How to Write a Business Plan That Works

What goes in a business plan, which format to choose and how to keep it useful after you write it.

Learning how to write a business plan is the first test of any idea: it turns a hope into numbers a lender, investor or grant reviewer can check. This guide covers the two formats, the eight sections and where to get a free review.

A business plan is a working tool, not a formality. It forces you to test your idea on paper, and it is the first thing a lender, investor or grant reviewer will ask to see.

Choose a format

A traditional plan is detailed, often 20 pages or more, and is what banks expect. A lean startup plan fits on one page and focuses on the key parts: value, customers, channels, costs and revenue. Many owners start lean and expand when they seek funding.

What a traditional plan includes

Executive summary: what the business is and why it will succeed, in one page.
Company description: the problem you solve and who you solve it for.
Market analysis: your industry, target market and competitors.
Organization and management: your structure and the people running it.
Products or services: what you sell, how it is made and how it is priced.
Marketing and sales: how you will reach and keep customers.
Funding request: how much you need, for what and over what period.
Financial projections: income, cash flow and balance sheet forecasts, usually for three to five years.

Make the numbers honest

Build your forecast from the bottom up: how many customers, buying how often, at what price. Show your assumptions so a reader can follow them, and include a cautious case as well as your expected one.

Keep it alive

Compare your actual results with the plan every quarter. Where they differ, find out why and update the plan. That habit is worth more than the first draft.