Business plan: What is it, How to Write One

What Is a Business Plan:

A business plan is like a map for a company. It shows what the company wants to achieve, how it works, and how it will make money. Having a plan helps secure investors and allows for growth in your business.

Even though they are the most beneficial for start-up businesses, all companies should have a business plan. It’s a good idea to update the plan every now and then to match the company’s goals. Sometimes, a company might make a new plan if they want to do something different.

How to Write a Business Plan

When of how to write a business plan, it’s important to choose the right format. There are two main formats: traditional and lean startup.

The traditional format is all about giving lots of details. It takes a lot of work to make, and lenders and investors usually want to see it. It covers everything about your business and can be many pages long. If you like details, want financing from traditional sources, or want a complete plan, the traditional format is for you.

Different Types of Plans

The lean startup format is different. It’s short and focuses on the most important parts of your business. It usually fits on just one page and can be done quickly, sometimes in just an hour. But sometimes lenders and investors still want more information. The lean startup plan is great if you want to explain your business quickly, have a simple business model, or expect to make lots of changes.

In a traditional business plan, there are different sections you should include. The executive summary gives a quick overview of your company, including what it’s all about, the products or services you offer, key people, where you’re located, and financial info. The company description shares detailed info about your business, like the problems you’re solving and who your customers are. The market analysis helps you learn about your industry and target market through research. Organization and management explain how your company is organized and introduces the important people who run it. The service or product line talks about what your products or services are and why they’re great for customers. And marketing and sales explain your plans for getting and keeping customers.


If you need money for your business, the funding request section is where you explain how much you need for the next five years and how you’ll use it. You say if you want debt or equity funding, what terms you want, and what you’ll use the money for. And financial projections back up your funding request with detailed predictions that show your business is stable and profitable. You include income statements, balance sheets, cash flow statements, and budgets for the next five years, and use charts and graphs to make things easier to understand.

Components of a Business Plan

All Business plans need to contain these Business Plan Components listed below, however, the size of a business plan will vary business to business. Usually, it’s good to have the important information in a document that is about 15 to 25 pages long. After that you can mention other important stuff, like patent applications, in the main document and add them as extra pages at the end.

Remember, every business plan is unique, but they usually have similar parts. Here are some of the important sections you should include in your business plan.

Below are the 11 Components needed in your plan:

Step 1: Elevator Pitch

Capture your audience’s attention with a short, powerful 15-second elevator pitch. Clearly and succinctly explain your product and its unique value proposition. Nail down the essence of your offering to leave a lasting impression on potential stakeholders.

Step 2: Problem

Identify the specific challenges your target audience faces. Emphasize the urgency and significance of solving these issues effectively. Show empathy and understanding for your customers’ pain points to establish a strong emotional connection.

Step 3: Solution

Present your product as the ultimate problem solver. Showcase how it addresses the identified challenges and highlight its unique advantages and selling points. Paint a compelling picture of how your offering can improve the lives of your customers.

Step 4: Market Opportunity

Conduct a thorough analysis of your target market’s size and dynamics. Demonstrate a deep understanding of your industry landscape and explain how your product perfectly fits within it. Investors want to see that your business is scalable and aligned with market demands.

Step 5: Market Entry

Develop a clear and actionable plan to enter your target market successfully. Outline your approach to ensure your product thrives amid competition. Describe your go-to-market strategy, distribution channels, and marketing tactics.

Step 6: Traction

Build credibility by showcasing any significant milestones, achievements, or customer feedback that validate your product’s market potential. Highlighting early successes and positive customer experiences will instill confidence in your offering.

Step 7: Analysis

Thoroughly assess your competition to identify areas of differentiation. Clearly define your niche and emphasize the features that set your product apart from others. Understanding your competitive landscape is crucial for positioning your brand effectively.

Step 8: Financials

Paint a clear picture of your company’s financial viability by providing an overview of expected expenses and revenue for the first year. Show investors that you have a sound financial plan in place and demonstrate how you will achieve profitability.

Step 9: Team

Introduce your team members and showcase their roles and unique contributions to the business. Highlight their expertise and experience, and identify any additional skills needed to drive the company’s success. A strong team can make or break a startup’s journey.

Step 10: Funding

Specify the amount of funding needed and provide a clear explanation of how it will be utilized to drive growth and achieve your business plan’s goals. Show potential investors that you have a well-thought-out plan for utilizing their investment wisely.

Step 11: Executive Summary

Summarize the key elements of your business plan into a concise and impactful executive summary. Craft a compelling narrative that effectively communicates your vision, mission, and the immense potential of your venture.