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How Are Different Types of Businesses Structured?

There are many ways to structure a business. Five of the more basic types include sole proprietorship, general partnership, limited partnership, limited liability partnership and a corporation. Keep reading to learn about the specifics of these business structures.

Sole Proprietorship

Many people think a sole proprietorship means that only one person owns the company. In all actuality, though, a sole proprietorship can also consist of a married couple in business together, states the State of Washington Business License Service. This business structure boasts an array of advantages, including simple formation, fewer legal controls and tax benefits, which is likely why it’s the most common type of business. However, if you want to form a sole proprietorship, it’s pertinent to understand that you’ll be held personally liable for any debts that your company incurs. This means if the company racks up $50,000 in business loan debt, your personal assets can be seized if you fail to pay off the loan.

General Partnership

When two or more people are equally liable for the debts of a company, this is known as a general partnership. All partners also contribute equally in regard to time, money and skill. In return, each partner has equal management of the company along with equal access to its profits. General partnerships should only be formed when there is a partnership agreement signed by all partners.

Limited Partnership

A limited partnership is much like a general partnership in that two or more people own the company. However, when you form a limited partnership, the company will have one or more general partners along with one or more limited partners. General partners manage the day-to-day activities of the company and share fully in both its losses and profits. The limited partners do share in the profits, but their loss is limited by the extent of their investment. Most times, limited partners aren’t involved in the day-to-day management of the company.

Limited Liability Partnership

When a limited liability partnership is formed, also known as an LLP, it means that the partners can’t be held liable for the negligence of the other partners. This type of business structure is commonly seen among accountants and lawyers.

Corporation

Structuring a company as a corporation usually requires following an extensive process. As a corporation, the company has certain rights and privileges, and the company’s legal entity is entirely separate from the identity of its owners. However, creating a corporation also comes with a few drawbacks, like decreased personal control along with steep licensing fees.

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What Is a Business Plan?

Understanding business plans, how to write a business plan, elements of a business plan, special considerations.

• Business Plan FAQs

Business Plan: What It Is, What's Included, and How To Write One

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

Investopedia / Ryan Oakley

A business plan is a document that defines in detail a company's objectives and how it plans to achieve its goals. A business plan lays out a written road map for the firm from marketing , financial, and operational standpoints. Both startups and established companies use business plans.

A business plan is an important document aimed at a company's external and internal audiences. For instance, a business plan is used to attract investment before a company has established a proven track record. It can also help to secure lending from financial institutions.

Furthermore, a business plan can serve to keep a company's executive team on the same page about strategic action items and on target for meeting established goals.

Although they're especially useful for new businesses, every company should have a business plan. Ideally, the plan is reviewed and updated periodically to reflect goals that have been met or have changed. Sometimes, a new business plan is created for an established business that has decided to move in a new direction.

Key Takeaways

• A business plan is a document describing a company's core business activities and how it plans to achieve its goals.
• Startup companies use business plans to get off the ground and attract outside investors.
• A business plan can also be used as an internal guide to keep an executive team focused on and working toward short- and long-term objectives.
• Businesses may create a lengthier traditional business plan or a shorter lean startup business plan.
• Good business plans should include an executive summary and sections on products and services, marketing strategy and analysis, financial planning, and a budget.

Want Funding? You Need a Business Plan

A business plan is a fundamental document that any new business should have in place prior to beginning operations. Indeed, banks and venture capital firms often require a viable business plan before considering whether they'll provide capital to new businesses.

Operating without a business plan usually is not a good idea. In fact, very few companies are able to last very long without one. There are benefits to creating (and sticking to) a good business plan. These include being able to think through ideas before investing too much money in them and working through potential obstacles to success.

A good business plan should outline all the projected costs and possible pitfalls of each decision a company makes. Business plans, even among competitors in the same industry, are rarely identical. However, they can have the same basic elements, such as an executive summary of the business and detailed descriptions of its operations, products and services, and financial projections. A plan also states how the business intends to achieve its goals.

While it's a good idea to give as much detail as possible, it's also important that a plan be concise to keep a reader's attention to the end.

A well-considered and well-written business plan can be of enormous value to a company. While there are templates that you can use to write a business plan, try to avoid producing a generic result. The plan should include an overview and, if possible, details of the industry of which the business will be a part. It should explain how the business will distinguish itself from its competitors.

Start with the essential structure: an executive summary, company description, market analysis, product or service description, marketing strategy, financial projections, and appendix (which include documents and data that support the main sections). These sections or elements of a business plan are outlined below.

When you write your business plan, you don’t have to strictly follow a particular business plan outline or template. Use only those sections that make the most sense for your particular business and its needs.

Traditional business plans use some combination of the sections below. Your plan might also include any funding requests you're making. Regardless, try to keep the main body of your plan to around 15-25 pages.

The length of a business plan varies greatly from business to business. Consider fitting the basic information into a 15- to 25-page document. Then, other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and included as appendices.

As mentioned above, no two business plans are the same. Nonetheless, they tend to have the same elements. Below are some of the common and key parts of a business plan.

• Executive summary: This section outlines the company and includes the mission statement along with any information about the company's leadership, employees, operations, and location.
• Products and services: Here, the company can outline the products and services it will offer, and may also include pricing, product lifespan, and benefits to the consumer. Other factors that may go into this section include production and manufacturing processes, any patents the company may have, as well as proprietary technology . Information about research and development (R&D) can also be included here.
• Market analysis: A firm needs a good handle on its industry as well as its target market. This section of the plan will detail a company's competition and how the company fits in the industry, along with its relative strengths and weaknesses. It will also describe the expected consumer demand for a company's products or services and how easy or difficult it may be to grab market share from incumbents.
• Marketing strategy: This section describes how the company will attract and keep its customer base and how it intends to reach the consumer. A clear distribution channel must be outlined. The section also spells out advertising and marketing campaign plans and the types of media those campaigns will use.
• Financial planning: This section should include a company's financial planning and projections. Financial statements, balance sheets, and other financial information may be included for established businesses. New businesses will include targets and estimates for the first few years plus a description of potential investors.
• Budget: Every company needs to have a budget in place. This section should include costs related to staffing, development, manufacturing, marketing, and any other expenses related to the business.

Unique Business Plans Help

The best business plans aren't generic ones created from easily accessed templates. A company should entice readers with a plan that demonstrates its singularity and potential for success.

Types of Business Plans

Business plans help companies identify their objectives and remain on track to meet goals. They can help companies start, manage themselves, and grow once up and running. They also act as a means to attract lenders and investors.

Although there is no right or wrong business plan, they can fall into two different categories—traditional or lean startup. According to the Small Business Administration (SBA) , the traditional business plan is the most common. It contains a lot of detail in each section. These tend to be longer than the lean startup plan and require more work.

Lean startup business plans, on the other hand, use an abbreviated structure that highlights key elements. These business plans aren't as common in the business world because they're short—as short as one page—and lack detail. If a company uses this kind of plan, it should be prepared to provide more detail if an investor or lender requests it.

Financial Projections

A complete business plan must include a set of financial projections for the business. These forward-looking financial statements are often called pro-forma financial statements or simply the " pro-formas ." They include an overall budget, current and projected financing needs, a market analysis, and the company's marketing strategy.

Other Considerations for a Business Plan

A major reason for a business plan is to give owners a clear picture of objectives, goals, resources, potential costs, and drawbacks of certain business decisions. A business plan should help them modify their structures before implementing their ideas. It also allows owners to project the type of financing required to get their businesses up and running.

If there are any especially interesting aspects of the business, they should be highlighted and used to attract financing, if needed. For example, Tesla Motors' electric car business essentially began only as a business plan.

Importantly, a business plan shouldn't be a static document. As a business grows and changes, so too should the business plan. An annual review of the company and its plan allows an entrepreneur or group of owners to update the plan, based on successes, setbacks, and other new information. It provides an opportunity to size up the plan's ability to help the company grow.

Think of the business plan as a living document that evolves with your business.

A business plan is a document created by a company that describes the company's goals, operations, industry standing, marketing objectives, and financial projections. The information it contains can be a helpful guide in running the company. What's more, it can be a valuable tool to attract investors and obtain financing from financial institutions.

Why Do Business Plans Fail?

Even if you have a good business plan, your company can still fail, especially if you do not stick to the plan! Having strong leadership with a focus on the plan is always a good strategy. Even when following the plan, if you had poor assumptions going into your projections, you can be caught with cash flow shortages and out-of-control budgets. Markets and the economy can also change. Without flexibility built into your business plan, you may be unable to pivot to a new course as needed.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is an option when a company prefers a quick explanation of its business. The company may feel that it doesn't have a lot of information to provide since it's just getting started.

Sections can include: a value proposition, a company's major activities and advantages, resources such as staff, intellectual property, and capital, a list of partnerships, customer segments, and revenue sources.

Small Business Administration. " Write Your Business Plan ."

• Business Development: Definition, Strategies, Steps & Skills 1 of 46
• Business Ethics: Definition, Principles, Why They're Important 2 of 46
• Business Plan: What It Is, What's Included, and How To Write One 3 of 46
• Organizational Structure for Companies With Examples and Benefits 4 of 46
• Which Type of Organization Is Best For Your Business? 5 of 46
• What Are the Major Types of Businesses in the Private Sector? 6 of 46
• Corporate Culture Definition, Characteristics, and Importance 7 of 46
• What Is an S Corp? 8 of 46
• LLC vs. Incorporation: Which Should I Choose? 9 of 46
• Private Company: What It Is, Types, and Pros and Cons 10 of 46
• Sole Proprietorship: What It Is, Pros & Cons, Examples, Differences From an LLC 11 of 46
• Bootstrapping Definition, Strategies, and Pros/Cons 12 of 46
• Crowdfunding: What It Is, How It Works, Popular Websites 13 of 46
• Seed Capital: What It Is, How It Works, Example 14 of 46
• Venture Capital: What Is VC and How Does It Work? 15 of 46
• Startup Capital Definition, Types, and Risks 16 of 46
• Capital Funding: Definition, How It Works, and 2 Primary Methods 17 of 46
• Series Funding: A, B, and C 18 of 46
• Small Business Administration (SBA): Definition and What It Does 19 of 46
• Upper Management: What it is, How it Works 20 of 46
• What is the C Suite?: Meaning and Positions Defined 21 of 46
• Chief Executive Officer (CEO): What They Do vs. Other Chief Roles 22 of 46
• Operations Management: Understanding and Using It 23 of 46
• Human Resource Planning (HRP) Meaning, Process, and Examples 24 of 46
• Brand: Types of Brands and How to Create a Successful Brand Identity 25 of 46
• What Is Brand Personality? How It Works and Examples 26 of 46
• What Is Brand Management? Requirements, How It Works, and Example 27 of 46
• What Is Brand Awareness? Definition, How It Works, and Strategies 28 of 46
• Brand Loyalty: What It Is, and How to Build It 29 of 46
• Brand Extension: Definition, How It Works, Example, and Criticism 30 of 46
• What Is Social Networking? 31 of 46
• Affiliate Marketer: Definition, Examples, and How to Get Started 32 of 46
• What Is Commercialization, Plus the Product Roll-Out Process 33 of 46
• Digital Marketing Overview: Types, Challenges, and Required Skills 34 of 46
• Direct Marketing: What It Is and How It Works 35 of 46
• Marketing in Business: Strategies and Types Explained 36 of 46
• What Are Marketing Campaigns? Definition, Types, and Examples 37 of 46
• How to Do Market Research, Types, and Example 38 of 46
• Micromarketing Explained: Definition, Uses, and Examples 39 of 46
• Network Marketing Meaning and How It Works 40 of 46
• Product Differentiation: What It Is, How Businesses Do It, and the 3 Main Types 41 of 46
• Target Market: Definition, Purpose, Examples, Market Segments 42 of 46
• Outside Sales: What They are, How They Work 43 of 46
• What Is a Sales Lead? How It Works and Factors Affecting Quality 44 of 46
• Indirect Sales: What it is, How it Works 45 of 46
• What Is Inside Sales? Definition, How It Works, and Advantages 46 of 46

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What is a business plan?

• Why you need a plan
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• When should you plan?
• Length of your business plan
• Business plan outline
• Operational and strategic plans
• Business plan vs business model

Start with a business plan outline

Use This Simple Business Plan Outline to Organize Your Plan

12 min. read

Updated June 23, 2023

When starting a business, having a well-thought-out business plan prepared is necessary for success . It helps guide your strategy and prepares you to overcome the obstacles and risks associated with entrepreneurship. In short, a business plan makes you more likely to succeed.

However, like everything in business, starting is often the hardest part. What information do you need? How in-depth should each section be? How should the plan be structured?

All good questions that you can answer by following this business plan outline. 

On this page

What is a business plan outline?

Why is a business plan outline important, 10 key sections in a standard business plan outline, detailed business plan outline.

A business plan outline is similar to a template for a business plan . It lists the common sections that all business plans should include.

A traditional business plan typically includes an executive summary, an overview of your products and services, thorough market research, a competitive analysis, a marketing and sales strategy, operational and company details, financial projections, and an appendix. 

Starting with a business plan outline helps ensure that you’re including all of the necessary information for a complete business plan. 

But, depending on what you intend to do with your plan, you may not need all of this information right away. If you’re going to speak with investors or pursue funding, then yes, you’ll need to include everything from this outline. But, if you’re using your plan to test an idea or help run your business, you may want to opt for a one-page plan . This is a simpler and faster method that is designed to be updated and used day-to-day. 

If you’re unsure of which plan is right for you, check out our guide explaining the differences and use cases for each plan type . 

No matter the type of business plan you create, these are the ten basic sections you should include. Be sure to download your free business plan template to start drafting your own plan as you work through this outline.

1. Executive summary

While it may appear first, it’s best to write your executive summary last. It’s a brief section that highlights the high-level points you’ve made elsewhere in your business plan.

Summarize the problem you are solving for customers, your solution, the target market, your team that’s building the business, and financial forecast highlights. Keep things as brief as possible and entice your audience to learn more about your company. 

Keep in mind, this is the first impression your plan and business will make. After looking over your executive summary, your reader is either going to throw your business plan away or keep reading. So make sure you spend the time to get it just right.

2. Products and services

Start the products and services section of your business plan by describing the problem you are solving for your customer. Next, describe how you solve that problem with your product or service. 

If you’ve already made some headway selling your solution, detail that progress here—this is called “traction”. You can also describe any intellectual property or patents that you have if that’s an important part of your business.

3. Market analysis 

You need to know your target market —the types of customers you are looking for—and how it’s changing.

Use the market analysis section of your business plan to discuss the size of your market—how many potential customers exist for your business—and if your potential customers can be segmented into different groups, such as age groups or some other demographic.

4. Competition

Describe your competition in this section. If you don’t have any direct competitors, describe what your customers currently do to solve the problem that your product fixes. 

If you have direct competition, detail what your strengths and weaknesses are in comparison, and how you’ll differentiate from what is already available. 

5. Marketing and sales

Use this business plan section to outline your marketing and sales plan —how you’ll reach your target customers and what the process will be for selling to them.

You’ll want to cover your market position, marketing activities, sales channels, and your pricing strategy. This will likely evolve over time, but it’s best to include anything that clearly details how you will sell and promote your products and services. 

6. Operations

What’s included in the operations section really depends on the type of business you are planning for. If your business has a physical location or other facilities, you’ll want to describe them here. If your business relies heavily on technology or specific equipment or tools, you should describe that technology or equipment here.

You can also use this section to describe your supply chain if that’s an important aspect of your business. 

7. Milestones and metrics

In a business, milestones are important goals that you are setting for your business. They may be important launch dates, or a timeline of when you’ll get regulatory approval—if that’s something you need for your business. Use this section of your plan to describe those milestones and the roadmap you are planning to follow.

You can also describe important metrics for your business, such as the number of sales leads you expect to get each month or the percentage of leads that will become customers.

8. Company overview and team

The company and team section of your plan is an overview of who you are.

It should describe the organization of your business, and the key members of the management team. It should also provide any historical background about your business. For example, you’ll describe when your company was founded, who the owners are, what state your company is registered in and where you do business, and when/if your company was incorporated.

Be sure to include summaries of your key team members’ backgrounds and experience—these should act like brief resumes—and describe their functions with the company. You should also include any professional gaps you intend to fill with new employees.

9. Financial plan and forecasts

Your financial plan should include a sales forecast, profit and loss, cash flow projections, and balance sheet, along with a brief description of the assumptions you’re making with your projections.

If you are raising money or taking out loans, you should highlight the money you need to launch the business. This part should also include a use of funds report—basically an overview of how the funding will be used in business operations. 

And while it’s not required, it may be wise to briefly mention your exit strategy . This doesn’t need to be overly detailed, just a general idea of how you may eventually want to exit your business. 

10. Appendix

The end of your business plan should include any additional information to back up specific elements of your plan. More detailed financial statements, resumes for your management team, patent documentation, credit histories, marketing examples, etc. 

If you’re looking for greater insight into what goes into specific planning sections, check out the following outline for a business plan. It can help you develop a detailed business plan or provide guidance as to what may be missing from your current plan. 

Keep in mind that every business plan will look a bit different because every business is unique. After all, business planning is to help you be more successful, so focus on the sections that are most beneficial to your business and skip the sections that aren’t useful or don’t apply. 

To help, we’ve marked sections that are truly optional with an *.

Executive summary

Company purpose / mission statement.

A very brief description of what your business does and/or what its mission is.

Problem We Solve

A summary of the problem you are solving and an identifiable need in the market you are filling.

Our Solution

A description of the product or service you will provide to solve the problem.

Target Market

A defined customer base who will most likely purchase the product or service.

Briefly describe who is behind the business.

Financial Summary

A short overview of revenue goals and profitability timeline.

If you’ve already started selling your product or service, highlight important initial details here.

Funding Needed*

If you are raising money for your business, describe how much capital you need.

Products & Services

Problem worth solving.

A thorough description of the problem or pain points you intend to solve for your customer base. 

A thorough description of your proposed product or service that alleviates the problem for your customer base.

Describe any initial evidence that your customers are excited to spend money on your solution. Initial sales or signed contracts are good signs.

Intellectual Property/Patents*

If this is important for your business, outline it here.

Regulatory Requirements*

If government approval is required for your business, explain the details and timeline.

Future Products and Services*

What products and services might you offer in the future once your initial products and services are successful?

Market Size & Segments

How many potential customers do you have and what potential groups of customers are separated by specific characteristics?

Market Trends*

How consumers in your target market tend to act including purchasing habits, financial trends, and any other relevant factors.

Market Growth*

The perceived potential increase or decrease in the size of your target market.

Industry Analysis*

If your industry is changing or adjusting over time, describe those changes.

Key Customers*

If your business relies on certain important customers, describe who they are here.

Future Markets*

A snapshot of the potential market based on the last few sections and how your business strategy works within it.

Competition 

Current alternatives.

A list of potential competitors. Identifying the competition isn’t always obvious and it may take some digging on your part.

Our Advantages

The strategic advantage(s) that makes your target market more likely to choose you over the competition. 

Barriers to Entry*

If there’s anything that makes it more difficult for other people to start competing with you, describe those barriers.

Marketing & Sales

Market positioning.

Where do your products or services fit into the market? Are you the low-price leader or the premium option?

Unique value proposition*

What’s special about your offering that makes your customers want to choose it over the competition.

Marketing Plan

An outline of your marketing and advertising strategy including costs, advertising channels, and goals.

How do you sell your product or service? Self-serve or with a team of sales representatives?

Pricing Strategy*

Describe your pricing and how it compares to alternatives in the market.

Distribution*

Describe how your product gets in front of customers. Are you selling in stores and online? Which retailers?

SWOT Analysis*

Strengths, weaknesses, opportunities, and threats.

Location & Facilities

If you have a physical presence, describe where and what it is.

What technology is crucial for your business success?

Equipment & Tools

If special equipment or tools are needed for your business, describe them here.

Sourcing and fulfillment*

If you purchase your products or parts for your products from somewhere else, describe that sourcing and supply chain.

Partners and Resources*

If you have key partners that you work with to make your business a success, describe who they are and what services or products they provide.

Milestones and metrics

A detailed roadmap of specific goals and objectives you plan to achieve will help you manage and steer your business.

Key metrics

Performance measurements that help you gauge the overall performance and health of your business.

Company overview and team

Organizational structure.

An overview of the legal structure of your business. 

Company history and ownership

A summary of your company’s history and how it relates to planning your business.

Management team

The team that is starting or running your business and why they are uniquely qualified to make the business a success.

Management team gaps

Key positions that your business will need to fill to make it successful.

Financial plan and forecast

Projected profit and loss.

How much money you will bring in by selling products and/or services and how much profit you will make or lose after accounting for costs and expenses.

Projected cash flow

How and when cash moves in and out of your business. This also includes your overall cash position.

Projected balance sheet

Expected balances for business assets, liabilities, and equity.

Use of funds

If you are raising money either through loans or investment, explain how funds will be used. This is typically meant to be shared with investors or lenders.

Exit strategy

A brief explanation of how you intend to eventually exit from your business. This could include selling the business, going public, transitioning the business to a family member/employee, etc.

A repository for any additional information, including charts and graphs, to support your business plan.

Business plan outline FAQ

How do you organize your business plan?

Should you include tables and charts in your business plan?

How long should your business plan be?

Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.

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Do This One Thing Before You Write Your Business Plan

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Discover the world’s #1 plan building software

Use This Business Plan Format to Expertly Write Your Plan

Written by Dave Lavinsky

In this guide, you’ll learn how to format your business plan professionally. Business plan structure and format helps readers look beyond distracting style to the real meat of your idea.

Download our Ultimate Business Plan Template here >

How to Format Your Business Plan: The Cover Sheet

Every business plan should begin with a simple business plan cover page including the business name, your name and contact information. An easy to read table of contents should follow.

Example Business Plan Table of Contents

I: Executive Summary      a. Business Overview      b. Success Factors      c. Financial Highlights

II: Company Overview      a. Who is [Company Name]?      b. [Company Name]’s History      c. [Company Name]’s Products & Services

III: Industry Analysis      a. Industry Trends

IV: Customer Analysis      a. Customer Segmentation

V: Competitive Analysis      a. Direct & Indirect Competitors      b. Competitive Advantage

VI: Marketing Plan      a. The [Company Name] Brand      b. Promotions Strategy      c. Pricing Strategy

VII: Operations Plan      a. Functional Roles      b. Goals and Milestones

VIII: Management Team      a. Management Team Members      b. Hiring Plan

IX: Financial Plan      a. Revenue and Cost Drivers      b. Revenue and Cost Drivers      c. Key Assumptions & Forecasts

X: Appendix

The cover sheet should leave no question for readers to be able to identify the business plan when it is in a stack with dozens of others on their desk. The table of contents allows them to easily refer to sections within the plan. For example, after reading the executive summary , some investors with an eye for numbers may turn directly to the financial plan and statements. Proper business plan format allows readers to quickly get the information they want.

Example Business Plan Format

There are 10 business plan components or sections that every entrepreneur and business owner must include in their plan. These include:

• Executive summary
• Company overview
• Industry analysis
• Customer analysis
• Competitive analysis
• Marketing plan
• Operations plan
• Management team
• Financial plan

You should recognize these if you’ve ever worked with a business plan template .

Formatting your business plan with charts and graphs is welcomed to break up long blocks of text. However, charts and graphs shouldn’t be used for their own sake. They must make the information easier to pass on than text would.

The business plan format that investors and lenders expect includes the following 10 sections. You can download our business plan format pdf here, to help you get started. We’ve included important notes in each section specific to business plan formatting to help you as you write your plan.

1. Start with Your Executive Summary

An executive summary gives readers a crisp overview of your business at the start of your plan. This section should not be more than two pages long and should include the following:

• What is the business about?
• Where and why did the idea of the business originate?
• Who are the owners?
• Which industry is it operating in?
• What is its core function?
• Where is it located?
• How is it going to make money?
• How much money (if any) is it already making?
• What are its financial projections?

The best format for your executive summary is paragraphs. Utilizing bullets and headings is also useful formatting within an executive summary, as it aids the reader in scanning the content on the page.

2. Company Overview Section

The company overview is the perfect place to highlight the strengths of your business. This section gives the reader additional information about your products and/or services and describes your company’s past accomplishments.

Including the below in this section will provide further clarity about your business:

• What type of business you are (e.g., C-Corporation, sole proprietor)
• When your business started
• Business’ accomplishments to date

The best formatting to use in this section is paragraphs to describe your company’s strengths and products/services. You should also include a chart that outlines your company’s achievements to date.

3. Industry or Market Analysis

The industry or market analysis gives the reader a clear understanding of your industry and the audience it serves. It includes a detailed explanation of your market size and trends.

Typically, the format of this section should be paragraphs. Feel free to include charts and graphs to best convey the information to the reader.

4. The Customer Analysis States Who Your Customers Are and What They Need

In this section of your plan, explain who your target customers are and identify their specific needs. Doing this will help you better target and attract customers.

5. Competitive Analysis

The Competitive Analysis section identifies your direct and indirect competitors. It discusses who they are and their strengths and weaknesses. It then details your areas of competitive advantages.

Whether your competitors are small or large businesses, describe them. Telling investors there are no competitors (big or small) often gives the impression that a market does not exist for your company.

With regards to formatting, use paragraphs to describe each competitor. As appropriate, adding a competitor matrix to show similarities and differences between your company and the competition can be very powerful.

6. Your Marketing Plan is a Key Section

The marketing & sales section of your business plan should outline how you plan to attract new customers and retain old ones. This section should outline the ways customers can be introduced to and engage with your offerings and describe how you will convert these prospects into paying customers.

Set marketing objectives that include the following (if applicable):

• Introducing new products
• Extending the market reach
• Exploring new markets
• Boosting sales
• Cross-selling
• Creating a long-term partnership with clients
• Increasing prices without affecting sales
• Creating a content marketing strategy

Organize your Marketing Plan into the 4 P’s – Price, Product, Promotions and Place. If you have multiple products or services, include a menu with each key item and its price.

7. The Operations Plan Format

Your Operations Plan identifies your key operational processes and milestones you expect to accomplish. Using a Gantt chart is a great way to show your expected future milestones. You can also format this section with tables that document the dates of future milestones.

8. You Need to Prove Your Management Team Can Execute

“A company is only as good as the people it keeps.” – Mary Kay Ash, American Entrepreneur and Businesswoman

The Management Team section of your business plan focuses on the people who run the business.

Who are the decision-makers, who is the product expert, who is the operations head, and who is running the entire show? A glimpse into the expertise and capabilities of your team members and how their experiences will help grow your business will boost stakeholder confidence.

To improve the formatting and best convey your management team to readers, consider adding an organizational chart that shows your team members and reporting structure.

9. Format Your Financial Plan

The goal of this section is to convince the reader that your business is stable and will be financially successful. Arm this section with past and/or forecasted cash flow statements, balance sheets, profit & loss statements, expense budgeting and sales forecasts.

If you run an operational business, include 3 years of historical data to help investors gain an understanding of how feasible your funding request is and if your business is capable of generating good returns.

Also include your funding request, if applicable, in this section. You should mention how much investment is required to take your business to the next significant milestone and how the money will be spent. You should also define if you are seeking debt or equity funding. If you are seeking debt financing like an SBA loan, ensure your financial projections include the debt and show steady repayments of both the principal and return under reasonable loan terms.

If you are seeking equity financing, you don’t need to include your valuation expectations in the business plan, but you should be aligned within your ownership team on the amount of equity you are willing to exchange before you pitch investors.

10. Appendix

This section includes supporting documentation of your business case. This could include renderings of a planned store location, market research reports referenced in the plan, key supplier or buyer contracts that substantiate your financial projections or historical marketing and sales data.

Formatting Your Business Plan

Overall, business plans should use simple and standard formatting. Twelve point font size in a standard font like Arial or Times New Roman is best, as well as the standard margin size of one inch on each side. Pages should be numbered, and the name of the company should appear on each page in the header or footer.

Use charts whenever possible as it makes it much easier for readers to consume the information in your plan.

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Basic Business Plan Structure

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How to write a business plan for jewelry making, how to make a business plan presentation.

• What Factors Make the Difference Between a Good Business Plan & an Excellent One?
• What Is an Executive Summary Business Plan?

Business plans vary in content according to their intended purposes, but the basic format remains the same. It consists of three elements: First, discuss the business model and describe your products and services. Then place the business in its industry and discuss your intended marketplace, including your target customers and how you'll reach them, beating your competition.

Last, relate these plans to the real world, discussing your contingency plans and finishing off with spreadsheets detailing your anticipated sales, costs of doing business and resulting profits. Vary the basic format only to more clearly present the idea. Clarity is the most important quality of a business plan.

The Executive Summary

Written last, the executive summary is an outline of key points in your business plan, explains SmartyCents.com . More marketing-oriented than the basic plan, it's the tool you use to entice people to ask to see your full plan document. Length can vary from one page for a dense abstract to the venture summary style of approximately 10 pages.

Venture summaries are used in marketing your idea to venture investors and others who will respond better to charts, pictures and an evocative approach to describing your business. Keep the presentation free of hyperbole, or your plan will appear more fanciful than realistic.

The Business Model

A description of the business model makes an effective start for your business plan. It can consists of several business plan areas. Begin with an introduction to the industry and your mission statement. Title your first section "Company Description" and include all the pertinent facts, such as your incorporation or other legal business status, licenses, trademarks and patents.

"Business Model" comes next. In this section, describe your products and services, how you intend to make money and why the business is relevant. A description of your management team can be added to this section, if you have an impressive team. If not, the "Management" section is often placed just before the "Financial Projections" section.

Your Marketing Model

"Marketing Model" contains a section titled "Target Market" in which you describe the demographics, psychographics and buying habits of your target market and why your product and service will appeal to it. Next, "Marketing Plan" is a detailed description of your marketing strategy and tactical methods of attracting business.

Finish with your "Competition" section, in which you list your competitors, with a realistic appraisal of their strengths, how your company compares and your strategic and tactical plans for developing and maintaining market share in your competitive niche.

Build-Out Model

In the "Build-Out" section, outline the steps to launching your company, if you're pitching a startup. It's appropriate to include benchmarks and a timeline. Investors also appreciate a discussion of how your costs of development and operations fit into the timeline and when revenues enter the equation.

For a business plan dealing with expansion, this section should detail the road map to your final goal. In an operational business plan, human resources, contract development, corporate change and administrative reorganization can be mapped.

Any Contingency Plans

It's always a good idea to include a section on what you'll do if your plans don't seem to be working out as expected – particularly if you're planning a startup. This is the place to insert a SWOT analysis – a discussion of the strengths, weaknesses, opportunities and threats facing your business goals. It's also another appropriate spot to discuss costs and how you plan to cover them or cut them if revenues or investments don't materialize as hoped.

Financial Projections

The final section contains financial projections, explains Entrepreneur magazine. Standard are sales projections, a personnel plan, a profit and loss statement, a cash flow statement and a balance sheet. If your company is already in operation, include current financials along with the pro forma financials.

• Entrepreneur:An Introduction to Business Plans
• SmartyCents.com: How to Write a Business Plan the Right Way

Victoria Duff specializes in entrepreneurial subjects, drawing on her experience as an acclaimed start-up facilitator, venture catalyst and investor relations manager. Since 1995 she has written many articles for e-zines and was a regular columnist for "Digital Coast Reporter" and "Developments Magazine." She holds a Bachelor of Arts in public administration from the University of California at Berkeley.

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How to Write a Business Plan, Step by Step

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1. Write an executive summary

2. describe your company, 3. state your business goals, 4. describe your products and services, 5. do your market research, 6. outline your marketing and sales plan, 7. perform a business financial analysis, 8. make financial projections, 9. add additional information to an appendix, business plan tips and resources.

A business plan is a document that outlines your business’s financial goals and explains how you’ll achieve them. A strong, detailed plan will provide a road map for the business’s next three to five years, and you can share it with potential investors, lenders or other important partners.

Here’s a step-by-step guide to writing your business plan.

» Need help writing? Learn about the best business plan software .

This is the first page of your business plan. Think of it as your elevator pitch. It should include a mission statement, a brief description of the products or services offered, and a broad summary of your financial growth plans.

Though the executive summary is the first thing your investors will read, it can be easier to write it last. That way, you can highlight information you’ve identified while writing other sections that go into more detail.

» MORE: How to write an executive summary in 6 steps

Next up is your company description, which should contain information like:

Your business’s registered name.

Address of your business location .

Names of key people in the business. Make sure to highlight unique skills or technical expertise among members of your team.

Your company description should also define your business structure — such as a sole proprietorship, partnership or corporation — and include the percent ownership that each owner has and the extent of each owner’s involvement in the company.

Lastly, it should cover the history of your company and the nature of your business now. This prepares the reader to learn about your goals in the next section.

» MORE: How to write a company overview for a business plan

The third part of a business plan is an objective statement. This section spells out exactly what you’d like to accomplish, both in the near term and over the long term.

If you’re looking for a business loan or outside investment, you can use this section to explain why you have a clear need for the funds, how the financing will help your business grow, and how you plan to achieve your growth targets. The key is to provide a clear explanation of the opportunity presented and how the loan or investment will grow your company.

For example, if your business is launching a second product line, you might explain how the loan will help your company launch the new product and how much you think sales will increase over the next three years as a result.

In this section, go into detail about the products or services you offer or plan to offer.

You should include the following:

An explanation of how your product or service works.

The pricing model for your product or service.

The typical customers you serve.

Your supply chain and order fulfillment strategy.

Your sales strategy.

Your distribution strategy.

You can also discuss current or pending trademarks and patents associated with your product or service.

Lenders and investors will want to know what sets your product apart from your competition. In your market analysis section , explain who your competitors are. Discuss what they do well, and point out what you can do better. If you’re serving a different or underserved market, explain that.

Here, you can address how you plan to persuade customers to buy your products or services, or how you will develop customer loyalty that will lead to repeat business.

» MORE: R e a d our complete guide to small business marketing

If you’re a startup, you may not have much information on your business financials yet. However, if you’re an existing business, you’ll want to include income or profit-and-loss statements, a balance sheet that lists your assets and debts, and a cash flow statement that shows how cash comes into and goes out of the company.

You may also include metrics such as:

Net profit margin: the percentage of revenue you keep as net income.

Current ratio: the measurement of your liquidity and ability to repay debts.

Accounts receivable turnover ratio: a measurement of how frequently you collect on receivables per year.

This is a great place to include charts and graphs that make it easy for those reading your plan to understand the financial health of your business.

» NerdWallet’s picks for setting up your business finances:

The best business checking accounts .

The best business credit cards .

The best accounting software .

This is a critical part of your business plan if you’re seeking financing or investors. It outlines how your business will generate enough profit to repay the loan or how you will earn a decent return for investors.

Here, you’ll provide your business’s monthly or quarterly sales, expenses and profit estimates over at least a three-year period — with the future numbers assuming you’ve obtained a new loan.

Accuracy is key, so carefully analyze your past financial statements before giving projections. Your goals may be aggressive, but they should also be realistic.

List any supporting information or additional materials that you couldn’t fit in elsewhere, such as resumes of key employees, licenses, equipment leases, permits, patents, receipts, bank statements, contracts and personal and business credit history. If the appendix is long, you may want to consider adding a table of contents at the beginning of this section.

Here are some tips to help your business plan stand out:

Avoid over-optimism: If you’re applying for a business loan at a local bank, the loan officer likely knows your market pretty well. Providing unreasonable sales estimates can hurt your chances of loan approval.

Proofread: Spelling, punctuation and grammatical errors can jump off the page and turn off lenders and prospective investors, taking their mind off your business and putting it on the mistakes you made. If writing and editing aren't your strong suit, you may want to hire a professional business plan writer, copy editor or proofreader.

Use free resources: SCORE is a nonprofit association that offers a large network of volunteer business mentors and experts who can help you write or edit your business plan. You can search for a mentor or find a local SCORE chapter for more guidance.

The U.S. Small Business Administration’s Small Business Development Centers , which provide free business consulting and help with business plan development, can also be a resource.

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