To make your business idea a reality, you need a business plan. These simple business plan templates will get you started.
Having a road map helps you reach your journey's end successfully. Business plans do the same for small businesses. They lay out the milestones you need to reach on your way to building a profitable small business. From finance to marketing, operations to sales, each part of a business plan helps you reach your goals.
What deters most entrepreneurs from creating a business plan, however, is writing it all out. Many are afraid to do so; they fear that their idea isn't as brilliant as they initially thought it was. For many, however, who take the time to research and write a plan, they find that it helps them identify risks and possible roadblocks. Business plans are essential to identifying and overcoming obstacles on your path so you can build a successful company. [These best picks for business planning software will help you write a top-notch business plan.]
While writing a business plan can be frustrating (especially when you're writing one from scratch,) there are plenty of online templates available to take some of the pain out of the process for you. Small business owners can benefit from simple, easy-to-follow business plan tools so they spend less time writing and more time launching their ventures.
Types of business plans
There are two main types of business plans: simple and traditional. Traditional business plans are long, detailed plans that expound on both short-term and long-term objectives. In comparison, a simple business plan focuses on a few key metrics in concise detail so as to quickly share data with investors.
Simple business plan
Business model expert Ash Maurya has developed a simple type of business plan called a lean canvas. The model, which was developed in 2010, is still one of the most popular types of business plans emulated today.
A lean canvas comprises nine sections, with each part of the plan containing high-value information and metrics to attract investors. This lean business plan often consists of a single page of information with the following listed:
- Key metrics
- Unique proposition
- Unfair advantage
- Customer targets
- Cost structures
- Revenue streams
Traditional business plan
Traditional plans are lengthy documents, sometimes as long as 30 or 40 pages. A traditional business plan acts as a blueprint of a new business, detailing its progress from launch to several years in the future when the startup is an established business. The following is covered in a traditional business plan:
- Executive summary
- Company description
- Products and services
- Market analysis
- Management team
- Financial plan
- Operational plan
Free download: Here is our business plan template you can use to craft a professional business plan quickly and easily.
Traditional plan template
1. Executive summary
The executive summary is the most important section of your business plan, because it needs to draw your readers into your plan and entice them to continue reading. If your executive summary doesn't capture the reader's attention, they won't read further, and their interest in your business won't be piqued.
Even though the executive summary is the first section in your business plan, you should write it last. When you are ready to write this section, we recommend that you summarize the problem (or market need) you aim to solve, your solution for consumers, an overview of the founders and/or owners, and key financial details. The key with this section is to be brief yet engaging.
2. Company description
This section is an overview of your entire business. Make sure you include basic information, such as when your company was founded, the type of business entity it is (a limited liability company, an S corporation, etc.) what state it is registered in, etc. Provide a summary of your company's history to give the readers a solid understanding of who you are and what your business is.
3. Products and services
Next, describe the products and/or services your business provides. Focus on your customers' perspective (and needs) by demonstrating the problem you are trying to solve. The goal with this section is to prove that your business fills a bona fide market need and will remain viable for the foreseeable future.
4. Market analysis
In this section, clearly define who your target audience is, where you will find customers, how you will reach them and, most importantly, how you will deliver your product or service to them. Provide a deep analysis of your ideal customer and how your business provides a solution for them.
You should also include your competitors in this section and illustrate how your business is uniquely different from the established companies in the industry or market. What are their strengths and weaknesses, and how will you differentiate yourself from the pack?
You will also need to write a marketing plan based on the context of your business. For example, if you're a small local business, you want to analyze your competitors who are located nearby. Franchises need to conduct larger-scale analysis, potentially on a national level. Competitor data helps you know the current trends in your target industry and the growth potential. These details also prove to investors that you're very familiar with the industry.
For this section, the listed target market paints a picture of what your ideal customer looks like. Data to include may be the age range, gender, income levels, location, marital status, and geographical regions of target consumers.
A SWOT analysis is a common tool entrepreneurs use to bring all collected data together in a market analysis. SWOT stands for strengths, weaknesses, opportunities and threats. Strengths and weaknesses analyze the advantages and disadvantages unique to your company, while opportunities and threats analyze the current market risks and rewards.
5. Management team
Before anyone invests in your business, they want a complete understanding of what they are investing in and who the company principals are. This section should illustrate how your business is organized. It should list key members of the management team, the founders/owners, board members, advisors, etc.
As you list each individual, provide a summary of their experience and their role within your company. Treat this section as a series of mini resumes and consider appending full-length resumes to your business plan.
6. Financial plan
Last, the financial plan should include a detailed overview of your finances. At the very least, you should include cash flow statements, as well as your profit and loss projections, over the next three to five years. You can also include historical financial data from the past few years, your sales forecast, balance sheet, etc.
Make sure this section is precise and accurate. It's often best practice to create this section with a professional accountant. Finally, if you're seeking outside funding for your business, highlight why you're seeking financing, how you will use that money and when investors can expect a return on their investment.
Investors want detailed information to confirm the viability of your business idea. Expect to provide an income statement for the business plan that includes a complete snapshot of your business. The income statement will list revenue, expenses and profits. Income statements are generated monthly for startups and quarterly for established businesses.
Another element of your financial plan is your projection for cash flow. In this section, you estimate the expected amount of money coming in and going out of your business. There are two benefits to including a cash flow projection. The first is that this forecast demonstrates whether your business is a high or low-risk venture. The second benefit of doing a cash flow projection is that it shows you whether you would benefit most from short-term or long-term financing.
Finally, a break-even analysis should be included in your financial plan. The break-even point is the point at which your company's sales totals cover all of its expenses. Investors want to see your revenue requirements to assess whether your business is capable of reaching the financial milestones you've laid out in your business plan.
7. Operational plan
The operational plan section details the physical needs of your business. The section discusses the location of the business, as well as required equipment or critical facilities needed to make your products. Some companies, depending on their business type, may also need to detail their inventory needs, including information about suppliers. For manufacturing companies, all processing details are spell out in the operational plan section.
For startups, you want to divide the operational plan into two distinct phases: the developmental plan and the production plan. The developmental plan explains each step in the process of bringing your product or service to market. You want to outline the risks and the protocols you're taking to demonstrate to investors that you've examined all potential liabilities and that your business is well positioned for success. For instance, if workers (or your products) are exposed to toxic materials during the production process, in your developmental plan, you want to list the safety measures you will follow to minimize the risk of illness and injury to workers and consumers and how you plan to minimize any potential culpability to your business.
Production plans have the day-to-day operation information, such as your business hours, the work site(s), company assets, equipment pieces, raw materials and any special requirements.
Downloadable business plan templates
LivePlan allows business owners to craft perfectly formatted business plans. They have more than 500 plans encompassing nearly every industry you can think of. After selecting the template you like, you can customize it to create a compelling presentation to pitch your idea to would-be investors. Post-launch, you can track your actual revenue and expenses against your earlier forecasts. Multiple users within a company can use LivePlan; pricing starts at less than $20 per month.
Business News Daily
We, at Business News Daily, have put together a simple but high-value template to help you create a business plan. The template is completely customizable and can be used to attract investors, secure board members, and narrow the scope of your company. Business plans can be overwhelming to new entrepreneurs, but our template makes it easy to provide all of the details required by financial institutions and private investors. [Download our free business plan template.]
The template has eight main sections, with subsections for each topic. For easy navigation, a table of contents is provided with the template. As you customize each section, you'll receive tips on how to correctly write the required details.
Katherine Arline and Marci Martin contributed to the reporting and writing in this article. Some source interviews were conducted for a previous version of this article.