business plan chapter 1

Business Plan Development Guide

(6 reviews)

Lee Swanson, University of Saskatchewan

Copyright Year: 2017

Publisher: OPENPRESS.USASK.CA

Language: English

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Reviewed by Kevin Heupel, Affiliate Faculty, Metropolitan State University of Denver on 3/4/20

The text does a good job of providing a general outline about writing and developing a written business plan. All of the important steps and components are included. However, the text is light on details, examples, and rationale for each element... read more

Comprehensiveness rating: 3 see less

The text does a good job of providing a general outline about writing and developing a written business plan. All of the important steps and components are included. However, the text is light on details, examples, and rationale for each element of the business plan. Some examples from actual business plans would be helpful.

Content Accuracy rating: 4

For the most part, the content is accurate. The content covers all important aspects of drafting a business plan. I thought the industry analysis could use more information about collecting primary and secondary sources; instead, this information was referenced in the marketing plan section.

Relevance/Longevity rating: 5

Most of the content relies on cites as far back as 2006; however, when it comes to developing and writing a business plan nothing has changed. Thus, the content is current and there is no concern about it becoming obsolete in the near future.

Clarity rating: 4

The text is clear. There are no difficult terms used and the writing is simple. The text uses a lot of bullet points though, which gets tedious to read for a few pages.

Consistency rating: 5

The text does a good job of maintaining consistency in terms of framework and terminology. The text is organized where it's easy to find the information you want in a quick manner.

Modularity rating: 3

The text has a lot of bullet points and the paragraphs are dense. However, the use of subheading is excellent.

Organization/Structure/Flow rating: 5

The book is organized as if you're writing a business plan from start to finish, which is helpful as a practical guide.

Interface rating: 5

There are no navigation problems, distortion of images/charts, or any other display features that may distract or confuse the reader.

Grammatical Errors rating: 5

The text is free of grammatical errors. The sentence structure is simple with many bullet points, which helps to avoid any grammatical issues.

Cultural Relevance rating: 5

This book was written by a Canadian professor and provides references to Canadian sources. However, the information in this text can be used for U.S. schools.

This book is very short and provides a good, general overview about the process of creating and writing a business plan. It won't help a reader if he/she is confused about a certain part of the business plan. The reader will have to find another source, such as "Preparing Effective Business Plans" by Bruce Barringer, Ph.D. The book provides links to good resources and a finished business plan that the reader can reference. I would recommend the book for undergraduate courses.

Reviewed by Kenneth Lacho, Professor of Management, The University of New Orleans on 6/19/18

1. Text is relevant to Canada. Not the United States 2. Needs to cover resources available to entrepreneur, e.g., federal government agencies, trade associations, chambers of commerce, economic development agencies. 3. Discuss local economy or... read more

1. Text is relevant to Canada. Not the United States 2. Needs to cover resources available to entrepreneur, e.g., federal government agencies, trade associations, chambers of commerce, economic development agencies. 3. Discuss local economy or economic area relevant to this proposed business. 4. Business model ok as a guide. 5. Suggested mission statement to cover: product/business, target customer, geographical area covered. 6. Need detailed promotion plan, e.g., personal selling, advertising, sales promotion, networking publicity, and social media. 7. How do you find the target market? 8. Chapter 6 too much detail on debt and equity financing. 9. Discuss how to find sources of financing, e.g., angels. 10. Expand coverage of bootstring, crowdfunding. 11. Chapter 4 – good checklist. 12. Chapter 3 - overlaps. 13. Chapter 7 – 3 pages of executive summary – double or single spaced typing. Number all tables, graphs. 14. Some references out-of-date, mostly academic. Bring in trade magazines such as Entrepreneur.

Content Accuracy rating: 5

In my opinion, the content is accurate and error free.

Relevance/Longevity rating: 4

The material is relevant to writing a business plan. I wonder if the Porter, SWOT VRIO, etc. material is too high level for students who may not be seniors or have non-business degrees (e.g., liberal arts). Porter has been around for a while and does have longevity. The author has to be more alert to changes in promotion, e.g., social media and sources of financing, e.g., crowdfunding.

Clarity rating: 3

As noted in No. 9, the tone of the writing is too academic, thus making the material difficult to understand. Paragraphs are too long. Need to define: Porter, TOWS Matrix, VRIO, PESTEL. A student less from a senior or a non-business major would not be familiar with these terms.

Consistency rating: 4

The text is internally consistent. The model approach helps keep the process consistent.

Modularity rating: 4

The process of developing a business plan is divided into blocks which are parts of the business plan. Paragraphs tend to be too long in some spots.

Organization/Structure/Flow rating: 4

The topics are presented in a logical step-wise flow. The language style is too academic in parts, paragraphs too long. Leaves out the citations. Provides excellent check lists.

There are no display features which confuse the reader.

Grammatical Errors rating: 4

The text has no grammatical errors. On the other hand, I found the writing to be too academic in nature. Some paragraphs are too long. The material is more like an academic conference paper or journal submission. Academic citations references are not needed. The material is not exciting to read.

The text is culturally neutral. There are no examples which are inclusive of a variety of races, ethnicities, and backgrounds.

This book best for a graduate class.

Reviewed by Louis Bruneau, Part Time Faculty, Portland Community College on 6/19/18

The text provides appropriate discussion and illustration of all major concepts and useful references to source and resource materials. read more

Comprehensiveness rating: 5 see less

The text provides appropriate discussion and illustration of all major concepts and useful references to source and resource materials.

Contents of the book were accurate, although it could have benefited from editing/proofreading; there was no evidence of bias. As to editing/proofreading, a couple of examples: A. “Figure 1 – Business Plan… “ is shown at the top of the page following the diagram vs. the bottom of the page the diagram is on. (There are other problems with what is placed on each page.) B. First paragraph under heading “Essential Initial Research” there is reference to pages 21 to 30 though page numbering is missing from the book. (Page numbers are used in the Table of Contents.)

The book is current in that business planning has been stable for sometime. The references and resources will age in time, but are limited and look easy to update.

Clarity rating: 5

The book is written in a straightforward way, technical terms that needed explanations got them, jargon was avoided and generally it was an easy read.

The text is internally consistent in terms of terminology and framework.

Modularity rating: 5

The book lends itself to a multi-week course. A chapter could be presented and students could work on that stage of Plan development. It could also be pre-meeting reading for a workshop presentation. Reorganizing the book would be inappropriate.

The topics in the text are presented in a logical, clear fashion.

Generally, the book is free of interface problems. The financial tables in the Sample Plan were turned 90° to maintain legibility. One potential problem was with Figure 6 – Business Model Canvas. The print within the cells was too small to read; the author mitigated the problem by presenting the information, following Figure 6, in the type font of the text.

I found no grammatical errors.

The text is not culturally insensitive or offensive in any way.

I require a business plan in a course I teach; for most of the students the assignment is a course project that they do not intend to pursue in real life. I shared the book with five students that intended to develop an actual start-up business; three of them found it helpful while the other two decided not to do that much work on their plans. If I were planning a start-up, I would use/follow the book.

Reviewed by Todd Johnson, Faculty of Business, North Hennepin Community College on 5/21/18

The text is a thorough overview of all elements of a business plan. read more

Comprehensiveness rating: 4 see less

The text is a thorough overview of all elements of a business plan.

The content is accurate and seems to lack bias.

Content seems relevant and useful . It does not help an entrepreneur generate ideas, and is very light on crowdfunding and other novel funding source content. It is more traditional. This can be easily updated in future versions, however. "Social Media" appears once in the book, as does "Crowd Funding".

The book is comprehensive, but perhaps not written in the most lucid, accessible prose. I am not sure any college student could pick this up and just read and learn. It would be best used as a "teach along guide" for students to process with an instructor.

The text seems consistent. The author does a nice job of consistently staying on task and using bullets and brevity.

Here I am not so certain. The table of contents is not a good guide for this book. It does make the book look nicely laid out, but there is a lot of complexity within these sections. I read it uncertain that it was well organized. Yes there are many good bits of information, however it is not as if I could spend time on one swathe of text at a time. I would need to go back and forth throughout the text.

Organization/Structure/Flow rating: 2

Similar to the above. I did not like the flow and organization of this. An editor would help things be in a more logical order.

Interface rating: 2

The interface is just OK. It is not an attractice interface, as it presents text in a very dense manner. The images and charts are hard to follow.

I did not find any grammatical errors.

Cultural Relevance rating: 4

I a not certain of the origins of Saskatchewan, but I do feel this is a different read. It is more formal and dense than it has to be. This would be a difficult read for my students. I do not feel it is insensitive in any way, or offensive in any way.

I would not adopt this book if given the chance. It is too dense, and not organized very well, even though the information is very good. The density and lack of modularity are barriers to understanding what is obviously very good information.

Reviewed by Mariana Mitova, Lecturer, Bowling Green State University on 2/1/18

Though this textbook has a prescriptive nature, it is quite comprehensive. The author strikes a good balance between presenting concepts in a concise way and providing enough information to explain them. Many every-day examples and live links to... read more

Though this textbook has a prescriptive nature, it is quite comprehensive. The author strikes a good balance between presenting concepts in a concise way and providing enough information to explain them. Many every-day examples and live links to other resources add to the completeness of the textbook.

Content seems accurate.

Since the content is somewhat conceptual, the text will not become obsolete quickly. In addition, the author seems to be updating and editing content often hence the relevance to current developments is on target.

The text is very clear, written in clear and straight-to-the point language.

The organization of content is consistent throughout the entire text.

The textbook is organized by chapters, beginning with overview of the model used and followed by chapters for each concept within the model. Nicely done.

The flow is clear, logical and easy to follow.

Overall, images, links, and text are well organized. Some headlines were misaligned but still easy to follow.

No concerns for grammar.

No concerns for cultural irrelevance.

Reviewed by Darlene Weibye, Cosmetology Instructor, Minnesota State Community and Technical College on 2/1/18

The text is comprehensive and covers the information needed to develop a business plan. The book provides all the means necessary in business planning. read more

The text is comprehensive and covers the information needed to develop a business plan. The book provides all the means necessary in business planning.

The text was accurate, and error-free. I did not find the book to be biased.

The content is up-to-date. I am reviewing the book in 2017, the same year the book was published.

The content was very clear. A business plan sample included operation timelines, start up costs, and all relevant material in starting a business.

The book is very consistent and is well organized.

The book has a table of contents and is broken down into specific chapters. The chapters are not divided into sub topics. I do not feel it is necessary for sub topics because the chapters are brief and to the point.

There is a great flow from chapter to chapter. One topic clearly leads into the next without repeating.

The table of contents has direct links to each chapter. The appearance of the chapters are easy to read and the charts are very beneficial.

Does not appear to have any grammatical errors.

The text is not culturally insensitive or offensive.

I am incorporating some of the text into the salon business course. Very well written book.

Table of Contents

Introduction

• Chapter 1 – Developing a Business Plan
• Chapter 2 – Essential Initial Research
• Chapter 3 – Business Models
• Chapter 4 – Initial Business Plan Draft
• Chapter 5 – Making the Business Plan Realistic
• Chapter 6 – Making the Plan Appeal to Stakeholders and Desirable to the Entrepreneur
• Chapter 7 – Finishing the Business Plan
• Chapter 8 – Business Plan Pitches

References Appendix A – Business Plan Development Checklist and Project Planner Appendix B – Fashion Importers Inc. Business Plan Business Plan Excel Template

Ancillary Material

About the book.

This textbook and its accompanying spreadsheet templates were designed with and for students wanting a practical and easy-to-follow guide for developing a business plan. It follows a unique format that both explains what to do and demonstrates how to do it.

About the Contributors

Dr. Lee Swanson is an Associate Professor of Management and Marketing at the Edwards School of Business at the University of Saskatchewan. His research focuses on entrepreneurship, social entrepreneurship, Aboriginal entrepreneurship, community capacity-building through entrepreneurship, and institutional-stakeholder engagement. Dr. Swanson’s current research is funded through a Social Sciences Humanities Research Council grant and focuses on social and economic capacity building in Northern Saskatchewan and Northern Scandinavia. He is also actively studying Aboriginal community partnerships with resource based companies, entrepreneurship centres at universities, community-based entrepreneurship, and entrepreneurial attitudes and intentions. He teaches upper-year and MBA entrepreneurship classes and conducts seminars on business planning and business development.

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

Noah Parsons

24 min. read

Updated July 29, 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

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• 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: 10 AI prompts you need to write a 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 to include in a business plan is sometimes not quite enough. If you’re struggling to get started or need additional guidance, it may be worth using a business plan template. 

There are plenty of great options available (we’ve rounded up our 8 favorites to streamline your search).

But, if you’re looking for a free downloadable business plan template , you can get one right now; 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

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.

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.

Table of Contents

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

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How to Write a Business Plan: The Ultimate Guide in 2024

• By Luisa Zhou
• Building a Business
• Updated: April 14, 2024

On this page

In this ultimate guide, you learn how to write a business plan you’ll actually use. 

You’ll learn:

• A simple process to create a stand-out business plan.
• The most important elements of a business plan.
• How to research your business plan. 
• How to write your business plan.
• Templates, examples, and much more. 

If you want to make sure that you write a great business plan, this guide will give you a lot of value. Read on!

Chapter 1: Business plan fundamentals

Let’s start by establishing what a business plan is. 

In this chapter, you get a business plan outline. 

You also learn how to write a great business plan, and much more. 

Let’s dive in.

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Business plan outline

Introduction.

• Executive Summary
• Company Description
• Product/Service Description 

Value Proposition

• Market Analysis 

Business Model 

• Sales Strategy 
• Growth Plan
• Management & Staffing
• Financial Summary 

What is a business plan? 

A business plan is a written document that outlines your business goals. It explains your business and how you’re going to reach those goals. 

You might need a business plan for obtaining a loan, receiving funding, or applying for a grant. 

But other than that, a business plan is mainly something you create as a roadmap for yourself. It gives you clarity, but no one else will probably see or use it. 

The thing is: 

You can use your business plan to crystallize your thinking and confirm your idea. Basically, to get started in the best way possible. 

That’s why I recommend that you keep it short. It is important to plan for your business. But it’s much more important to get out there and start building your business. 

This guide helps to make writing a business plan a simple process.

Steps to writing a good business plan

A great business plan consists of a few things:

• The language is clear and concise. If you’re writing your business plan for yourself, a few pages (2-5) is more than enough. If you’re writing it for a more official purpose, 15-20 pages will usually do. 
• Your audience’s needs and wants . Your business is built to address your customers’ problems, so your business plan should be written from your audience’s perspective. 
• Research. Your business plan should build on research and not your own assumptions. 

Chapter 2: How to do market research for your business

In this chapter, we’ll look at the research you need for your business plan.

You see, you need to understand your market to write a great business plan.

And for this, you need to do market research. 

Let’s find out how you do it. 

Why do you need market research? 

A lot of failed businesses have one thing in common.

They didn’t research their market. 

Market research essentially means that you research your audience of potential buyers. You get to understand why they want your product or service. 

Plus, if you’re just starting your business, market research can quickly help you get your first clients. That’s because during your research, people might get interested in working with you.

Most importantly: It helps make your business plan incredibly valuable, so that you’re one step closer to a successful business.

How to do market research

There are a few ways to do market research.

The first one is online research.

Look for information on your service or product and audience. 

First, look for information on pricing and positioning.

What are similar products or services priced at? Who is their target audience? How do they speak about their product?

And look at what potential audiences are saying about those products and services. 

For example, Amazon is a great resource because there are so many books and products with reviews by people who might be in your target audience.

Another site with plenty of reviews is the software review site Capterra . 

Also social media groups like Reddit and Facebook groups include a lot of information on what products and services people want to pay for. 

For example, I started my first online business, an advertising consulting business because I noticed that business owners were talking about this need in Facebook groups.

The next step is to interview people.

For example, you can ask people in social media groups to jump on a quick call with you. In exchange, you offer a free consulting call or similar. 

But what should you ask your interview subjects? 

Check out this video where I talk through what you should be looking for:

Other than that, the questions you need to ask are:

• “What is your biggest challenge related to ___?” 
• “What is your goal for ___?”
• “Would you be willing to pay for ___? How much would you be willing to pay to make this problem go away?”

When you’ve talked to 3-5 people, you’re ready to start writing your business plan.

Chapter 3: How to write a business plan

In this chapter, we’ll look at how to write a business plan.

Again, your business plan shouldn’t be too complicated. (That’s unless you need it for a specific reason, like getting funding. In that case, your business plan should follow the funding source’s requirements.)

Here’s how to write a simple business plan.

Executive summary

An executive summary is a summary of the rest of your plan. That’s why you can leave writing it to the end. Your executive summary should be one page, at most. It includes a high-level overview of:

• Your business concept. What does your business do?
• Product or service. What do you sell? 
• Business goals. What are your long-term goals? 
• Market. What does your market look like? Your competitors? 
• Customers. Who do you sell to? 
• Value proposition. How is your business different from what already exists?
• Scope of business. How big can your business get? 
• Business model. What does your marketing look like? Your revenue model? 

Company description

This section is all about understanding what your business is.

These elements should be included in your company description: 

• Your business structure (Sole proprietorship, limited partnership, incorporates company, or general partnership) 
• Your industry 
• What you’re selling
• Your long-term plan (Do you plan to keep your business or sell it?)
• Your vision, mission, and values (Why does your business operate?) 
• Short-term goals (the next year) and long-term goals (the next 1-5 years) 

Product or service description

Is your product or service ready for the market now? For example, if you sell products in an online store, you first need to develop your product and build an inventory. 

But if your business is service-based, your service is ready now. This includes coaching and consulting businesses. 

Also, explain your pricing strategy. How much will your products or services cost? What pricing model do you use (monthly billing, per-product price, or something else)? 

In this video, I give my best pricing recommendations:

And finally, does your product or service come with any intellectual property considerations? Is there a risk that you might be infringing on someone’s IP rights?

A physical product might come with these types of considerations. 

On the other hand, a service-based business doesn’t come with many potential IP rights violations because you’re selling a more generic service. 

(That’s not to say coaching program names and similar can’t be protected, even if the service, like health coaching, can’t. Note that I’m not a lawyer and these tips aren’t meant as legal advice.)

Market Analysis

Your market is crucial for your business success. By choosing a market with plenty of customers who need your product or service, you’re setting yourself up for success.

Remember how we talked about research in the last chapter? 

This is where you’ll use that research to understand why you customers want to buy from you.

Target market

Your customers are at the core of your business. 

Most customer persona guides tell you to list your customers’ demographics:

• Where they live
• Income 
• Interests 

But by now, you know that customer research is so much more than that. Use your customer research (which we looked at in Chapter 3) to dive deeper and understand the psychographics of your target audience. 

What language do they use to describe their needs and goals? For example, a 60-year old executive will talk very differently about her health goals compared to a 25-year old. 

Ask yourself (and answer these questions with your market research):

• What is the problem my customer wants to solve? 
• Why can’t my customer solve this today? 
• What’s the measurable outcome my customer wants to achieve? 

Industry 

How big is your potential market? Check for trends and trajectories in your industry. 

For example, as the boomer generation continues to retire, industries for retirees will continue to grow. If you serve that market, you should mention this in your business plan so you can take that into account when thinking about your business’s long-term goals.

You can get this information from:

• News outlets.
• Governmental statistics offices.
• Academic research.

SWOT analysis

With a SWOT analysis, you analyze your strengths, weaknesses, opportunities, and threats. 

Most importantly, remember that you never have perfect information. You will need to operate with some assumptions. So ask yourself what assumptions you have that, if proven wrong, would cause this business to fail.

Take these into consideration in your SWOT analysis.

Competition

The next step is to look more closely at your competition.

Research your competition with Harvard professor Michael Porter’s Five Forces Framework in mind. This model builds on five forces to determine the competitive intensity and the attractiveness of an industry in terms of profitability. 

An industry with intense competition won’t have incredibly profitable businesses. But industries with mild competition (most coaching and consulting industries) have room for high returns. 

The five forces are:

• Threat of new entry. How likely is it that new businesses will enter your market? For example, airlines don’t see a huge number of competitors because airlines need money and infrastructure to get started. But people will start online businesses (physical products, coaching, or consulting) much more easily. 
• Buyer power. What buying power do your customers have? If you sell coaching to executives, you will likely have customers with better buying power than if you sell coaching to unemployed people.
• Supplier power. How many suppliers are there on the market? If there aren’t that many, you might face high prices, which eat up your profitability. 
• Threat of substitution. How likely is it that your product or service will get substituted by a low-cost, better alternative? Generic products will easily get substituted, but businesses that build a strong brand won’t. For example, think Apple iPhones. 
• Competitive rivalry. How can you distinguish yourself from your competition, so that you don’t have to directly compete with anyone? You can do this by serving a specific group of customers, distinguishing yourself from the competition with marketing, or establishing technological leadership.

Value proposition

One of the main reasons 20% of small businesses fail within their first year is because they don’t understand their value proposition. Make sure you get this right in your business plan. 

The thing is:

Your value proposition helps you understand how you’re going to stand out. 

You can build your value proposition on Michael Porter’s Generic Competitive Strategies .

These include three different factors:

• Cost Leadership. You become the low-cost business in your industry. This usually requires scale, proprietary technology, access to raw material, or something else. For example, think about how Amazon uses technology, infrastructure, and scale to drive down prices. 
• Differentiation. Your business stands out by being unique. You position yourself to meet customers’ needs. This means that you can ask for a premium price for your services. For example, my client David is a health coach who helps people lose weight with the help of herbs, a very unique way to position a health coaching business.
• Cost Focus or Differentiation Focus. Your business focuses on a specific niche and differentiates itself either by serving a specific target market need or a target market cost behavior. 

For example, I started my current business when I realized that there wasn’t a great product for employees who wanted to quit their jobs and become entrepreneurs. I used differentiation focus to target a specific segment within a competitive market (business coaching). 

This chart should help you answer two questions: 

• Who is your target customer? 
• How are you different from the competition? 

Business Model

Your operations plan outlines the workflows you’ll need to implement to make your business work. In terms of a physical product, this includes suppliers, logistics, inventory, and more. You’ll also need a contingency plan in case anything goes wrong.

In terms of a service-based business, you don’t need to put too much energy on your operations because all you need is yourself and your laptop. 

Your marketing plan shows how you’re going to spread the word about your business now and in the future. Focus on where your clients are hanging out, whether that’s on Instagram, Facebook, or somewhere else. 

Your marketing strategy should answer these questions:

• What is the pricing of your product or service? Why did you choose this price?
• How do you promote your business?
• What are you selling and how is that different from other existing products and services?
• Where will you sell your products and services?

Sales strategy

Next, share your sales strategy. This is the process you undergo when you sell to your customers.

It covers all activities that lead up to a sale. Your sales cycle could look something like this:

Facebook ad → Lead subscribes to your email list → Lead reads your emails → Lead buys from you

Growth plan

What will your business growth look like? How will you make it happen? Your growth plan should be specific and realistic. Define the exact steps you’ll take to grow your business.

Management & staffing

What does the management of your business look like? If you’re starting a business on your own, you’re the CEO and you don’t need to include anyone else here.

Will your business employ a team? Or at what point will you start hiring people, if at all? 

If you’re unsure, I share advice on hiring in this video: 

Financial summary

Your financial plan builds on your income statement, balance sheet, and cash-flow statement. 

Income statement: Where do you get your revenue and what are your expenses? With this information, you can make a profit-and-loss calculation. 

If you haven’t made any sales yet, you can work with estimates. Remember that people are less likely to buy in the beginning when you don’t have testimonials and you’re new to sales. That’s why I recommend estimating that one out of every ten sales calls will convert. 

Cash-flow statement: Your cash-flow statement is just like your income statement, but it also takes into account when revenues are collected and expenses paid. If you get more money in than is going out, you have a positive cash-flow statement. 

Balance sheet: List your business assets or what you own (if you have any) and what you owe. By deducting liabilities from assets you get your business’s shareholder equity. 

Also ask yourself: What’s the biggest risk to your financial viability? 

For example, let’s say you’re a health coach who teams up with a local gym to provide their members with health coaching. Your biggest financial risk (assuming this was your only client acquisition strategy) would be that the gym went bankrupt. 

Knowing your risks upfront means that you can prepare for them. And by including these in your business plan, you are clear on your risks and your planning for those risks. 

Need a way to set up your financial plan for your business plan? Copy this simple financial tracker that I created for you and calculate your own business income.

Chapter 4: Business plan template

This chapter is all about using what you’ve learned so far. 

First, you get a fillable business plan template.

And second, we’ll look at a business plan example.

Let’s dive right in.

Business plan template 

The simplest business plan format? A Business Model Canvas.

The Business Model Canvas was first developed by Alexander Osterwalder in 2005. This is a visual chart of your business plan that includes nine ‘building blocks’. You can either use it as your business plan or use it to structure a longer business plan. Either way, use what you’ve learned so far in this guide to fill in the sheet. 

Start by filling in this PDF to answer all the business plan elements we’ve looked at so far. 

Then, use your answers to fill in your own Business Model Canvas. 

Here is a fillable PDF Business Model Canvas you can use, including instructions on how to use it. 

Business plan example

Not sure exactly what your Business Model Canvas should look like?

Here’s a simple business plan example to help you get started. 

Chapter 5: Helpful resources

Starting a business is so much more than creating a business plan.

A business plan will help you put your idea on paper.

But that’s when the real work kicks in.

These resources will help you write your business plan and start your business. 

Let’s take a look.

Start a business resources 

“ How to Start an Online Business ” 

“ Start Your Own Business ” – USAGov

Shopify’s Business Name Generator 

“ Talking to Humans: Success Starts With Understanding Your Customers ” – Giff Constable

“ Your Strategy Should Be a Hypothesis You Constantly Adjust ” – Harvard Business Review

“ The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It ”, Michael E. Gerber

Legal resources to start a business 

“ Register Your Business ” – US Small Business Administration

“ Starting a Business: License and Permit Checklist ” – LegalZoom

“ Business Structures ” – IRS

Funding resources  

“ Fund Your Business ” – US Small Business Administration 

“ Government Small Business Loans ” – SBA.com 

Financial resources

“ Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine ”, Mike Michalowicz

“ Business Planning & Financial Statements Template Gallery ” – SCORE

Marketing and sales resources

“ Business Marketing Strategies ”

“ 5 Tips to Using Social Media for Your Business Without Being Salesy ”

“ How I Learned to Sell (Strategies for Business) ” (YouTube)

What’s next?

There you have it. Now you know how to write a business plan. 

However, there are far more things that go into building a successful online business.

And not just any business, but a business that lets you quit your day job, earn a great income, and build a flexible life.

I teach the exact steps you need to take to build such a business in this PDF on starting a six-figure online business.

Get it here:

About Luisa Zhou

Luisa Zhou has helped thousands of students build and scale their own profitable online Freedom Business. Fun Fact: She used to work as an engineer for the Space Station and holds a B.S.E. from Princeton. Click here to learn more about Luisa.

Hope you enjoy this blog post.

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You don’t have to write an entire plan if you don’t plan to present it to a board of trustees. You can always start with a business model canvas.

Thank you, thank you so much. So simple and easy to understand and work with. I appreciate you so much. Thank you!

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How to Write a Business Plan (Plus Examples & Templates)

Have you ever wondered how to write a business plan step by step? Mike Andes, told us: 

This guide will help you write a business plan to impress investors.

Throughout this process, we’ll get information from Mike Andes, who started Augusta Lawn Care Services when he was 12 and turned it into a franchise with over 90 locations. He has gone on to help others learn how to write business plans and start businesses.  He knows a thing or two about writing  business plans!

We’ll start by discussing the definition of a business plan. Then we’ll discuss how to come up with the idea, how to do the market research, and then the important elements in the business plan format. Keep reading to start your journey!

What Is a Business Plan?

A business plan is simply a road map of what you are trying to achieve with your business and how you will go about achieving it. It should cover all elements of your business including: 

• Finding customers
• Plans for developing a team
•  Competition
• Legal structures
• Key milestones you are pursuing

If you aren’t quite ready to create a business plan, consider starting by reading our business startup guide .

Get a Business Idea

Before you can write a business plan, you have to have a business idea. You may see a problem that needs to be solved and have an idea how to solve it, or you might start by evaluating your interests and skills. 

Mike told us, “The three things I suggest asking yourself when thinking about starting a business are:

• What am I good at?
• What would I enjoy doing?
• What can I get paid for?”

If all three of these questions don’t lead to at least one common answer, it will probably be a much harder road to success. Either there is not much market for it, you won’t be good at it, or you won’t enjoy doing it. 

As Mike told us, “There’s enough stress starting and running a business that if you don’t like it or aren’t good at it, it’s hard to succeed.”

If you’d like to hear more about Mike’s approach to starting a business, check out our YouTube video

Conduct Market Analysis

Market analysis is focused on establishing if there is a target market for your products and services, how large the target market is, and identifying the demographics of people or businesses that would be interested in the product or service. The goal here is to establish how much money your business concept can make.

Product and Service Demand

A search engine is your best friend when trying to figure out if there is demand for your products and services. Personally, I love using presearch.org because it lets you directly search on a ton of different platforms including Google, Youtube, Twitter, and more. Check out the screenshot for the full list of search options.

With quick web searches, you can find out how many competitors you have, look through their reviews, and see if there are common complaints about the competitors. Bad reviews are a great place to find opportunities to offer better products or services. 

If there are no similar products or services, you may have stumbled upon something new, or there may just be no demand for it. To find out, go talk to your most honest friend about the idea and see what they think. If they tell you it’s dumb or stare at you vacantly, there’s probably no market for it.

You can also conduct a survey through social media to get public opinion on your idea. Using Facebook Business Manager , you could get a feel for who would be interested in your product or service.

 I ran a quick test of how many people between 18-65  you could reach in the U.S. during a week. It returned an estimated 700-2,000 for the total number of leads, which is enough to do a fairly accurate statistical analysis.

Identify Demographics of Target Market

Depending on what type of business you want to run, your target market will be different. The narrower the demographic, the fewer potential customers you’ll have. If you did a survey, you’ll be able to use that data to help define your target audience. Some considerations you’ll want to consider are:

• Other Interests
• Marital Status
• Do they have kids?

Once you have this information, it can help you narrow down your options for location and help define your marketing further. One resource that Mike recommended using is the Census Bureau’s Quick Facts Map . He told us,  

“It helps you quickly evaluate what the best areas are for your business to be located.”

How to Write a Business Plan

Now that you’ve developed your idea a little and established there is a market for it, you can begin writing a business plan. Getting started is easier with the business plan template we created for you to download. I strongly recommend using it as it is updated to make it easier to create an action plan. 

Each of the following should be a section of your business plan:

• Business Plan Cover Page
• Table of Contents
• Executive Summary
• Company Description
• Description of Products and Services

SWOT Analysis

• Competitor Data
• Competitive Analysis
• Marketing Expenses Strategy 

Pricing Strategy

• Distribution Channel Assessment
• Operational Plan
• Management and Organizational Strategy
• Financial Statements and/or Financial Projections

We’ll look into each of these. Don’t forget to download our free business plan template (mentioned just above) so you can follow along as we go. 

How to Write a Business Plan Step 1. Create a Cover Page

The first thing investors will see is the cover page for your business plan. Make sure it looks professional. A great cover page shows that you think about first impressions.

A good business plan should have the following elements on a cover page:

• Professionally designed logo
• Company name
• Mission or Vision Statement
• Contact Info

Basically, think of a cover page for your business plan like a giant business card. It is meant to capture people’s attention but be quickly processed.

How to Write a Business Plan Step 2. Create a Table of Contents

Most people are busy enough that they don’t have a lot of time. Providing a table of contents makes it easy for them to find the pages of your plan that are meaningful to them.

A table of contents will be immediately after the cover page, but you can include it after the executive summary. Including the table of contents immediately after the executive summary will help investors know what section of your business plan they want to review more thoroughly.

Check out Canva’s article about creating a  table of contents . It has a ton of great information about creating easy access to each section of your business plan. Just remember that you’ll want to use different strategies for digital and hard copy business plans.

How to Write a Business Plan Step 3. Write an Executive Summary

An executive summary is where your business plan should catch the readers interest.  It doesn’t need to be long, but should be quick and easy to read.

Mike told us,

How long should an executive summary bein an informal business plan?

For casual use, an executive summary should be similar to an elevator pitch, no more than 150-160 words, just enough to get them interested and wanting more. Indeed has a great article on elevator pitches .  This can also be used for the content of emails to get readers’ attention.

It consists of three basic parts:

• An introduction to you and your business.
• What your business is about.
• A call to action

Example of an informal executive summary 

One of the best elevator pitches I’ve used is:

So far that pitch has achieved a 100% success rate in getting partnerships for the business.

What should I include in an executive summary for investors?

Investors are going to need a more detailed executive summary if you want to secure financing or sell equity. The executive summary should be a brief overview of your entire business plan and include:

• Introduction of yourself and company.
• An origin story (Recognition of a problem and how you came to solution)
• An introduction to your products or services.
• Your unique value proposition. Make sure to include intellectual property.
• Where you are in the business life cycle
• Request and why you need it.

Successful business plan examples

The owner of Urbanity told us he spent 2 months writing a 75-page business plan and received a $250,000 loan from the bank when he was 23. Make your business plan as detailed as possible when looking for financing. We’ve provided a template to help you prepare the portions of a business plan that banks expect.

Here’s the interview with the owner of Urbanity:

When to write an executive summary?

Even though the summary is near the beginning of a business plan, you should write it after you complete the rest of a business plan. You can’t talk about revenue, profits, and expected expenditures if you haven’t done the market research and created a financial plan.

What mistakes do people make when writing an executive summary?

Business owners commonly go into too much detail about the following items in an executive summary:

• Marketing and sales processes
• Financial statements
• Organizational structure
• Market analysis

These are things that people will want to know later, but they don’t hook the reader. They won’t spark interest in your small business, but they’ll close the deal.

How to Write a Business Plan Step 4. Company Description

Every business plan should include a company description. A great business plan will include the following elements while describing the company:

• Mission statement
• Philosophy and vision
• Company goals

Target market

• Legal structure

Let’s take a look at what each section includes in a good business plan.

Mission Statement

A mission statement is a brief explanation of why you started the company and what the company’s main focus is. It should be no more than one or two sentences. Check out HubSpot’s article 27 Inspiring Mission Statement for a great read on informative and inspiring mission and vision statements. 

Company Philosophy and Vision

The company philosophy is what drives your company. You’ll normally hear them called core values.  These are the building blocks that make your company different. You want to communicate your values to customers, business owners, and investors as often as possible to build a company culture, but make sure to back them up.

What makes your company different?

Each company is different. Your new business should rise above the standard company lines of honesty, integrity, fun, innovation, and community when communicating your business values. The standard answers are corporate jargon and lack authenticity. 

Examples of core values

One of my clients decided to add a core values page to their website. As a tech company they emphasized the values:

•  Prioritize communication.
•  Never stop learning.
•  Be transparent.
•  Start small and grow incrementally.

These values communicate how the owner and the rest of the company operate. They also show a value proposition and competitive advantage because they specifically focus on delivering business value from the start. These values also genuinely show what the company is about and customers recognize the sincerity. Indeed has a great blog about how to identify your core values .

What is a vision statement?

A vision statement communicate the long lasting change a business pursues. The vision helps investors and customers understand what your company is trying to accomplish. The vision statement goes beyond a mission statement to provide something meaningful to the community, customer’s lives, or even the world.

Example vision statements

The Alzheimer’s Association is a great example of a vision statement:

A world without Alzheimer’s Disease and other dementia.

It clearly tells how they want to change the world. A world without Alzheimers might be unachievable, but that means they always have room for improvement.

Business Goals

You have to measure success against goals for a business plan to be meaningful. A business plan helps guide a company similar to how your GPS provides a road map to your favorite travel destination. A goal to make as much money as possible is not inspirational and sounds greedy.

Sure, business owners want to increase their profits and improve customer service, but they need to present an overview of what they consider success. The goals should help everyone prioritize their work.

How far in advance should a business plan?

Business planning should be done at least one year in advance, but many banks and investors prefer three to five year business plans. Longer plans show investors that the management team  understands the market and knows the business is operating in a constantly shifting market. In addition, a plan helps businesses to adjust to changes because they have already considered how to handle them.

Example of great business goals

My all time-favorite long-term company goals are included in Tesla’s Master Plan, Part Deux . These goals were written in 2016 and drive the company’s decisions through 2026. They are the reason that investors are so forgiving when Elon Musk continually fails to meet his quarterly and annual goals.

If the progress aligns with the business plan investors are likely to continue to believe in the company. Just make sure the goals are reasonable or you’ll be discredited (unless you’re Elon Musk).

You did target market research before creating a business plan. Now it’s time to add it to the plan so others understand what your ideal customer looks like. As a new business owner, you may not be considered an expert in your field yet, so document everything. Make sure the references you use are from respectable sources. 

Use information from the specific lender when you are applying for lending. Most lenders provide industry research reports and using their data can strengthen the position of your business plan.

A small business plan should include a section on the external environment. Understanding the industry is crucial because we don’t plan a business in a vacuum. Make sure to research the industry trends, competitors, and forecasts. I personally prefer IBIS World for my business research. Make sure to answer questions like:

• What is the industry outlook long-term and short-term?
• How will your business take advantage of projected industry changes and trends?
• What might happen to your competitors and how will your business successfully compete?

Industry resources

Some helpful resources to help you establish more about your industry are:

• Trade Associations
• Federal Reserve
• Bureau of Labor Statistics

Legal Structure

There are five basic types of legal structures that most people will utilize:

• Sole proprietorships
• Limited Liability Companies (LLC)

Partnerships

Corporations.

• Franchises.

Each business structure has their pros and cons. An LLC is the most common legal structure due to its protection of personal assets and ease of setting up. Make sure to specify how ownership is divided and what roles each owner plays when you have more than one business owner.

You’ll have to decide which structure is best for you, but we’ve gathered information on each to make it easier.

Sole Proprietorship

A sole proprietorship is the easiest legal structure to set up but doesn’t protect the owner’s personal assets from legal issues. That means if something goes wrong, you could lose both your company and your home.

To start a sole proprietorship, fill out a special tax form called a  Schedule C . Sole proprietors can also join the American Independent Business Alliance .

Limited Liability Company (LLC)

An LLC is the most common business structure used in the United States because an LLC protects the owner’s personal assets. It’s similar to partnerships and corporations, but can be a single-member LLC in most states. An LLC requires a document called an operating agreement.

Each state has different requirements. Here’s a link to find your state’s requirements . Delaware and Nevada are common states to file an LLC because they are really business-friendly. Here’s a blog on the top 10 states to get an LLC.

Partnerships are typically for legal firms. If you choose to use a partnership choose a Limited Liability Partnership. Alternatively, you can just use an LLC.

Corporations are typically for massive organizations. Corporations have taxes on both corporate and income tax so unless you plan on selling stock, you are better off considering an LLC with S-Corp status . Investopedia has good information corporations here .

There are several opportunities to purchase successful franchises. TopFranchise.com has a list of companies in a variety of industries that offer franchise opportunities. This makes it where an entrepreneur can benefit from the reputation of an established business that has already worked out many of the kinks of starting from scratch.

How to Write a Business Plan Step 5. Products and Services

This section of the business plan should focus on what you sell, how you source it, and how you sell it. You should include:

• Unique features that differentiate your business products from competitors
• Intellectual property
• Your supply chain
• Cost and pricing structure 

Questions to answer about your products and services

Mike gave us a list  of the most important questions to answer about your product and services:

• How will you be selling the product? (in person, ecommerce, wholesale, direct to consumer)?
• How do you let them know they need a product?
• How do you communicate the message?
• How will you do transactions?
• How much will you be selling it for?
• How many do you think you’ll sell and why?

Make sure to use the worksheet on our business plan template .

How to Write a Business Plan Step 6. Sales and Marketing Plan

The marketing and sales plan is focused on the strategy to bring awareness to your company and guides how you will get the product to the consumer.  It should contain the following sections:

SWOT Analysis stands for strengths, weaknesses, opportunities, and threats. Not only do you want to identify them, but you also want to document how the business plans to deal with them.

Business owners need to do a thorough job documenting how their service or product stacks up against the competition.

If proper research isn’t done, investors will be able to tell that the owner hasn’t researched the competition and is less likely to believe that the team can protect its service from threats by the more well-established competition. This is one of the most common parts of a presentation that trips up business owners presenting on Shark Tank .

SWOT Examples

Examples of strengths and weaknesses could be things like the lack of cash flow, intellectual property ownership, high costs of suppliers, and customers’ expectations on shipping times.

Opportunities could be ways to capitalize on your strengths or improve your weaknesses, but may also be gaps in the industry. This includes:

• Adding offerings that fit with your current small business
• Increase sales to current customers
• Reducing costs through bulk ordering
• Finding ways to reduce inventory
•  And other areas you can improve

Threats will normally come from outside of the company but could also be things like losing a key member of the team. Threats normally come from competition, regulations, taxes, and unforeseen events.

The management team should use the SWOT analysis to guide other areas of business planning, but it absolutely has to be done before a business owner starts marketing. 

Include Competitor Data in Your Business Plan

When you plan a business, taking into consideration the strengths and weaknesses of the competition is key to navigating the field. Providing an overview of your competition and where they are headed shows that you are invested in understanding the industry.

For smaller businesses, you’ll want to search both the company and the owners names to see what they are working on. For publicly held corporations, you can find their quarterly and annual reports on the SEC website .

What another business plans to do can impact your business. Make sure to include things that might make it attractive for bigger companies to outsource to a small business.

Marketing Strategy

The marketing and sales part of business plans should be focused on how you are going to make potential customers aware of your business and then sell to them.

If you haven’t already included it, Mike recommends:

“They’ll want to know about Demographics, ages, and wealth of your target market.”

Make sure to include the Total addressable market .  The term refers to the value if you captured 100% of the market.

Advertising Strategy

You’ll explain what formats of advertising you’ll be using. Some possibilities are:

• Online: Facebook and Google are the big names to work with here.
• Print : Print can be used to reach broad groups or targeted markets. Check out this for tips .
• Radio : iHeartMedia is one of the best ways to advertise on the radio
• Cable television : High priced, hard to measure ROI, but here’s an explanation of the process
• Billboards: Attracting customers with billboards can be beneficial in high traffic areas.

You’ll want to define how you’ll be using each including frequency, duration, and cost. If you have the materials already created, including pictures or links to the marketing to show creative assets.

Mike told us “Most businesses are marketing digitally now due to Covid, but that’s not always the right answer.”

Make sure the marketing strategy will help team members or external marketing agencies stay within the brand guidelines .

This section of a business plan should be focused on pricing. There are a ton of pricing strategies that may work for different business plans. Which one will work for you depends on what kind of a business you run.

Some common pricing strategies are:

• Value-based pricing – Commonly used with home buying and selling or other products that are status symbols.
• Skimming pricing – Commonly seen in video game consoles, price starts off high to recoup expenses quickly, then reduces over time.
• Competition-based pricing – Pricing based on competitors’ pricing is commonly seen at gas stations.
• Freemium services –  Commonly used for software, where there is a free plan, then purchase options for more functionality.

HubSpot has a great calculator and blog on pricing strategies.

Beyond explaining what strategy your business plans to use, you should include references for how you came to this pricing strategy and how it will impact your cash flow.

Distribution Plan

This part of a business plan is focused on how the product or service is going to go through the supply chain. These may include multiple divisions or multiple companies. Make sure to include any parts of the workflow that are automated so investors can see where cost savings are expected and when.

Supply Chain Examples

For instance, lawn care companies  would need to cover aspects such as:

• Suppliers for lawn care equipment and tools
• Any chemicals or treatments needed
• Repair parts for sprinkler systems
• Vehicles to transport equipment and employees
• Insurance to protect the company vehicles and people.

Examples of Supply Chains

These are fairly flat supply chains compared to something like a clothing designer where the clothes would go through multiple vendors. A clothing company might have the following supply chain:

• Raw materials
• Shipping of raw materials
• Converting of raw materials to thread
• Shipping thread to produce garments
• Garment producer
• Shipping to company
• Company storage
• Shipping to retail stores

There have been advances such as print on demand that eliminate many of these steps. If you are designing completely custom clothing, all of this would need to be planned to keep from having business disruptions.

The main thing to include in the business plan is the list of suppliers, the path the supply chain follows, the time from order to the customer’s home, and the costs associated with each step of the process.

According to BizPlanReview , a business plan without this information is likely to get rejected because they have failed to research the key elements necessary to make sales to the customer.

How to Write a Business Plan Step 7. Company Organization and Operational Plan

This part of the business plan is focused on how the business model will function while serving customers.  The business plan should provide an overview of  how the team will manage the following aspects:

Quality Control

• Legal environment

Let’s look at each for some insight.

Production has already been discussed in previous sections so I won’t go into it much. When writing a business plan for investors, try to avoid repetition as it creates a more simple business plan.

If the organizational plan will be used by the team as an overview of how to perform the best services for the customer, then redundancy makes more sense as it communicates what is important to the business.

Quality control policies help to keep the team focused on how to verify that the company adheres to the business plan and meets or exceeds customer expectations.

Quality control can be anything from a standard that says “all labels on shirts can be no more than 1/16″ off center” to a defined checklist of steps that should be performed and filled out for every customer.

There are a variety of organizations that help define quality control including:

• International Organization for Standardization – Quality standards for energy, technology, food, production environments, and cybersecurity
• AICPA – Standard defined for accounting.
• The Joint Commission – Healthcare
• ASHRAE – HVAC best practices

You can find lists of the organizations that contribute most to the government regulation of industries on Open Secrets . Research what the leaders in your field are doing. Follow their example and implement it in your quality control plan.

For location, you should use information from the market research to establish where the location will be. Make sure to include the following in the location documentation.

• The size of your location
• The type of building (retail, industrial, commercial, etc.)
• Zoning restrictions – Urban Wire has a good map on how zoning works in each state
• Accessibility – Does it meet ADA requirements?
• Costs including rent, maintenance, utilities, insurance and any buildout or remodeling costs
• Utilities – b.e.f. has a good energy calculator .

Legal Environment

The legal requirement section is focused on defining how to meet the legal requirements for your industry. A good business plan should include all of the following:

• Any licenses and/or permits that are needed and whether you’ve obtained them
• Any trademarks, copyrights, or patents that you have or are in the process of applying for
• The insurance coverage your business requires and how much it costs
• Any environmental, health, or workplace regulations affecting your business
• Any special regulations affecting your industry
• Bonding requirements, if applicable

Your local SBA office can help you establish requirements in your area. I strongly recommend using them. They are a great resource.

Your business plan should include a plan for company organization and hiring. While you may be the only person with the company right now, down the road you’ll need more people. Make sure to consider and document the answers to the following questions:

• What is the current leadership structure and what will it look like in the future?
• What types of employees will you have? Are there any licensing or educational requirements?
• How many employees will you need?
• Will you ever hire freelancers or independent contractors?
• What is each position’s job description?
• What is the pay structure (hourly, salaried, base plus commission, etc.)?
• How do you plan to find qualified employees and contractors?

One of the most crucial parts of a business plan is the organizational chart. This simply shows the positions the company will need, who is in charge of them and the relationship of each of them. It will look similar to this:

Our small business plan template has a much more in-depth organizational chart you can edit to include when you include the organizational chart in your business plan.

How to Write a Business Plan Step 8. Financial Statements 

No business plan is complete without financial statements or financial projections. The business plan format will be different based on whether you are writing a business plan to expand a business or a startup business plan. Let’s dig deeper into each.

Provide All Financial Income from an Existing Business

An existing business should use their past financial documents including the income statement, balance sheet, and cash flow statement to find trends to estimate the next 3-5 years.

You can create easy trendlines in excel to predict future revenue, profit and loss, cash flow, and other changes in year-over-year performance. This will show your expected performance assuming business continues as normal.

If you are seeking an investment, then the business is probably not going to continue as normal. Depending on the financial plan and the purpose of getting financing, adjustments may be needed to the following:

• Higher Revenue if expanding business
• Lower Cost of Goods Sold if purchasing inventory with bulk discounts
• Adding interest if utilizing financing (not equity deal)
• Changes in expenses
• Addition of financing information to the cash flow statement
• Changes in Earnings per Share on the balance sheet

Financial modeling is a challenging subject, but there are plenty of low-cost courses on the subject. If you need help planning your business financial documentation take some time to watch some of them.

Make it a point to document how you calculated all the changes to the income statement, balance sheet, and cash flow statement in your business plan so that key team members or investors can verify your research.

Financial Projections For A Startup Business Plan

Unlike an existing business, a startup doesn’t have previous success to model its future performance. In this scenario, you need to focus on how to make a business plan realistic through the use of industry research and averages.

Mike gave the following advice in his interview:

Financial Forecasting Mistakes

One of the things a lot of inexperienced people use is the argument, “If I get one percent of the market, it is worth $100 million.” If you use this, investors are likely to file the document under bad business plan examples.

Let’s use custom t-shirts as an example.

Credence Research estimated in 2018 there were 11,334,800,000 custom t-shirts sold for a total of $206.12 Billion, with a 6% compound annual growth rate.

With that data,  you can calculate that the industry will grow to $270 Billion in 2023 and that the average shirt sold creates $18.18 in revenue.

Combine that with an IBIS World estimate of 11,094 custom screen printers and that means even if you become an average seller, you’ll get .009% of the market.

Here’s a table for easier viewing of that information.

The point here is to make sure your business proposal examples make sense.

You’ll need to know industry averages such as cost of customer acquisition, revenue per customer, the average cost of goods sold, and admin costs to be able to create accurate estimates.

Our simple business plan templates walk you through most of these processes. If you follow them you’ll have a good idea of how to write a business proposal.

How to Write a Business Plan Step 9. Business Plan Example of Funding Requests

What is a business plan without a plan on how to obtain funding?

The Small Business Administration has an example for a pizza restaurant that theoretically needed nearly $20k to make it through their first month.

In our video, How to Start a $500K/Year T-Shirt Business (Pt. 1 ), Sanford Booth told us he needed about $200,000 to start his franchise and broke even after 4 months.

Freshbooks estimates it takes on average 2-3 years for a business to be profitable, which means the fictitious pizza company from the SBA could need up to $330k to make it through that time and still pay their bills for their home and pizza shop.

Not every business needs that much to start, but realistically it’s a good idea to assume that you need a fairly large cushion.

Ways to get funding for a small business

There are a variety of ways to cover this. the most common are:

• Bootstrapping – Using your savings without external funding.
• Taking out debt – loans, credit cards
• Equity, Seed Funding – Ownership of a percentage of the company in exchange for current funds
• Crowdsourcing – Promising a good for funding to create the product

Keep reading for more tips on how to write a business plan.

How funding will be used

When asking for business financing make sure to include:

• How much to get started?
• What is the minimum viable product and how soon can you make money?
• How will the money be spent?

Mike emphasized two aspects that should be included in every plan, 

How to Write a Business Plan Resources

Here are some links to a business plan sample and business plan outline. 

• Sample plan

It’s also helpful to follow some of the leading influencers in the business plan writing community. Here’s a list:

• Wise Plans –  Shares a lot of information on starting businesses and is a business plan writing company.
• Optimus Business Plans –  Another business plan writing company.
• Venture Capital – A venture capital thread that can help give you ideas.

How to Write a Business Plan: What’s Next?

We hope this guide about how to write a simple business plan step by step has been helpful. We’ve covered:

• The definition of a business plan
• Coming up with a business idea
• Performing market research
• The critical components of a business plan
• An example business plan

In addition, we provided you with a simple business plan template to assist you in the process of writing your startup business plan. The startup business plan template also includes a business model template that will be the key to your success.

Don’t forget to check out the rest of our business hub .

Have you written a business plan before? How did it impact your ability to achieve your goals?

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2 Developing a Business Plan

Learning Objectives

After completing this chapter, you will be able to

• Describe the purposes for business planning
• Describe common business planning principles
• Explain common business plan development guidelines and tools
• List and explain the elements of the business plan development process
• Explain the purposes of each element of the business plan development process
• Explain how applying the business plan development process can aid in developing a business plan that will meet entrepreneurs’ goals

This chapter describes the purposes, principles, and the general concepts and tools for business planning, and the process for developing a business plan.

Purposes for Developing Business Plans

Business plans are developed for both internal and external purposes. Internally, entrepreneurs develop business plans to help put the pieces of their business together. Externally, the most common purpose is to raise capital.

Internal Purposes

As the road map for a business’s development, the business plan

• Defines the vision for the company
• Establishes the company’s strategy
• Describes how the strategy will be implemented
• Provides a framework for analysis of key issues
• Provides a plan for the development of the business
• Helps the entrepreneur develop and measure critical success factors
• Helps the entrepreneur to be realistic and test theories

External Purposes

The business plan provides the most complete source of information for valuation of the business. Thus, it is often the main method of describing a company to external audiences such as potential sources for financing and key personnel being recruited. It should assist outside parties to understand the current status of the company, its opportunities, and its needs for resources such as capital and personnel.

Business Plan Development Principles [1]

Hindle and Mainprize suggested that business plan writers must strive to effectively communicate their expectations about the nature of an uncertain future and to project credibility. The liabilities of newness make communicating the expected future of new ventures much more difficult than for existing businesses. Consequently, business plan writers should adhere to five specific communication principles .

First, business plans must be written to meet the expectations of targeted readers in terms of what they need to know to support the proposed business. They should also lay out the milestones that investors or other targeted readers need to know. Finally, writers must clearly outline the opportunity , the context within the proposed venture will operate (internal and external environment), and the business model.

There are also five business plan credibility principles that writers should consider. Business plan writers should build and establish their credibility by highlighting important and relevant information about the venture team . Writers need to elaborate on the plans they outline in their document so that targeted readers have the information they need to assess the plan’s credibility. To build and establish credibility, they must  integrate scenarios to show that the entrepreneur has made realistic assumptions and has effectively anticipated what the future holds for their proposed venture. Writers need to provide comprehensive and realistic financial links between all relevant components of the plan. Finally, they must outline the deal , or the value that targeted readers should expect to derive from their involvement with the venture. [2]

General Guidelines for Developing Business Plans

Many businesses must have a business plan to achieve their goals. Using a standard format helps the reader understand that the you have thought everything through, and that the returns justify the risk. The following are some basic guidelines for business plan development.

As You Write Your Business Plan

• If appropriate, include nice, catchy, professional graphics on your title page to make it appealing to targeted readers, but don’t go overboard.
• Bind your document so readers can go through it easily without it falling apart. You might use a three-ring binder, coil binding, or a similar method. Make sure the binding method you use does not obscure the information next to where it is bound.
• Make certain all of your pages are ordered and numbered correctly.
• The usual business plan convention is to number all major sections and subsections within your plan using the format as follows:

1. First main heading

1.1 First subheading under the first main heading

1.1.1. First sub-subheading under the first subheading

2. Second main heading

2.1 First subheading under the second main heading

Use the styles and references features in Word to automatically number and format your section titles and to generate your table of contents. Be sure that the last thing you do before printing your document is update your automatic numbering and automatically generated tables. If you fail to do this, your numbering may be incorrect.

5. Prior to submitting your plan, be 100% certain each of the following requirements are met:

• Everything must be completely integrated. The written part must say exactly the same thing as the financial part.
• All financial statements must be completely linked and valid. Make sure all of your balance sheets balance.
• Everything must be correct. There should be NO spelling, grammar, sentence structure, referencing, or calculation errors.
• Your document must be well organized and formatted. The layout you choose should make the document easy to read and comprehend. All of your diagrams, charts, statements, and other additions should be easy to find and be located in the parts of the plan best suited to them.
• In some cases it can strengthen your business plan to show some information in both text and table or figure formats. You should avoid unnecessary repetition , however, as it is usually unnecessary—and even damaging—to state the same thing more than once.
• You should include all the information necessary for readers to understand everything in your document.
• The terms you use in your plan should be clear and consistent. For example, the following statement in a business plan would leave a reader completely confused: “There is a shortage of 100,000 units with competitors currently producing 25,000. We can help fill this huge gap in demand with our capacity to produce 5,000 units.” This statement might mean there is a total shortage of 100,000 units, but competitors are filling this gap by producing 25,000 per year; in which case there will only be a shortage for four years. However, it could mean that the annual shortage is 100,000 units and only 25,000 are produced each year, in which case the total shortage is very high and is growing each year.
• You must always provide the complete perspective by indicating the appropriate time frame, currency, size, or other measurement.
• If you use a percentage figure, you must indicate to what it refers—otherwise the number is meaningless to a reader.
• If your plan includes an international element, you must indicate in which currency or currencies the costs, revenues, prices, or other values are quoted. This can be solved by indicating up-front in the document in which currency all values will be quoted. Another option is to indicate each time which currency is being used, and sometimes you might want to indicate the value in more than one currency. Of course, you will need to assess the exchange rate risk to which you will be exposed and describe this in your document.

6. Ensure credibility is both established and maintained. [3]

• If a statement presents something as a fact when this fact is not generally known, always indicate the source. Unsupported statements damage credibility.
• Be specific. A business plan is simply not of value if it uses vague references to high demand, carefully set prices, and other weak phrasing. It must show hard numbers (properly referenced, of course), actual prices, and real data acquired through proper research. This is the only way to ensure your plan is considered credible.
• Your strategies must be integrated. For example, your pricing strategy must complement and mesh perfectly with your product/service strategy, distribution strategy, and promotions strategy. For example, you probably shouldn’t promote your product as a premium product if you plan to charge lower-than-market prices for it.

7. Before finalizing your business plan, re-read each section to evaluate whether it will appeal to your targeted readers.

Useful Resources for Business Planning

• Financial Performance Data : Innovation, Science and Economic Development Canada
• BizPal  for accessing licensing and other needs
• Canada Revenue Agency  for CRA asset classifications
• Canadian Company Capabilities database to use to find suppliers and buyers
• Merx for finding possible Canadian Government contracts
• The Conference Board of Canada
• Bank of Canada
• Scotia Bank
• Bank of Montreal
• Business Loan Calculator

Library Resources

NSCC Library – Business Databases [journals and other resources]

Employee compensation calculators

• Salary Data & Career Research Center – Canada

Existing business plans

The Word and Excel templates in this book

• Business Plan Template (Word)
• Business Plan Template (Excel)

Business Plan Development Tools

Credibility and communication.

According to Hindle and Mainprize, strong business plans effectively communicate the necessary information to the targeted readers while also establishing the credibility of the plan and the entrepreneur. [4] The Credibility and Communication Meter icon is used throughout this book to highlight where and how business plan writers can improve the quality of the information and enhance their and their plan’s credibility.

Use the following tools to improve the information in and credibility of your plans:

The Ratchet Effect

A ratchet is a tool that most of us are familiar with. It is useful because it helps its user accomplish something with each effort expended while guarding against losing past advancements.

With each word, sentence, paragraph, heading, chart, figure, and table you include in your final business plan, the ratchet should move ahead a notch because you achieve two important things.

First, only needed and relevant information is included.

Second, your additions build credibility in a relevant way.

Apply the ratchet effect by making sure that each and every sentence and paragraph conveys needed and relevant information that adds to your and your plan’s credibility. Use the following principles: Rarely—and only if it truly needs to be said again—repeat something that you have already said in your plan.

Avoid using killer phrases, like “there is no competition for our product” or “our product will sell itself, so we will not need to advertise it.” Any savvy reader will understand that these kinds of statements are naive and demonstrate a lack of understanding about how the market and other real-life factors actually work.

Avoid contradicting yourself. Make sure that what is said in the written part of your plan completely syncs with what is said in the other parts of your plan. Likewise, ensure that what you include in the financial parts of your plan is completely in sync with what is said the written part.

The Magic Formula

Apply the following magic formula throughout your write your plan.

• …consideration X affects my business because…
• …consideration X is subject to this trend into the future…
• …which means that we have decided to do this…(or) will implement this strategy…in response to how the expected trends for consideration X will affect my business

Here is an example of how you can use the magic formula to develop part of the pricing strategy in the marketing plan part of your business plan: We expect that our expenses to run our business will rise with the rate of inflation, which means that we must plan to increase the prices on our products to establish and maintain our profitability. The Bank of Canada (201x) has projected that the general inflation rate in <the city in which my business will operate> will be 3.0% in 201x, 3.5% in 201y, and 4.0% in 201z. In our projected financial statements, therefore, we have inflated both our expenses and our prices by those rates in those years.

Context and Framing

You must provide the right context when you describe situations, strategies, and other components of your plan. Business plan readers should never be left to guess why you indicate in a business plan that you will do something. Proper context is needed to help you frame the information you present.

When you frame the stories you tell correctly, the ratchet effect will happen and your plan will be stronger. One example of effective framing is when you, as the writer of the plan and the entrepreneur, clearly indicate how your education, expertise, relevant experiences, and network of contacts will make up for any lack of direct experience you have in running this particular kind of business. An example of ineffective framing is when you indicate that you lack experience with this type of business, or when you fail to specify how and why your levels of experience will affect the business’s development.

Prioritizing Problems

Don’t get hung up on something that doesn’t need an immediate solution. Instead, flag it for future consideration and move on. When you return to re-address the issue, it might no longer be a problem or you might have by then figured out a solution.

Process for Developing Business Plans

The business plan development process described next has been extensively tested with entrepreneurship students and has proven to provide the guidance entrepreneurs need to develop a business plan appropriate for their needs: a high power business plan .

Developing a high power business plan has six stages, which can be compared to a process for hosting a dinner for a few friends. A host hoping to make a good impression with their anticipated guests might analyze the situation at multiple levels to collect data on new alternatives for healthy ingredients, what ingredients have the best prices and are most readily available at certain times of year, the new trends in party appetizers, what food allergies the expected guests might have, possible party themes, and so on. This analysis is the  Essential Initial Research stage.

In the Business Model stage, the host might construct a menu of items to include with the meal along with a list of decorations to order, music to play, and costume themes to suggest to the guests. The mix of these kinds of elements chosen by the host will aid in the success of the party.

The Initial Business Plan Draft stage is where the host rolls up their sleeves and begins to make some of the food items, puts up some of the decorations, and generally gets everything started for the party.

During this stage, the host will begin to realize that some plans are not feasible and that changes are needed. The required changes might be substantial, like the need to postpone the entire party and ultimately start over in a few months, and others might be less drastic, like the need to change the menu when an invited guest indicates that they can’t eat food containing gluten. These changes are incorporated into the plan during the  Making the Business Plan Realistic  stage to make it realistic and feasible.

The Making the Plan Appeal to Stakeholders and Desirable to the Entrepreneur stage involves further changes to the party plan to make it more appealing to both the invited guests and to make it a fun experience for the host. For example, the host might learn that some of the single guests would like to bring dates and others might need to be able to bring their children to be able to attend. The host might be able to accommodate those desires or needs in ways that will also make the party more fun for them—maybe by accepting some guests’ offers to bring food or games, or maybe hiring a babysitter to entertain and look after the children.

The final stage— Finishing the Business Plan— involves the host putting all of the final touches in place for the party in preparation for the arrival of the guests.

Essential Initial Research

A business plan writer should analyze the environment in which they anticipate operating at each of the levels of analysis: Societal , Industry , Market , and Firm . This stage of planning is called the Essential Initial Research stage, and it is a necessary first step to better understand the trends that will affect their business and the decisions they must make to lay the groundwork for, which will improve their potential for success.

In some cases, much of this research should be included in the developing business plan as its own separate section to help show readers that there is a market need for the business being considered and that it stands a good chance of being successful.

In other cases, a business plan will be stronger when the components of the research are distributed throughout the business plan to provide support for the outlined plans and strategies outlined. For example, the industry- or market-level research might outline the pricing strategies used by identified competitors, which might be best placed in the Pricing Strategy part of the business plan to support the decision made to employ a particular pricing strategy.

Business Model

Inherent in any business plan is a description of the Business Model chosen by the entrepreneur as the one that they feel will best ensure success. Based upon their analysis from the Essential Initial Research stage, an entrepreneur should determine how each element of their business model—including their revenue streams, cost structure, customer segments, value propositions, key activities, key partners, and so on—might fit together to improve the potential success of their business venture (see Chapter 3 – Business Models ).

For some types of ventures, at this stage an entrepreneur might launch a lean start-up (see the “Lean Start-up” section in Chapter 2 – Essential Initial Research ) and grow their business by continually pivoting, or constantly adjusting their business model in response to the real-time signals they get from the markets’ reactions to their business operations. In many cases, however, an entrepreneur will require a business plan. In those cases, their initial business model will provide the basis for that plan.

Of course, throughout this and all of the stages in this process, the entrepreneur should seek to continually gather information and adjust the plans in response to the new knowledge they gather. As shown in Figure 1 by its enclosure in the Progressive Research box, the business plan developer might need to conduct further research before finishing the business model and moving on to the initial business plan draft.

Initial Business Plan Draft

The Initial Business Plan Draft  stage involves taking the knowledge and ideas developed during the first two stages and organizing them into a business plan format. Many entrepreneurs prefer to create a full draft of the business plan with all of the sections, including the front part with the business description, vision, mission, values, value proposition statement, preliminary set of goals, and possibly even a table of contents and lists of tables and figures all set up using the software features enabling their automatic generation. Writing all of the operations, human resources, marketing, and financial plans as part of the first draft ensures that all of these parts can be appropriately and necessarily integrated. The business plan will tell the story of a planned business startup in two ways: 1) by using primarily words along with some charts and graphs in the operations, human resources, and marketing plans and 2) through the financial plan. Both must tell the same story.

The feedback loop shown in Figure 1 demonstrates that the business developer may need to review the business model.  Additionally, as shown by its enclosure in the Progressive Research box, the business plan developer might need to conduct further research before finishing the Initial Business Plan Draft stage and moving on to the Making Business Plan Realistic stage.

Making Business Plan Realistic

The first draft of a business plan will almost never be realistic. As the entrepreneur writes the plan, it will necessarily change as new information is gathered. Another factor that usually renders the first draft unrealistic is the difficulty in making certain that the written part—in the front part of the plan along with the operations, human resources, and marketing plans—tells the exact same story as the financial part does. This stage of work involves making the necessary adjustments to the plan to make it as realistic as possible.

The Making Business Plan Realistic  stage has two possible feedback loops. The first means going back to the Initial Business Plan Draft stage if the initial business plan needs to be significantly changed before it is possible to adjust it so that it is realistic. The second feedback loop circles back to the Business Model stage if the business developer needs to rethink the business model. As shown in Figure 1 by its enclosure in the Progressive Research box, the business plan developer might need to conduct further research before finishing the Making Business Plan Realistic stage and moving on to the Making Plan Appeal to Stakeholders stage.

Making Plan Appeal to Stakeholders and Desirable to the Entrepreneur

A business plan can be realistic without appealing to potential investors and other external stakeholders, like employees, suppliers, and needed business partners. It might also be realistic (and possibly appealing to stakeholders) without being desirable to the entrepreneur. During this stage, the entrepreneur will keep the business plan realistic as they adjust plans to appeal to potential investors, stakeholders, and themselves.

If, for example, investors will be required to finance the business’s start, some adjustments might need to be relatively extensive to appeal to potential investors’ needs for an exit strategy from the business, to accommodate the rate of return they expect from their investments, and to convince them that the entrepreneur can accomplish all that is promised in the plan. In this case, and in others, the entrepreneur will also need to get what they want out of the business to make it worthwhile for them to start and run it. So, this stage of adjustments to the developing business plan might be fairly extensive, and they must be informed by a superior knowledge of what targeted investors need from a business proposal before they will invest. They also need to be informed by a clear set of goals that will make the venture worthwhile for the entrepreneur to pursue.

The caution with this stage is to balance the need to make realistic plans with the desire to meet the entrepreneur’s goals while avoiding becoming discouraged enough to drop the idea of pursuing the business idea . If an entrepreneur is convinced that the proposed venture will satisfy a valid market need, there is often a way to assemble the financing required to start and operate the business while also meeting the entrepreneur’s most important goals. To do so, however, might require significant changes to the business model.

One of the feedback loops shown in Figure 1 indicates that the business plan writer might need to adjust the draft business plan while ensuring that it is still realistic before it can be made appealing to the targeted stakeholders and desirable to the entrepreneur. The second feedback loop indicates that it might be necessary to go all the way back to the Business Model stage to re-establish the framework and plans needed to develop a realistic, appealing, and desirable business plan. Additionally, this stage’s enclosure in the Progressive Research box suggests that the business plan developer might need to conduct further research.

Finishing the Business Plan

The final stage involves putting the important finishing touches on the business plan so that it will present well to potential investors and others. This involves making sure that the math and links between the written and financial parts are accurate. It involves ensuring that all the needed corrections are made to the spelling, grammar, and formatting. The final set of goals should be written to appeal to the target readers and to reflect what the business plan says. An executive summary should be written and included as a final step.

Chapter Summary

This chapter described the internal and external purposes for business planning. It also explained how business plans must effectively communicate while establishing and building credibility for both the entrepreneur and the venture. The general guidelines for business planning were covered as were some important business planning tools. The chapter concluded with descriptions of the stages of the business development process for effective business planning.

• Hindle, K., & Mainprize, B. (2006). A systematic approach to writing and rating entrepreneurial business plans. The Journal of Private Equity, 9(3), 7-23. ↵
• Ibid. ↵

Business Plan Development Guide Copyright © 2023 by Lee A. Swanson is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License , except where otherwise noted.

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Business Plan Example and Template

Learn how to create a business plan

What is a Business Plan?

A business plan is a document that contains the operational and financial plan of a business, and details how its objectives will be achieved. It serves as a road map for the business and can be used when pitching investors or financial institutions for debt or equity financing .

A business plan should follow a standard format and contain all the important business plan elements. Typically, it should present whatever information an investor or financial institution expects to see before providing financing to a business.

Contents of a Business Plan

A business plan should be structured in a way that it contains all the important information that investors are looking for. Here are the main sections of a business plan:

1. Title Page

The title page captures the legal information of the business, which includes the registered business name, physical address, phone number, email address, date, and the company logo.

2. Executive Summary

The executive summary is the most important section because it is the first section that investors and bankers see when they open the business plan. It provides a summary of the entire business plan. It should be written last to ensure that you don’t leave any details out. It must be short and to the point, and it should capture the reader’s attention. The executive summary should not exceed two pages.

3. Industry Overview

The industry overview section provides information about the specific industry that the business operates in. Some of the information provided in this section includes major competitors, industry trends, and estimated revenues. It also shows the company’s position in the industry and how it will compete in the market against other major players.

4. Market Analysis and Competition

The market analysis section details the target market for the company’s product offerings. This section confirms that the company understands the market and that it has already analyzed the existing market to determine that there is adequate demand to support its proposed business model.

Market analysis includes information about the target market’s demographics , geographical location, consumer behavior, and market needs. The company can present numbers and sources to give an overview of the target market size.

A business can choose to consolidate the market analysis and competition analysis into one section or present them as two separate sections.

5. Sales and Marketing Plan

The sales and marketing plan details how the company plans to sell its products to the target market. It attempts to present the business’s unique selling proposition and the channels it will use to sell its goods and services. It details the company’s advertising and promotion activities, pricing strategy, sales and distribution methods, and after-sales support.

6. Management Plan

The management plan provides an outline of the company’s legal structure, its management team, and internal and external human resource requirements. It should list the number of employees that will be needed and the remuneration to be paid to each of the employees.

Any external professionals, such as lawyers, valuers, architects, and consultants, that the company will need should also be included. If the company intends to use the business plan to source funding from investors, it should list the members of the executive team, as well as the members of the advisory board.

7. Operating Plan

The operating plan provides an overview of the company’s physical requirements, such as office space, machinery, labor, supplies, and inventory . For a business that requires custom warehouses and specialized equipment, the operating plan will be more detailed, as compared to, say, a home-based consulting business. If the business plan is for a manufacturing company, it will include information on raw material requirements and the supply chain.

8. Financial Plan

The financial plan is an important section that will often determine whether the business will obtain required financing from financial institutions, investors, or venture capitalists. It should demonstrate that the proposed business is viable and will return enough revenues to be able to meet its financial obligations. Some of the information contained in the financial plan includes a projected income statement , balance sheet, and cash flow.

9. Appendices and Exhibits

The appendices and exhibits part is the last section of a business plan. It includes any additional information that banks and investors may be interested in or that adds credibility to the business. Some of the information that may be included in the appendices section includes office/building plans, detailed market research , products/services offering information, marketing brochures, and credit histories of the promoters.

Business Plan Template

Here is a basic template that any business can use when developing its business plan:

Section 1: Executive Summary

• Present the company’s mission.
• Describe the company’s product and/or service offerings.
• Give a summary of the target market and its demographics.
• Summarize the industry competition and how the company will capture a share of the available market.
• Give a summary of the operational plan, such as inventory, office and labor, and equipment requirements.

Section 2: Industry Overview

• Describe the company’s position in the industry.
• Describe the existing competition and the major players in the industry.
• Provide information about the industry that the business will operate in, estimated revenues, industry trends, government influences, as well as the demographics of the target market.

Section 3: Market Analysis and Competition

• Define your target market, their needs, and their geographical location.
• Describe the size of the market, the units of the company’s products that potential customers may buy, and the market changes that may occur due to overall economic changes.
• Give an overview of the estimated sales volume vis-à-vis what competitors sell.
• Give a plan on how the company plans to combat the existing competition to gain and retain market share.

Section 4: Sales and Marketing Plan

• Describe the products that the company will offer for sale and its unique selling proposition.
• List the different advertising platforms that the business will use to get its message to customers.
• Describe how the business plans to price its products in a way that allows it to make a profit.
• Give details on how the company’s products will be distributed to the target market and the shipping method.

Section 5: Management Plan

• Describe the organizational structure of the company.
• List the owners of the company and their ownership percentages.
• List the key executives, their roles, and remuneration.
• List any internal and external professionals that the company plans to hire, and how they will be compensated.
• Include a list of the members of the advisory board, if available.

Section 6: Operating Plan

• Describe the location of the business, including office and warehouse requirements.
• Describe the labor requirement of the company. Outline the number of staff that the company needs, their roles, skills training needed, and employee tenures (full-time or part-time).
• Describe the manufacturing process, and the time it will take to produce one unit of a product.
• Describe the equipment and machinery requirements, and if the company will lease or purchase equipment and machinery, and the related costs that the company estimates it will incur.
• Provide a list of raw material requirements, how they will be sourced, and the main suppliers that will supply the required inputs.

Section 7: Financial Plan

• Describe the financial projections of the company, by including the projected income statement, projected cash flow statement, and the balance sheet projection.

Section 8: Appendices and Exhibits

• Quotes of building and machinery leases
• Proposed office and warehouse plan
• Market research and a summary of the target market
• Credit information of the owners
• List of product and/or services

Related Readings

Thank you for reading CFI’s guide to Business Plans. To keep learning and advancing your career, the following CFI resources will be helpful:

• Corporate Structure
• Three Financial Statements
• Business Model Canvas Examples
• See all management & strategy resources
• Share this article

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Writing a Business Plan

In This Chapter

• Recognizing the value of a business plan
• Understanding what goes into a plan
• Creating a map for your business
• Getting your message to your plan's audience
• Setting your business time frame and milestones

T he fact that you're reading this chapter means the task of writing a business plan has made it onto your to-do list. That's a big step in the right direction. Now come the questions. What exactly is business planning? What should it include? Where do you start the process of writing your business plan?

This chapter should confirm your hunch that business planning is essential — when you start your business and at every growth stage along the way. It helps you think about the audience for your plan, what its key components should be, and roughly how long you'll need to put it together.

Writing a business plan is not exactly a breeze. It takes time and thought. This chapter provides a quick and easy overview to get you oriented and on your way to business-planning success.

Selling Yourself on the Importance of Planning

Nearly all business experts agree on one thing: the importance of drafting a business plan. Yet plenty of companies plunge into the competitive arena without a formal plan. Why? Plenty of excuses have posed as reasons. A lot of new businesses are carried away and figure their passion and optimism are enough to build a successful company. Others say they were just too busy to develop a formal business plan. But operating ...

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How to Create a Business Plan

By Scott McDowell

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A business plan is a helpful step to create a roadmap as you start or start to grow your business. This guide will explain the value of having a business plan and provide a detailed, step-by-step process to help you create one.

Think of a business plan as more than just a theoretical overview. It is a practical, actionable resource that informs your business as you grow.

What is a business plan?

At its most basic, a business plan is a formal document that outlines your objectives, strategy, and timeline to profitability. It includes basic information all in one place: your mission , organizational structure, product offerings, financial projections, and more.

A good business plan will:

Clarify your vision and strategy

Guide growth and help you stay on track

Provide a framework for making informed decisions regarding your business

At the end of the day, a business plan helps you stay focused on your goals and demonstrates that you have a viable strategy for growth. 

Why create a business plan?

Even if you don’t need one right now, a business plan can help you clarify your goals and lay out the steps to grow your revenue and customer base, so you can keep doing work you enjoy. A solid business plan can keep you on track and provide a benchmark for measuring progress. Plus, you’ll likely need a comprehensive business plan if you plan to attract outside investors.

How to develop a business plan

Before you start putting together your business plan, there are a few key pieces of thinking and research that will inform the details. 

1. Evaluate your business idea

Take some time to evaluate your new business. This step helps you hone in on your mission and vision for the business and what makes it unique. 

Ask and answer the following questions:

What problem does my business solve?

Is there a demand for my product or service?

What are the potential pitfalls and risks?

2. Conduct market research

Market research involves gathering information about your industry, target audience, and competitors to understand your market and identify gaps and sales opportunities. This helps you look more closely at where you stand among similar businesses and how you can differentiate yourself.

Industry analysis: Look at industry trends, growth potential, and market size.

Target market: Identify who your customers are, their demographics, preferences, and buying behavior.

Competitor analysis : Analyze your competitors' strengths and weaknesses, their market positioning, and their strategies.

Read our guide to audience research

3. Understand your audience

Developing a clear understanding of your target audience will help you figure out how to speak to them effectively, how to market your brand to them, and their unique needs.

Once you know your target market, dive deeper into their needs. Ask yourself:

How do you solve a problem or fill a need for them?

What are their priorities?

How do you reach them online or in person?

What type of message or behavior is likely to gain their trust or loyalty?

Creating a customer or buyer persona —a fictional version of your ideal customer—can be a helpful way to summarize these details. 

The elements of a business plan

A formal business plan includes several parts, including details about your business, how it’s structured, marketing plans, financials, and products. Which parts you need for your own business plan depends on its purpose. If you plan to present this to a potential partner or investor, you likely need most of the elements. If the business plan is to help you log your goals and plans, you can remove sections that don’t feel relevant to your needs.

Executive summary

The executive summary is the first section of your business plan, but you should probably write it last. It’s a one or two paragraph high-level summary of your entire plan. Remember, the executive summary is the first thing someone will see, so it needs to be concise and engaging.

What to include in your executive summary:

Business name: Your business' name and any relevant branding

Mission statement: A brief description of your business’s purpose and core values

Products/services: A summary of the products or services you offer

Market opportunity: An overview of the market need you are addressing

Financial highlights: Key financial projections, including expected revenue and profit

Example: For an eco-friendly clothing line, the executive summary might highlight the growing demand for sustainable fashion, the unique designs offered, and projected first-year revenues of $100,000.

"Our eco-friendly clothing line, GreenDress, is dedicated to providing stylish and sustainable fashion alternatives. With the mission to reduce fashion waste, our products are made from organic and recycled materials. Addressing the increasing consumer demand for eco-friendly options, we aim to capture a significant share of the sustainable fashion market, projecting first-year revenues of $100,000 with a profit margin of 20%."

Company description

Provide a comprehensive overview of your company, including its structure, history, and the problem it solves. This is similar to the About section you might write for your website bio .

What to include in your company description:

Business structure: Describe your legal business structure (for example, sole proprietorship, partnership, LLC ).

History: Provide a brief history of your business, if applicable.

Market needs: Reiterate the problem your business solves and why there’s a demand.

Example: “ GreenDress is an LLC founded in 2023 by Joan Campion, a fashion stylist and designer with over 10 years of experience in sustainable manufacturing. Our mission is to offer fashionable, eco-friendly women’s clothing options that minimize environmental impact. With growing awareness of fashion’s ecological footprint, there is an increasing demand for sustainable fashion.”

Market analysis

Conduct market analysis to help you understand your industry, market size, and competitors. This helps you and others understand where you sit among competitors, who your brand is for, and what makes you unique.

What to include in your market analysis:

Industry overview: Summarize the industry landscape and trends.

Target market: Define your target market, including demographics, location, and purchasing behavior.

Competitive analysis: Identify your main competitors and analyze their strengths and weaknesses.

Example: “The sustainable fashion industry is growing at an annual rate of 10%. Our target market consists of eco-conscious consumers aged 18-35 who value sustainability and unique design. Competitors include established brands like Patagonia, independent sustainable fashion brands, and direct-to-consumer startups like Everlane. GreenDress differentiates itself by offering more affordable and fashion-forward options.”

Organization and management

Highlight the experience and expertise of your team members. If you’re creating a business plan for your own planning purposes, you can likely skip this section unless it’s helpful to sketch out your team structure.

What to include in your organization and management section:

Organizational structure: Include an org chart and provide a one or two sentence overview of your business’s organizational structure. 

Management team: Introduce team members, their roles, and relevant experience.

Advisors: Mention any advisors or board members.

Example: “ GreenDress is led by CEO Joan Campion, with over a decade of experience in sustainable fashion design. Our team includes COO Carlos Silver, who has a background in supply chain management, and CFO Emily Deschutes, an expert in financial planning for startups. We also have a board of advisors consisting of industry veterans and sustainability experts.”

Products or services

Describe your products and explain what makes them unique. Writing this out can help you clarify how you talk about your products and the process for creating and selling them.

What to include in the products or services section:

Description: Provide detailed descriptions of your products or services.

Benefits: Highlight the key benefits to your customers and the unique selling points of your products.

Lifecycle: Outline the lifecycle of your products or services, including development and future plans.

Example: “ Our product line includes organic cotton dresses, jeans, t-shirts, and jackets made of recycled and repurposed materials. Each item is designed with style and sustainability in mind. Our clothing is durable, stylish, and eco-friendly, appealing to consumers who want to reduce their environmental impact without sacrificing fashion.”

Marketing and sales strategy

How will you attract and retain customers? Include information about your preferred marketing channels, sales tactics, and customer retention plans.

What to include in the marketing and sales strategy section:

Marketing channels: Describe the channels you will use to reach your target market (for example: social media , email marketing , influencers).

Sales strategy: Explain your sales process and tactics.

Customer retention: State how you plan to retain customers and encourage repeat business.

Example: “ We will leverage social media platforms, fashionistas, and eco-influencers to promote our brand. Our sales strategy includes an ecommerce website and pop-up shops in vibrant neighborhoods. We will implement a customer loyalty program, offer discounts for repeat buyers, and regularly update our product line to retain customers and keep our brand fresh and appealing.”

Read our guide to creating a marketing strategy

Financial plan

Provide an overview of your business’ financial projections. You may need to talk to a financial expert or ask a friend who understands the financials of starting a business. 

What to include in the financial plan section:

Revenue model: Explain how your business will make money.

Funding requirements: Detail any funding you need to start or grow your business.

Financial projections: Provide projected income statements, cash flow statements, and balance sheets for the next 3-5 years.

Example: “ Our revenue model is based on direct-to-consumer sales through our website and pop-up shops. We are seeking $50,000 in seed funding to cover initial production costs and marketing expenses. Projected first-year revenue is $100,000, with a net profit margin of 20%.”

Include any additional information that supports your business plan in an appendix. Consider what additional questions your audience might have. If this business plan is for your records, think about what business documentation would be useful to keep in your plan for easy reference.

The appendix can include things like:

Resumes: Detailed resumes or bios of the management team.

Product photos: High-quality images of your products .

Legal documentation: Any relevant legal documents, such as patents or trademarks.

Creating a simple starter business plan

Depending on your business stage and goals, you may only need a truncated, straightforward business plan outline. Focus on the essentials and don’t get bogged down in too much detail. Instead of including everything listed above, start with these sections:

Financial projections

A shorter business plan may be all you need to get your venture off the ground. It will provide enough of a framework to take the idea in your head and make it a real, viable business.

4 tips for writing a good business plan

A few best practices apply no matter how long your business plan is or who it’s for. A great business plan is clear, realistic, and based on research.

Use clear and straightforward language. Avoid jargon and overly technical terms, use short sentences and paragraphs, and be specific and direct.

Support your claims with data and research. Use credible sources for market data, provide references and cite your sources, and use charts or graphs to illustrate data and make it easy on the eyes.

Set feasible and achievable goals.  Base your projections on realistic assumptions and don’t be overly optimistic, consider potential challenges and risks and how you plan to address them, and be able to explain for your projections.

Seek feedback from friends, mentors, and advisors. Share your plan with someone you trust, ideally with more experience than you and use the feedback to refine and improve your plan.

Crafting a well-structured business plan is an elemental step for starting a new business or side hustle. You can start with a simple bare-bones plan or develop a more robust one, depending on your needs. The process can seem daunting, but armed with a clear and detailed plan, you will be ready to guide your business to success.

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5.6 The Business Plan

Learning objective.

• Discuss the importance of planning for your business, and identify the key sections of a business plan.

If you want to start a business, you must prepare a business plan. This essential document should tell the story of your business concept, provide an overview of the industry in which you will operate, describe the goods or services you will provide, identify your customers and proposed marketing activities, explain the qualifications of your management team, and state your projected income and borrowing needs.

Purpose of a Business Plan

The business plan is a plan or blueprint for the company, and it’s an indispensable tool in attracting investors, obtaining loans, or both. Remember, too, that the value of your business plan isn’t limited to the planning stages of your business and the process of finding start-up money. Once you’ve acquired start-up capital, don’t just stuff your plan in a drawer. Treat it as an ongoing guide to your business and its operations, as well as a yardstick by which you can measure your performance. Keep it handy, update it periodically, and use it to assess your progress.

In developing and writing your business plan, you must make strategic decisions in the areas of management, operations, marketing, accounting, and finance—in short, in all the functional areas of business that we described in Chapter 1 “The Foundations of Business” . Granted, preparing a business plan takes a lot of time and work, but it’s well worth the effort. A business plan forces you to think critically about your proposed business and reduces your risk of failure. It forces you to analyze your business concept and the industry in which you’ll be operating, and it helps you determine how you can grab a percentage of sales in that industry.

The most common use of a business plan is persuading investors, lenders, or both, to provide financing. These two groups look for different things. Investors are particularly interested in the quality of your business concept and the ability of management to make your venture successful. Bankers and other lenders are primarily concerned with your company’s ability to generate cash to repay loans. To persuade investors and lenders to support your business, you need a professional, well-written business plan that paints a clear picture of your proposed business.

Sections of the Business Plan

Though formats can vary, a business plan generally includes the following sections: executive summary, description of proposed business, industry analysis, mission statement and core values, management plan, goods or services and (if applicable) production processes, marketing, global issues, and financial plan. Let’s explore each of these sections in more detail. ( Note : More detailed documents and an Excel template are available for those classes in which the optional business plan project is assigned.)

Executive Summary

The executive summary is a one- to three-page overview of the business plan. It’s actually the most important part of the business plan: it’s what the reader looks at first, and if it doesn’t capture the reader’s attention, it might be the only thing that he or she looks at. It should therefore emphasize the key points of the plan and get the reader excited about the prospects of the business.

Even though the executive summary is the first thing read, it’s written after the other sections of the plan are completed. An effective approach in writing the executive summary is to paraphrase key sentences from each section of the business plan. This process will ensure that the key information of each section is included in the executive summary.

Description of Proposed Business

Here, you present a brief description of the company and tell the reader why you’re starting your business, what benefits it provides, and why it will be successful. Some of the questions to answer in this section include the following:

• What will your proposed company do? Will it be a manufacturer, a retailer, or a service provider?
• What goods or services will it provide?
• Why are your goods or services unique?
• Who will be your main customers?
• How will your goods or services be sold?
• Where will your business be located?

Because later parts of the plan will provide more detailed discussions of many of these issues, this section should provide only an overview of these topics.

Industry Analysis

This section provides a brief introduction to the industry in which you propose to operate. It describes both the current situation and the future possibilities, and it addresses such questions as the following:

• How large is the industry? What are total sales for the industry, in volume and dollars?
• Is the industry mature or are new companies successfully entering it?
• What opportunities exist in the industry? What threats exist?
• What factors will influence future expansion or contraction of the industry?
• What is the overall outlook for the industry?
• Who are your major competitors in the industry?
• How does your product differ from those of your competitors?

Mission Statement and Core Values

This portion of the business plan states the company’s mission statement and core values . The mission statement describes the purpose or mission of your organization—its reason for existence. It tells the reader what the organization is committed to doing. For example, one mission statement reads, “The mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit” (Southwest Airline’s, 2011).

Core values are fundamental beliefs about what’s important and what is (and isn’t) appropriate in conducting company activities. Core values are not about profits, but rather about ideals. They should help guide the behavior of individuals in the organization. Coca-Cola, for example, intends that its core values—leadership, passion, integrity, collaboration, diversity, quality, and accountability—will let employees know what behaviors are (and aren’t) acceptable (The Coca-Cola Company, 2011).

Management Plan

Management makes the key decisions for the business, such as its legal form and organizational structure. This section of the business plan should outline these decisions and provide information about the qualifications of the key management personnel.

A. Legal Form of Organization

This section dentifies the chosen legal form of business ownership: sole proprietorship (personal ownership), partnership (ownership shared with one or more partners), or corporation (ownership through shares of stock).

B. Qualifications of Management Team and Compensation Package

It isn’t enough merely to have a good business idea: you need a talented management team that can turn your concept into a profitable venture. This part of the management plan section provides information about the qualifications of each member of the management team. Its purpose is to convince the reader that the company will be run by experienced, well-qualified managers. It describes each individual’s education, experience, and expertise, as well as each person’s responsibilities. It also indicates the estimated annual salary to be paid to each member of the management team.

C. Organizational Structure

This section of the management plan describes the relationships among individuals within the company, listing the major responsibilities of each member of the management team.

Goods, Services, and the Production Process

To succeed in attracting investors and lenders, you must be able to describe your goods or services clearly (and enthusiastically). Here, you describe all the goods and services that you will provide the marketplace. This section explains why your proposed offerings are better than those of competitors and indicates what market needs will be met by your goods or services. In other words, it addresses a key question: What competitive advantage will the company’s goods and services have over similar products on the market?

This section also indicates how you plan to obtain or make your products. Naturally, the write-up will vary, depending on whether you’re proposing a service company, a retailer, or a manufacturer. If it’s a service company, describe the process by which you’ll deliver your services. If it’s a retail company, tell the reader where you’ll purchase products for resale.

If you’re going to be a manufacturer, you must furnish information on product design, development, and production processes. You must address questions such as the following:

• How will products be designed?
• What technology will be needed to design and manufacture products?
• Will the company run its own production facilities, or will its products be manufactured by someone else?
• Where will production facilities be located?
• What type of equipment will be used?
• What are the design and layout of the facilities?
• How many workers will be employed in the production process?
• How many units will be produced?
• How will the company ensure that products are of high quality?

This critical section focuses on four marketing-related areas—target market, pricing, distribution, and promotion:

• Target market . Describe future customers and profile them according to age, gender, income, interests, and so forth. If your company will sell to other companies, describe your typical business customer.
• Pricing . State the proposed price for each product. Compare your pricing strategy to that of competitors.
• Distribution . Explain how your goods or services will be distributed to customers. Indicate whether they’ll be sold directly to customers or through retail outlets.
• Promotion . Explain your promotion strategy, indicating what types of advertising you’ll be using.

In addition, if you intend to use the Internet to promote or sell your products, also provide answers to these questions:

• Will your company have a Web site? Who will visit the site?
• What will the site look like? What information will it supply?
• Will you sell products over the Internet?
• How will you attract customers to your site and entice them to buy from your company?

Global Issues

In this section, indicate whether you’ll be involved in international markets, by either buying or selling in other countries. If you’re going to operate across borders, identify the challenges that you’ll face in your global environment, and explain how you’ll meet them. If you don’t plan initially to be involved in international markets, state what strategies, if any, you’ll use to move into international markets when the time comes.

Financial Plan

In preparing the financial section of your business plan, specify the company’s cash needs and explain how you’ll be able to repay debt. This information is vital in obtaining financing. It reports the amount of cash needed by the company for start-up and initial operations and provides an overview of proposed funding sources. It presents financial projections, including expected sales, costs, and profits (or losses). It refers to a set of financial statements included in an appendix to the business plan.

Here, you furnish supplemental information that may be of interest to the reader. In addition to a set of financial statements, for example, you might attach the résumés of your management team.

Key Takeaways

• A business plan tells the story of your business concept, provides an overview of the industry in which you will operate, describes the goods or services you will provide, identifies your customers and proposed marketing activities, explains the qualifications of your management team, and states your projected income and borrowing needs.
• In your business plan, you make strategic decisions in the areas of management, operations, marketing, accounting, and finance. Developing your business plan forces you to analyze your business concept and the industry in which you’ll be operating. Its most common use is persuading investors and lenders to provide financing.

A business plan generally includes the following sections:

• Executive summary . One- to three-page overview.
• Description of proposed business . Brief description of the company that answers such questions as what your proposed company will do, what goods or services it will provide, and who its main customers will be.
• Industry analysis . Short introduction to the industry in which you propose to operate.
• Mission statement and core values . Declaration of your mission statement , which are fundamental beliefs about what’s important and what is (and isn’t) appropriate in conducting company activities.
• Management plan . Information about management team qualifications and responsibilities, and designation of your proposed legal form of organization.
• Goods, services, and the production process . Description of the goods and services that you’ll provide in the marketplace; explanation of how you plan to obtain or make your products or of the process by which you’ll deliver your services.
• Marketing . Description of your plans in four marketing-related areas: target market, pricing, distribution, and promotion.
• Global issues . Description of your involvement, if any, in international markets.
• Financial plan . Report on the cash you’ll need for start-up and initial operations, proposed funding sources, and means of repaying your debt.
• Appendices . Supplemental information that may be of interest to the reader.

(AACSB) Analysis

Let’s start with three givens: (1) college students love chocolate chip cookies, (2) you have a special talent for baking cookies, and (3) you’re always broke. Given these three conditions, you’ve come up with the idea of starting an on-campus business—selling chocolate chip cookies to fellow students. As a business major, you want to do things right by preparing a business plan. First, you identified a number of specifics about your proposed business. Now, you need to put these various pieces of information into the relevant section of your business plan. Using the business plan format described in this chapter, indicate the section of the business plan into which you’d put each of the following:

• You’ll bake the cookies in the kitchen of a friend’s apartment.
• You’ll charge $1 each or $10 a dozen.
• Your purpose is to make the best cookies on campus and deliver them fresh. You value integrity, consideration of others, and quality.
• Each cookie will have ten chocolate chips and will be superior to those sold in nearby bakeries and other stores.
• You expect sales of $6,000 for the first year.
• Chocolate chip cookies are irresistible to college students. There’s a lot of competition from local bakeries, but your cookies will be superior and popular with college students. You’ll make them close to campus using only fresh ingredients and sell them for $1 each. Your management team is excellent. You expect first-year sales of $6,000 and net income of $1,500. You estimate start-up costs at $600.
• You’ll place ads for your product in the college newspaper.
• You’ll hire a vice president at a salary of $100 a week.
• You can ship cookies anywhere in the United States and in Canada.
• You need $600 in cash to start the business.
• There are six bakeries within walking distance of the college.
• You’ll bake nothing but cookies and sell them to college students. You’ll make them in an apartment near campus and deliver them fresh.

The Coca-Cola Company, “Workplace Culture,” The Coca-Cola Company, http://www.thecoca-colacompany.com/citizenship/workplace_culture.html (accessed August 31, 2011).

Southwest Airline’s company Web site, about SWA section, http://www.southwest.com/about_swa/mission.html (accessed August 31, 2011).

Exploring Business Copyright © 2016 by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.

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Business Plan Section 1: Executive Summary

The executive summary of your business plan introduces you, describes your company, and where you’d like to take it. Discover the top 8 points to include.

The executive summary is the first thing someone will read when they start making their way through your business plan, and that makes it vitally important. Just like a great movie trailer excites you about seeing a film, or a book jacket blurb entices you to pick up a novel, the executive summary needs to engage your readers and spark their interest, making them want to continue reading more about your business.

The executive summary introduces you, describes the current state of your company, where you’d like to take it, and why you believe you’ll be successful in getting there. Interestingly, many experts suggest that even though this section comes first in the finished document, you don’t write it until last -after you’ve put the rest of your business plan together, so you can highlight your strengths and the important points you’ve made.

We’ve talked about pitching your company before. At its essence, that’s what the executive summary is: your first pitch, whether it be to a lender , an investor, or a potential employee. If you don’t write a decent executive summary, there’s a chance the rest of your plan won’t even get read. If you hit it out of the park, then you’ve gone a long way toward achieving your desired result.

What Goes Into the Executive Summary of a Business Plan?

As we mentioned in our Introduction to Business Plans , plans can serve several different purposes and be intended for different audiences. What you include in the summary will depend on where in the business cycle your company is and what the plan is for.

In every case, keep in mind that this is a summary! Make it impactful but keep it concise. The Small Business Administration recommends fitting everything on one page, and two should certainly be your limit.

Company Information

The company information to include is the name of your business, when it was formed, the names and roles of the founders, how many employees you have, and where you’re located.

The Problem Your Business Solves

Remember that if your product or service doesn’t answer a need or isn’t solving a problem, you don’t have a viable business. The problem may be as simple as: “There are no day spas within a 50 mile radius of Anytown,” but you need to identify and state the problem you’re solving.

If you have a mission statement for the company, it might fit in here, or you can include it in the company description section instead. A mission statement isn’t a required element of a business plan, but creating one could be a help in giving you direction and defining the character and culture of your company.

The Solution Your Business Provides

How will you address the existing situation you described and solve the problem? Keep in mind that this is a summary, so you don’t need to go into detail; the rest of your plan will cover that. Describe the way your business is the solution in a few sentences or bullet points.

The Concept

Explain who you’re marketing to and how your concept fits what they’re looking for. Going back to our fictitious day spa, describe the environment you’ll create; for example, whether you’re targeting a clientele that will appreciate a peaceful environment, an upscale luxury market, or something more mass appeal, and how your concept fits that. Writing the summary last, you’re able to pull info from the market research and strategy sections and point to the research that backs up your idea.

How You Compare to Your Competition

Even if there are no day spas in your area, there may be gyms that offer massages, beauty salons that do facials, etc. Discuss how your business will solve the problem better and more successfully. Why would a potential customer choose you?

You’ll introduce them extensively later on, but part of exciting readers is letting them know who’s on your team, and why you’re uniquely qualified to be successful. If you don’t have everyone on board yet, that’s okay. Talk about the positions you intend to fill and how you plan to do that.

Your Current Situation

Describe where you are now with the business and what you’ve already accomplished. It’s okay to be just starting out, but talk about the progress you’ve already made. If you’ve found the perfect spot for that day spa we’ve been talking about, mention it here. Perhaps you have an interior design already. You should include the drawing later in the plan, but mention it here.

Where would you like to see your business headed? What are you trying to achieve? If you’re writing a business plan to help you secure a loan or investor, how will that infusion of money help you get there?

If you’re writing your business plan because you’re seeking funding, there are certain pieces of information you need to include, such as information about your current bank and investors, if any. If you’re running an established business, you’ll need to outline your current revenue and expenses, although save the nitty-gritty details for the financial section of the business plan.

The executive summary section of a business plan for a new business can offer information about its business model and how you plan to earn revenue. You should also share financial projections and your anticipated expenses.

If your business plan is for your own use as an operational tool, you can be a little less formal with what you include in the executive summary. Concentrate on the problem-solving and conceptual details of the business. It’s okay to skip the company information, your team’s biographies, and other operational and logistical details.

How to Format the Executive Summary

Start with a paragraph that grabs the reader’s attention. If you have a compelling anecdote about the company, an interesting fact, or relevant statistic, that could be one way to go. Some summaries open with a statement about the purpose of the company or its mission statement.

After the opening paragraph, you can follow the order of the following sections of the plan. Each topic belongs in its own paragraph. And because this is a summary, cover them in just two or three sentences each.

In your final paragraph, tell the reader the purpose of the plan. If you want a loan, how much and for how long? If it’s an investment, are you looking for a percentage or specific amount? And what are you offering in exchange?

You want to create excitement and interest in your business, so use positive and compelling language. While to you, it may be entirely obvious that the universe has been waiting for just your product or service, but that’s probably not the case for the people reading your business plan. Balance your enthusiasm with sincerity, don’t exaggerate, and persuade with facts. Be simple and clear so that even someone who is totally unfamiliar with your industry will understand what you’re saying.

Next Article: Business Plan Section 2 – Company Description

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Business Restructuring Review Vol. 23 No. 4 | July–August 2024

In This Issue:

U.S. Supreme Court Bankruptcy Update

The U.S. Supreme Court handed down three bankruptcy rulings to finish the current Term. The decisions address the validity of nonconsensual third-party releases in chapter 11 plans, the standing of insurance companies to object to "insurance neutral" chapter 11 plans, and the remedy for overpayment of administrative fees in chapter 11 cases to the Office of the U.S. Trustee. [ Read more … ]  

Ohio Bankruptcy Court Offers Guidance on (the Amended) Ordinary Course Payment Preference Defense

In In re ASPC Corp. , 658 B.R. 455 (Bankr. S.D. Ohio 2024), the U.S. Bankruptcy Court for the Southern District of Ohio addressed a preference defendant's burden of proof under the amended section of the Bankruptcy Code shielding from avoidance transfers made to pay debts incurred in the ordinary course of business of the debtor and the transferee. The court granted summary judgment to a creditor in avoidance litigation, ruling that the defendant need only demonstrate that the payment satisfied one—but not both—of the tests stated in section 547(c)(2). According to the bankruptcy court, "[t]his case illustrates the importance of [the 2005 amendment's] replacement of the conjunctive 'and' with the disjunctive 'or' between the subjective and objective tests for the ordinary course of business defense."           [ Read more … ]

First Impressions: Seventh Circuit Rules that the Bankruptcy Code's "Safe Harbor" for Securities Contracts Transfers Applies to Non-Public Securities

Section 546(e) of the Bankruptcy Code's "safe harbor" preventing avoidance in bankruptcy of certain securities, commodity, or forward-contract payments has long been a magnet for controversy. Several noteworthy court rulings have been issued in bankruptcy cases addressing the scope of the provision. One of the latest chapters in the ongoing debate was written by the U.S. Court of Appeals for the Seventh Circuit in Petr v. BMO Harris Bank N.A. , 95 F.4th 1090 (7th Cir. 2024). The Seventh Circuit affirmed a district court ruling broadly construing the section 546(e) safe harbor to bar a chapter 7 trustee from suing under state law and section 544 of the Bankruptcy Code to avoid an alleged constructively fraudulent transfer made by the debtor shortly after it had been acquired in a leveraged buy-out. Among other things, the Seventh Circuit agreed with the district court's conclusions that: (i) the safe harbor is not limited to transfers involving publicly traded securities; and (ii) section 546(e) preempted the trustee's claim to recover the value of the transfer under section 544 and state law. [ Read more … ]

Third Circuit: Unsecured Claim for Royalties from Intellectual Property Purchased by Debtor Discharged Under Chapter 11 Plan

Mitigating risk of loss associated with a bankruptcy filing should be an element of any commercial transaction, especially if it involves a sale or license of intellectual property rights. A ruling recently handed down by the U.S. Court of Appeals for the Third Circuit provides a stark reminder of the consequences of when it is not. In In re Mallinckrodt PLC , 99 F.4th 617 (3d Cir. 2024), the Third Circuit ruled that, in the absence of any security, a claim asserted by the seller of intellectual property rights for royalties payable under the sale agreement was a prepetition unsecured claim that was discharged when the bankruptcy court confirmed the debtor-buyer's chapter 11 plan. [ Read more … ]

Circuit Split: Eleventh Circuit and Second Circuit Disagree on Eligibility Requirements for Chapter 15 Debtors

Courts disagree over whether a foreign bankruptcy case can be recognized under chapter 15 of the Bankruptcy Code if the foreign debtor does not reside or have assets or a place of business in the United States. In 2013, the U.S. Court of Appeals for the Second Circuit staked out its position on this issue in Drawbridge Special Opportunities Fund LP v. Barnet (In re Barnet) , 737 F.3d 238 (2d Cir. 2013), ruling that the provision of the Bankruptcy Code requiring U.S. residency, assets, or a place of business applies in chapter 15 cases as well as cases filed under other chapters. The U.S. Court of Appeals for the Eleventh Circuit split with the Second Circuit on this controversial issue in In re Al Zawawi , 97 F.4th 1244 (11th Cir. 2024). Distancing itself from Barnet , the Eleventh Circuit affirmed a district court ruling that chapter 15 has its own eligibility requirements, and that the eligibility requirements for debtors in cases under other chapters of the Bankruptcy Code do not apply in chapter 15 cases. [ Read more … ]

New York Bankruptcy Court: Lockup Provision in Proposed Settlement Agreement Violated Bankruptcy Code's Disclosure and Solicitation Requirements

The U.S. Bankruptcy Court for the Southern District of New York addressed the propriety of restructuring support, plan support, or lockup agreements in In re GOL Linhas Aéreas Inteligentes S.A. , 2024 WL 1716490 (Bankr. S.D.N.Y. Apr. 22, 2024). The court approved a global settlement among the chapter 11 debtors and various aircraft lessors, but denied approval of an impermissible "lockup" provision in the settlement agreements, obligating the counterparties to support any chapter 11 plan later filed by the debtors provided the plan embodied the terms of the settlement. Although the bankruptcy court declined to adopt a "bright-line" prohibition of such agreements in all cases, it emphasized that the Bankruptcy Code's disclosure and vote solicitation requirements are paramount. The court also concluded that the lockup provision before it failed to pass muster because, unlike most typical lockup or "plan support agreements" or "restructuring support agreements," the provision did not specify the terms of a proposed chapter 11 plan, but merely the terms of the proposed settlement, together with a requirement that any plan could not be inconsistent with those settlement terms. [ Read more … ]

Newsworthy:

Heather Lennox  (Cleveland/New York) , Bruce Bennett  (Los Angeles) , Kevyn D. Orr  (Washington) , Gregory M. Gordon  (Dallas) , Carl E. Black  (Cleveland) , Daniel J. Merrett  (Atlanta) , Robert W. Hamilton  (Columbus) , Corinne Ball  (New York) , Gary L. Kaplan  (Miami) , Thomas M. Wearsch  (New York/Cleveland) , Brad B. Erens  (Chicago) , Jeffrey B. Ellman  (Atlanta) , and Dan T. Moss  (Washington/New York) were recognized as leading lawyers in the area of Bankruptcy/Restructuring in the 2024 edition of Chambers USA . Bruce Bennett and Gregory M. Gordon received a "Band 1" designation. Heather Lennox was ranked as a "Star Individual." Corinne Ball was designated a "Senior Statesperson."

Thomas M. Wearsch  (New York/Cleveland) spoke on a panel discussing "International Restructuring in the Automotive Sector" on June 4, 2024, at the International Bar Association Annual Meeting in Zurich, Switzerland.

Dr. Olaf Benning  (Frankfurt) , Markus Ledwina  (Frankfurt) , and Alexander Ballmann  (Munich) were recognized as leading lawyers by The Best Lawyers in Germany ™ 2025 in the practice area Restructuring and Insolvency Law.

On June 10, 2024, Dan T. Moss  (Washington/New York) was on a panel discussing "Insolvency Proceedings Without Solvency?" at the 24th Annual International Insolvency Conference in Singapore.

An article written by Daniel J. Merrett  (Atlanta) titled "New York Bankruptcy Court: Setoff and Unjust Enrichment Cannot Be Asserted as Affirmative Defenses in Bankruptcy Avoidance Litigation" was posted on June 11, 2024, on the Harvard Law School Bankruptcy Roundtable .

On May 17, 2024, the U.S. Bankruptcy Court for the District of Delaware recognized and enforced a restructuring plan for Spark Networks SE ("Spark") under chapter 15 of the Bankruptcy Code, marking the first such order for a plan formulated under Germany's Corporate Stabilization and Restructuring Act ("StaRUG"). Dating platformer provider Spark received approval for its StaRUG plan from a German court in January and successfully defended an appeal by certain shareholders in April. Introduced in January 2021, StaRUG allows companies to impose a compromise or arrangement, including a restructuring of liabilities, upon all or a subset of the creditors. The plan waives more than $30 million of secured debt and $13 million of unsecured debt, and provides approximately $24 million in liquidity support. The Jones Day professionals advising Spark included Dan T. Moss  (Washington/New York) , Olaf Benning  (Frankfurt) , David S. Torborg  (Washington) , Colleen E. Laduzinski  (Boston/New York) , Ryan Sims  (Washington) , S. Christopher Cundra IV  (Washington) , Nick Buchta  (Cleveland) , Richard H. Howell  (Washington) , Elizabeth A. Dengler  (Boston) , and Alexandra Levay  (Boston) .

An article written by T. Daniel Reynolds  (Cleveland) titled "Fifth Circuit: Recent U.S. Supreme Court Ruling Did Not Alter Mootness Requirements for Unstayed Bankruptcy Sale Orders" was published on June 4, 2024, by Lexis Practical Guidance .

An article written by Dan T. Moss  (Washington/New York) , Heather Lennox  (Cleveland/New York) , David S. Torborg  (Washington) , and Vinay Kurien  (Singapore) titled "Third Circuit Updates Its Standard for Granting Comity to Foreign Bankruptcy Proceedings" was published on June 9, 2024, by Lexis Practical Guidance .

An article written by Corinne Ball  (New York) , David S. Torborg  (Washington) , and Dan T. Moss  (Washington/New York) titled "Delaware Bankruptcy Court: 'Center of Main Interests' for Purposes of Chapter 15 Recognition Must Be Determined on Debtor-by-Debtor Rather than Enterprise Group Basis was published on June 9, 2024, by Lexis Practical Guidance .

An article written by T. Daniel Reynolds  (Cleveland) titled "Ability of Creditors' Committees to Prosecute Estate Claims Given a Boost in Delaware Bankruptcy Courts" was published on June 4, 2024, by Lexis Practical Guidance . 

Lawyer Spotlight: Fabienne Beuzit

Fabienne Beuzit is a partner in the Paris Office, where she leads the Business Restructuring & Reorganization team. Fabienne focuses on bankruptcy proceedings, court and out-of-court restructurings, distressed M&A matters, and insolvency-related litigation. She guides clients through complex restructuring situations and has represented debtors, lenders, shareholders, and investors in numerous restructurings in France and internationally. She regularly interacts with the dedicated departments of the French Ministry of Economy and Finance Affairs, particularly the Comité Interministériel de Restructuration Industrielle in charge of assisting distressed companies, and liaising with all relevant public bodies dedicated to the companies.

Fabienne's experience also includes setting up strategic carve-out, reorganization, or restructurings of groups and assisting turnaround distressed funds in the sale, acquisition, or investment of distressed equity interests.

According to Chambers Europe , Fabienne has "strong technical expertise coupled with business sense, and dedication at odd hours when the situation commands." France Legal 500 EMEA , which named her among the "Leading Individuals" in France, described Fabienne as a tough negotiator, creative in mastering all aspects of a restructuring case, and "totally dedicated to her clients."

• Attachments
• Business Restructuring Review Vol. 23 No. 4 | July–August 2024.pdf

Corinne Ball

Dan T. Moss

Daniel J. Merrett

Nicholas J. Morin

David S. Torborg

Jane Rue Wittstein

Oliver S. Zeltner

July 2024 Reprint

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• Business Restructuring & Reorganization

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