meant to be supplementary. Your business plan should stand on its own, even if the reader skips this section.

Dig Deeper : What to include in your business plan appendix

Optional: Business plan cover page

Adding a business plan cover page can make your plan, and by extension your business, seem more professional in the eyes of potential investors, lenders, and partners. It serves as the introduction to your document and provides necessary contact information for stakeholders to reference.

Your cover page should be simple and include:

  • Company logo
  • Business name
  • Value proposition (optional)
  • Business plan title
  • Completion and/or update date
  • Address and contact information
  • Confidentiality statement

Just remember, the cover page is optional. If you decide to include it, keep it very simple and only spend a short amount of time putting it together.

Dig Deeper: How to create a business plan cover page

How to use AI to help write your business plan

Generative AI tools such as ChatGPT can speed up the business plan writing process and help you think through concepts like market segmentation and competition. These tools are especially useful for taking ideas that you provide and converting them into polished text for your business plan.

The best way to use AI for your business plan is to leverage it as a collaborator , not a replacement for human creative thinking and ingenuity. 

AI can come up with lots of ideas and act as a brainstorming partner. It’s up to you to filter through those ideas and figure out which ones are realistic enough to resonate with your customers. 

There are pros and cons of using AI to help with your business plan . So, spend some time understanding how it can be most helpful before just outsourcing the job to AI.

Learn more: How to collaborate with AI on your business plan

  • Writing tips and strategies

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 to 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 funds and exactly how you will use them.

Regardless of how you intend to use your business plan , think about why you are writing and what you’re trying to get out of the process before you begin.

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 . The longer your plan is, the less likely people are to read it. 

So focus on trimming things down to the essentials your readers need to know. Skip the extended, wordy descriptions and instead focus on creating a plan that is easy to read —using bullets and short sentences whenever possible.

Have someone review your business plan

Writing a business plan in a vacuum is never a good idea. Sometimes it’s helpful to zoom out and check if your plan makes sense to someone else. 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. Start sharing your plan early, and find out from readers what questions your plan leaves unanswered. This early review cycle will help you spot shortcomings in your plan and address them quickly, rather than finding out about them right before you present your plan to a lender or investor.

If you need a more detailed review, you may want to explore hiring a professional plan writer to thoroughly examine it.

Use a free business plan template and business plan examples 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 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 550 free business plan examples . 

We even have a growing list of industry business planning guides with tips for what to focus on depending on your business type.

Common pitfalls and how to avoid them

It’s easy to make mistakes when you’re writing your business plan. Some entrepreneurs get sucked into the writing and research process, and don’t focus enough on actually getting their business started. 

Here are a few common mistakes and how to avoid them:

Not talking to your customers : This is one of the most common mistakes. It’s easy to assume that your product or service is something that people want. Before you invest too much in your business and too much in the planning process, make sure you talk to your prospective customers and have a good understanding of their needs.

  • Overly optimistic sales and profit forecasts: By nature, entrepreneurs are optimistic about the future. But it’s good to temper that optimism a little when you’re planning, and make sure your forecasts are grounded in reality. 
  • Spending too much time planning: Yes, planning is crucial. But you also need to get out and talk to customers, build prototypes of your product and figure out if there’s a market for your idea. Make sure to balance planning with building.
  • Not revising the plan: Planning is useful, but nothing ever goes exactly as planned. As you learn more about what’s working and what’s not—revise your plan, your budgets, and your revenue forecast. Doing so will provide a more realistic picture of where your business is going, and what your financial needs will be moving forward.
  • Not using the plan to manage your business: A good business plan is a management tool. Don’t just write it and put it on the shelf to collect dust – use it to track your progress and help you reach your goals.
  • Presenting your business plan

The planning process forces you to think through every aspect of your business and answer questions that you may not have thought of. That’s the real benefit of writing a business plan – the knowledge you gain about your business that you may not have been able to discover otherwise.

With all of this knowledge, you’re well prepared to convert your business plan into a pitch presentation to present your ideas. 

A pitch presentation is a summary of your plan, just hitting the highlights and key points. It’s the best way to present your business plan to investors and team members.

Dig Deeper: Learn what key slides should be included in your pitch deck

Use your business plan to manage your business

One of the biggest benefits of planning is that it gives you a tool to manage your business better. With a revenue forecast, expense budget, and projected cash flow, you know your targets and where you are headed.

And yet, nothing ever goes exactly as planned – it’s the nature of business.

That’s where using your plan as a management tool comes in. The key to leveraging it for your business is to review it periodically and compare your forecasts and projections to your actual results.

Start by setting up a regular time to review the plan – a monthly review is a good starting point. During this review, answer questions like:

  • Did you meet your sales goals?
  • Is spending following your budget?
  • Has anything gone differently than what you expected?

Now that you see whether you’re meeting your goals or are off track, you can make adjustments and set new targets. 

Maybe you’re exceeding your sales goals and should set new, more aggressive goals. In that case, maybe you should also explore more spending or hiring more employees. 

Or maybe expenses are rising faster than you projected. If that’s the case, you would need to look at where you can cut costs.

A plan, and a method for comparing your plan to your actual results , is the tool you need to steer your business toward success.

Learn More: How to run a regular plan review

Free business plan templates and examples

Kickstart your business plan writing with one of our free business plan templates or recommended tools.

how do you know a business plan

Free business plan template

Download a free SBA-approved business plan template built for small businesses and startups.

Download Template

how do you know a business plan

One-page plan template

Download a free one-page plan template to write a useful business plan in as little as 30-minutes.

how do you know a business plan

Sample business plan library

Explore over 500 real-world business plan examples from a wide variety of industries.

View Sample Plans

how do you know a business plan

Write your plan faster with LivePlan

Try the business planning and growth tool trusted by over 1-million business owners.

Start your plan

How to write a business plan FAQ

What is a business plan?

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.

What are the benefits of a business plan?

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 investors, and identifies 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.

What are the 7 steps of a business plan?

The seven steps to writing a business plan include:

  • Write a brief executive summary
  • Describe your products and services.
  • Conduct market research and compile data into a cohesive market analysis.
  • Describe your marketing and sales strategy.
  • Outline your organizational structure and management team.
  • Develop financial projections for sales, revenue, and cash flow.
  • Add any additional documents to your appendix.

What are the 5 most common business plan mistakes?

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.
  • Having unrealistic financial projections or incomplete financial information.
  • Inconsistent information or simple mistakes.
  • Failing to establish a sound business model.
  • Not having a defined purpose for your business plan.

What questions should be answered in a 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?

How long should a business plan be?

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 to get all of the necessary information in place.

What are the different types of business plans?

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.

What’s the difference between a business plan and a strategic plan?

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.

LivePlan Logo

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Content Author: Noah Parsons

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

how do you know a business plan

Table of Contents

  • Use AI to help write your plan
  • Common planning mistakes
  • Manage with your business plan
  • Templates and examples

Related Articles

how do you know a business plan

8 Min. Read

How to forecast personnel costs

how do you know a business plan

14 Min. Read

8. Know all the ways to use your plan

how do you know a business plan

5 Min. Read

Agritourism business plan

how do you know a business plan

3 Min. Read

Add supporting information to an appendix

The LivePlan Newsletter

Become a smarter, more strategic entrepreneur.

Your first monthly newsetter will be delivered soon..

Unsubscribe anytime. Privacy policy .

Garrett's Bike Shop

The quickest way to turn a business idea into a business plan

Fill-in-the-blanks and automatic financials make it easy.

No thanks, I prefer writing 40-page documents.

LivePlan pitch example

Discover the world’s #1 plan building software

how do you know a business plan

How to Start a Business: A Comprehensive Guide and Essential Steps

  • Search Search Please fill out this field.

Conducting Market Research

Crafting a business plan, reviewing funding options, understanding legal requirements, implementing marketing strategies, how much does it cost to start a business, what should i do before starting a business, what types of funding are available to start a business, do you need to write a business plan, the bottom line.

Building an effective business launch plan

how do you know a business plan

Starting a business in the United States involves a number of different steps, spanning legal considerations, market research, creating a business plan, securing funding, and developing a marketing strategy. It also entails decisions around a business’s location, structure, name, taxation, and registration.

This article covers the key steps involved in starting a business, as well as important aspects of the process for entrepreneurs to consider.

Key Takeaways

  • Entrepreneurs seeking to develop their own business should start by conducting market research to understand their industry space and competition, and to target customers.
  • The next step is to write a comprehensive business plan, outlining the company’s structure, vision, and strategy. Potential funders and partners may want to review the business plan in advance of signing any agreements.
  • Securing funding is crucial in launching a business. Funding can come in the form of grants, loans, venture capital, or crowdfunded money; entrepreneurs may also opt to self-fund instead of or in combination with any of these avenues.
  • Choosing a location and business structure can have many implications for legal aspects of business ownership, such as taxation, registration, and permitting, so it’s important to fully understand the regulations and requirements for the jurisdiction in which the business will operate. 
  • Another key aspect of launching a new business is having a strategic marketing plan that addresses the specifics of the business, industry, and target market.

Before starting a business, entrepreneurs should conduct market research to determine their target audience, competition, and market trends. 

The U.S. Small Business Administration (SBA) recommends researching demographic data around potential customers to understand a given consumer base and reduce business risk. It also breaks down common market considerations as follows:

  • Demand : Do people want or need this product or service?
  • Market size : How many people might be interested?
  • Economic indicators : These include income, employment rate, and spending habits of potential customers.
  • Location : Where are the target market and the business located?
  • Market saturation : How competitive is the business space, and how many similar offerings exist?
  • Pricing : What might a customer be willing to pay?

Market research should also include an analysis of the competition (including their strengths and weaknesses compared to those of the proposed business), market opportunities and barriers to entry, industry trends, and competitors’ market share .

There are various methods for conducting market research, and the usefulness of different sources and methodologies will depend on the nature of the industry and potential business. Data can come from a variety of sources: statistical agencies, economic and financial institutions, and industry sources, as well as direct consumer research through focus groups, interviews, surveys, or questionnaires.

A comprehensive business plan is like a blueprint for a business. It will help lay the foundation for business development and can assist in decision making, day-to-day operations, and growth. 

Potential investors or business partners may want to review and assess a business plan in advance of agreeing to work together. Financial institutions often request business plans as part of an application for a loan or other forms of capital. 

Business plans will differ according to the needs and nature of the company and only need to include what makes sense for the business in question. As such, they can vary in length and structure depending on their intended purpose. 

Business plans can generally be divided into two formats: traditional business plans and lean startup business plans. The latter is typically more useful for businesses that will need to adjust their planning quickly and frequently, as they are shorter and provide a higher-level overview of the company.

The process of funding a business can be as unique as the business itself—that is, it will depend on the needs and vision of the business and the current financial situation of the business owner. 

The first step in seeking funding is to calculate how much it will cost to start the business. Estimate startup costs by identifying a list of expenses and putting a number to each of them through research and requesting quotes. The SBA has a startup costs calculator for small businesses that includes common types of business expenses. 

From there, an entrepreneur will need to determine how to secure the required funding. Common funding methods include:

  • Self-funding , also known as bootstrapping  
  • Seeking funding from investors, also known as venture capital  
  • Raising money by crowdfunding
  • Securing a business loan
  • Winning a business grant

Each method will hold advantages and disadvantages depending on the situation of the business. It’s important to consider the obligations associated with any avenue of funding. For example, investors generally provide funding in exchange for a degree of ownership or control in the company, whereas self-funding may allow business owners to maintain complete control (albeit while taking on all of the risk). 

The availability of funding sources is another potential consideration. Unlike loans, grants do not have to be paid back—however, as a result, they are a highly competitive form of business funding. The federal government also does not provide grants for the purposes of starting or growing a business, although private organizations may. On the other hand, the SBA guarantees several categories of loans to support small business owners in accessing capital that may not be available through traditional lenders.

Whichever funding method (or methods) an entrepreneur decides to pursue, it’s essential to evaluate in detail how the funding will be used and lay out a future financial plan for the business, including sales projections and loan repayments , as applicable.  

Legally, businesses operating in the U.S. are subject to regulations and requirements under many jurisdictions, across local, county, state, and federal levels. Legal business requirements are often tied to the location and structure of the business, which then determine obligations around taxation, business IDs, registration, and permits.

Choosing a Business Location

The location—that is, the neighborhood, city, and state—in which a business operates will have an impact on many different aspects of running the business, such as the applicable taxes, zoning laws (for brick-and-mortar, or physical locations), and regulations.

A business needs to be registered in a certain location; this location then determines the taxes, licenses, and permits required. Other factors to consider when choosing a location might include:

  • Human factors : Such as the target audience for your business, and preferences of business owners and partners around convenience, knowledge of the area, and commuting distance
  • Regulations and restrictions : Concerning applicable jurisdictions or government agencies, including zoning laws
  • Regionally specific expenses : Such as average salaries (including required minimum wages), property or rental prices, insurance rates, utilities, and government fees and licensing
  • The tax and financial environment : Including income tax, sales tax, corporate tax, and property tax, or the availability of tax credits, incentives, or loan programs

Picking a Business Structure

The structure of a business should reflect the desired number of owners, liability characteristics, and tax status. Because these have legal and tax compliance implications, it’s important to fully understand and choose a business structure carefully and, if necessary, consult a business counselor, lawyer, and/or accountant.

Common business structures include:

  • Sole proprietorship : An unincorporated business that has just one owner, who pays personal income tax on profits
  • Partnership : Options include a limited partnership (LP) or a limited liability partnership (LLP)
  • Limited liability company (LLC) : A business structure that protects its owners from personal responsibility for its debts or liabilities
  • Corporation : Options include a C corp , S corp , B corp , closed corporation , or nonprofit

Getting a Tax ID Number

A tax ID number is like a Social Security number for a business. Whether or not a state and/or federal tax ID number is required for any given business will depend on the nature of the business, as well as the location in which the business is registered.

If a business is required to pay state taxes (such as income taxes and employment taxes), then a state tax ID will be necessary. The process and requirements around state tax IDs vary by state and can be found on individual states’ official websites. In some situations, state tax IDs can also be used for other purposes, such as protecting sole proprietors against identity theft.

A federal tax ID, also known as an employer identification number (EIN) , is required if a business:

  • Operates as a corporation or partnership
  • Pays federal taxes
  • Wants to open a business bank account
  • Applies for federal business licenses and permits
  • Files employment, excise, alcohol, tobacco, or firearms tax returns

There are further situations in which a business might need a federal tax ID number, specific to income taxation, certain types of pension plans, and working with certain types of organizations. Business owners can check with the Internal Revenue Service (IRS) about whether they need an EIN.

Registering a Business

Registration of a business will depend on its location and business structure, and can look quite different depending on the nature and size of the business. 

For example, small businesses may not require any steps beyond registering their business name with local and state governments, and business owners whose business name is their own legal name might not need to register at all. However, registration can include personal liability protection as well as legal and tax benefits, so it can be beneficial even if it’s not strictly required. 

Most LLCs, corporations, partnerships, and nonprofits are required to register at the state level and will require a registered agent to file on their behalf. Determining which state to register with can depend on factors such as:

  • Whether the business has a physical presence in the state
  • If the business often conducts in-person client meetings in the state
  • If a large portion of business revenue comes from the state
  • Whether the business has employees working in the state

If a business operates in more than one state, it may need to file for foreign qualification in other states in which it conducts business. In this case, the business would register in the state in which it was formed (this would be considered the domestic state), and file for foreign qualification in any additional states.

Some businesses may decide to register with the federal government if they are seeking tax-exempt status or trademark protection, but federal registration is not required for many businesses.

Overall registration requirements, costs, and documentation will vary depending on the governing jurisdictions and business structure.

Obtaining Permits

Filing for the applicable government licenses and permits will depend on the industry and nature of the business, and might include submitting an application to a federal agency, state, county, and/or city. The SBA lists federally regulated business activities alongside the corresponding license-issuing agency, while state, county, and city regulations can be found on the official government websites for each region.

Every business should have a marketing plan that outlines an overall strategy and the day-to-day tactics used to execute it. A successful marketing plan will lay out tactics for how to connect with customers and convince them to buy what the company is selling. 

Marketing plans will vary according to the specifics of the industry , target market, and business, but they should aim to include descriptions of and strategies around the following:

  • A target customer : Including market size, demographics, traits, and relevant trends
  • Unique value propositions or business differentiators : Essentially, an overview of the company’s competitive advantage with regard to employees, certifications, or offerings
  • A sales and marketing plan : Including methods, channels, and a customer’s journey through interacting with the business
  • Goals : Should cover different aspects of the marketing and sales strategy, such as social media follower growth, public relations opportunities, or sales targets
  • An execution plan : Should detail tactics and break down higher-level goals into specific actions
  • A budget : Detailing how much different marketing projects and activities will cost

The startup costs for any given business will vary greatly depending on the industry, business activity, and product or service offering. Home-based online businesses will usually cost less than those that require an office setting to meet with customers. The estimated cost can be calculated by first identifying a list of expenses and then researching and requesting quotes for each one. Use the SBA’s startup costs calculator for common types of expenses associated with starting a small business.

Entrepreneurs seeking to start their own business should fully research and understand all the legal and funding considerations involved, conduct market research, and create marketing and business plans. They will also need to secure any necessary permits, licenses, funding, and business bank accounts.

Startup capital can come in the form of loans, grants, crowdfunding, venture capital, or self-funding. Note that the federal government does not provide grant funding for the purposes of starting a business, although private sources do.

Business plans are comprehensive documents that lay out the most important information about a business. They are important references for the growth, development, and decision-making processes of a business, and financial institutions as well as potential investors and partners generally request to review them in advance of agreeing to provide funding or work together.

Starting a business is no easy feat, but research and preparation can help smooth the way. Having a firm understanding of the target market, competition, industry, business goals, business structure, funding requirements, tax and operating regulations, and marketing strategy, and conducting research and consulting experts where necessary, are all things that entrepreneurs can do to set themselves up for success.

U.S. Small Business Administration. “ Market Research and Competitive Analysis .”

U.S. Small Business Administration. “ Write Your Business Plan .”

U.S. Small Business Administration. “ Loans .”

U.S. Small Business Administration. “ Fund Your Business .”

U.S. Small Business Administration. “ Pick Your Business Location .”

U.S. Small Business Administration. “ Choose a Business Structure .”

U.S. Small Business Administration. “ Get Federal and State Tax ID Numbers .”

Internal Revenue Service. “ Do You Need an EIN? ”

U.S. Small Business Administration. “ Register Your Business .”

U.S. Small Business Administration. “ Apply for Licenses and Permits .”

U.S. Small Business Administration. “ Marketing and Sales .”

U.S. Small Business Administration. “ Grants .”

  • How to Start a Business: A Comprehensive Guide and Essential Steps 1 of 25
  • How to Do Market Research, Types, and Example 2 of 25
  • Marketing Strategy: What It Is, How It Works, and How to Create One 3 of 25
  • Marketing in Business: Strategies and Types Explained 4 of 25
  • What Is a Marketing Plan? Types and How to Write One 5 of 25
  • Business Development: Definition, Strategies, Steps & Skills 6 of 25
  • Business Plan: What It Is, What's Included, and How to Write One 7 of 25
  • Small Business Development Center (SBDC): Meaning, Types, Impact 8 of 25
  • How to Write a Business Plan for a Loan 9 of 25
  • Business Startup Costs: It’s in the Details 10 of 25
  • Startup Capital Definition, Types, and Risks 11 of 25
  • Bootstrapping Definition, Strategies, and Pros/Cons 12 of 25
  • Crowdfunding: What It Is, How It Works, and Popular Websites 13 of 25
  • Starting a Business with No Money: How to Begin 14 of 25
  • A Comprehensive Guide to Establishing Business Credit 15 of 25
  • Equity Financing: What It Is, How It Works, Pros and Cons 16 of 25
  • Best Startup Business Loans 17 of 25
  • Sole Proprietorship: What It Is, Pros and Cons, and Differences From an LLC 18 of 25
  • Partnership: Definition, How It Works, Taxation, and Types 19 of 25
  • What is an LLC? Limited Liability Company Structure and Benefits Defined 20 of 25
  • Corporation: What It Is and How to Form One 21 of 25
  • Starting a Small Business: Your Complete How-to Guide 22 of 25
  • Starting an Online Business: A Step-by-Step Guide 23 of 25
  • How to Start Your Own Bookkeeping Business: Essential Tips 24 of 25
  • How to Start a Successful Dropshipping Business: A Comprehensive Guide 25 of 25

how do you know a business plan

  • Terms of Service
  • Editorial Policy
  • Privacy Policy
  • Your Privacy Choices

Starting a Business | How To

How to Write a Business Plan in 7 Steps

Published February 2, 2024

Published Feb 2, 2024

Mary King

WRITTEN BY: Mary King

Get Your Free Ebook

how do you know a business plan

Your Privacy is important to us.

This article is part of a larger series on Starting a Business .

Starting A Business?

Explore QuickBooks Icon

Step 1: Gather Your Information

Step 2: outline your business plan, step 3: write each section, step 4: organize your appendix, step 5: add final details, step 6: add a table of contents, step 7: get feedback, bottom line.

A solid business plan helps you forecast your future business and is a critical tool for raising money or attracting key employees or business partners. A business plan is also an opportunity to show why and how your business will become a success. Learning how to write a business plan successfully requires planning ahead and conducting financial and market research.

How to write a business plan step-by-step:

  • Gather your information
  • Outline your business plan
  • Write each section
  • Organize your appendix
  • Add final details
  • Add a table of contents
  • Get feedback.

Your first step is to get organized by gathering all your relevant business information. This will save you time completing the various sections of your business plan. At a minimum, you’ll want to have the following handy:

  • Business name, contact information, and address
  • Owner(s) names, contact information, and addresses
  • Names, contact information, and addresses of any business partners (if you will be working with partners)
  • Resume and relevant work history for yourself and any key partners or employees
  • Any significant sales, commerce, traffic, and financial data and forecasts
  • Customer data (if applicable)
  • Any significant data about your nearest competitors’ commerce, traffic, or finances

Now it’s time to outline your business plan, making note of the sections you need to include and what data you want to include in each section. You can create an outline on your own or use a business plan template to help. Whichever route you choose, it is common to include these sections in your business plan outline:

  • Introduction
  • Executive summary
  • Company overview
  • Products and services
  • Market and industry analysis
  • Marketing strategy
  • Sales strategy
  • Management and organization
  • Financial data, analysis, and forecasts

Connect the data you gathered in step one to specific sections of your outline. Make a note if you need to convert some information into charts or images to make them more compelling for potential investors. For example, you’ll want to include relevant work history in your management section and convert your sales forecasts into charts for your financial data section.

Now it’s time to write your business plan. Attack this one section at a time, adding the relevant data as you go.

Executive Summary

The executive summary is an overview of the business plan and should ideally be one, but no more than two, pages in length. Some investors actually only request the executive summary. So make it an informative, persuasive, and concise version of your business plan.

It can be easier to write the executive summary last, after the other sections. Then you can more clearly understand which sections of your business plan are the most important to highlight in the executive summary.

When learning how to write an executive summary for a business plan, remember to include the following:

  • Business objectives : Your business objectives are specific and attainable goals for your business. Create at least four business objectives organized by bullet point. If you’re not sure how to phrase your objectives, read our SMART goals examples to understand how to do so.
  • Mission statement: The mission statement discusses the aim, purpose, and values of your business. It’s typically a short statement from one sentence to several sentences in length. You may find that your mission statement evolves as your business grows. Learn more on how to write your mission statement in our guide.

Consider also including the following in your executive summary:

  • Business description : Similar to a 30-second pitch, describing your business and what makes it unique
  • Products and services : The type of products and services you’re providing and their costs
  • Competitors : Your biggest competitors and why your business will succeed despite them
  • Management and organization : The owners’ backgrounds and how they will help the business succeed; management structure within the business
  • Business location (or facility) : Location benefits and the surrounding area
  • Target market and ideal customer : Who your ideal customers are and why they’re going to purchase your products or services
  • Financial data and projections : Provide brief financial data and projections relevant to your business, such as startup costs, at what month the business will be profitable, and forecasted sales data
  • Financing needed : Explanation of the startup funding sources and the amount of financing being requested

The bullets above can be combined into several paragraphs. You can add or remove sections based on your business’ needs. For example, if you don’t have a physical location, you might remove that piece of information. Or, if a web presence is crucial to your success, include two to three sentences about your online strategy .

Company Overview

The company overview (sometimes also called a “business overview”) section highlights your company successes (if you’re already in business) or why it will be successful (if you’re a startup). In the opening paragraph or paragraphs, provide information like location, owners, hours of operation, products, and services.

How you structure this section depends on whether you’re a startup or an established business. A startup will discuss the general expenses and steps needed to open the business, such as permits, build-outs, rent, and marketing. An established business will briefly discuss the company’s financial performance over the past three years.

If you’re trying to raise capital from an investor or bank, include a chart listing the items your business will acquire with the capital. For example, if you’re purchasing equipment with the additional funding, list each piece of equipment and the associated cost. At the bottom of the chart, show the total of all expenses, which should be the requested amount of funding.

Screenshot of Startup Expenses From Startup Assets

This startup cost table for a pizza restaurant separates startup expenses from startup assets.

Your company overview should cover the following:

  • Location & Facilities : If you have a brick-and-mortar location or a facility, like a warehouse, describe it here. Detail the benefits of your location and the surrounding areas. Write about square footage, leases or ownership, the surrounding area, and a brief description of the population.
  • Ownership : Briefly mention the company ownership team and their backgrounds. Show why these owners are likely to be successful in operating this business by providing certain details, such as each owner’s industry experience, previous employers, education, and awards. This will be discussed more in-depth in the management and organization section below.
  • Competitive advantage : Ideally, your competitive advantage is what your business can do that your competitors cannot. It’s the one big differentiator that will make your company successful. Many investors are looking for specific competitive advantages, such as patents, proprietary tech, data, and industry relationships. If you don’t have these, describe the top aspect in which your business will do better than competitors, such as quality of products, quality of services, relationships with vendors, or marketing strategy.

Products & Services

The products and services section is the most flexible section because its structure depends on what your business sells. Regardless of what you’re selling, include a description of your business model to explain how your business makes money. Also include future products or services your business could provide one, two, or five years down the road.

List and describe all physical and digital products you plan to sell, as well as any services the business provides. Services don’t necessarily have to be sold for a cost—your business might offer entertainment, like live music or bar games as a free service.

Whether you’re selling products, services, or both, it’s important to discuss fulfillment, or how each will be delivered. If you make or sell physical products, describe how products will be sold, assembled, packed, and shipped. If your business is service-based, describe how a service, such as a window installation, will be ordered and completed. Where will the glass be purchased from and acquired, how will customers place orders, and how will the window be installed?

Market & Industry Analysis

The market and industry analysis section is where you analyze potential customers and the forces that influence your industry. This section is where you make the case as to why your business should succeed, ideally backed by data. You’ll want to do a deep dive into your competitors and discuss their challenges and successes. Learn more about sales targeting to improve how you approach your sales strategy.

Market Segmentation

Market segmentation, or your target market, consists of the customers who are most likely to purchase your products or services. Describe these groups of customers based on demographics, including attributes like age, income, location, and buying habits. Additionally, if you’ll be operating with a business-to-business (B2B) model, use characteristics to describe the ideal businesses to which you’ll sell.

Once your target market is segmented into groups, use market research data to show that those customers are physically located near your business (or are likely to do business with you if you’re online). If you’re opening a daycare, for example, you’ll want to show the data on how many families are in a certain mile radius around your business. You can obtain this kind of data from a free resource, like the U.S. Census and ReferenceUSA .

Once you have at least three segments, briefly outline the strategy you’ll use to reach them. Most likely it will be a combination of marketing, pricing, networking, and sales.

Learn the best approach to product pricing in our guide.

Industry Analysis

Take a look at your business’s industry and explain why it’s a great idea to start a business in that niche. If you’re in a growing industry, a bank is more likely to lend your business capital because it’s predicted to be in demand and have additional customers. Learn about how to find a niche market .

Find industry statistics from a free tool, like the Bureau of Labor Statistics , or a paid tool like the Hoovers Industry Research , which provides professionally curated reports for over 1,000 industries.

Competitor Research

Wrap up the market and industry analysis section by analyzing at least five competitors within a five-mile radius (expand the radius, if needed). Create a table with the five competitors and mention their distance from your business (if applicable), along with their challenges, and successes.

During your analysis, you’ll want to frame their challenges as something you can improve upon. Persuade your reader that your business will provide superior products and services than the competitors.

Marketing Strategy & Implementation Summary

In the opening paragraphs of your marketing strategy and implementation summary, give an overview of the subsections below.

Include any industry trends you may take advantage of. If applicable, include the advertising strategy and budget, stating specific channels. Mention who in the business will be responsible for overseeing the marketing.

Include any platforms and tools the business will use, like your website, social media, email marketing, and video. If you’re hiring a company to do any online work, like creating a website or managing social media, briefly describe them and the overall cost (you can elaborate more on costs in the financial data section ).

Don’t forget to include a subsection for your traditional marketing plan. Traditional marketing encompasses anything not online, such as business cards, flyers, local media, direct mail, magazine advertising, and signage.

Sales Strategy

If sales is an important component of your business, include a section about your sales strategy. Describe the role of the salesperson (or persons), strategies they’ll use to close the deal with clients, lead follow-up procedures, and networking they’ll attend. Also, list any training your sales staff will attend.

Sales Forecast Table

A sales forecast table gives a high-level summary of where you expect your sales and expenses to occur for each of the next three years in business. In the paragraph before the table, state where you expect growth to come from and include a growth percentage rate. The annual sales forecast chart will be broken down further in the financial projections section below.

Screenshot of Annual Sales Forecast

The annual sales forecast for this restaurant summarizes sales, cost, and profit for the first three years in business.

Pricing Strategy

In the pricing strategy section, discuss product/service pricing, competitor pricing, sales promotions , and discounts—basically anything related to the pricing of what you sell. You should discuss pricing in relation to product and service quality as well. Consider including an overview of pricing for specific products, e.g., pizza price discounts when ordering a specific number of pizzas for catering.

Milestones in a business plan are typically displayed in a table. They outline important tasks to do before the business opens (or expands, if already in business). For each milestone, include the name, estimated start and completion date, cost, person responsible, and department responsible (or outside company responsible). List at least seven milestones.

Screenshot of Milestones for This Commercial Photography Business

Milestones for this commercial photography business include hiring staff and completing marketing campaigns.

Management & Organization Summary

The management and organization summary is an in-depth look at the ownership background and key personnel. This is an important section because many investors say they don’t invest in companies, they invest in people. In this section, make the case why you and your team have the experience and knowledge to make this business a success.

Ownership Background

Discuss the owners’ backgrounds and place an emphasis on why that background will ensure the business succeeds. If you don’t have experience managing a retail business, consider finding a co-owner who does. Typically, banks won’t lend to someone who doesn’t have experience in the type of business they’re trying to open.

Management Team Gaps

If there are any experience or knowledge gaps within the management team, state them. List the consultants or employees you will hire to cover the gaps. Investors who know your industry well may recognize gaps within your business plan, and it’s important to state the gaps without waiting for the investor to bring it up. This makes it appear that you know the industry well.

Personnel Plan

The personnel plan outlines every position within your business for at least the next three years. In the opening paragraph, discuss the roles within the company and who will report to whom. Include a table with at least three years of salary projections for each employee in your business. Include a total salary figure at the bottom. This table may be broken down further into salaries for each month in the financial projections or appendix.

Screenshot of Personnel Plan

This commercial photography business has the CEO at the same salary every year, with their employees’ salaries increasing year over year.

Financial Data & Analysis

The financial data and analysis section is the most difficult part of a business plan. This section requires you to forecast income and expenses for the next three years. You’ll need a working knowledge of common financial statements, like the profit and loss statement, balance sheet, and cash flow statement.

In the opening paragraphs of the financial data and analysis section, give an overview of the sections below. Discuss the break-even point and the projected profit at the first, second, and third year in business. State the assets and liabilities from the projected balance sheet as well.

If you’re getting a loan from a bank, say how long and from what source the loan will be repaid. One of the main pieces of information bankers want to ascertain from financial forecasting is if they will be paid back and how likely that is to happen.

You might also include the following financial reports:

  • Break-even analysis : Break-even is when your business starts to make money. Break-even analysis is where you illustrate the point at which your revenue exceeds expenses and a profit occurs. In this section’s opening paragraph, state your monthly fixed costs and average percent variable costs (cost that changes with output, like labor or cost of goods). In the example below, variable costs increase 8% for every additional dollar made.

Screenshot of Breakeven Analysis

The break-even point for this document shredding business is $31,500 in a month.

  • Projected profit & loss: The profit and loss table is a month-by-month breakdown of income and expenses (including startup expenses). Typically, you should expect your business to show a profit within the first year of operating and increase in years two and three. Be sure to show income and expenses month-by-month for the first two years in operation. Create a separate chart that shows income and expenses year-by-year for the first three years.
  • Projected cash flow : The cash flow section shows your business’s monthly incoming and outgoing cash. It should cover the first two years in business. Mention what you plan to do with excess cash. See how to run a statement cash flow in QuickBooks Online .
  • Projected balance sheet: The balance sheet shows the net worth of the business and the financial position of the company on a specific date. It focuses on the assets and liabilities of the business. Ideally, the balance sheet should show that the net worth of your business increases. Prepare a projected year-by-year balance sheet for the first three years.
  • Business ratios: Also called financial ratios, these are a way to evaluate business performance. It’s helpful to compare your projected business ratios to the industry standard. Project your business ratios by year for the first three years.

The appendix is where you put information about the business that doesn’t fit in the above categories. What you put here largely depends on the type of business you’re creating. It’s a good idea to put any visual components in the appendix. A restaurant might add an image of the menu and an artist rendering of the interior and exterior, for example.

Consider including the following items in your business plan appendix:

  • Artist mock-up of interior
  • Building permits
  • Equipment documentation
  • Incorporation documents
  • Leases and agreements
  • Letters of recommendation
  • Licenses and permits
  • Marketing materials
  • Media coverage
  • Supplier agreements

An appendix isn’t required in a business plan, but it’s highly recommended for additional persuasion. Documents like media coverage, agreements, and equipment documentation show the investor and banker you’re serious about the business. If your appendix is more than 10 pages, consider creating a second table of contents just for the appendix.

Detailed Financial Projections

Put the more detailed projections in the appendix. The financial projections in the previous section is typically a year-by-year breakdown for three years in the future. But many bankers and investors want to see the first two years broken down month-by-month for at least the profit and loss statement, balance sheet, cash flow, and personnel plan.

Typically, you can print out the spreadsheet in smaller font and include it in the appendix. You don’t need to create additional charts for the appendix.

With all of your information organized, now it’s time to add the final details, like cover pages and a nondisclosure agreement (NDA).

  • Cover Page: The cover page provides contact information about the business and its owner. The cover page should have the business name and who prepared it, including your name, address, phone number, and email address. Additionally, if the registered company name with the state is different from the business name, you may want to add that as a “company name.”
  • Nondisclosure Agreement: An NDA ((also called a confidentiality agreement) is a legal document that safeguards business information. You’d want someone to sign it before reading your business plan if you believe they could use the information to their advantage and your disadvantage, such as to steal your business idea or marketing strategy.

Screenshot of Fit Small Business Providing a Free Non-Disclosure Agreement

Fit Small Business provides a free non-disclosure agreement.

Once your final details are added, proofread all the sections of your business plan, ensuring that the information is accurate and that all spelling and grammar are correct. If there are any illustrations, projections, or additional information you forgot to include, now is the time to add it.

The final step is adding a table of contents so that bankers and potential investors can easily navigate your business plan. A table of contents lists the sections and subsections of your business plan. All of the headers above (Executive Summary, Business Objectives, Company Overview, Products and Services, and so on) are considered sections of a business plan. You can number the sections for additional organization. For example, 1.0 is the executive summary, 1.1 is the business objectives, and 1.2 is the mission statement.

Editing and formatting can change the pagination of your business plan. So you’ll save yourself work if you finalize the business plan content first, then arrange the table of contents at the end.

Congratulations! You’ve captured your business idea and plan for profitability on paper. Before you send this business plan to loan officers and potential investors, ask friends, family, and other supportive business owners to read it and provide feedback. They may notice typos or other errors that you missed. They may also identify details you can add to make your business plan more persuasive.

Frequently Asked Questions (FAQs) About How to Write a Business Plan

These are the most common questions I hear about writing a business plan.

What needs to be in a business plan?

What you should put in a business plan depends on its purpose and your industry. If you’re seeking funding from a bank or investor, you’re going to need most of the sections above, with a strong focus on your financial projections. If you are using your business plan to attract key employees (like a chef for your restaurant), mock-ups and vendor agreements will be more useful. Think about the information that will help your target reader make a decision about whether to get involved with your business—whether that is a location, a business model, or product idea—and be sure your business plan includes that information.

How do you write a business plan for a startup?

The business plan for a startup is similar to a business plan for an established business. The startup business plan will include startup costs, which will be listed by item and factored into the financial projections. Additionally, since your business hasn’t proven it can be successful yet, you may need additional information about the ownership, business model, market, and industry to convince the reader your business will succeed.

How long does it take to write a business plan?

A simple business plan may only take a couple of hours. However, for the business plan provided with this template, which includes financial projections, it may take over 60 hours to research the income and costs associated with running your business. You also have to format those costs into a chart, because it’s best to showcase the data with easy-to-understand charts.

Is writing a business plan hard?

Creating a business plan for funding from a bank or investor is a detailed process. Unless you have a background in financial statements, the financial projections may be difficult for the average business owner. But you can ask for help; it is common to hire a bookkeeper or accountant to assist you with financial projects to ensure your math is correct. Outside of the projections, most other business plan sections are simple, though you’ll want to give yourself time to make each section persuasive.

Every type of business, whether it’s a side hustle or a multimillion-dollar business, should have a business plan. The industry analysis and market segmentation sections validate your business idea. Researching and forecasting financial projections helps you logically think through income and expenses, which lessens the risk of business failure. Remember to get feedback on your business plan from business employees and associates. If necessary, have them sign an NDA before they review the plan.

About the Author

Mary King

Find Mary On LinkedIn Twitter

Mary King is an expert restaurant and small business contributor at Fit Small Business. With more than a decade of small business experience, Mary has worked with some of the best restaurants in the world, and some of the most forward-thinking hospitality programs in the country. Mary’s firsthand operational experience ranges from independent food trucks to the grand scale of Michelin-starred restaurants, from small trades-based businesses to cutting-edge co-working spaces.

Join Fit Small Business

Sign up to receive more well-researched small business articles and topics in your inbox, personalized for you. Select the newsletters you’re interested in below.

how do you know a business plan

  • Business Plan Builder

Financial Forecasting

  • Canvas Modeling
  • Product Tour
  • Business Consultants and Advisors
  • Entrepreneurs And Small Businesses
  • Accelerators & Incubators
  • Educators & Business Schools
  • Students & Scholars
  • Sample Business Plans
  • business plan course

Strategic Canvas Templates

  • E-Books, Guides & More
  • Success Stories

Upmetrics AI Assistant: Simplifying Business Planning through AI-Powered Insights. Learn How

Upmetrics

  • 400+ Sample Business Plans

Business Plan Course

E-books, guides & more.

  • WHY UPMETRICS?

Customers Success Stories

Business planning, ai assistance, see how upmetrics works  →, stratrgic planning, business consultants, entrepreneurs and small business, accelerators and incubators, educators & business schools, students & scholars.

  • Sample Plans

How to Write a Business Plan Complete Guide

Business Plan Template

Free Business Plan Template

Paresh Balar

  • January 3, 2024

24 Min Read

how to write a business plan

Welcome to the journey of entrepreneurship . You are here because you have a great business idea and want to know how to write a business plan to convert that idea into reality.

Before you start writing your business plan, let’s understand What is a business plan? Why do you need one in the first place? And What should you include in your business plan?

Table of Contents

  • What is a business plan?
  • Why do you need a business plan?
  • What to include in your business plan?

Business Plan Outline

  • Key things to remember
  • How to write a business plan?

Let’s get started with an important question.

What is a Business Plan?

In simple words, a business plan is a document that outlines your business goals and details how you plan to achieve those goals. It is a living document that will prove to you and the rest of the world that your idea is not just a dream but can be a viable reality.

Also, it will help investors learn about your business, and vision, and convince them that your business idea is worth investing in. Your business plan will provide concrete evidence that your business idea is sound and has every chance of success.

Your business plan is the backbone of your business.

What Should You Include in Your Business Plan?

Every business idea and plan is unique in its terms. You should include all the details that explain your business idea in the best possible way. However, there are a few elements that every entrepreneur should include in their business plan.

The following is a full guide for creating a comprehensive business plan. We’ll first list out the sections that must be included in the business plan and in the later part, we’ll explain what should be added to each section:

Business Plan Cover Page

  • Executive Summary
  • Company Overview
  • Problem Analysis
  • Products & Services
  • Product Features
  • Market Overview
  • Market Size
  • Target Customers
  • Customer Needs
  • Direct Competitors
  • Indirect Competitors

Competitive Advantages

Swot analysis.

  • Promotions Plan
  • Distribution Plan
  • Key Operational Processes

Management Team

  • Management Team Gaps
  • Board Members
  • Revenue Model
  • Financial Highlights
  • Funding Requirements
  • Use of Funds
  • Exit Strategy
  • Appendix – Supporting Documentation

Now you are ready to write your business plan, let’s understand in detail how you can write your business plan and what you should include in each element of the business plan.

business plan cover page

The business plan cover page is the first and most important part of the business plan because it will create the first impact and will set the platform for how investors or readers will engage with your business plan.

Just by looking at the business plan cover page, an investor or reader can get a quick idea about the purpose of your business idea and business plan.

However, many entrepreneurs do not pay enough attention to the cover page, which is their biggest mistake.

business plan table of contents

In any document, the business plan table of contents provides a quick overview and works as navigation to navigate across the document. The same does for a business plan as well.

A table of contents is important to provide a quick overview of the sections that you have included in your business plan and help readers to navigate to the section that interests them the most. If investors are excited about a particular part of the business plan first, they will find the table of contents extremely useful in finding the relevant sections within the business plan.

Usually, the table of contents needs to be added at the start of the document and just after the business plan cover page.

Here’s a Quick Overview of Each Key Chapter:

1. Executive Summary

The executive summary is the first section of your business plan. However, the executive summary is always written at last as it is a brief introduction to your business plan and a summary of your entire business plan document.

A good executive summary should answer the following basic questions:

  • What are you trying to achieve with your business idea?
  • Why is your business idea important? and
  • How are you going to achieve your business goals?

Generally, a good executive summary should include the following details:

  • A brief description of the problems you will be solving
  • Summary of your business goals & vision
  • Products or services you are going to offer
  • A solid description of the market you are targeting
  • A quick look at your competition and your competitive advantages
  • A basic financial projection of your revenue, expenses, and profits
  • Your funding requirements (if any) and how you will be using that funds.

It does seem like lots of details are required to write a good executive summary but at the same time, it is important to get it right because if your summary does not clearly explain how you will solve a customer problem and make a profit, then investors or readers might not find it worth reading.

Most of the investors just read the executive summary and decide if they should read the rest of the business plan or not. So make your efforts count in this part of the business plan.

In short, write your executive summary in such a way that readers would want to turn the page and keep on reading.

Always remember, that a good executive summary should not be more than one or two pages long. However, in some cases, it can be longer if there is an absolute requirement.

2. Company Overview

The company overview section provides a brief history of your company if it already exists. However, if you are starting a new business, here you will need to write about yourself, your achievements, and how you will set up and form your business as a company.

Here you need to answer questions such as how and when your company was formed, what type of legal entity you are, and what are your achievements to date. Your past journey and achievements are the best sign of your possible future success, so make sure to include all the important milestones you or your company have achieved to date.

As a startup, your company overview can be very much short, so focus on your personal history, achievements, and the journey that led you to start your business in the first place. Sharing your original idea is important because it shows how you think and how you were able to craft your idea into a business.

Even if you are just starting, your educational background, professional experience, achievements, and the details of your best business idea can give potential investors a vision of what you are trying to achieve.

Have a look at this company overview example

  • Starbucks company profile
  • Puma company page

3. Problem Analysis

You have started the business because you have identified the unique problem that customers are facing and in this section, you just need to explain that problem.

The problem statement section can be explained with three simple questions.

  • Whom does the problem affect?
  • What are the causes of the problem?
  • Why is it important to fix it?

When you write your problem statement, just describe how bigger the problem is and why it is most important to fix it. Also, there might be multiple problems you will be solving, but always try to focus on the main problem because you don’t win on the number of problems you solve; you win on how well you solve a specific problem .

While writing the business plan, most entrepreneurs focus on the solution they are going to offer, and in that process, they forget to explain the actual importance of the problem. Remember the more accurately you will explain the problem, the more valuable the solution will be.

Remember to keep the problem statement as simple as possible and should be self-explanatory. Also, it is good to include the key statistics that explain the severity of the problem.

After you explain the problem, it is also important to describe the world once a particular problem will be solved and that will set the stage to introduce the solution you are proposing.

4. The Solution

Business Plan Solution Section

The solution section is also called the product & services section . In this section, you will need to define your best-proposed solution to the problem you explained in the previous problem analysis section.

Your solution details should be as simple as possible. It is not recommended to use too many technical or industry details while writing about your product details. Keep in mind your readers will not have the same education or technical background as you.

The length of this section will depend on the nature of your business. for example, if your business is product-focused and the product is relatively new in the market, then you should write more about the product, its design, its features, etc. However, if your business is relatively common like selling bicycles or restaurant business and you are planning to compete with better pricing or customer service then you probably don’t need to write more about products.

If your product is hard to explain it’s a good idea to include a picture. Also, if you are planning to expand your business and will come with new products or services in the future, then you can mention those details here as well.

Your product or service pricing should be mentioned here in this section. Apply the right pricing strategy to set the best pricing for your product or services. Also, if you have any product patents, copyrights, licenses, etc then add those details here in this section.

In short, your solution section should answer the following common questions:

  • Your products or services are currently under development or already available?
  • If not available, what will be the timeline for delivering products and services to the market?
  • How are your products or services different from the competition?
  • How will you get your products? Are you the manufacturer or do you purchase products from suppliers or wholesalers?

When you write this product and services section, think of your reader as a person who knows little to nothing about your business. so make it as simple as possible.

5. Market Analysis

Before you start your business, it is essential to check if there is a viable market available for the products or services you are planning to offer, and that makes market research the most critical and key to success for any business.

In simple words, market analysis is studying the industry your business will operate in, the size of the industry, and its trend & direction (growing, stable, or in decline).

The market analysis consists of main three parts:

  • Market Overview: This is a general overview of the industry. In this part, you will need to describe the current position of the industry, market trends, and where it is heading. Also, you can write about your knowledge and experience in the industry.
  • Target Market: In this part, you will need to be more specific about the segment of the market that will use your products or services. Not everyone from the industry will use your product or services, so it is important to find the right audience for your product. (For example, if you are starting a veg restaurant in the town, then all the people from town will not visit your restaurant. The only people who prefer and eat veg food will be your target customers).
  • Market Size: Market size is all about finding how many potential customers are there for your product or service. Here you will need to show some statistics about the size of the industry (e.g., total U.S. sales in the last year) and its growth rate over the last few years.

The main objective of the market analysis is to identify the opportunities and risks associated with the business. It will also help you to understand how you should prepare your marketing strategy , where you should invest in terms of marketing efforts, and avoid making the wrong decisions.

With market analysis, you can identify the market entry barrier, and market needs, and estimate the market attractiveness from a financial standpoint.

6. Customer Analysis

Once you complete your market analysis, it’s time to identify the customers and needs of customers who are going to use your product or services, and this process is called customer analysis . Customer analysis is a key element of any successful marketing plan, as well as your overall business plan.

Customer analysis is critical for any business to succeed because if you do not know who is going to your offerings, and what your customers want, no business can succeed.

Now that you know customer analysis is that important, it is time to learn how you can perform strong customer analysis.

Customer analysis consists of main three parts:

  • Demographics: Age, Sex, Ethnicity, Income, Family, Occupation, etc.
  • Geographic: Location (Neighbourhood, Region, Urban/Rural, Online)
  • Psychographic: Lifestyle, Personality, etc
  • Interests: Hobbies, Activities, etc
  • Growth: Size of the target customers and whether they are growing, shrinking, or stable.

It’s up to you what is the best way to get this information for your business. However, some practical methods include customer surveys, existing customer data analysis, social media listening, or talking with your customer support team.

  • Identify your customer’s needs: Once you identify who your customers are, it’s important to understand their needs as well, and the answer to this question should be your offering.
  • Explain how your product or services will meet those needs: Now that you know your target customers and what they need, it’s time to explain your products or services’ benefits. In this part, list out the key features of your products or services that will fulfill customers’ needs, explain the benefits of your offerings, and the outcome customers can expect by using your products or services.

Keep in mind, that a strong customer analysis must answer these three key questions:

  • Who are your customers?
  • What do they need?
  • How do your products or services meet those needs?

how do you know a business plan

Want to Create a Customer Persona in Easy Steps?

Generate valuable customer insights in minutes with our Free Customer Persona Generator .

7. Competitive Analysis

Business Plan Competitive Analysis Section

Competitive analysis is all about finding your competitors, analyzing their strengths and weaknesses, products and services, pricing, social media presence, marketing & sales strategy, etc.

Your competitors can be categorized into two classes:

  • Direct Competitors: Direct competitors are the ones who provide the same solution as you do. For example, if you operate an Italian restaurant, other restaurants that serve Italian food will be your direct competitors. In this section of your business plan, outline who your direct competitors are, and add their strengths and weaknesses.
  • Indirect Competitors: Indirect competitors are the ones who do not provide the same solution as you do. However, solve the same customer problem as you do. For example, if you operate an Italian restaurant, a Mexican or Spanish restaurant would be an indirect competitor. In this section of your business plan, outline who your indirect competitors are, and add their strengths and weaknesses.

Once you identify who your competitors are, it’s time to explain how different and superior you are compared to them and that will be the competitive advantage section of your business plan .

competitive advantages

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.

Her strengths and weaknesses are subjective to your business which you can control and change like business location, pricing, uniqueness, etc. While opportunities and threats are external that are running outside your business, in the larger market. However, you can take advantage of opportunities and defend your business against potential threats, but you can’t change them.

It is always best if the business owners perform a SWOT analysis themselves. This task is not something that you should assign to someone else. A precise SWOT analysis will allow you to measure your strengths and weaknesses against the opportunities and threats in your business environment.

Once your SWOT analysis is ready, it will help you to form a strategy to achieve your business goals.

how do you know a business plan

Want to create a SWOT analysis for your business?

Craft a powerful SWOT Analysis in just minutes using our user-friendly and free online SWOT Analysis Generator Tool!

8. Marketing Plan

Now that you have explained your products or services and identified who is going to use those products or services, it is time to let your customers know about your products or services. And for this, you will have to plan strategy, and that planning you will need to explain in this section.

Your marketing plan can be divided into the following sections:

  • Pricing: Explain your product or service pricing here in this section. Mainly, discuss how you finalized your pricing and how your pricing is better than the competition. Also, discuss if it’s low-cost or premium offerings and how your pricing supports it. This will ensure investors also that you have finalized your pricing with proper research.
  • Promotional Plan: In this section, talk about your marketing activities and strategies that you will execute to attract your customers. It is always great to have some unique selling propositions (USP). However, Unique selling propositions should be short and self-explanatory. For example, Domino’s Pizza’s USP is “We deliver hot, fresh pizza in 30 minutes or less, or it’s free.” Also, discuss your other marketing or promotional activities that may include discount offers for early customers, media or online advertisements, product launches or social events, radio newspaper or magazine ads, affiliate or referral programs, etc. In this section, you can also write about your customer relation and support team and how they will work to retain your existing customers.
  • Distribution Plan: The main purpose of your marketing plan is that customers to buy your products or services. So it is important to explain how they can buy your products or services. Your distribution plan will include all details about your distribution channel, sales channel & strategy, and payment policies.

Once you complete writing your marketing plan , make sure your marketing plan answers these key questions.

  • What will be the pricing of your offerings?
  • How will you reach out to your target customers?
  • How will you retain your customers to buy from you repeatedly?
  • How and from where customers can buy your products and services?

Your marketing plan can be 7-8 pages long. However, while writing your business plan, make sure you do not go into details and try to keep it as simple as possible. You can separately write your marketing plan for internal purposes.?

9. Operations Plan

Your operation plan will explain how you will manufacture your product and run your business. It can include a lot of details depending on your business. For example, if you are in the production business, you will want to include all the information about how you will get raw materials, and equipment, build your products and ship them.

However, it is not recommended to include all these details while writing the operations section of your business plan . You should include only major details that you think will give you a competitive advantage or are important for your readers.

An operations plan is useful for internal purposes as it will help your team to understand their roles to achieve your business goals. However, it will help investors also to learn how you will run your business to make your business succeed.

Business Plan Management Team Section

The management team should be the easiest section of your business plan because, in this section, you will need to write about yourself and your core team members who will run the business.

Always remember, that businesses’ success will depend on the team who is running them. So you must write this section carefully and convince your readers or investors that you are the best person to execute and run this business.

Many investors believe it is not the business that succeeds, it is the team that makes the business successful. In fact, in some cases, investors have funded start-ups mainly based on the team who will run the business.

The ultimate guide to starting a business

In this section, list out important details of core team members like name, position in the company, contact information, qualifications, past experiences, achievements, etc.

You can also mention any management gaps present in your organization and when you are planning to fill those gaps. You can also mention if there is an advisory team or board of members who might not work in your organization but will advise you from outside.

10. Financial Plan

Business Plan Finance Section

The financial section of the business plan is the most important component of the business plan. Whatever you will write in the business plan will be conceptual until you do not add some numbers to support it.

Have a financial plan if you want to secure outside funding from investors or bank loans from financial institutes. Even if you do not need funds, it is always helpful to have a financial forecast to achieve your business goals and make your business successful. Financial forecasting will give you a clear idea of whether your business is viable or not.

Your financial plan will include the following sections.

  • Revenue Model: The main purpose of this section is to explain the different revenue streams of your business. Do you sell products?  Do you provide services? Do you provide third-party advertisements? Or do you sell all of the above? It is equally important to update this revenue model section, once you start generating revenue. Use the revenue model as a living document to improve your plans. Focus on revenue streams that work best, while changing your approach to those that aren’t doing well.
  • Financial Highlights: Include financial reports like cash flow, balance sheet, profit & loss, projected revenue, expenses, etc.
  • Funds Needed: This section is required if you are looking for funds to run your business operations. Before you directly request funds, it is good to explain your current financial situation, how much you have already invested, and how much funds you already have secured. Once you explain your current financial position, it is time to explain what type of funding you are looking for. What are your preferred options to secure funds? It is important to update this section once you secure funding.
  • Use of Funds: Once you explain how many funds you are looking for, it’s time to explain how you will use those funds. You will use it to hire new talents, expand your operations, pay your existing debts, or buy new equipment. If you are going to use funds for multiple things, mention each and also mention how much funds you are going to spend for each thing. Investors or financial institutes usually approve funds if they have a clear idea about how you are going to use your money.
  • Exit Strategy: If you are looking for equity funding, it is important to have an exit strategy. A common exit strategy includes selling your company to a larger firm (acquisitions), selling or diluting your ownership, initial public offering (IPO), etc. If you have such plans, provide a detailed explanation of them in this section.

With upmetrics, business financial forecasting is easy and fun. Once you add your data, the system will generate all required reports automatically. Later you can embed those reports into your business plan. learn more about the upmetrics financial planning feature .

11. Supporting Documentation (Appendix)

Adding supporting documents is not a mandatory section in your business plan. However, it is important to add the documents which you think can convince investors that your business will succeed.

These documents can include achievements, product patents, awards, financial statements, resumes of key team members, legal agreements, product or organization pictures, etc. These documents can help readers understand your story clearly and concisely.

Once you write your business plan, it is equally important to update your business plan as your business grows. Keep in mind, that a business plan is not just a document but it is a roadmap of your business.

Things to Consider Before Writing a Business Plan

Now before you start the actual writing of your business plan and learn what to include in each section of the business plan, there are some key concepts that you must keep in mind and rules that you should follow during the entire business planning process .

Key things to remember while creating business plan

1. Keep it short

Don’t you want your business plan to be read by your investors? Remember, many investors do not like to read a long business plan.

In this competitive time, no one has time to go through a 100-page long document. A typical 20-25 pages should be fine for any standard business plan. A well-written business plan ensures to communicate your message to your potential investors effectively.

However, if your business idea is a completely new kind of business or even a new industry, it may need quite a bit of writing to get the message across.

Your business plan writing purpose will decide how long your business plan should be . If you are writing your business plan to seek millions of funding, then you might need a lengthy and detailed business plan. A short business plan would work if you are looking to expand your business.

2. Be realistic and creative

Do not consider your business idea as your baby. Be realistic and honest with yourself while writing your business plan, and always try to add facts and realistic details of your business idea.

Also, your business plan should grab your reader’s attention quickly. Be creative while designing your business plan cover page and writing any important details in your business plan.

When it comes to the formatting of the business plan, make sure to use bullet points, images, and charts. Also, highlight the key points or metrics that you want readers to focus on. It helps bring your idea to life. Plus, it will keep your readers focused on reading.

3. You should be able to change it as the business grows

Most businesses start with a business plan, and once written, it’s never revisited. Never make that mistake. Your business plan should be treated as a working document that should be developed as your business grows.

For example, you might want to update your business plan as per the changing trends for a new round of funding or you might want to update it to counter unexpected problems like the COVID crisis. In a nutshell, keep your plan alive!

Why Do You Need a Business Plan?

Some entrepreneurs have achieved tremendous success without writing a business plan with their past experiences, less competition, or maybe by luck.

But the fact is, that many entrepreneurs have failed as well. It is just that we learn more about success stories only.

So, does writing a business plan guarantee success? Of course Not.

But, the business plan is your companion on your entrepreneurship journey. It will help you and your team understand the problems and the competition you will encounter in your journey. It will keep you and your entire team in sync and on the right path to achieving your business goals and success.

Click here to download how to write a business plan pdf

Build your Business Plan Faster

with step-by-step Guidance & AI Assistance.

crossline

About the Author

how do you know a business plan

Paresh Balar is the co-founder of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He loves sharing his thoughts on business and financial planning and its challenges through his blog posts. Read more

Related Articles

how do you know a business plan

How to Prepare a Financial Plan for Startup Business (w/ example)

how do you know a business plan

How to Write an Effective Company Overview for Your Business Plan

how do you know a business plan

How to Write a Business Plan Executive Summary: Tips & Example

Upmetrics logo

Reach Your Goals with Accurate Planning

No Risk – Cancel at Any Time – 15 Day Money Back Guarantee

trustpilot reviews

Popular Templates

Business-Plan-Template

24 of My Favorite Sample Business Plans & Examples For Your Inspiration

Clifford Chi

Published: February 06, 2024

Free Business Plan Template

how do you know a business plan

The essential document for starting a business -- custom built for your needs.

Thank you for downloading the offer.

I believe that reading sample business plans is essential when writing your own.

sample business plans and examples

hbspt.cta._relativeUrls=true;hbspt.cta.load(53, 'e9d2eacb-6b01-423a-bf7a-19d42ba77eaa', {"useNewLoader":"true","region":"na1"});

As you explore business plan examples from real companies and brands, it’s easier for you to learn how to write a good one.

But what does a good business plan look like? And how do you write one that’s both viable and convincing. I’ll walk you through the ideal business plan format along with some examples to help you get started.

Table of Contents

Business Plan Format

Business plan types, sample business plan templates, top business plan examples.

Ask any successful sports coach how they win so many games, and they’ll tell you they have a unique plan for every single game. To me, the same logic applies to business.

If you want to build a thriving company that can pull ahead of the competition, you need to prepare for battle before breaking into a market.

Business plans guide you along the rocky journey of growing a company. And if your business plan is compelling enough, it can also convince investors to give you funding.

With so much at stake, I’m sure you’re wondering where to begin.

how do you know a business plan

  • Outline your idea.
  • Pitch to investors.
  • Secure funding.
  • Get to work!

You're all set!

Click this link to access this resource at any time.

Fill out the form to get your free template.

First, you’ll want to nail down your formatting. Most business plans include the following sections.

1. Executive Summary

I’d say the executive summary is the most important section of the entire business plan. 

Why? Essentially, it's the overview or introduction, written in a way to grab readers' attention and guide them through the rest of the business plan. This is important, because a business plan can be dozens or hundreds of pages long.

There are two main elements I’d recommend including in your executive summary:

Company Description

This is the perfect space to highlight your company’s mission statement and goals, a brief overview of your history and leadership, and your top accomplishments as a business.

Tell potential investors who you are and why what you do matters. Naturally, they’re going to want to know who they’re getting into business with up front, and this is a great opportunity to showcase your impact.

Need some extra help firming up those business goals? Check out HubSpot Academy’s free course to help you set goals that matter — I’d highly recommend it

Products and Services

To piggyback off of the company description, be sure to incorporate an overview of your offerings. This doesn’t have to be extensive — just another chance to introduce your industry and overall purpose as a business.

In addition to the items above, I recommend including some information about your financial projections and competitive advantage here too.:

Keep in mind you'll cover many of these topics in more detail later on in the business plan. So, keep the executive summary clear and brief, and only include the most important takeaways.

Executive Summary Business Plan Examples

This example was created with HubSpot’s business plan template:

business plan sample: Executive Summary Example

This executive summary is so good to me because it tells potential investors a short story while still covering all of the most important details.

Business plans examples: Executive Summary

Image Source

Tips for Writing Your Executive Summary

  • Start with a strong introduction of your company, showcase your mission and impact, and outline the products and services you provide.
  • Clearly define a problem, and explain how your product solves that problem, and show why the market needs your business.
  • Be sure to highlight your value proposition, market opportunity, and growth potential.
  • Keep it concise and support ideas with data.
  • Customize your summary to your audience. For example, emphasize finances and return on investment for venture capitalists.

Check out our tips for writing an effective executive summary for more guidance.

2. Market Opportunity

This is where you'll detail the opportunity in the market.

The main question I’d ask myself here is this: Where is the gap in the current industry, and how will my product fill that gap?

More specifically, here’s what I’d include in this section:

  • The size of the market
  • Current or potential market share
  • Trends in the industry and consumer behavior
  • Where the gap is
  • What caused the gap
  • How you intend to fill it

To get a thorough understanding of the market opportunity, you'll want to conduct a TAM, SAM, and SOM analysis and perform market research on your industry.

You may also benefit from creating a SWOT analysis to get some of the insights for this section.

Market Opportunity Business Plan Example

I like this example because it uses critical data to underline the size of the potential market and what part of that market this service hopes to capture.

Business plans examples: Market Opportunity

Tips for Writing Your Market Opportunity Section

  • Focus on demand and potential for growth.
  • Use market research, surveys, and industry trend data to support your market forecast and projections.
  • Add a review of regulation shifts, tech advances, and consumer behavior changes.
  • Refer to reliable sources.
  • Showcase how your business can make the most of this opportunity.

3. Competitive Landscape

Since we’re already speaking of market share, you'll also need to create a section that shares details on who the top competitors are.

After all, your customers likely have more than one brand to choose from, and you'll want to understand exactly why they might choose one over another.

My favorite part of performing a competitive analysis is that it can help you uncover:

  • Industry trends that other brands may not be utilizing
  • Strengths in your competition that may be obstacles to handle
  • Weaknesses in your competition that may help you develop selling points
  • The unique proposition you bring to the market that may resonate with customers

Competitive Landscape Business Plan Example

I like how the competitive landscape section of this business plan below shows a clear outline of who the top competitors are.

Business plans examples: Competitive Landscape

It also highlights specific industry knowledge and the importance of location, which shows useful experience in this specific industry. 

This can help build trust in your ability to execute your business plan.

Tips for Writing Your Competitive Landscape

  • Complete in-depth research, then emphasize your most important findings.
  • Compare your unique selling proposition (USP) to your direct and indirect competitors.
  • Show a clear and realistic plan for product and brand differentiation.
  • Look for specific advantages and barriers in the competitive landscape. Then, highlight how that information could impact your business.
  • Outline growth opportunities from a competitive perspective.
  • Add customer feedback and insights to support your competitive analysis.

4. Target Audience

Use this section to describe who your customer segments are in detail. What is the demographic and psychographic information of your audience?

If your immediate answer is "everyone," you'll need to dig deeper. Here are some questions I’d ask myself here:

  • What demographics will most likely need/buy your product or service?
  • What are the psychographics of this audience? (Desires, triggering events, etc.)
  • Why are your offerings valuable to them?

I’d also recommend building a buyer persona to get in the mindset of your ideal customers and be clear on why you're targeting them.

Target Audience Business Plan Example

I like the example below because it uses in-depth research to draw conclusions about audience priorities. It also analyzes how to create the right content for this audience.

Business plans examples: Target Audience

Tips for Writing Your Target Audience Section

  • Include details on the size and growth potential of your target audience.
  • Figure out and refine the pain points for your target audience , then show why your product is a useful solution.
  • Describe your targeted customer acquisition strategy in detail.
  • Share anticipated challenges your business may face in acquiring customers and how you plan to address them.
  • Add case studies, testimonials, and other data to support your target audience ideas.
  • Remember to consider niche audiences and segments of your target audience in your business plan.

5. Marketing Strategy

Here, you'll discuss how you'll acquire new customers with your marketing strategy. I’d suggest including information:

  • Your brand positioning vision and how you'll cultivate it
  • The goal targets you aim to achieve
  • The metrics you'll use to measure success
  • The channels and distribution tactics you'll use

I think it’s helpful to have a marketing plan built out in advance to make this part of your business plan easier.

Marketing Strategy Business Plan Example

This business plan example includes the marketing strategy for the town of Gawler.

In my opinion, it really works because it offers a comprehensive picture of how they plan to use digital marketing to promote the community.

Business plans examples: Marketing Strategy

Tips for Writing Your Marketing Strategy

  • Include a section about how you believe your brand vision will appeal to customers.
  • Add the budget and resources you'll need to put your plan in place.
  • Outline strategies for specific marketing segments.
  • Connect strategies to earlier sections like target audience and competitive analysis.
  • Review how your marketing strategy will scale with the growth of your business.
  • Cover a range of channels and tactics to highlight your ability to adapt your plan in the face of change.

6. Key Features and Benefits

At some point in your business plan, you'll need to review the key features and benefits of your products and/or services.

Laying these out can give readers an idea of how you're positioning yourself in the market and the messaging you're likely to use. It can even help them gain better insight into your business model.

Key Features and Benefits Business Plan Example

In my opinion, the example below does a great job outlining products and services for this business, along with why these qualities will attract the audience.

Business plans examples: Key Features and Benefits

Tips for Writing Your Key Features and Benefits

  • Emphasize why and how your product or service offers value to customers.
  • Use metrics and testimonials to support the ideas in this section.
  • Talk about how your products and services have the potential to scale.
  • Think about including a product roadmap.
  • Focus on customer needs, and how the features and benefits you are sharing meet those needs.
  • Offer proof of concept for your ideas, like case studies or pilot program feedback.
  • Proofread this section carefully, and remove any jargon or complex language.

7. Pricing and Revenue

This is where you'll discuss your cost structure and various revenue streams. Your pricing strategy must be solid enough to turn a profit while staying competitive in the industry. 

For this reason, here’s what I’d might outline in this section:

  • The specific pricing breakdowns per product or service
  • Why your pricing is higher or lower than your competition's
  • (If higher) Why customers would be willing to pay more
  • (If lower) How you're able to offer your products or services at a lower cost
  • When you expect to break even, what margins do you expect, etc?

Pricing and Revenue Business Plan Example

I like how this business plan example begins with an overview of the business revenue model, then shows proposed pricing for key products.

Business plans examples: Pricing and Revenue

Tips for Writing Your Pricing and Revenue Section

  • Get specific about your pricing strategy. Specifically, how you connect that strategy to customer needs and product value.
  • If you are asking a premium price, share unique features or innovations that justify that price point.
  • Show how you plan to communicate pricing to customers.
  • Create an overview of every revenue stream for your business and how each stream adds to your business model as a whole.
  • Share plans to develop new revenue streams in the future.
  • Show how and whether pricing will vary by customer segment and how pricing aligns with marketing strategies.
  • Restate your value proposition and explain how it aligns with your revenue model.

8. Financials

To me, this section is particularly informative for investors and leadership teams to figure out funding strategies, investment opportunities, and more.

 According to Forbes , you'll want to include three main things:

  • Profit/Loss Statement - This answers the question of whether your business is currently profitable.
  • Cash Flow Statement - This details exactly how much cash is incoming and outgoing to give insight into how much cash a business has on hand.
  • Balance Sheet - This outlines assets, liabilities, and equity, which gives insight into how much a business is worth.

While some business plans might include more or less information, these are the key details I’d include in this section.

Financials Business Plan Example

This balance sheet is a great example of level of detail you’ll need to include in the financials section of your business plan.

Business plans examples: Financials

Tips for Writing Your Financials Section

  • Growth potential is important in this section too. Using your data, create a forecast of financial performance in the next three to five years.
  • Include any data that supports your projections to assure investors of the credibility of your proposal.
  • Add a break-even analysis to show that your business plan is financially practical. This information can also help you pivot quickly as your business grows.
  • Consider adding a section that reviews potential risks and how sensitive your plan is to changes in the market.
  • Triple-check all financial information in your plan for accuracy.
  • Show how any proposed funding needs align with your plans for growth.

As you create your business plan, keep in mind that each of these sections will be formatted differently. Some may be in paragraph format, while others could be charts or graphs.

The formats above apply to most types of business plans. That said, the format and structure of your plan will vary by your goals for that plan. 

So, I’ve added a quick review of different business plan types. For a more detailed overview, check out this post .

1. Startups

Startup business plans are for proposing new business ideas.

If you’re planning to start a small business, preparing a business plan is crucial. The plan should include all the major factors of your business.

You can check out this guide for more detailed business plan inspiration .

2. Feasibility Studies

Feasibility business plans focus on that business's product or service. Feasibility plans are sometimes added to startup business plans. They can also be a new business plan for an already thriving organization.

3. Internal Use

You can use internal business plans to share goals, strategies, or performance updates with stakeholders. In my opinion, internal business plans are useful for alignment and building support for ambitious goals.

4. Strategic Initiatives

Another business plan that's often for sharing internally is a strategic business plan. This plan covers long-term business objectives that might not have been included in the startup business plan.

5. Business Acquisition or Repositioning

When a business is moving forward with an acquisition or repositioning, it may need extra structure and support. These types of business plans expand on a company's acquisition or repositioning strategy.

Growth sometimes just happens as a business continues operations. But more often, a business needs to create a structure with specific targets to meet set goals for expansion. This business plan type can help a business focus on short-term growth goals and align resources with those goals.

Now that you know what's included and how to format a business plan, let's review some of my favorite templates.

1. HubSpot's One-Page Business Plan

Download a free, editable one-page business plan template..

The business plan linked above was created here at HubSpot and is perfect for businesses of any size — no matter how many strategies we still have to develop.

Fields such as Company Description, Required Funding, and Implementation Timeline give this one-page business plan a framework for how to build your brand and what tasks to keep track of as you grow.

Then, as the business matures, you can expand on your original business plan with a new iteration of the above document.

Why I Like It

This one-page business plan is a fantastic choice for the new business owner who doesn’t have the time or resources to draft a full-blown business plan. It includes all the essential sections in an accessible, bullet-point-friendly format. That way, you can get the broad strokes down before honing in on the details.

2. HubSpot's Downloadable Business Plan Template

Sample business plan: hubspot free editable pdf

We also created a business plan template for entrepreneurs.

The template is designed as a guide and checklist for starting your own business. You’ll learn what to include in each section of your business plan and how to do it.

There’s also a list for you to check off when you finish each section of your business plan.

Strong game plans help coaches win games and help businesses rocket to the top of their industries. So if you dedicate the time and effort required to write a workable and convincing business plan, you’ll boost your chances of success and even dominance in your market.

This business plan kit is essential for the budding entrepreneur who needs a more extensive document to share with investors and other stakeholders.

It not only includes sections for your executive summary, product line, market analysis, marketing plan, and sales plan, but it also offers hands-on guidance for filling out those sections.

3. LiveFlow’s Financial Planning Template with built-in automation

Sample Business Plan: LiveFLow

This free template from LiveFlow aims to make it easy for businesses to create a financial plan and track their progress on a monthly basis.

The P&L Budget versus Actual format allows users to track their revenue, cost of sales, operating expenses, operating profit margin, net profit, and more.

The summary dashboard aggregates all of the data put into the financial plan sheet and will automatically update when changes are made.

Instead of wasting hours manually importing your data to your spreadsheet, LiveFlow can also help you to automatically connect your accounting and banking data directly to your spreadsheet, so your numbers are always up-to-date.

With the dashboard, you can view your runway, cash balance, burn rate, gross margins, and other metrics. Having a simple way to track everything in one place will make it easier to complete the financials section of your business plan.

This is a fantastic template to track performance and alignment internally and to create a dependable process for documenting financial information across the business. It’s highly versatile and beginner-friendly.

It’s especially useful if you don’t have an accountant on the team. (I always recommend you do, but for new businesses, having one might not be possible.)

4. ThoughtCo’s Sample Business Plan

sample business plan: ThoughtCo.

One of the more financially oriented sample business plans in this list, BPlan’s free business plan template dedicates many of its pages to your business’s financial plan and financial statements.

After filling this business plan out, your company will truly understand its financial health and the steps you need to take to maintain or improve it.

I absolutely love this business plan template because of its ease-of-use and hands-on instructions (in addition to its finance-centric components). If you feel overwhelmed by the thought of writing an entire business plan, consider using this template to help you with the process.

6. Harvard Business Review’s "How to Write a Winning Business Plan"

Most sample business plans teach you what to include in your business plan, but this Harvard Business Review article will take your business plan to the next level — it teaches you the why and how behind writing a business plan.

With the guidance of Stanley Rich and Richard Gumpert, co-authors of " Business Plans That Win: Lessons From the MIT Enterprise Forum ", you'll learn how to write a convincing business plan that emphasizes the market demand for your product or service.

You’ll also learn the financial benefits investors can reap from putting money into your venture rather than trying to sell them on how great your product or service is.

This business plan guide focuses less on the individual parts of a business plan, and more on the overarching goal of writing one. For that reason, it’s one of my favorites to supplement any template you choose to use. Harvard Business Review’s guide is instrumental for both new and seasoned business owners.

7. HubSpot’s Complete Guide to Starting a Business

If you’re an entrepreneur, you know writing a business plan is one of the most challenging first steps to starting a business.

Fortunately, with HubSpot's comprehensive guide to starting a business, you'll learn how to map out all the details by understanding what to include in your business plan and why it’s important to include them. The guide also fleshes out an entire sample business plan for you.

If you need further guidance on starting a business, HubSpot's guide can teach you how to make your business legal, choose and register your business name, and fund your business. It will also give small business tax information and includes marketing, sales, and service tips.

This comprehensive guide will walk you through the process of starting a business, in addition to writing your business plan, with a high level of exactitude and detail. So if you’re in the midst of starting your business, this is an excellent guide for you.

It also offers other resources you might need, such as market analysis templates.

8. Panda Doc’s Free Business Plan Template

sample business plan: Panda Doc

PandaDoc’s free business plan template is one of the more detailed and fleshed-out sample business plans on this list. It describes what you should include in each section, so you don't have to come up with everything from scratch.

Once you fill it out, you’ll fully understand your business’ nitty-gritty details and how all of its moving parts should work together to contribute to its success.

This template has two things I love: comprehensiveness and in-depth instructions. Plus, it’s synced with PandaDoc’s e-signature software so that you and other stakeholders can sign it with ease. For that reason, I especially love it for those starting a business with a partner or with a board of directors.

9. Small Business Administration Free Business Plan Template

sample business plan: Small Business Administration

The Small Business Administration (SBA) offers several free business plan templates that can be used to inspire your own plan.

Before you get started, you can decide what type of business plan you need — a traditional or lean start-up plan.

Then, you can review the format for both of those plans and view examples of what they might look like.

We love both of the SBA’s templates because of their versatility. You can choose between two options and use the existing content in the templates to flesh out your own plan. Plus, if needed, you can get a free business counselor to help you along the way.

I’ve compiled some completed business plan samples to help you get an idea of how to customize a plan for your business.

I chose different types of business plan ideas to expand your imagination. Some are extensive, while others are fairly simple.

Let’s take a look.

1. LiveFlow

business plan example: liveflow

One of the major business expenses is marketing. How you handle your marketing reflects your company’s revenue.

I included this business plan to show you how you can ensure your marketing team is aligned with your overall business plan to get results. The plan also shows you how to track even the smallest metrics of your campaigns, like ROI and payback periods instead of just focusing on big metrics like gross and revenue.

Fintech startup, LiveFlow, allows users to sync real-time data from its accounting services, payment platforms, and banks into custom reports. This eliminates the task of pulling reports together manually, saving teams time and helping automate workflows.

"Using this framework over a traditional marketing plan will help you set a profitable marketing strategy taking things like CAC, LTV, Payback period, and P&L into consideration," explains LiveFlow co-founder, Lasse Kalkar .

When it came to including marketing strategy in its business plan, LiveFlow created a separate marketing profit and loss statement (P&L) to track how well the company was doing with its marketing initiatives.

This is a great approach, allowing businesses to focus on where their marketing dollars are making the most impact. Having this information handy will enable you to build out your business plan’s marketing section with confidence. LiveFlow has shared the template here . You can test it for yourself.

2. Lula Body

Business plan example: Lula body

Sometimes all you need is a solid mission statement and core values to guide you on how to go about everything. You do this by creating a business plan revolving around how to fulfill your statement best.

For example, Patagonia is an eco-friendly company, so their plan discusses how to make the best environmentally friendly products without causing harm.

A good mission statement  should not only resonate with consumers but should also serve as a core value compass for employees as well.

Patagonia has one of the most compelling mission statements I’ve seen:

"Together, let’s prioritise purpose over profit and protect this wondrous planet, our only home."

It reels you in from the start, and the environmentally friendly theme continues throughout the rest of the statement.

This mission goes on to explain that they are out to "Build the best product, cause no unnecessary harm, and use business to protect nature."

Their mission statement is compelling and detailed, with each section outlining how they will accomplish their goal.

4. Vesta Home Automation

business plan example: Vesta executive summary

This executive summary for a smart home device startup is part of a business plan created by students at Mount Royal University .

While it lacks some of the sleek visuals of the templates above, its executive summary does a great job of demonstrating how invested they are in the business.

Right away, they mention they’ve invested $200,000 into the company already, which shows investors they have skin in the game and aren’t just looking for someone else to foot the bill.

This is the kind of business plan you need when applying for business funds. It clearly illustrates the expected future of the company and how the business has been coming along over the years.

5. NALB Creative Center

business plan examples: nalb creative center

This fictional business plan for an art supply store includes everything one might need in a business plan: an executive summary, a company summary, a list of services, a market analysis summary, and more.

One of its most notable sections is its market analysis summary, which includes an overview of the population growth in the business’ target geographical area, as well as a breakdown of the types of potential customers they expect to welcome at the store. 

This sort of granular insight is essential for understanding and communicating your business’s growth potential. Plus, it lays a strong foundation for creating relevant and useful buyer personas .

It’s essential to keep this information up-to-date as your market and target buyer changes. For that reason, you should carry out market research as often as possible to ensure that you’re targeting the correct audience and sharing accurate information with your investors.

Due to its comprehensiveness, it’s an excellent example to follow if you’re opening a brick-and-mortar store and need to get external funding to start your business .

6. Curriculum Companion Suites (CSS)

business plan examples: curriculum companion suites

If you’re looking for a SaaS business plan example, look no further than this business plan for a fictional educational software company called Curriculum Companion Suites. 

Like the business plan for the NALB Creative Center, it includes plenty of information for prospective investors and other key stakeholders in the business.

One of the most notable features of this business plan is the executive summary, which includes an overview of the product, market, and mission.

The first two are essential for software companies because the product offering is so often at the forefront of the company’s strategy. Without that information being immediately available to investors and executives, then you risk writing an unfocused business plan.

It’s essential to front-load your company’s mission if it explains your "Why?" and this example does just that. In other words, why do you do what you do, and why should stakeholders care? This is an important section to include if you feel that your mission will drive interest in the business and its offerings.

7. Culina Sample Business Plan

sample business plan: Culina

Culina's sample business plan is an excellent example of how to lay out your business plan so that it flows naturally, engages readers, and provides the critical information investors and stakeholders need. 

You can use this template as a guide while you're gathering important information for your own business plan. You'll have a better understanding of the data and research you need to do since Culina’s plan outlines these details so flawlessly for inspiration.

8. Plum Sample Business Plan

Sample business plan: Plum

Don't forget to share this post!

Related articles.

How to Write a Powerful Executive Summary [+4 Top Examples]

How to Write a Powerful Executive Summary [+4 Top Examples]

19 Best Sample Business Plans & Examples to Help You Write Your Own

19 Best Sample Business Plans & Examples to Help You Write Your Own

What is a Business Plan? Definition, Tips, and Templates

What is a Business Plan? Definition, Tips, and Templates

Maximizing Your Social Media Strategy: The Top Aggregator Tools to Use

Maximizing Your Social Media Strategy: The Top Aggregator Tools to Use

The Content Aggregator Guide for 2023

The Content Aggregator Guide for 2023

7 Gantt Chart Examples You'll Want to Copy [+ 5 Steps to Make One]

7 Gantt Chart Examples You'll Want to Copy [+ 5 Steps to Make One]

The 8 Best Free Flowchart Templates [+ Examples]

The 8 Best Free Flowchart Templates [+ Examples]

15 Best Screen Recorders to Use for Collaboration

15 Best Screen Recorders to Use for Collaboration

The 25 Best Google Chrome Extensions for SEO

The 25 Best Google Chrome Extensions for SEO

Professional Invoice Design: 28 Samples & Templates to Inspire You

Professional Invoice Design: 28 Samples & Templates to Inspire You

2 Essential Templates For Starting Your Business

Marketing software that helps you drive revenue, save time and resources, and measure and optimize your investments — all on one easy-to-use platform

  • Credit cards
  • View all credit cards
  • Banking guide
  • Loans guide
  • Insurance guide
  • Personal finance
  • View all personal finance
  • Small business
  • View all small business
  • View all taxes

You’re our first priority. Every time.

We believe everyone should be able to make financial decisions with confidence. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free.

So how do we make money? Our partners compensate us. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Here is a list of our partners .

Are You in the Wrong Medicare Advantage Plan? What to Review Now

Kate Ashford, CSA®

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

Many people choose Medicare Advantage plans without exploring their options or noticing what changes their plan may have made, according to research from KFF, a health policy nonprofit. But now that a new year has started, you may realize the plan you picked during Medicare’s fall open enrollment doesn’t work for you. Or maybe you stuck with your old plan and it changed this year. (That can happen, too.)

Medicare Advantage open enrollment , which runs from Jan. 1 to March 31, gives members the option to switch Medicare Advantage plans or move back to Original Medicare.

“It’s set up especially for people who begin the year enrolled in a Medicare Advantage plan and allows them to make certain changes,” says David Lipschutz, associate director of the Center for Medicare Advocacy.

Here’s where to start.

Does your current coverage work for you?

Even if you haven’t had a chance to stress test your plan yet, do some research while you still have time to change your mind. Are there providers or specialists you want to see or hospitals you prefer? Make sure they’re in your network.

Check your medications, particularly if you’re on a newer drug that may be covered differently by different plans. How much do your prescriptions cost under your plan?

Then, think about your situation this year. “Are there any procedures, like a surgery that’s coming up?” says Christopher Fong, director and co-founder of Smile Insurance Group in Mesa, Arizona. “Is it outpatient? Inpatient? How many emergency room visits do you have? Do you need an electric scooter?” The more you can predict your health care usage, the more accurately you can determine whether you’re in the right plan.

Next, consider your lifestyle. Do you travel or plan to spend part of the year in another state? Make sure your insurance offers an extended network or travel benefit. Or consider Original Medicare , which allows you to see any doctor in the country who accepts Medicare.

What can you do during Medicare Advantage open enrollment?

During this time, people who are already enrolled in a Medicare Advantage plan can switch — once — to another Medicare Advantage plan, or they can return to Original Medicare and purchase a Medicare Part D prescription drug plan . But if you don’t already have Medicare Advantage, you can’t join a plan now.

That said, although you can return to Original Medicare, you may not be able to sign up for Medicare Supplement Insurance, or Medigap . Medigap’s open enrollment period — when insurance companies must offer you a plan at the same price as everyone else, regardless of health issues — lasts for six months after you're 65 and have Medicare Part B . After that, aside from a few states and situations, you’ll be subject to medical underwriting to qualify.

“While you can get in and out of a Medicare Advantage plan on an annual basis, your rights to purchase a Medigap policy are usually far more restrictive,” Lipschutz says.

Should you switch plans?

Some circumstances are red flags — meaning you should probably change your coverage. If your primary care physician or primary hospital system is now out of network, for instance, you’ll want to look for a plan that includes them.

If an expensive medication isn’t covered, see if there’s a plan that includes it. (You can input your medications into the plan finder on Medicare.gov to see options.) Make sure, when you’re estimating drug costs, that you’re as accurate as possible about what you’re taking, including name and dosage. “Some people will get confused between the generic version and the brand name version, and there’s a huge difference,” says Emily Gang, CEO of the Medicare Coach, a site that provides Medicare guidance.

If you had a health event and found that you weren’t covered in the way that you expected, give switching plans some thought, but consider that any money you’ve paid is a sunk cost. You’ve already spent it, Gang says. And it may not make sense to start over in a new plan with a new deductible.

In general, resist switching plans for the perks alone. “We’re not proponents of benefit chasing unless everything else lines up correctly for the member,’” Fong says.

Then, next year, do your homework during Medicare’s fall open enrollment from Oct. 15 to Dec. 7. “Ideally, you look at the plan details in advance to avoid any surprises,” Gang says.

This article was written by NerdWallet and was originally published by The Associated Press. 

On a similar note...

how do you know a business plan

For more audio journalism and storytelling, download New York Times Audio , a new iOS app available for news subscribers.

The Daily logo

  • February 23, 2024   •   25:48 Trump’s Cash Crunch
  • February 22, 2024   •   32:02 Putin’s Opposition Ponders a Future Without Aleksei Navalny
  • February 21, 2024   •   23:33 What Happens if America Turns Its Back on Its Allies in Europe
  • February 20, 2024   •   40:44 Stranded in Rafah as an Israeli Invasion Looms
  • February 19, 2024   •   35:50 The Booming Business of Cutting Babies’ Tongues
  • February 16, 2024   •   39:24 An Explosive Hearing in Trump’s Georgia Election Case
  • February 15, 2024   •   29:38 How China Broke One Man’s Dreams
  • February 14, 2024   •   33:06 The Biden Problem Democrats Can No Longer Ignore
  • February 13, 2024   •   27:23 Why the Race to Replace George Santos Is So Close
  • February 12, 2024   •   21:57 Why Boeing’s Top Airplanes Keep Failing
  • February 11, 2024   •   42:04 The Sunday Read: ‘The Unthinkable Mental Health Crisis That Shook a New England College’
  • February 9, 2024   •   34:05 Kick Trump Off the Ballot? Even Liberal Justices Are Skeptical.

Trump’s Cash Crunch

The ruling in former president donald j. trump’s civil fraud case could cost him all his available cash..

  • Share full article

Hosted by Michael Barbaro

Featuring Jonah E. Bromwich and Maggie Haberman

Produced by Will Reid and Mary Wilson

Edited by Brendan Klinkenberg

With Rachel Quester

Original music by Elisheba Ittoop and Dan Powell

Engineered by Alyssa Moxley

Listen and follow The Daily Apple Podcasts | Spotify | Amazon Music

Last week, when a civil court judge in New York ruled against Donald J. Trump, he imposed a set of penalties so severe that they could temporarily sever the former president from his real-estate empire and wipe out all of his cash.

Jonah Bromwich, who covers criminal justice in New York, and Maggie Haberman, a senior political correspondent for The Times, explain what that will mean for Mr. Trump as a businessman and as a candidate.

On today’s episode

how do you know a business plan

Jonah E. Bromwich , a criminal justice correspondent for The New York Times.

how do you know a business plan

Maggie Haberman , a senior political correspondent for The New York Times.

Donald Trump is pictured walking through a courthouse, surrounded by uniformed staff.

Background reading

Mr. Trump was met with a $450 million blow to his finances and his identity.

Here’s a guide to the New York law that made the fierce punishment possible.

There are a lot of ways to listen to The Daily. Here’s how.

We aim to make transcripts available the next workday after an episode’s publication. You can find them at the top of the page.

Special thanks to Ben Protess .

The Daily is made by Rachel Quester, Lynsea Garrison, Clare Toeniskoetter, Paige Cowett, Michael Simon Johnson, Brad Fisher, Chris Wood, Jessica Cheung, Stella Tan, Alexandra Leigh Young, Lisa Chow, Eric Krupke, Marc Georges, Luke Vander Ploeg, M.J. Davis Lin, Dan Powell, Sydney Harper, Mike Benoist, Liz O. Baylen, Asthaa Chaturvedi, Rachelle Bonja, Diana Nguyen, Marion Lozano, Corey Schreppel, Rob Szypko, Elisheba Ittoop, Mooj Zadie, Patricia Willens, Rowan Niemisto, Jody Becker, Rikki Novetsky, John Ketchum, Nina Feldman, Will Reid, Carlos Prieto, Ben Calhoun, Susan Lee, Lexie Diao, Mary Wilson, Alex Stern, Dan Farrell, Sophia Lanman, Shannon Lin, Diane Wong, Devon Taylor, Alyssa Moxley, Summer Thomad, Olivia Natt, Daniel Ramirez and Brendan Klinkenberg.

Our theme music is by Jim Brunberg and Ben Landsverk of Wonderly. Special thanks to Sam Dolnick, Paula Szuchman, Lisa Tobin, Larissa Anderson, Julia Simon, Sofia Milan, Mahima Chablani, Elizabeth Davis-Moorer, Jeffrey Miranda, Renan Borelli, Maddy Masiello, Isabella Anderson and Nina Lassam.

Jonah E. Bromwich covers criminal justice in New York, with a focus on the Manhattan district attorney's office, state criminal courts in Manhattan and New York City's jails. More about Jonah E. Bromwich

Maggie Haberman is a senior political correspondent reporting on the 2024 presidential campaign, down ballot races across the country and the investigations into former President Donald J. Trump. More about Maggie Haberman

Advertisement

Trump's civil fraud verdict appeal may hinge on 'no victims' defense

  • Private Escapes Platinum One Central Park West, Llc Follow
  • Trump Organization Inc Follow

Former U.S. President and Republican presidential candidate Trump holds a rally in Rochester

Reporting by Jack Queen; editing by Will Dunham, Noeleen Walder and Amy Stevens

Our Standards: The Thomson Reuters Trust Principles. , opens new tab

how do you know a business plan

Thomson Reuters

Legal correspondent specializing in politically charged cases.

Read Next / Editor's Picks

The Library at Vanderbilt University in Nashville

Industry Insight

how do you know a business plan

Mike Scarcella, David Thomas

how do you know a business plan

Karen Sloan

how do you know a business plan

Henry Engler

how do you know a business plan

Diana Novak Jones

An official website of the United States Government

  • Kreyòl ayisyen
  • Search Toggle search Search Include Historical Content - Any - No Include Historical Content - Any - No Search
  • Menu Toggle menu
  • INFORMATION FOR…
  • Individuals
  • Business & Self Employed
  • Charities and Nonprofits
  • International Taxpayers
  • Federal State and Local Governments
  • Indian Tribal Governments
  • Tax Exempt Bonds
  • FILING FOR INDIVIDUALS
  • How to File
  • When to File
  • Where to File
  • Update Your Information
  • Get Your Tax Record
  • Apply for an Employer ID Number (EIN)
  • Check Your Amended Return Status
  • Get an Identity Protection PIN (IP PIN)
  • File Your Taxes for Free
  • Bank Account (Direct Pay)
  • Debit or Credit Card
  • Payment Plan (Installment Agreement)
  • Electronic Federal Tax Payment System (EFTPS)
  • Your Online Account
  • Tax Withholding Estimator
  • Estimated Taxes
  • Where's My Refund
  • What to Expect
  • Direct Deposit
  • Reduced Refunds
  • Amend Return

Credits & Deductions

  • INFORMATION FOR...
  • Businesses & Self-Employed
  • Earned Income Credit (EITC)
  • Child Tax Credit
  • Clean Energy and Vehicle Credits
  • Standard Deduction
  • Retirement Plans

Forms & Instructions

  • POPULAR FORMS & INSTRUCTIONS
  • Form 1040 Instructions
  • Form 4506-T
  • POPULAR FOR TAX PROS
  • Form 1040-X
  • Circular 230

Tax Time Guide 2024: What to know before completing a tax return

More in news.

  • Topics in the News
  • News Releases for Frequently Asked Questions
  • Multimedia Center
  • Tax Relief in Disaster Situations
  • Inflation Reduction Act
  • Taxpayer First Act
  • Tax Scams/Consumer Alerts
  • The Tax Gap
  • Fact Sheets
  • IRS Tax Tips
  • e-News Subscriptions
  • IRS Guidance
  • Media Contacts
  • IRS Statements and Announcements

IR-2024-45, Feb. 21, 2024

WASHINGTON — During the busiest time of the tax filing season, the Internal Revenue Service kicked off its 2024 Tax Time Guide series to help remind taxpayers of key items they’ll need to file a 2023 tax return.

As part of its four-part, weekly Tax Time Guide series, the IRS continues to provide new and updated resources to help taxpayers file an accurate tax return. Taxpayers can count on IRS.gov for updated resources and tools along with a special free help page available around the clock. Taxpayers are also encouraged to read Publication 17, Your Federal Income Tax (For Individuals) for additional guidance.

Essentials to filing an accurate tax return

The deadline this tax season for filing Form 1040, U.S. Individual Income Tax Return , or 1040-SR, U.S. Tax Return for Seniors , is April 15, 2024. However, those who live in Maine or Massachusetts will have until April 17, 2024, to file due to official holidays observed in those states.

Taxpayers are advised to wait until they receive all their proper tax documents before filing their tax returns. Filing without all the necessary documents could lead to mistakes and potential delays.

It’s important for taxpayers to carefully review their documents for any inaccuracies or missing information. If any issues are found, taxpayers should contact the payer immediately to request a correction or confirm that the payer has their current mailing or email address on file.

Creating an IRS Online Account can provide taxpayers with secure access to information about their federal tax account, including payment history, tax records and other important information.

Having organized tax records can make the process of preparing a complete and accurate tax return easier and may also help taxpayers identify any overlooked deductions or credits .

Taxpayers who have an Individual Taxpayer Identification Number or ITIN may need to renew it if it has expired and is required for a U.S. federal tax return. If an expiring or expired ITIN is not renewed, the IRS can still accept the tax return, but it may result in processing delays or delays in credits owed.

Changes to credits and deductions for tax year 2023

Standard deduction amount increased. For 2023, the standard deduction amount has been increased for all filers. The amounts are:

  • Single or married filing separately — $13,850.
  • Head of household — $20,800.
  • Married filing jointly or qualifying surviving spouse — $27,700.

Additional child tax credit amount increased. The maximum additional child tax credit amount has increased to $1,600 for each qualifying child.

Child tax credit enhancements. Many changes to the Child tax credit (CTC) that had been implemented by the American Rescue Plan Act of 2021 have expired.

However, the IRS continues to closely monitor legislation being considered by Congress affecting the Child Tax Credit. The IRS reminds taxpayers eligible for the Child Tax Credit that they should not wait to file their 2023 tax return this filing season. If Congress changes the CTC guidelines, the IRS will automatically make adjustments for those who have already filed so no additional action will be needed by those eligible taxpayers.

Under current law, for tax year 2023, the following currently apply:

  • The enhanced credit allowed for qualifying children under age 6 and children under age 18 has expired. For 2023, the initial amount of the CTC is $2,000 for each qualifying child. The credit amount begins to phase out where AGI income exceeds $200,000 ($400,000 in the case of a joint return). The amount of the CTC that can be claimed as a refundable credit is limited as it was in 2020 except that the maximum ACTC amount for each qualifying child increased to $1,500.
  • The increased age allowance for a qualifying child has expired. A child must be under age 17 at the end of 2023 to be a qualifying child.

Changes to the Earned Income Tax Credit (EITC). The enhancements for taxpayers without a qualifying child implemented by the American Rescue Plan Act of 2021 will not apply for tax year 2023. To claim the EITC without a qualifying child in 2023, taxpayers must be at least age 25 but under age 65 at the end of 2023. If a taxpayer is married filing a joint return, one spouse must be at least age 25 but under age 65 at the end of 2023.

Taxpayers may find more information on Child tax credits in the Instructions for Schedule 8812 (Form 1040) .

New Clean Vehicle Credit. The credit for new qualified plug-in electric drive motor vehicles has changed. This credit is now known as the Clean Vehicle Credit. The maximum amount of the credit and some of the requirements to claim the credit have changed. The credit is reported on Form 8936, Qualified Plug-In Electric Drive Motor Vehicle Credit , and on Form 1040, Schedule 3.

More information on these and other credit and deduction changes for tax year 2023 may be found in the Publication 17, Your Federal Income Tax (For Individuals) , taxpayer guide.

1099-K reporting requirements have not changed for tax year 2023

Following feedback from taxpayers, tax professionals and payment processors, and to reduce taxpayer confusion, the IRS recently released Notice 2023-74 announcing a delay of the new $600 reporting threshold for tax year 2023 on Form 1099-K, Payment Card and Third-Party Network Transactions . The previous reporting thresholds will remain in place for 2023.

The IRS has published a fact sheet with further information to assist taxpayers concerning changes to 1099-K reporting requirements for tax year 2023.

Form 1099-K reporting requirements

Taxpayers who take direct payment by credit, debit or gift cards for selling goods or providing services by customers or clients should get a Form 1099-K from their payment processor or payment settlement entity no matter how many payments they got or how much they were for.

If they used a payment app or online marketplace and received over $20,000 from over 200 transactions,

the payment app or online marketplace is required to send a Form 1099-K. However, they can send a Form 1099-K with lower amounts. Whether or not the taxpayer receives a Form 1099-K, they must still report any income on their tax return.

What’s taxable? It’s the profit from these activities that’s taxable income. The Form 1099-K shows the gross or total amount of payments received. Taxpayers can use it and other records to figure out the actual taxes they owe on any profits. Remember that all income, no matter the amount, is taxable unless the tax law says it isn’t – even if taxpayers don’t get a Form 1099-K.

What’s not taxable? Taxpayers shouldn’t receive a Form 1099-K for personal payments, including money received as a gift and for repayment of shared expenses. That money isn’t taxable. To prevent getting an inaccurate Form 1099-K, note those payments as “personal,” if possible.

Good recordkeeping is key. Be sure to keep good records because it helps when it’s time to file a tax return. It’s a good idea to keep business and personal transactions separate to make it easier to figure out what a taxpayer owes.

For details on what to do if a taxpayer gets a Form 1099-K in error or the information on their form is incorrect, visit IRS.gov/1099k  or find frequently asked questions at Form 1099-K FAQs .

Direct File pilot program provides a new option this year for some

The IRS launched the Direct File pilot program during the 2024 tax season. The pilot will give eligible taxpayers an option to prepare and electronically file their 2023 tax returns, for free, directly with the IRS.

The Direct File pilot program will be offered to eligible taxpayers in 12 pilot states who have relatively simple tax returns reporting only certain types of income and claiming limited credits and deductions. The 12 states currently participating in the Direct File pilot program are Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington state and Wyoming. Taxpayers can check their eligibility at directfile.irs.gov .

The Direct File pilot is currently in the internal testing phase and will be more widely available in mid-March. Taxpayers can get the latest news about the pilot at Direct File pilot news and sign up to be notified when Direct File is open to new users.

Finally, for comprehensive information on all these and other changes for tax year 2023, taxpayers and tax professionals are encouraged to read the Publication 17, Your Federal Income Tax (For Individuals) , taxpayer guide, as well as visit other topics of taxpayer interest on IRS.gov.

  •  Facebook
  •  Twitter
  •  Linkedin

Houston Chronicle

5 things to know when choosing your Texas electricity plan in 2024

W ith the new year upon us, one of your resolutions may be finding ways to cut costs and evaluating if your electricity plan is right for you.

The electricity market in Texas is deregulated and intended to give consumers choice and keep costs competitive. It also creates a market where retail electricity providers vie for your business, and the abundance of options can be confusing.

Power to Choose , a site hosted by the Public Utility Commission of Texas, the state’s utility regulator, is one resource to help consumers compare plans. Private ventures such as Energy Ogre are brokers that can also help Texans shop for electricity plans. David Kinchen, Energy Ogre’s chief operating officer, offered some guidance. 

READING YOUR BILL: Here are some tips in understanding your Texas electric bill

Longer-term contract

Most electricity plans last for set lengths such as six months or a year. The retail electricity provider is required to notify residential customers at least 30 days before the contract expires. If the customer takes no action to the notice, the provider will start enrolling the customer on a month-to-month basis.

If you don’t realize you’ve been switched to a month-to-month plan, you may see unexpected volatility in your bills. That’s because these contracts reflect the rise and fall of prices in the wholesale electricity market, which can be quick to go up but very slow to come down, Kinchen said. 

A longer-term plan offers more protection against price spikes, Kinchen said. To check if you’re on a longer-term plan, see if your energy bill states a date on which your contract ends. That said, a month-to-month plan can make sense if you plan to move soon or don’t know how long you’ll be living at your current address.

SELLING BACK:  In Texas, electricity consumers are becoming suppliers, selling back power to the grid

Consider a cheaper plan 

If your contract is about to expire, it’s good to shop around to see if there are cheaper market rates available, Kinchen said. Residential customers can switch to a new plan within 14 days of their contract expiration date without incurring an early termination fee. (This fee doesn’t apply if you’re moving to a new address.)

Even if you still have time left on your contract, it can be worthwhile to switch to a cheaper plan, Kinchen said. It does take a little math: First, calculate how much electricity usage you have left on the contract by multiplying the number of months remaining on the plan with your typical monthly usage. Second, multiply that figure by the difference in per kilowatt-hour pricing between your current plan and the cheaper contract. 

The final figure is how much you would save if you switched to the cheaper plan. If the potential savings are greater than your current plan’s early termination fee, Kinchen suggested making the switch. 

FINANCIAL HELP: Struggling to pay electricity bills? Here’s a list of resources

Avoid February, July or August

That’s when prices tend to be high in the wholesale electricity market, where power generators sell the electricity they produce to retail electricity providers. If your contract ends in one of these months, you’ll have to shop around when the market price for plans tends to be higher, Kinchen said. 

Also, plans may look cheaper if they don’t include the peak summer months; for example, if it’s a six-month plan from January to June. But “at some point you have to pay the piper. You’re going to have to have a contract that has summer months,” he said.

‘Free nights and weekend’ 

The standard option is a fixed-rate plan, which charges customers the same price per kilowatt-hour at all times. Many retailers also offer plans that make electricity use free on nights and weekends. Some sell discounted plans for summer and winter electricity usage. Others have what are called  time-of-use plans , which charge consumers less for using electricity in off-peak hours. 

However, there is usually a significant cost increase when using electricity outside of the discounted windows. For most people, the benefits are worthwhile only if they can shift the majority of their electricity usage to those free or low-cost periods, Kinchen said. For example, free nights and weekends can make sense for those who work outside of the home during the day.

STARTING 2024:  ERCOT issues weather watch but expects normal grid conditions ahead of next week's cold front

Solar or a smart thermostat

If you’re among a growing number of Texans with home solar panels or batteries, you may have installed them to be environmentally conscious or to keep the lights on in a blackout. With the right electricity plan, you can save money too.

Some retailers will pay you for selling excess electricity back to the grid. You can  get a free analysis on your solar system and the retail plans available to you at Texas Power Guide, a site that helps consumers choose plans. 

If you have a Tesla Powerwall, the company has a pilot program in the CenterPoint and Oncor service areas that allow you to sell electricity back to the grid . 

Other retailers offer discounted plans for customers with smart thermostats , which give the retailer the ability to adjust the thermostat during times of grid strain . 

With the New Year upon us, one of your resolutions may be finding ways to cut costs and reevaluating if your electricity plan is right for you.

IMAGES

  1. One-Page Business Plan: The Step-By-Step Guide

    how do you know a business plan

  2. business-plan

    how do you know a business plan

  3. Creating a Business Plan: Why it Matters and Where to Start

    how do you know a business plan

  4. A Complete Guide On Small Business Plan Examples (2022)

    how do you know a business plan

  5. How to Write a Business Plan

    how do you know a business plan

  6. How To Write A Business Plan Template

    how do you know a business plan

VIDEO

  1. BUSINESS IDEA IN 2024 || Business Information and Idea || Business Plan discussion

  2. I know chemistry, and you know business

COMMENTS

  1. How To Write A Business Plan (2024 Guide)

    Describe Your Services or Products. The business plan should have a section that explains the services or products that you're offering. This is the part where you can also describe how they fit ...

  2. Write your business plan

    Include your mission statement, your product or service, and basic information about your company's leadership team, employees, and location. You should also include financial information and high-level growth plans if you plan to ask for financing.

  3. Business Plan: What it Is, How to Write One

    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...

  4. Business Plan: What It Is, What's Included, and How to Write One

    Vikki Velasquez What Is a Business Plan? A business plan is a document that details a company's goals and how it intends to achieve them. Business plans can be of benefit to both startups and...

  5. How to Write a Simple Business Plan

    A business plan is a document that communicates a company's goals and ambitions, along with the timeline, finances, and methods needed to achieve them. Additionally, it may include a mission statement and details about the specific products or services offered.

  6. Business Plan: Everything You Need to Know

    A business plan is a written description of your small business's future. It shows what you intend to do and the way you intend to do it. Business plans are inherently strategic. Your plan reveals how you're going to start and grow your business. Executive Summary This defines the marketing strategy.

  7. How To Write a Business Plan in 9 Steps (2024)

    blog | Guides How To Write a Business Plan in 9 Steps (2024) Business plans aren't just for entrepreneurs who need to secure funding—they can help you plan and evaluate new ideas or growth plans, too. Find out how to write a business plan and get the most out of the process in this comprehensive guide. by Desirae Odjick Dec 15, 2023

  8. Your Complete Guide to Writing a Business Plan: What You Need to Know

    Set more realistic goals Plan for financing Who is going to read your business plan (besides you)? A business plan is a great check-in tool for you as a business owner, but it's also a helpful reference point for other people.

  9. 10 steps to start your business

    Conduct market research. Market research will tell you if there's an opportunity to turn your idea into a successful business. It's a way to gather information about potential customers and businesses already operating in your area. Use that information to find a competitive advantage for your business. Learn more about conducting market ...

  10. How to Write a Business Plan (Tips, Templates, Examples)

    1. Executive Summary. While your executive summary is the first page of your business plan, it's the section you'll write last. That's because it summarizes your entire business plan into a succinct one-pager. Begin with an executive summary that introduces the reader to your business and gives them an overview of what's inside the ...

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

    Step 1: Write an Executive Summary As with any other piece of writing, this introduction to your plan is the hook. Why should the reader believe in your business? Sell your business and explain why it matters.

  12. How to Write a Business Plan: Guide + Examples

    The basics of business planning If you're reading this guide, then you already know why you need a business plan . You understand that planning helps you: Raise money Grow strategically Keep your business on the right track As you start to write your plan, it's useful to zoom out and remember what a business plan is.

  13. How to Start a Business: A Comprehensive Guide and Essential Steps

    Economic indicators: These include income, employment rate, and spending habits of potential customers. Location: Where are the target market and the business located? Market saturation: How...

  14. How To Write A Business Plan: A Comprehensive Guide

    1. Investors Are Short On Time If your chief goal is using your business plan to secure funding, then it means you intend on getting it in front of an investor. And if there's one thing investors are, it's busy. So keep this in mind throughout writing a business plan. Investors wade through hundreds of business plans a year.

  15. How To Write A Business Plan (2024 Guide)

    Describe your services or products. The business plan should have a section that explains the services or products that you're offering. This is the part where you can also describe how they fit ...

  16. How to Write a Business Plan in 7 Steps

    Step 1: Gather Your Information. Your first step is to get organized by gathering all your relevant business information. This will save you time completing the various sections of your business plan. At a minimum, you'll want to have the following handy: Business name, contact information, and address. Owner (s) names, contact information ...

  17. How To Start A Business In 11 Steps (2024 Guide)

    1. Determine Your Business Concept 2. Research Your Competitors and Market 3. Create Your Business Plan 4. Choose Your Business Structure 5. Register Your Business and Get Licenses 6. Get...

  18. 10-part business plan template and how write a business plan

    First, know your audience Start with a clear picture of the audience your plan will address. Is it a room full of angel investors? Your local bank's venture funding department? Or is it you, your leaders, and your employees?

  19. How to Write a Business Plan: 10 Tips + Best Practices

    6. Outline the Management and Organization. In this section of the business plan, you need to introduce your legal structure - the team, each member's role and responsibilities, and how you organize everyone to accomplish your business goals. Create a brief biography of each team member and highlight their experience.

  20. How to Write a Business Plan Complete Guide

    January 3, 2024 24 Min Read Welcome to the journey of entrepreneurship. You are here because you have a great business idea and want to know how to write a business plan to convert that idea into reality. Before you start writing your business plan, let's understand What is a business plan? Why do you need one in the first place?

  21. 24 of My Favorite Sample Business Plans & Examples For Your Inspiration

    This is a fantastic template for an existing business that's strategically shifting directions. If your company has been around for a while, and you're looking to improve your bottom line or revitalize your strategy, this is an excellent template to use and follow. 5. BPlan's Free Business Plan Template.

  22. 4 Signs Your Business Plan is a Success

    No. 1 - You can predict strong revenue months. Your business plan should determine your strong revenue months, while also finding opportunities for repeat business from customers. Likewise, you should always make an effort to ensure your company's current reportings exceed previous ones. Furthermore, the business plan should account for growth ...

  23. How to Buy an Existing Business

    All three of these approaches can be used to arrive at a fair price for a business, and the final price will always be the one that both the buyer and the seller agree on. 7. Secure capital to ...

  24. Are You in the Wrong Medicare Advantage Plan? What to Review Now

    Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does ...

  25. Trump's Cash Crunch

    Last week, when a civil court judge in New York ruled against Donald J. Trump, he imposed a set of penalties so severe that they could temporarily sever the former president from his real-estate ...

  26. Trump's civil fraud verdict appeal may hinge on 'no victims' defense

    On appeal to a five-judge panel of the New York Appellate Division - a mid-level state appeals court - Trump's lawyers are expected to reiterate arguments they made to no avail during the trial.

  27. What to know about insurance coverage for weight loss drugs and costs

    Weight loss drugs like Novo Nordisk's Wegovy and Eli Lilly's Zepbound cost over $1,000 a month, and right now, most employer health insurance doesn't cover it.

  28. Tax Time Guide 2024: What to know before completing a tax return

    IR-2024-45, Feb. 21, 2024. WASHINGTON — During the busiest time of the tax filing season, the Internal Revenue Service kicked off its 2024 Tax Time Guide series to help remind taxpayers of key items they'll need to file a 2023 tax return.

  29. 5 things to know when choosing your Texas electricity plan in 2024

    A longer-term plan offers more protection against price spikes, Kinchen said. To check if you're on a longer-term plan, see if your energy bill states a date on which your contract ends.