How to Write a Business Plan (Step by Step)

Entrepreneurs who write formal plans are 16% more likely to achieve viability than those who don't (HBR, 2017). Not because the document is magic. Because the process forces you to answer hard questions before your bank account answers them for you.

Most guides overcomplicate this. The SBA version reads like a government form. Bank of America's guide is a pitch for their lending products. Here's the version that gets you from blank page to finished plan, with a template you can start filling in today.

Why You Need a Business Plan

70% of companies surviving past five years followed a strategic plan (Palo Alto Software, 2024). The ones that didn't? Most of them are the other 30%.

You need one if you're:

• Applying for a loan. Banks require a business plan for loan approval. No plan, no funding.
• Pitching investors. A business plan for a startup is table stakes. Show up without one and the meeting ends early.
• Starting something new. Creating a business plan forces you to validate the idea before you spend money on it.
• Running an existing business. Annual plan reviews catch problems while they're still fixable.

Even a simple business plan, one page, beats winging it.

Now let's pick your format before we get into the sections.

Traditional or Lean: Pick Your Business Plan Format

Two options. The right one depends on who's reading it.

This guide builds the traditional format. It covers everything a lean plan includes, plus the depth lenders and investors expect. If you're early stage, start lean and expand later.

Here's what goes in each section.

What Goes in Each Section

Full business plan outline below. Each section covers what to include, target length, and the mistakes that get plans rejected.

1. Executive Summary (Write It Last)

This is the section investors actually read. Everything else is backup. Write it after you've finished the other six sections, so you're condensing real work, not guessing.

What to include:

• Business name, location, founding date
• What you sell or what service you provide
• Mission statement (two sentences max)
• Target market and customer profile
• Your competitive advantage (why you win)
• Revenue model (how you make money)
• Financial highlights (projected revenue, break-even point)
• Funding request amount, if applicable

Length: 1-2 pages.

Write it for someone who'll only read this page. Most investors skim the executive summary first. If it doesn't land, they close the PDF.

Business plan example (executive summary):

Bright Clean Co. is a residential cleaning service in Austin, TX, serving dual-income households that need reliable weekly cleaning. Our subscription model creates predictable revenue. We project $420,000 in year-one revenue with a 22% net margin. We're seeking $75,000 in SBA loan funding to cover equipment, insurance, and first-year marketing.

2. Company Description: The "Why" Behind Your Business

This goes deeper than the summary. It answers why your business exists and why you're the one to build it.

What to include:

• Legal structure (LLC, S-Corp, sole proprietorship, partnership)
• Ownership details and founding story
• The problem your business solves
• Your target customers (specific, not "everyone")
• Competitive advantages you bring (expertise, location, technology, patents)
• Milestones achieved so far

Length: 1-2 pages.

The mistake here is vagueness. "Everyone" isn't a target market. "Homeowners aged 30-50 in Austin suburbs with household income above $100K" is a target market. Narrow beats broad in every investor conversation.

3. Market Analysis: Prove You've Done Your Homework

This is where most plans fall apart. Founders spend 80% of their time on the product and 20% studying the market. Flip that ratio for this section.

What to include:

• Industry overview. Market size, growth rate, major trends. Pull data from IBISWorld, Statista, or Census Bureau reports.
• Target market. Demographics, buying behavior, pain points, willingness to pay. How big is this segment in dollars?
• Competitive analysis. Name 3-5 direct competitors. What they charge. Where they're strong. Where they fall short.
• Your positioning. Price? Quality? Speed? Specialization? Pick one and own it.

Length: 2-4 pages.

Include a competitor comparison table. Visual clarity helps. Investors scan these first.

4. Organization and Management: Who's Running This?

Investors bet on teams, not ideas. This section shows who's behind the business and whether they can pull it off.

What to include:

• Organizational chart (even a simple one)
• Bios of key team members with relevant experience
• Roles and responsibilities
• Advisory board or mentors
• Hiring plan for the first 1-2 years

Length: 1-2 pages.

Here's what investors actually look for: relevant experience. Opening a restaurant? Have you worked in food service? Launching a tech startup? Does someone on the team write code? The team section is often more important than the idea section.

5. Products or Services: What You're Actually Selling

Describe what you sell clearly enough that a stranger could explain it back to you.

What to include:

• Description of each product or service
• Pricing strategy and how you set those prices
• How your offering benefits customers (benefits, not features)
• Product roadmap or development timeline
• Intellectual property (patents, trademarks, copyrights)
• Supplier or vendor relationships

Length: 1-2 pages.

The distinction that matters: "Our app uses AI to match cleaners to homes" is a feature. "Homeowners get a vetted cleaner within two hours of booking" is a benefit. Lead with benefits.

Marketing and sales come next. You know what you're selling. Now let's figure out how to sell it.

6. Marketing and Sales Strategy: How You'll Get Customers

Two questions. How will you attract customers? How will you close them? Answer both.

What to include:

• Marketing channels. SEO, paid ads, social media, direct mail, referrals, partnerships. Be specific about which channels you'll prioritize and why.
• Sales process. How does someone go from stranger to paying customer? Map the journey step by step.
• Pricing strategy. How your pricing compares to competitors and the reasoning behind it.
• Customer retention. Subscriptions, loyalty programs, follow-up sequences.
• Launch plan. What happens in the first 30, 60, and 90 days?

Length: 2-3 pages.

The mistake that shows up in 90% of plans: "we'll use social media." Which platforms? What content? How often? What budget? If you can't answer those, you don't have a marketing plan. You have a wish.

If you're building a marketing plan from scratch, these writing and marketing prompt templates can help you draft positioning, messaging, and campaign outlines faster.

7. Financial Projections: Prove the Numbers Work

This section gets the most scrutiny from lenders. If you're writing a business plan for a loan, expect your bank to spend more time here than anywhere else.

What to include:

• Income statement (P&L). Revenue minus expenses equals profit. Project monthly for Year 1, annually for Years 2-5.
• Cash flow statement. When money comes in vs. when it goes out. Profitable businesses still run out of cash.
• Balance sheet. Assets minus liabilities equals equity.
• Break-even analysis. How many units or customers before revenue covers costs.
• Key assumptions. Growth rate, conversion rate, churn rate. State them clearly so investors can challenge them.

Length: 3-5 pages (including tables and charts).

Be conservative. Investors have seen thousands of "hockey stick" projections. A reasonable forecast with stated assumptions beats an aggressive one every time.

For the financial sections, these tools can speed things up:

• Profit and Loss Statement Template for building your income statement
• Budget Template for mapping expense categories
• Financial Statement Analyzer if you have existing financials to review

8. Funding Request (If You Need Money)

Skip this if the plan is for internal use. Include it if you're pitching investors or applying for a loan.

What to include:

• Exact dollar amount you need
• How you'll use the funds (equipment, marketing, hiring, working capital)
• Whether you want debt (loan) or equity (ownership share)
• Repayment plan or expected investor return
• Timeline for when you need the money

Length: 1 page.

Precision matters here. "$150,000 for marketing" is weak. "$150,000: $80,000 for paid acquisition over 12 months, $40,000 for a sales hire, $30,000 for website development" is strong. Investors want to see you've thought through every dollar.

9. Appendix (Optional, But Shows Thoroughness)

Supporting documents that back up your claims. Not everyone reads it, but having it ready shows you've done the work.

What to include:

• Founder resumes and key team bios
• Product photos or mockups
• Letters of intent or early customer commitments
• Lease agreements or location details
• Permits, licenses, legal documents
• Detailed financial model spreadsheets
• Market research data sources

That's every section. Let's make this easier to start.

One-Page Business Plan Template

Don't stare at a blank document. Copy this business plan template, fill in each bullet, and expand from there.

BUSINESS PLAN: [Your Business Name]

1. Executive Summary

• What does the business do?
• Who does it serve?
• How does it make money?
• Projected Year 1 revenue?
• Funding needed (if any)?

2. Company Description

• Legal structure:
• Location:
• Problem you solve:
• Target customer:
• Competitive advantage:

3. Market Analysis

• Industry size and growth:
• Target market size:
• Top 3 competitors and how you differ:

4. Organization

• Founder(s) and experience:
• Key hires needed:
• Organizational structure:

5. Products/Services

• Description:
• Pricing:
• Key benefits:

6. Marketing and Sales

• Primary marketing channels:
• Sales process:
• Launch plan (first 90 days):

7. Financial Projections

• Year 1 revenue target:
• Monthly burn rate:
• Break-even point:
• Key assumptions:

8. Funding Request (if applicable)

• Amount needed:
• Use of funds:
• Repayment or return timeline:

Fill in rough answers first. Even incomplete answers beat a blank page. The first draft is never the final draft.

Template done. Here's the process for actually writing the full version.

How to Write a Business Plan in 8 Steps

You know what goes in each section. Here's the order that actually works.

Step 1: Research first. Spend 2-3 days gathering data. Industry reports, competitor websites, customer interviews. Writing goes 3x faster when you have the facts ready.

Step 2: Start with what you know. Most guides say "write the executive summary first." Don't. Start with products/services or company description. You know your own business. Build momentum with the easy sections.

Step 3: Write the market analysis. This forces you to look outward. Most founders spend too much time staring at their own product. This section flips that.

Step 4: Build financial projections. Start with revenue assumptions. How many customers can you realistically get in Month 1? Month 6? Month 12? Work backward from there.

Step 5: Draft the marketing and sales plan. Now that you know your numbers, figure out how you'll hit them. Match channels to budgets.

Step 6: Write the executive summary. Pull the best lines from every other section. Condense into 1-2 pages. This should take 30 minutes, not three hours.

Step 7: Edit ruthlessly. Cut jargon. Cut repetition. Cut anything that doesn't help the reader say "yes." Read it aloud. If a sentence sounds stiff, rewrite it.

Step 8: Get outside feedback. Show it to someone who doesn't know your industry. If they understand the plan, you're in good shape. If they have questions, those are gaps in your writing.

The Business Plan Generator can handle steps 2-6 as a structured first draft. You plug in your business details, it produces every section. Then you focus your time on refining strategy, validating numbers, and making the hard decisions only a founder can make.

5 Mistakes That Kill Business Plans

1. Writing in a vacuum. A plan built on assumptions alone is fiction. Talk to 10 potential customers before you write. Ten conversations will change your plan more than ten hours of desk research.

2. Hockey-stick financial projections. Projecting $1M in Year 1 with no marketing budget and no sales team isn't ambitious. It's not credible. Investors have seen this a thousand times. Be honest about the ramp-up.

3. "We have no competitors." Writing that tells investors you haven't done your homework. Every business has competition, even if it's the status quo (customers doing nothing). Name your competitors. Explain how you're different.

4. Too long. A 50-page plan doesn't impress. It exhausts. Strong business plans land between 15 and 25 pages. If you need more, put extras in the appendix.

5. Writing it and filing it. A business plan should be a living document. Review it quarterly. Update financial projections with real data. Adjust your marketing strategy based on what's working. The SBA recommends reviewing at every major milestone (SBA.gov).

Frequently Asked Questions

What are the main sections of a business plan?

Executive Summary, Company Description, Market Analysis, Organization and Management, Products or Services, Marketing and Sales Strategy, and Financial Projections. Add a Funding Request if you're seeking investment or a loan, and an Appendix for supporting documents.

How do I write a simple business plan?

Use the one-page template above. Answer each question in 1-3 sentences. You'll have a working simple business plan in under an hour. Expand sections later as you gather data and refine your strategy.

What are the 3 C's of a business plan?

Company, Customers, and Competitors. Your plan should clearly describe what your company does, who your target customers are, and how you stack up against competitors. The market analysis section covers all three.

How long should a business plan be?

15-25 pages for a traditional business plan. One page for a lean startup plan. The right length depends on your audience. Banks and investors expect detail. Internal plans can be shorter. Quality beats length.

Can I use AI to write a business plan?

Yes, and you should. AI tools can draft sections, build financial models, and research competitors. They work best as a starting point, not a finished product. You still need to validate numbers and add the details only you know about your specific market.

The Business Plan Generator creates a structured first draft covering every section. Plug in your business details, get a starting point in minutes, then spend your time on what matters: the strategy.