How to write a business plan
You had a vision. That vision turned into an idea. You felt so excited about this idea, you quit your day job and started a business. You definitely have passion, drive and belief in yourself – but do you know how to write a business plan?
Every successful business began with a plan – or as Tony calls it, a massive action plan or business map. This is a flexible way to get a new perspective on your business. But if you want to attract investors and top talent, you’ll also need to learn how to make a business plan that follows traditional guidelines and outlines your strategy in detail.
Creating a business map is an essential step for every businessLearn More Here
Beginner tips for how to write a business plan
Writing your first business plan can be intimidating. Before you get started, keep in mind a few tips for how to make a business plan in a way that is easy to read and understand.
Know your audience
Before you think about how to create a business plan, you need to know who you’re writing for. Business plans are typically read by potential investors who want to know that you have a solid strategy to scale your company and a vision that matches theirs. They’re also used internally to demonstrate what the path to success looks like. Use plain language and avoid jargon, industry-specific terms or acronyms that could confuse your audience.
Keep it concise
It’s understandable that you’re passionate about your business and want to communicate your vision to the world. That’s why you need to learn how to write a business plan – but you also need to make sure it’s concise. There’s no set rule for an ideal business plan length, but the US Small Business Administration recommends 50 pages for a basic plan and up to 100 pages for a complex plan. It can take up to three months to write a concise business plan, so be prepared to invest some time.
More important than the page length is the amount of time it takes to skim your business plan. Investors need to be able to get a good idea of who you are and what you need within 15 minutes. Use different-sized headers, clear breaks between sections and chapters and plenty of white space to allow your readers to skim your business plan without fully diving in.
Be ambitious, but realistic. Be conservative in your financial estimates and rational about your marketing and growth plans. Don’t make any claims without using testimonials, quotes and statistics to support them. Investors know how to create a business plan, and they can easily spot empty claims or overblown estimates.
Outline of a business plan
When you’re learning how to write a business plan, you can use the following outline as a guide. The exact contents of a business plan will vary – based on your industry, product or service, business model and more – but it will generally include these eight sections.
1. Executive summary
This section sums up your business plan. Investors often request your executive summary before the detailed plan, so it must be able to stand on its own as a separate document. It includes:
- A one-sentence vision statement
- Short industry overview
- The problem you’re solving and how you plan to solve it
- Your expected sales, expenses and profitability
- How much money you need to raise
- A short timeline of your progress so far
2. Company overview
This is a summary of your company from a branding, legal and operations standpoint. Investors will want to see:
- Mission statement
- Any intellectual property
- A review of your company’s legal structure and ownership
- The business location
- A brief history of the company
3. Business description
Now you’ll go into specifics about your organization. The business description is where you set out exactly what your company does.
- Your target market
- Your market opportunities based on market research and trends
- Your competition and what are your competitive advantages
- Your team’s credentials
- Details about your products and services
- Milestones and metrics: your objectives and how will you get there
4. Sales and marketing plan
To master how to write a business plan, you need to know the ins and outs of every facet of your company. The next four sections are where you plan a path for each department. First up is your marketing plan, where you’ll talk about how you’ll create raving fan customers.
5. Operations plan
Operations are essential to any business. This is where you’ll find the efficiencies that will ultimately determine whether your business is a success – so make this section as detailed as possible.
- Sourcing and major suppliers
- Production and inventory methods
- Licenses, permits and regulations in your industry
- Patents, trademarks and copyrights owned or in progress
- Breakdown of staffing
- Locations and facility management
- Inventory including expected turnover and fluctuations
- Distribution channels (for technology companies, describe how your tech works and how it gets to the consumer)
6. Management plan
True managers – those who were born to do it – are rare, making your managers some of the most vital people on your team. Don’t rush this section, especially if you’re just learning how to create a business plan.
- Key leaders’ titles and names
- Leaders’ education, experience and skills
- Key duties and responsibilities of each position
- Salary structure and salaries by position
- Any gaps in your team and how you plan to fill them
- Organizational chart
7. Financial plan
The last main section of your business plan is likely the most important to investors. Details about your finances help them evaluate whether you’ll be successful. Remember, investors are experienced with how to make a business plan, so make sure this section is accurate and realistic.
An appendix isn’t required, but it can be useful if you’re learning how to write a business plan that’s particularly detailed. It can include things like:
- Charts and tables (especially for finances)
- Organizational chart
- Definitions of less well-known terms
- Legal notes
- Product illustrations and patent illustrations
- Résumés of key leaders
- Examples of marketing collateral
- Photographs of your facilities and operations
Sounds like a lot, doesn’t it? Writing a business plan does take a lot of time and effort, but it’s necessary if you want to get financing or hire great talent. The good news is there’s plenty of help out there, including events like Tony Robbins’ Business Mastery, where you’ll learn about all these details and more.