A business plan is a road map that will guide your strategic decisions in the short and long term. Because there are so many factors to include, a business plan template can be especially helpful in making sure you've considered all angles before moving forward.
You should have prepared a few reports before getting started with your business planning. Perhaps most important are your market research report and income statement, both of which will allow you to decide whether it's worth creating a business plan at all. Then, your business plan can represent a high-level overview that refers to those supplemental reports, data and research.
Don't feel intimidated about writing a business plan. It does not have to be an incredibly elaborate document. Even though a business plan template has many sections, you can pick and choose which ones to write until everything has been filled in to your satisfaction. This free business plan template step-by-step guide will help you get started.
Sample Business Plan Template
A typical business plan includes sections such as:
- Executive Summary
- Table of Contents
- Company's Core Values
- Organizational Chart
- Market Research
- Competitive Advantage
- Product and Service Development
- Growth Strategy
- Pricing Strategies
- Marketing Plan
- Expected Obstacles
- Contingency Plan
- Financial Information and Projections
- Resources to Be Used
Perhaps an example will help ease any anxieties in which you can read a summary of each major section of a business plan, and then see it in action in Patricia's Ice Cream Parlor's business plan!
Executive Summary: Explanation
An executive summary acts as an introduction to the rest of the business plan. Limit this summary to approximately one page and make sure it provides a high-level overview of what to expect from the document. Mention big takeaways, like the company's major products and services, target market, primary competitors, market advantages and projected profit. Also include the addresses and contact information for major company locations.
The goal of an executive summary is to provide enough information for someone to understand your company's strategic plan without necessarily needing to read the entire document. Of course, your team does need to read the entire plan. However, the executive summary frames the way they read it, giving details that will help them understand the company's overall goals and strategy. Consider writing it last so that you have all the appropriate details well organized and ready for summation.
Executive Summary: Example
Patricia's Ice Cream Parlor was founded by Patricia Smith in 2018 in order to serve ice cream and a friendly atmosphere to the people of Anywhere, USA. By offering a variety of flavors and topping options as well as having a convenient location, we will have a competitive advantage over our major competitors, which are fast-food chains located 15 minutes away from our location. Our financial projections indicate that we stand to make a net profit of at least $5,000 per month.
Mission, Vision and Story: Explanation
The mission statement, vision statement and story section sets the tone for the rest of the document, so you want to make sure everyone feels excited and ready to rally around the cause after reading these few paragraphs. The vision statement in particular serves as a reminder to "dream big". What would your company look like if all your wildest dreams came true? Your vision statement can simply start, "We envision ...," but there are other creative ways you can craft this sentence.
On the other hand, a mission statement clearly states what you do, for whom you do it and why. Mention the products or services you offer, your target customers and why you feel your work is important. Whereas a vision statement embodies a long-term goal, a mission statement should represent the everyday work the company performs. It serves as a general company description.
Finally, you can write a few paragraphs about why you started this small business. You saw an opportunity that spoke to you. Sharing your own personal motivation can inspire your team and put your mission and vision statements into perspective.
Mission, Vision and Story: Example
I've always had a sweet tooth and a particular love for ice cream, but the only way to get my ice cream fix in my hometown of Anywhere, USA was to drive about 15 minutes to a fast-food chain for mediocre soft serve in limited flavors. I had to drive even further — about 40 minutes — for delectable hand-dipped ice cream. I knew I couldn't be the only one wishing a cold treat was just an easy walk away during the hot summer months, so I decided to launch my own ice cream parlor.
The mission of Patricia's Ice Cream Parlor is to provide a variety of ice cream flavors, toppings and serving options to the people of Anywhere, USA in a welcoming and fun-filled atmosphere. Patricia's Ice Cream Parlor envisions itself as a place where diverse people can feel accepted and where families can create memories while enjoying a sweet treat.
Company's Core Values: Explanation
Next, it's helpful to talk about the core values that will help the company achieve its mission and vision statements. For example, you might prioritize environmentally friendly actions in your coffee shop, such as donating used coffee grounds to a local community garden for composting. You might simply prioritize your customers' satisfaction and make a serious effort to handle all complaints and criticism with grace.
Numerous potential core values exist, so this is a topic you'll want to brainstorm with your team. Core values will also play an important role in branding and marketing your company, so don't skip this step. Consider waiting until you've performed a market analysis and know your target audience and competitive advantage before finalizing this section of your business plan.
Company's Core Values: Example
Because we believe in diversity — and not just in terms of ice cream options! — we treat all of our customers with courtesy and a smiling face. We want our local customers to be repeat customers and to feel safe while visiting us, not ashamed for indulging in their love of ice cream.
Employees at Patricia's Ice Cream Parlor are upbeat and positive while striving to make a personal connection with visitors. We also value our local community and have volunteer days to give back. Our dining area is a safe place for kids to come after school for tutoring or to study. Above all, our customers should always feel welcome.
Biographies and Organizational Chart: Explanation
If you have a board of directors, mention them in this section along with a brief biography that discusses relevant credentials. Photos are optional but can be helpful for a growing team. For small business owners who employ just a few team members, include biographies of everyone and discuss their strengths in relation to the business plan. For larger companies, stick to biographies of upper management for the sake of space and time.
Next, include an organizational chart to show how everyone fits into the company hierarchy. Who reports to whom? Even if you haven't yet hired anyone, break up your company into necessary departments and try to determine how many people you may need for each. For example, you can have a marketing director who reports to you but has different managers working under him as well.
Finally, mention the type of business structure under which your company operates. Are you a sole proprietor, or do you have a business partner? Maybe you're an LLC, an S corp or a C corp. Include other important information like whether you have a board of directors or are a 501(c)(3) nonprofit organization.
Biographies and Organizational Chart: Example
Patricia Smith, Founder: Patricia Smith earned a B.A. in communications and worked for a large corporation from 2006 to 2018. She has been an active volunteer for multiple organizations in Anywhere, USA, and founding Patricia's Ice Cream Parlor in 2018 was a unique way for her to continue to serve the community while also indulging in her entrepreneurial spirit.
Greg Brown, Head of Operations: Greg Brown graduated with an MBA in 2010 and has helped multiple startups become sustainable enterprises, including This Cool Business. Greg met Patricia at a conference in 2016 and was honored to come aboard as the head of operations when Patricia's Ice Cream Parlor was officially launched.
Daily employees will report to their shift manager. All shift managers will report directly to Greg. Greg reports directly to Patricia. Patricia's Ice Cream Parlor is an LLC.
Market Research and Competitive Advantage: Explanation
Market research includes a market demand analysis and competitor research. This is an important section in the business plan because it essentially explains why your business is viable and likely to make a profit.
You don't necessarily need to include a full market and competitive research report in your business plan, but do have a full report prepared as an additional resource. For your business plan, you can simply discuss the major findings of this research.
As you discuss the results of your competitive research, be sure to highlight any opportunities of which you can take advantage. Do your competitors' customers leave unhappy reviews? What can you offer that will cause them to prefer your brand vs. the competition? Discuss any strengths that you identified in your SWOT analysis as well.
Market Research and Competitive Advantage: Example
Survey results indicate that 78% of people who live and work in downtown Anywhere, USA enjoy eating ice cream. Of those people, 55% say their favorite flavor is unavailable at fast-food chains, and 82% say they would visit an ice cream parlor located downtown instead of driving elsewhere.
Our competitive advantage would be a differentiation focus. We may not have the cheapest ice cream available, but we have more options than the competition and are more conveniently located to serve our target market: ice cream lovers in downtown Anywhere, USA.
Development and Growth Strategy: Explanation
Now that you've discussed what you want to do (in big-picture terms) and why it seems to be a good idea to do so, it's time to get down to the nitty gritty and explain exactly from where your sales will come. In this section of your business plan, list the products or services that you want to offer your customers. The more specific you can be, the better.
Talk about how these products or services will be developed. Does your team need training or certification in order to provide a specific service? Can you purchase a product wholesale, or do you need to work with a design and development team to make a brand-new product?
In the event that your business plan is achieved, how will you grow your business? Perhaps you will simply hire more staff to handle the uptick in customers, or maybe you'll want to open a new location across town. Do you have plans to expand into a new line of products? Discuss your growth strategy here, including what will prompt you to move ahead with growing your business, such as hitting a specific net-profit goal.
Development and Growth Strategy: Example
We will begin by ordering wholesale ice cream flavors from An Ice Cream Company. Based on the flavors that prove most popular among our customers, we will order new flavors or create a flavor rotation. We will produce our own waffle cones in house, provide a birthday party service and sell pints of ice cream that customers can take home to enjoy.
Our long-term growth strategy involves making some of our ice cream flavors in house, operating a mobile truck to take to community events and expanding into a second location. We'll need to do additional market research and hire more staff to make this happen.
Pricing Strategies and Marketing Plan: Explanation
You will achieve those financial projections by getting people to buy your products or services, of course. A marketing plan will help you do just that. Outline each marketing strategy that you plan to employ, such as direct marketing, search-engine optimization, social-media marketing, radio advertisements, email marketing, etc.
Talk about how often you'll run sales or what will determine whether an item can be discounted. Will you have a "loyal shoppers" program? If you will have an e-commerce store, talk about whether you'll employ strategies like remarketing, upselling and cross-selling.
Pricing Strategies and Marketing Plan: Example
Patricia's Ice Cream Parlor has a startup budget of $50,000, which will allow a shop location to be rented and renovated, equipment to be purchased and employees to be hired. Based on our projected income statement, we forecast a $5,000 net profit each month.
Our pricing strategy is based on the serving option (cake cone, waffle cone, bowl, shake or pint) and how many scoops a customer wants. We do not aim to have a cost-leadership advantage. Instead, we will either match our competitors' prices for similar ice cream products or remain within 10% of their prices.
We plan to do most of our Internet marketing on Facebook while also running some TV commercials on local stations.
Expected Obstacles and Contingency Plans: Explanation
You already discussed the positive results of your SWOT analysis in the competitive advantage section of the business plan. Now, it's time to talk about the negatives. What kinds of weaknesses and threats did you uncover? What might make this new business really hard to get off the ground, and how will you combat that?
No one wants to think about the business failing, but smart business owners will have a plan regardless. What's yours? Talk about how the business will be dissolved if it fails and your definition of failure in the first place.
Expected Obstacles and Contingency Plans: Example
There is a possibility that our customers will not desire ice cream as much as our market research suggests, leading to poor revenue. We may also experience some backlash from established fast-food chains, such as marketing campaigns targeting our local customers. We have a six-month plan and will re-evaluate after that. Patricia's Ice Cream Parlor will be dissolved and assets divided according to law if we fail to have positive revenue for six months in a row.
Writing Your Own Business Plan: Extras
Patricia has an excellent draft started for her business plan, but a typical business plan template includes a few extra documents or organizational elements. Including concrete items, like the data gathered during market research surveys or her income statement, will make her plan even stronger. So will other visuals when appropriate, like a map of her location in proximity to her competitors or a visual organizational chart.
Table of Contents
A business plan can turn into a massive document with a lot of information. A table of contents makes it easy for readers to find the section or data for which they're looking. You can make your table of contents as high level or detailed as you feel may be necessary. Just make sure headers mentioned in the table of contents match up to headers found throughout the text rather than mentioning headers that don't exist in the text.
Although the table of contents appears in the beginning of your business plan, it's typically the last thing that you'll create in order to keep all page numbers accurate and prevent tedious editing. However, if you use the table of contents function along with formatted headers in a program like Microsoft Word, you can update changes automatically.
Financial Information and Projections
Now that you've provided an overview of what you'll sell for income and what kind of resources you'll need to get your business up and running, it's time to put dollar signs next to those ideas.
A projected profit-and-loss statement (also called an income statement) is a high-level financial overview of your expected net profit. It lists your expected income from sales, the cost of sales, your fixed expenses and even tax information. Ultimately, it shows how much profit your business could make if it meets those sales and expense goals.
In addition, you'll want to include a cash-flow projection to display any other assets or loans and how they factor into your business accounting. Finally, a balance sheet may not be useful for a business just getting started, but it's important information to include every time you create a new business plan (whether it's every three years, every five years, etc.).
Resources to Be Used
What kinds of resources will you need in order to develop your products or services? Think about financial resources as well as human capital. How many employees do you need to hire for each department?
If you'll be outsourcing some of your work, list companies or contractors whom you would like to hire. Also make a list of software that you might need, such as an accounting program or project management platform.
Visual Aids in Your Business Plan
Finally, don't forget to include important visuals in your business plan. You can attach these as appendices at the end of the document or include them in line with the text in the appropriate section of the business plan. Survey results, financial projections and product models are just a few examples of visual aids that can help clarify your business plan. A good business plan can help sway potential investors in your favor, so make it count!
Cathy Habas specializes in marketing, customer experiences, and behind-the-scenes management. Cathy has contributed to sites like Business and Finance, Business 2 Community, and Inside Small Business. She served as the managing editor for a small content marketing agency before continuing with her writing career.