How To Write A Business Plan The Right Way – With Examples And Explanations

Despite its intimidating reputation, drafting a business plan delivers compelling benefits. Investing time in writing a business plan can pay off in increased clarity, better decision-making, and attracting external help.

There’s never a bad time to write a business plan. You can write while thinking about starting a business, in the midst of launching it, or when it’s been operating a while. A business plan signals to the world you’re serious about building your organization, and you’ve done the homework to be successful. 

The SBA calls a business plan a “GPS to get your business going.” Learning to write a business plan now saves guessing later. 

Your plan is a reference, a roadmap if you will, which you can check against as you progress. For example, if there’s a difference between projected revenues and the money actually coming in, reviewing the plan can pinpoint needed changes in sales and marketing. 

In this guide to business-plan writing, we’ll examine the two most common types of plans, what to include in each one, and how to use it to make a pitch to investors or others interested in helping you. 

Many new business owners ask if a business plan is required for a loan. The short answer is “no.” However, writing a business plan helps you envision and execute your strategy for the next three to five years.

By writing a business plan, you complete a number of tasks critical to a successful launch or to continued success. A completed business plan can:

• Keep your entire team on track
• Confirm your business exists in a competitive sweet spot
• Map the entire ecosystem of your business
• Ensure you offer a solid value proposition

If you want to attract venture capital (VC) money, you’ll need a powerful pitch deck – a PowerPoint presentation clearly demonstrating why you’re worth their investment. Developing a business plan first lays the groundwork for a persuasive pitch deck. 

Business plans typically come in two flavors: traditional or lean startup. Traditional business plans are detailed documents, providing background information about the industry and the company’s place in the industry ecosystem. 

A lean startup business plan provides similar information, but in the form of a brief overview, rather than a comprehensive roadmap. We will cover how to build a lean startup business plan later in this guide.

For most entrepreneurs, a traditional business plan is worth the time needed to create. The level of detail encourages thorough analysis of your business idea and of how you are running it.

A strong business plan addresses risk management, leadership, staffing, marketing, product development, and more. Financial summaries and projections are also included.

You may wonder if there’s any room to be creative in a business plan. Certainly! Creative approaches to market definition, product design, marketing or operations will definitely stand out. 

In this section, we will walk through of the components of a traditional business plan, which include: 

• Executive Summary
• Company Description
• State Of The Industry
• Market Analysis
• Competitor Analysis
• Ownership And Management
• Critical Risks And Solutions 
• Management And Personnel
• Marketing And Sales Plan
• Financial Summary
• Financial Projections
• Funding Request 

To illustrate these, we’ll pair descriptions of each section with a screenshot from a business plan created by Piktochart’s AI Business Plan Generator or a real-life business plan developed for the school-lunch business elevATE. 

Your executive summary should do all the work for your reader, who could very well be an executive and need a great TLDR experience before they decide to read the entire plan. Knowing how to write an executive summary is key to creating a plan that gets results.

Just as your business plan acts as a teaser to encourage the reader to buy in (literally or figuratively) to your company, the executive summary is designed to “hook” readers and encourage them to dive into the details. 

An executive summary provides a 30,000-foot overview of your business and plans for it. Include basic data about yourself, your employees and leadership team, and your business locations. If asking for funding, a top-level financial summary and growth projections should be included. 

You may want to write your executive summary last, making it easier to include the most important information from other sections. 

ElevATE, winner of the Virtual Enterprise International’s 2023-24 Business Plan Competition for young entrepreneurs, provides a detailed introduction to their business.

The company overview summarizes how your business operates. The goals of a company overview are to:

• Introduce where you’re located and your chosen legal structure  
• Give a more detailed summary why your company should exist 
• Show a solid value proposition to offer potential customers
• Mention owners, leadership team, and staffing structure 

Follow up by highlighting advantages over competitors, such as staffing, intellectual property, innovative approach, etc. 

Entering a heavily competitive market, how will your company gain a toehold? If defining a new market with your business, what research or company financial results indicate you can be successful? 

ElevATE provides a clear picture of how the business is set up and how it operates. 

After outlining your company, we recommend you provide a brief overview of your industry. 

Identifying which industry you belong to communicates two things: one, you know your precise position in the market; and two, you understand what industry forces will impact your operations. 

For example, if your company produces farm hardware equipment, you might discuss trends impacting the farming sector over the past few years. You might also note sales trends for various types of equipment and how those have risen or fallen in recent years.

Or let’s say that you want to start a business training writers and editors to leverage generative artificial intelligence (Gen AI) in their work. You identify your industry as learning and development. You might discuss how this industry has evolved in the past decade. You can discuss what training modalities (classroom training, self-paced online training, etc.) are popular. You can also note how Gen AI platforms are developing over the past two to three years and what that means for content professionals.

Our virtual enterprise, elevATE, paints an optimistic picture for the subscription box industry of which it is a part.

The market analysis is a much more focused section than the state of the industry. Here, you’re looking at the specific market(s) you plan to enter. Continuing an example from the previous section, if our business owners who want to train writers and editors to use Gen AI operate in the learning and development industry, they may define their market as technology training for content professionals. 

Before moving to analyzing your competitors, we recommend providing a snapshot of your target customers. You can include psychographic data, lifestyle patterns, income levels, geographic distribution, etc. Some organizations provide detailed “personas” – character descriptions created to embody general customer data – to illustrate this. 

Once you build a clear picture of your customers, discuss who else wants to reach them. How crowded is your market? How many competitors are serving your target customers?  One? Three? 10? 

This section describes trends and themes you see in this market. What is working for your competitors? How are you going to do it better? 

Customer reviews can provide a wealth of data about your competitors. Beyond reviews on Google My Business, Amazon, or Etsy, there are many websites dedicated to aggregating reviews for both B2B and B2C products and services. 

Below is a simple market analysis for a new resume-writing service, Read. Hot. Resumes., created by Piktochart’s AI Business Plan Generator. 

Once you lay out the contours of your specific market, you’ll document how your competitors are serving customers. The competitor analysis section gets even more specific than your market analysis. 

Use your research to select two or three companies most likely to compete closely for your customers. Then, compare data on the following areas to those of your own products or services:

• Price
• Pricing model (one-time purchase, subscription, etc.)
• Product offerings
• Warranties or guarantees offered
• Product or service quality
• Effectiveness and structure of website
• Market share and growth rate
• Financial performance data (fairly easy for public companies; harder to get specifics for private companies)
• Strategic intent, as voiced through statements on social media or quarterly financial statements

Provide specifics on the strengths of their approach, but always in reference to your business. What things (in your analysis) are they overlooking? 

For example, let’s say that you discover that one of your competitors can’t be beat on price. If you frame their low prices as a weakness, you can highlight your product’s higher quality and durability. 

You could also frame the price issue in relation to your offerings by determining whether your competitor’s “low prices” apply in all circumstances. Perhaps you actually have better subscription prices, or your end-to-end pricing is better.

At elevATE, the business plan provides detailed information about their closest competitors.

The unique backgrounds of owners and managers at a company contain the seeds of competitive advantage. A business plan that includes detailed ownership and leadership information provides a compelling reason to invest or partner with the company.   

Here, you will note the legal structure for your business, such as a sole proprietorship, a general or limited partnership, a limited-liability company (LLC), an S or C Corporation. Mention the advantages of the structure you chose and how it will advance your goals. 

In the business plan for Read. Hot. Resumes., the ownership section describes the legal format, the industry certifications of the principal owner and a contract employee, and the duties of all three people noted in this section. 

Your ability to identify and mitigate potential risks to your business is a must-have in a business plan.  The risks and threats you address should range from the cost of your raw materials to product liability challenges. 

While you needn’t cover every conceivable risk, it’s important to show awareness of the most credible threats to your business. One model for risk assessment moves from identifying major threats, to assessing impact and likelihood of the threat, to finally strategizing how you plan to neutralize them. 

Other approaches to documenting risk assessment include a SWOT (Strengths – Weaknesses – Opportunities – Threats) Analysis, or presenting your risk assessments in a problem/solution format. Here’s an example of a SWOT analysis developed by a digital marketer who wants to provide services to small businesses in the hospitality industry.

ElevATE’s plan identifies (and proposes solutions to) both logistical and product-related challenges to their business. The “misuse of product” section highlights a key risk related to their unique self-heating meal packages. The plan discusses multiple paths to ensure customers enjoy meals safely while the company avoids product liability issues.

Beneath the owner and top leaders at a company are teams of employees who produce, sell, or deliver the product to customers. You’ll want to include a section about  who currently fills these roles in your company, and how you will hire additional employees as the business grows or changes.

Hiring the right people for the right roles can boost quality and increase customer satisfaction. How do you want to evolve your staffing strategy? 

For example, if your head of sales is also responsible for training initiatives, you may want to hire a training director. If one C-level employee handles all accounting functions, you may eventually want to split the role into a Chief Financial Officer and a Comptroller. 

If your workforce will include contract, part-time, or temporary employees, explain how they fit into your personnel picture. The staffing/personnel plan for the resume-writing business contains details about when the company plans to hire more workers or expand a part-time role to full-time. 

Many entrepreneurs love this part of their business plan because it provides an opportunity to discuss their product or service idea. 

Typically, your marketing and sales plan includes a service or product line description, as well as a plan for attracting and retaining customers. We also recommend addressing your pricing strategy, your sales/delivery plans, and your marketing plan. 

The marketing and sales plan is linked to your financial projections, so providing specific numbers in this section is important. To the extent possible, we recommend quantifying the cost of proposed marketing or sales activities. 

Even relying on referrals can have a cost – especially if you pay referral sources a fee for directing new business your way. Is the cost of acquiring this customer going to impact your profitability? You’ll need to spell that out. 

Although the resume-writing service is a very small business, included is a clear idea of how the enterprise plans to find clients.

Bluntly, a business plan without a financial summary is a fantasy. All the previous sections explain where you want to take your business, but you must provide a financial snapshot of where your business is right now. 

Developing the financial summary doesn’t have to be scary. Look at it as a scorecard for measuring your strategies. 

You’ll want to include tables, charts or statements to show the following:

• Balance sheets
• Income statements
• Expenses, such as cost of goods sold, payroll, insurance, advertising, etc.
• Cash flow

If you’re just starting out, you can create a “pro forma” financial summary, based on projections. Take care to label this type of summary clearly. 

We recommend establishing baselines for pricing and production, as well as other major expenses, and spelling out all assumptions. You can find excellent online guides to understanding financial statements if you need to get up to speed before tackling this part of your business plan (or hiring someone to help you). 

ElevATE provides a comprehensive explanation of its current financial situation. Their use of color in the balance sheet makes it easier to read and integrates it nicely into the rest of the plan. 

When you present your financial projections, your money talk pivots from “what’s happening so far” to “here’s how we see things evolving.” Use charts, graphs and tables to illustrate data from the financial summary section, showing how you foresee revenues and expenses developing. 

A key metric to include in your projections is the break-even point for your business, if you haven’t yet reached profitability. This demonstrates how long an investor will need to be involved to recoup their investment. 

To find this point, you’ll need to know your fixed costs (which don’t change) and your variable costs (which change with production), as well as the selling price of your offerings. The break-even point can be calculated by dividing fixed costs by the difference between the selling price per item and the variable cost per item. The more data (ideally three years worth) used to calculate this inflection point, the better. 

Here’s a projected revenue chart in the business plan for Read. Hot. Resumes. One of the nice parts of using the AI Business Plan Generator in Piktochart is you enter your data directly into the interface, and the chart is adjusted for you. 

Remember how we noted at the beginning of the article you don’t need a business plan for a loan? While that’s true, securing funding from investors requires a solid business plan with a knock-out financials section to back up your pitch deck. 

Anyone positioned to give you money will want something in return. A bank providing a loan wants evidence you can pay it back. An investor wants a return on money they invest.

The funding request should provide a description of how much money you’d like for the next three to five years and detail what the money will be spent on. Don’t skimp or be modest here. Ask for funding sufficient to achieve the goals in your financial projections section. 

When developing your funding request content, clarify the terms for receiving the money. Is this a debt for your enterprise, or would you offer an equity stake in the company? How will you offer an investor exit plan so they can maximize their return? Each path has benefits and pitfalls. Think through your choice carefully.

Although the resume-writing business makes a relatively small funding request, its business plan provides details on how the money is to be used. 

The traditional business plans reviewed so far work very well for established businesses.  What if, though, you just have an idea you hope to fund, or you don’t want to invest time in a lengthy document? If this sounds like you, you may consider the lean startup business plan format. 

The heart of a lean business plan focuses on small steps and continuous improvement. Once you’ve laid out your plan, you take a step, evaluate, and revise your plan while getting ready for the next small step. With this approach, your plan may need updating multiple times. 

Lean plans are much shorter than a traditional business plan, usually one to five pages. The sections included are similar to a traditional format but greatly slimmed down. Writing a lean plan forces you to describe what you intend to do (your strategy) and how you intend to do it (your tactics) in a few words. 

Entrepreneurs testing business ideas can use a lean startup business plan to describe “minimum viable products,” early-stage offerings to be rapidly updated or replaced as they get feedback from the market or from mentors on real customer demand. 

Two key sections in a lean startup business plan are the problem statement and corresponding solution statement. This is where you identify your enterprise as the ideal answer to your target market’s challenge. 

Problem statements need to be laser focused on 1) a specific pain point in a market and 2) why this is an opportunity for your enterprise. This pain point needs to be significant, relatable, and not easily addressed through current market options. 

For example, in the early 2000s, Netflix’s founders observed the time and hassle of going to the video-rental store. Their problem statement could have been, “Renting videos is a pain.” Given the options available then, this problem statement aptly described the pain point many video enthusiasts felt. 

Solution statements showcase your offering as the answer to the problem. It succinctly answers how you will resolve the pain point in a different and better way different from your competitors. 

Netflix’s solution statement when it launched its business could have been, “Our company allows you to rent videos by mail, from the comfort of your home. (Plus, no late fees. EVER!).” 

Let’s look at a smaller, more contemporary example. If you want to launch a business selling hand-crafted wooden toys, your problem statement might be, “Parents and grandparents of toddlers and preschool children are frustrated by dangerous, flimsy toys made of questionable materials, like plastic or painted metal.” Your solution statement could then be, “Wooden Wonders toy line delivers safe, durable, age-appropriate toys made exclusively of hardwoods crafted by skilled American artisans.” 

With a lean business plan, you don’t need ideas as well developed as if you were drafting a traditional business plan. What matters is presenting your idea clearly, identifying your market niche, and outlining how you intend to proceed. 

In the screenshot below, we’ll look at the resume-writing service again. This time, let’s imagine they have not started their business yet. The owner is only in the planning stage and wants to make the service stand out. They can take this one-page plan to potential funders, loan officers, or business coaches for quick feedback on differentiating themselves from similar offerings. 

Now that you understand the structure of traditional and lean startup business plans, let’s look at examples from a variety of industries. 

Eco Depot, based in California, leverages new state laws to create an innovative value proposition. The executive summary notes that the company was formed in 2022, shortly after the state passed SB 1383, encouraging elimination of food waste in landfills. 

Eco Depot aims to serve individual consumers, as well as large-scale restaurant and agriculture clients. It sells composting equipment to individuals, offers food waste management solutions for businesses, and sells farmers soil amendments created from composted waste and earthworm castings. 

Highlights: Eco Depot takes the potentially complex topic of its business rationale and turns it into a simple problem/solution statement. 

The business plan also provides an outstanding company overview. 

Room For Improvement: Overall, this business plan is comprehensive and educational. However, specifics about their product line are buried deep in the plan. 

Go Gather takes an interesting approach to combating the amount of time teens and young adults spend on their phones. It creates themed activity boxes providing conversation starters, craft projects, recipes, and a playlist for in-person gatherings. The idea is to teach socialization skills in a fun, interactive way.

Highlights: In addition to providing solid research to back up their business premise, Go Gather’s business plan provides two very concise explanations of product offering and their key marketing differentiator in their executive summary. 

Room For Improvement: The page order for some sections of Go Gather’s 32-page business plan is a bit random, and their sales projection charts are confusing. 

Mynet is a financial education application for Generation Z (those born between 1997 and 2012). It offers lessons in financial concepts, money management simulations, and curated financial news for a monthly subscription fee. The app aims to help users reach common Gen Z financial goals, such as moving out on one’s own, paying for college, and home ownership. 

Highlights: The company’s business plan does an outstanding job of explaining the educational component of the app. 

It also has a great explanation of its organizational structure and a well-designed org chart. 

Room For Improvement: The business plan’s executive summary and mission statement are placed ahead of the table of contents, which makes for a confusing reading experience. 

Electronic Detectives, Inc., a forensic data-recovery business, assists attorneys in retrieving, decrypting, and analyzing digital data discovered during civil lawsuits. It also provides expert witness testimony. They aim to serve experienced law firms on the West Coast in intellectual property, corporate law, and environmental law cases. 

Highlights: It can be challenging to describe what the company does in simple terms, but Electronic Detectives, Inc., does a great job in both the executive summary and a later service description portion. 

Room For Improvement: There is no mention of the backgrounds of the founders in the executive summary – a glaring omission, since their expertise is critical to the success of the business. 

The business plan for Catering For Kids, operating under the auspices of the Bright Future Family & Youth Services in Eugene, Oregon, demonstrates how such plans can benefit nonprofits. This program serves catering needs of local nonprofits and small businesses, employing at-risk youth trained in food services skills.

Highlights: This plan excels analyzing the program’s competition and defining its niche. 

Room For Improvement: This plan misses a critical opportunity to summarize the program’s value proposition right off the bat. It fails to place a description of Catering For Kids at the start of the executive summary, opting instead to include a general description of the problem it addresses. 

Once you’ve done research, written, and formatted your business plan, you can move on to building a pitch deck. Having a strong, persuasive pitch deck grounded in research from your business plan makes you attractive to VC investors, community organizers, and potential referral partners. 

Piktochart’s ultimate business plan presentation template follows Guy Kawasaki’s 10/20/30 rule for pitch decks. The deck (excluding the title page or table of contents) is only 10 slides long, so you can get through your presentation in 20 minutes or less. It utilizes 30-point fonts for all headings and subheads, so those elements are readable at a glance. 

Here’s a sneak peek of the ultimate template!

Piktochart has several other business plan presentation templates, including options using the business model canvas system, presenting plans as a strategic roadmap, and merging the business plan with a detailed execution schedule. It’s easy to select a deck layout that aligns with your company’s logo, color palette, or brand standards. 

Here’s a look at the business model canvas template:

Using this post as a guide, writing a business plan with a template is a snap. 

First, choose the traditional or lean startup plan format. Research each section carefully, focusing on delivering accurate financial calculations and easy-to-read organizational details. Just as important as research and accuracy is your ability to convey your strategy. 

Draft your content, using design tools like Piktochart’s AI Business Plan Generator to format your document. After finalizing, select a complementary pitch deck template to create your presentation. Practice presenting until you feel confident and empowered.

We strongly suggest having multiple people proofread your documents! You don’t want to have your awesome business plan or your pitch deck derailed by an errant comma or a misspelled title. 

By far the most valuable aspect of developing a business plan is the feedback opportunity it represents. Sharing your plan with friends, mentors, investors, and business associates helps sharpen your ideas and strengthen your business concept. May your plan bring success!