How to write a business plan that covers your market, financial projections, operations, and funding strategy, whether for investors or your own roadmap.
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Executive Summary
Write a one-page executive summary
Write this section last, even though it goes first. Investors spend an average of 3 minutes 44 seconds reviewing a business plan, so this page must stand on its own.
State the problem your business solves in 1-2 sentences
Describe your solution and business model
Include your funding ask if seeking investment
Define your mission statement
Keep it to 1-2 sentences. A good mission statement answers three questions: what you do, who you do it for, and why it matters. Avoid vague language like 'world-class' or 'best-in-class.'
List your top 3 competitive advantages
Be specific and provable. 'We are cheaper' is weak. 'Our manufacturing process reduces costs by 35% compared to the industry average' is strong and verifiable.
Market Analysis
Define your target market with demographics and size
Use census data, industry reports, and trade association statistics. Express market size as TAM (total addressable market), SAM (serviceable addressable market), and SOM (serviceable obtainable market) with dollar figures.
Identify your ideal customer profile with age, income, and location
Estimate the number of potential customers in your area or online
Research and profile your top 3-5 competitors
For each competitor, document their pricing, strengths, weaknesses, and market share. Use their public reviews (aim for 50+ reviews per competitor) to identify gaps you can fill.
Identify industry trends and growth rate
Reference at least 2-3 credible sources like industry association reports, government data, or research firm publications. Include year-over-year growth rates for the past 3-5 years.
Conduct customer validation interviews or surveys
Talk to at least 20 potential customers before writing your plan. Ask about their current solutions, frustrations, and willingness to pay. Document direct quotes — investors find these compelling.
Products and Services
Describe your product or service in detail
Write as if the reader has never heard of your industry. Include what the customer receives, how it is delivered, and how long it takes. Avoid technical jargon unless writing for industry-specific investors.
Define your pricing strategy with justification
Show your pricing relative to competitors and explain your rationale. Include your gross margin target — investors typically want to see 50%+ gross margins for product businesses and 60%+ for service businesses.
Outline your product development roadmap
Break your roadmap into 3 phases: launch (0-6 months), growth (6-18 months), and scale (18-36 months). Include specific milestones and estimated costs for each phase.
Describe any intellectual property or proprietary technology
If you have patents, trademarks, or trade secrets, list them with filing dates and status. Even pending applications add value. If you have none, describe barriers to entry that protect your business.
Operations and Management
Document your day-to-day operations plan
Map out the customer journey from first contact to repeat purchase. Include your supply chain, key vendors, facilities, and equipment needs with associated costs.
List key suppliers and backup vendors
Define your production or service delivery process
Create an organizational chart with key roles
Include founders, current team, and planned hires for the first 12-18 months. Specify which roles are full-time, part-time, or contractor positions with salary ranges.
Write brief bios for each founder and key team member
Focus on relevant experience and accomplishments, not job titles. Investors back teams, not ideas — highlight the specific skills each person brings. Keep each bio to 3-5 sentences.
Identify key milestones for the first 12 months
Include 6-10 measurable milestones with target dates. Good milestones are specific: 'Reach 500 paying customers by month 8' is better than 'grow the customer base.'
Financial Projections
Build a 3-year revenue projection
Use bottom-up projections: number of customers x average transaction value x purchase frequency. Top-down projections ('we will capture 1% of a $10B market') are less credible to investors.
Project monthly revenue for year 1
Project quarterly revenue for years 2 and 3
Create a detailed expense budget
Categorize expenses as fixed (rent, salaries, insurance) and variable (materials, shipping, commissions). Most startups underestimate expenses by 20-30%, so build in a 15% contingency buffer.
Calculate your break-even point
Divide your total fixed costs by your gross margin percentage. For example, $10,000 monthly fixed costs with a 60% gross margin means you need $16,667 in monthly revenue to break even.
Prepare a 12-month cash flow statement
Cash flow kills more startups than lack of profit. Map out when money comes in versus when bills are due. Most businesses need 3-6 months of operating expenses as a cash reserve.
State your funding requirements and use of proceeds
Break down exactly how you will spend invested funds by category (e.g., 40% product development, 30% marketing, 20% operations, 10% reserve). Investors want to see their money tied to specific growth activities.
Final Review and Formatting
Proofread the entire document for errors
A single typo on your financial page can undermine credibility with investors. Read the plan backward paragraph by paragraph to catch errors your brain might skip reading forward.
Add a professional cover page and table of contents
Include your company name, logo, date, and contact information on the cover. Keep the total plan under 25 pages — 15-20 pages is ideal for most businesses.
Have 2-3 trusted advisors review and give feedback
Ideally include someone with industry experience, someone with financial expertise, and someone unfamiliar with your industry (to test clarity). Give reviewers 5-7 days and specific questions to answer.
Prepare a 2-page summary version for initial outreach
Many investors prefer a short summary before committing to read a full plan. Include your value proposition, market size, traction, team, and funding ask — each in 2-3 sentences.
Frequently Asked Questions
How long should a business plan be?
For seeking funding from banks or investors, 15-25 pages is the standard range. SBA loan applications expect a plan in this range with detailed financial projections covering 3-5 years. For internal use or lean startups, a one-page business model canvas or a 5-page plan can be sufficient to align the founding team on strategy.
Can I write a business plan without financial experience?
Yes. Free tools like SCORE.org templates, LivePlan ($20/month), and the SBA Business Plan Builder walk you through financial projections step by step. At minimum, you need a 12-month cash flow forecast, break-even analysis, and startup cost estimate. If you are seeking over $100,000 in funding, hiring an accountant ($500-$2,000) to review your projections adds credibility.
Do investors actually read the full business plan?
Most venture capitalists spend 3-4 minutes on an initial review and focus on the executive summary, market size, traction metrics, and financial projections. The full plan matters more for bank loans and SBA applications, where loan officers evaluate every section systematically. For VC pitches, a 10-15 slide deck paired with a strong executive summary often carries more weight than a 25-page document.
What financial projections should a business plan include?
At minimum: a 12-month cash flow statement, projected income statement (profit and loss) for years 1-3, balance sheet projections, and a break-even analysis showing when revenue covers all fixed and variable costs. Lenders also want to see a sources-and-uses table detailing how loan funds will be spent and personal financial statements from each owner holding 20% or more equity.
How often should a business plan be updated?
Review financial projections quarterly against actual results and update the full plan annually. Major triggers for an immediate revision include launching a new product line, entering a new market, seeking additional funding, or experiencing a 20%+ variance from projected revenue. Keeping the plan current also helps if unexpected opportunities for partnership or acquisition arise.