Writing a business plan is one of the most valuable things you can do for your business. Study after study proves that business planning significantly improves your chances of success by up to 30 percent. That’s because the planning process helps you think about all aspects of your business and how your business will operate and grow.
In fact, writing a business plan is one of the only free things you can do to greatly impact the success and growth of your business. Ready to write your own detailed business plan? Here’s everything you need (along with a free template) to create your plan.
Before you write a detailed business plan, start with a one-page business plan
Despite the benefit of planning, it’s easy to procrastinate writing a business plan. Most people would prefer to work hands-on in their business rather than think about business strategy. That’s why, to make things easier, we recommend you start with a simpler and shorter one-page business plan.
With a one-page plan, there’s no need to go into a lot of details or dive deep into financial projections—you just write down the fundamentals of your business and how it works. A one-page plan should cover:
- Value proposition
- Market need
- Your solution
- Target market
- Sales and marketing
- Budget and sales goals
- Team summary
- Key partners
- Funding needs
A one-page business plan is a great jumping-off point in the planning process. It’ll give you an overview of your business and help you quickly refine your ideas.
When do you need a more detailed business plan?
A one-page plan doesn’t always capture all the information that you need, however. If that’s the case, then it may be time to expand into a more detailed business plan.
There are several reasons for putting together a detailed business plan:
Flesh out the details
A one-page business plan is just a summary of your business. If you want to document additional details such as market research, marketing and sales strategies, or product direction—you should expand your plan into a longer, more detailed plan.
Build a more detailed financial forecast
A one-page plan only includes a summary of your financial projections. A detailed plan includes a full financial forecast, including a profit and loss statement, balance sheet, and cash flow forecast—one of the most important forecasts for any business.
Be prepared for lenders and investors
While investors might not ask to actually read your business plan, they will certainly ask detailed questions about your business. Planning is the only way to be well-prepared for these investor meetings.
Selling your business
If you’re selling your business, a detailed business plan presentation will be part of your sales kit. Potential buyers will want to know the details of how your business works, from marketing details to your product roadmap.
How to write a detailed business plan
When you do need to write a detailed business plan, focus on the parts most important to you and your business. If you plan on distributing your plan to outsiders, you should complete every section. But, if your plan is just for internal use, focus on the areas that will help you right now.
For example, if you’re struggling with marketing, spend time working on your target market section and marketing strategy and skip the sections covering the company organization.
Let’s go step-by-step through the sections you should include in your business plan:
1. Executive summary
Yes, the executive summary comes first in your plan, but you should write it last, once you know all the details of your business plan. It is truly just a summary of all the details in your plan, so be careful not to be too repetitive—just summarize and try to keep it to one or two pages at most. If you’ve already put together a one-page business plan, you can use that here instead of writing a new executive summary.
Your executive summary should be able to stand alone as a document because it’s often useful to share just the summary with potential investors. When they’re ready for more detail, they’ll ask for the full business plan.
For existing businesses, write the executive summary for your audience—whether it’s investors, business partners, or employees. Think about what your audience will want to know and just hit the highlights.
The key parts of your plan that you’ll want to highlight in your executive summary are:
- Your opportunity: This is a summary of what your business does, what problem it solves, and who your customers are. This is where you want readers to get excited about your business
- Your team: For investors, your business’s team is often even more important than what the business is. Briefly highlight why your team is uniquely qualified to build the business and make it successful.
- Financials: What are the highlights of your financial forecast? Summarize your sales goals, when you plan to be profitable, and how much money you need to get your business off the ground.
The “opportunity” section of your business plan is all about the products and services that you are creating. The goal is to explain why your business is exciting and the problems that it solves for people. You’ll want to cover:
A mission statement is a short summary of your overall goals. It’s a short summary of how you hope to improve customers’ lives with your products and services. It’s a summary of the aspirations of your business and the guiding north star for you and your team.
Problem & solution
Most successful businesses solve a problem for their customers. Their products and services make people’s lives easier or fill an unmet need in the marketplace. In this section, you’ll want to explain the problem that you solve, whom you solve it for, and what your solution is. This is where you go in-depth to describe what you do and how you improve the lives of your customers.
In the previous section, you summarized your target customer. Now you’ll want to describe them in much greater detail. You’ll want to cover things like your target market’s demographics (age, gender, location, etc.) and psychographics (hobbies and other behaviors). Ideally, you can also estimate the size of your target market so you know how many potential customers you might have.
Every business has competition, so don’t leave this section out. You’ll need to explain what other companies are doing to serve your customers or if your customers have other options for solving the problem you are solving. Explain how your approach is different and better than your competitors, whether it’s better features, better pricing, or a better location. Explain why a customer would come to you instead of going to another company.
This section of your business plan dives into how you’re going to accomplish your goals. While the Opportunity section discussed what you’re doing, you now need to explain the specifics of how you’re going to do it.
Marketing & sales
What marketing tactics do you plan to use to get the word out about your business? You’ll want to explain how you get customers to your door and what the sales process looks like. For businesses that have a sales force, explain how the sales team gets leads and what the process is like for closing a sale.
Depending on the type of business that you are starting, the operations section needs to be customized to meet your needs. If you are building a mail-order business you’ll want to cover how you source your products and how fulfillment will work.
If you’re building a manufacturing business, explain the manufacturing process and the facilities you need to use. This is where you’ll talk about how your business “works,” meaning, you should explain what day-to-day functions and processes are needed to make your business successful.
Milestones & metrics
Until now, your business plan has mostly discussed what you’re doing and how you’re going to do it. The milestones and metrics section is all about timing. Your plan should highlight key dates and goals that you intend to hit. You don’t need extensive project planning in this section, just key milestones that you want to hit and when you plan to hit them. You should also discuss key metrics: the numbers you will track to determine your success.
Use the Company section of your business plan to explain the overall structure of your business and the team behind it.
Describe your location, facilities, and anything else about your physical location that is relevant to your business. You’ll also want to explain the legal structure of your business—are you an S-corp, C-corp, or an LLC? What does company ownership look like?
Arguably one of the most important parts of your plan when seeking investment is the “Team” section. This should explain who you are and who else is helping you run the business. Focus on experience and qualifications for building the type of business that you want to build.
It’s OK if you don’t have a complete team yet. Just highlight the key roles that you need to fill and the type of person you hope to hire for each role.
5. Financial plan and projections
Your business plan has now covered the “what”, the “how”, and the “when” for your business. Now it’s time to talk about money. What revenue do you plan on bringing in and when? What kind of expenses will you have?
Your sales forecast should cover at least the first 12 months of your business and ideally contain educated guesses at the following two years in annual totals. Some investors and lenders might want to see a five-year forecast, but three years is usually enough.
You’ll want to cover sales, expenses, personnel costs, asset purchases, and more. You’ll end up with three key financial statements: An Income Statement (also called Profit and Loss), a Cash Flow Statement, and a Balance Sheet.
If you’re raising money for your business, the Financing section is where you describe how much you need. Whether you’re getting loans or investments, you should highlight what you need, and when you need it. Ideally, you’ll also want to summarize the specific ways that you’ll use the cash once you have it in hand.
The final section of your business plan is the appendix. Include detailed financial forecasts here as well as any other key documentation for your business. If you have product schematics, patent information, or any other details that aren’t appropriate for the main body of the plan but need to be included for reference.
Download a business plan template
Are you ready to write your business plan? Get started by downloading our free business plan template. With that, you will be well on your way to a better business strategy, with all of the necessary information expected in a more detailed plan.
If you want to elevate your ability to build a healthy, growing business, you may want to consider LivePlan.
It’s a product that makes planning easy and features step-by-step guidance that ensures you cover everything necessary while reducing the time spent on formatting and presenting. You’ll also gain access to financial forecasting tools that propel you through the process. Finally, it will transform your plan into a management tool that will help you easily compare your forecasts to your actual results.
Using your plan to grow your business
Your business plan isn’t just a document to attract investors or close a bank loan. It’s a tool that helps you better manage and grow your business. And you’ll get the most value from your business plan if you use it as part of a growth planning process.
With growth planning, you’ll easily create and execute your plan, track performance, identify opportunities and issues, and consistently revise your strategy. It’s a flexible process that encourages you to build a plan that fits your needs. So, whether you stick with a one-page plan or expand into a more detailed business plan—you’ll be ready to start growth planning.
Ready to try it for yourself? Learn how LivePlan can help you use this modern business planning method to write your plan and consistently grow your business.