How to Write Your First Business Plan


Bryce Warnes


Reviewed by


April 8, 2021

This article is Tax Professional approved


A business plan lays out where your business stands in the present and where it’s headed in the future. If you’re applying for a loan or bringing on investors, your business plan proves that your business is making money, and that you’re well positioned to make more.

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But even if you aren’t looking for working capital, having a business plan can be a huge benefit. It helps you set future goals, put together strategies to help you reach them, and make decisions along the way.

What a business plan tells you

Every business plan is different. The way you create yours will depend on the nature of your business. However, it should include the following:

  • The value you offer customers or clients
  • How your business makes money
  • The resources you rely on to operate
  • New products or services you may provide in the future
  • Your position in the market versus competitors
  • How you plan for your business to grow
  • Current financial report
  • Financial projections

There are different ways to communicate this information—we’ll get to those shortly.

Reasons to write a business plan

A business plan is like a Swiss Army knife—it can do a lot of things really well. And once you have one, it soon becomes indispensable.

While each industry’s business plan will look different—an ecommerce business plan will be different than a medical tech company—there are very basic commonalities. Broadly speaking, here are five important goals you can achieve with a business plan.

1. Test out your business idea

Maybe you’re considering turning your side hustle into a full-time gig, or maybe it’s still just a twinkle in your eye. Either way, writing a plan is a good way to see if it’s feasible before you start investing serious time and money.

Working through a business plan can lay bare your idea’s strengths and weaknesses, and flag any roadblocks you may face down the line. Specifically, when you do market and competitor analysis for your prospective business, you should quickly be able to tell whether it will be profitable. Financial projections can help you determine what type of income you’ll be earning, and what you need for funding.

2. Get funding

If you’re applying for a small business loan, having a thorough business plan is essential. Lenders want to be sure you’ll be able to pay off the loan, with interest. A business plan shows them how you’ll do that.

3. Attract investors

Similar to lenders, investors—whether they’re angel investors, venture capital firms, or even friends and family—want to know your business will turn a profit. After all, they’ll want a good return on their investment. Most investors expect to see your business plan before they risk their money.

4. Plan for the future

With financial projections and marketing objectives, your business plan sets a roadmap for the future. That can help you decide what to do in the here and now, and prepare for the years to come.

5. Make decisions more easily

When you’ve got a map guiding you, you spend less time at the crossroads picking a direction to take. As you face decisions during periods of business growth, your business plan acts as a powerful tool.

Should you open a brick-and-mortar location, or offer a wider range of products online? Should you apply for a loan now, or wait until next year? If your business plan is thorough, you already have the answers. That means less time debating, and more time acting.

Steps to writing a business plan

1. Determine its purpose

First, decide what goals you hope your business plan will help you achieve. Your business plan’s purpose will determine how you format it, what type of documentation you need to support it, and the kind of research you’ll need to conduct. For instance, if your aim is to secure financing, your plan will be different than it would be if you were using it internally to make business decisions.

2. Pick your audience

Who will read your business plan? Potential investors, lenders, or buyers? Employees? All of the above? Write your plan, choosing the language you use and the information you present with your specific audience in mind.

3. Do the research

Any claims you make need to be supported by hard facts. Research will take up the bulk of the time you spend creating your business plan. For instance, if your business plan assumes your industry is on the upswing, you should have the numbers to prove it.

Some questions you should be prepared to answer with the support of research:

  • Who are your main competitors?
  • What services/products are your target clients or customers looking for?
  • Where is your industry headed?
  • What is the history of your industry or niche?
  • What types of roadblocks could you potentially face down the line?

4. Get documentation together

The most important documents in your business plan are your financial records. Past tax returns, financial reports, and comprehensive bookkeeping demonstrate your company’s history and future viability. You’ll use them to create financial projections.

You’ll also need a list of all employees and their positions within the company. And if your business relies on licensing agreements or intellectual property, be prepared to compile those as well.

5. Create a company profile

Your company profile is a public-facing document. For inspiration, make a list of companies you admire and then check their website’s “About” page and their LinkedIn profile.

Your company profile should explain:

  • The problems your business solves for customers and clients
  • What sets you apart from the competition
  • The resources you use to get the job done
  • Your company’s history
  • What inspired you to go into business
  • Your mission statement and vision for the future

This should be a short document, no longer than one page. These topics will be covered in greater detail within the business statement itself, but spelling out all the info now can help you get started and guide you as you write it.

6. Write the business plan

When you’ve decided what you’re aiming to achieve and who you’re addressing, compiled all the information you need, and laid the groundwork with a company profile, you’re ready to write your plan. Don’t start until you’ve covered the previous five steps—it’s better to over prepare for writing your plan rather than scramble for information when you’re in the thick of it.

It’s also best practice to include a cover page. It should be simple and introduce the key information of your business including a logo and legal information.

7. (Optional) Prepare a presentation

If you’re looking for funding or sharing your work with partners and employees, you may want to create a business plan presentation. This can take the form of a speech, slideshow, promotional video, audio track, or any combination of the above.

Think of it as a pitch for your company and your plans for the future. Boil down the information in your business plan into a digestible format, with the goal of getting your audience excited.

Types of business plans: traditional vs. lean

Business plans can be split into two categories: traditional and lean (or “startup”). Each has its own strengths and weaknesses. Choosing the type that’s relevant to your business will depend on how you intend to use your business plan.


A traditional business plan is highly detailed, and relies on plenty of research. This is the type favored by investors and lenders—if you’re seeking out more working capital, it’s a good choice.

The drawback? Traditional plans take longer to research, plan, and write than lean business plans.


A lean business plan is less detailed than a traditional one, relying on less research. Specifically, it doesn’t feature financial projections or detailed competitor and market analysis. It’s relatively quick to write, and leaves you more flexibility—you can write a lean business plan now, and a traditional one later on. That makes it a great choice for startups still sketching out exactly what their business will look like.

Since it’s less detailed than a traditional plan, if you present a lean business plan to lenders or investors, they may ask you for more information. A lean plan is best used as a “rough draft” to help guide you in the early days of your business.

Business plan formats


Even if you’re seeking funding, the traditional format may seem like overkill. But each of the following nine parts plays an important role—feel free to adjust them to suit your needs.

Section Includes
Executive summary:
Provides essential information about your business, and serves as a broad overview of your business plan. While it comes first in your business plan, you should write it last, once you’ve put together all your information in the following sections. Try to keep the executive summary concise—no more than one or two pages.
- Your mission statement
- A description of your product/service
- Where your business is based
- The members of your leadership team
- The number of employees you have
- Up-to-date financial data
- Growth projections
Company description
Explains what you do for customers or clients, positioning your business relative to the rest of your industry. This helps readers understand the value you have to offer, and puts your business in a broader context.
- Description of your industry and its niches
- Explanation of where your business is positioned within your industry
- Who your business serves (demographics, verticals, sectors, organizations)
- The problems your business solves for customers/clients
Market analysis
Outlines the companies you’re going up against, and how you’ll beat them, based on your market research. For this section, consider reaching out to others in your industry—they may have insights into the current state of the industry that can help you get started with your research.
- Description of how you plan to gain more shares of the market
- Explanation of how you’ll protect your current market share
- Listing of your top competitors
- Examples of successful competitors, and the reasons for their success
- How you plan to distinguish yourself from the competition
- Any new products/services you intend to introduce to your industry
Organization and management
Introduces readers to key executives on your team, what they do, and how they all work together. This proves you’ve got a team ready to help grow your business. Highlight opportunities to bring on new members—or leverage current members’ specializations and experience to get better results.
- Organizational chart explaining each team member’s contribution to the business (e.g., specialization, experience)
- Your current legal structure, and any plans to change it (e.g., by incorporating)
- (Optional) resumés or bios of key team members
Service or products
Walks readers through the process of how you create value and generate revenue. It also demonstrates how you stand out from the competition.
- The products/services you offer and the problems they solve for your customers/clients
- How your products/services stand out from those of competitors
- The life cycle of your product/service
- How you fulfill orders for customers/clients (including delivery methods)
- Your pricing model
- Detailed description of any current research and development
Marketing and sales
Explains how you get from Point A (your current revenue) to Point B (your future revenue). Do this through defining key marketing objectives—such as establishing yourself in your industry, making more sales, and increasing brand awareness.
- Outline of the sales journey
- How you attract and retain customers/clients
- Marketing objectives
Describes your funding needs. Be concrete about how much you’re seeking, how long you’ll take to repay it (in the case of debt), and the work you’ll put it to. You should have a clear five-year plan for how you’ll use funding. Readers will see the effects of this use in your financial projections.
- How much funding you’re seeking
- Prospective repayment terms (debt)
- A five-year plan for how you’ll use funding if you secure it
Financial projections
Show how you expect your revenue to increase, year over year, for the next five years. If you’re seeking additional funding, use this section to demonstrate how it will help increase your revenue. Consider using visual aids, like line graphs or pie charts, to help readers more easily process the information.
- Financial projections for the next five years
Includes any materials you make reference to in your business plan—supplementary information that supports or clarifies statements you make.
- Your credit history
- Team member resumés
- Letters of reference
- Business licenses and permits
- Samples of branding materials
- Photos of your products or storefront
- Legal documents
- Other supplementary info


The lean business plan is based on the Lean Business Model Canvas, a classic format for startup business plans. When creating a lean business plan, keep it brief and digestible. It can be as short as one page.

Section Includes
Key partnerships List of suppliers, subcontractors, strategic partners
Key activities Services and products your business offers, what helps you stand out from the competition
Key resources Team members, intellectual property, and capital at your disposal
Value proposition Clear, concise explanation of the value you offer customers/clients (examples)
Customer relationships How customers interact with your business, what it looks like when they buy your product/service
Customer segments Description of your target market, broken down into verticals
Channels How you communicate with the world through marketing and customer relations
Cost structure How you either decrease cost or increase value for customers/clients
Revenue streams How your business makes money, including both primary and secondary streams

Even if you aren’t using your business plan to seek funding, including financial projections offers major benefits. By looking into the future of your business, you can make plans for growth and set realistic goals to reach along the way. Get started with our guide to financial forecasting.

This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.
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