What is a Business Plan?

A Business Plan is a written document outlining a company’s business goals and its plans to achieve them. 

A plan outlines several key aspects of the business’s future objectives, operations, marketing, and financial projections, serving as an internal decision-making tool. Additionally, it meets external business needs, such as helping investors assess risks before funding a company.

Why are Business Plans important?

Business Plans serve several important purposes and benefits for a company. Preparing a Business Plan can help internal company development as well as serve external needs, including:

• Developing a strategic roadmap by documenting goals, financial projections, and marketing plans while organizing the company’s vision
• Measuring company progress by establishing benchmarks against which the company can track its performance
• Reducing risk by testing ideas and understanding potential problems before launching a new business or strategy
• Communicating the core vision of the company to partners, investors, and staff looking to work toward the same goals
• Helping secure funding by showing lenders and investors a plan to evaluate any risks before providing capital or support

What are the key components of a Business Plan?

A Business Plan describes the key aspects of a company’s business model, strategy, and plans for operating and growing the business. Key features of a plan include:

1. Executive summary

An overview of your company’s management structure, products or services, goals, capital requirements, and marketing strategy.

2. Goals and objectives

A summary of your business’s ownership and management structure, its goals and objectives, as well as any background information, which might be particularly relevant for an existing company needing an updated plan. A plan specifies the industry, clients, and consumers you expect to serve, in addition to what gives you a competitive edge.

3. Strengths, weaknesses, opportunities, threats (SWOT) analysis

A SWOT Analysis complements your Business Plan by evaluating specific internal (strengths and weaknesses) and external (opportunities and threats) elements of your business. Using this analysis can help predict viability and potential issues, bringing strategic focus to your business.

Complete this strategic planning with LawDepot’s SWOT Analysis tool.

4. Competitor analysis

A thorough description of the competition and how you plan to compete against their current strategies. 

Keeping your finger on the pulse of competitors can help you develop effective marketing strategies by learning from businesses that compete for your potential customers or clients. Your analysis can also look at financial and marketing trends, target demographics, consumer statistics, employee income, and more.

5. Financial plan

This can include your company’s income (profit and loss) statement and contributions by the owners. If you need to pitch your ideas to investors, you can describe the capital you need to start or expand your business.

6. Marketing plans

A strategy and budget to get your product or services in front of customers or clients. You can include advertising methods (online or traditional) and distribution plans for your products or services (e.g., brick-and-mortar, e-commerce).

7. Operations overview

A glimpse into your business’s daily operations, including the management and staffing structure, your operating facility, suppliers, and production methods (e.g., quotas or manufacturing details).

8. Product or service details

A breakdown of what your products or services are, along with their unique features, and any patents, trademarks, or licenses you may have. You can also add products you plan to develop in the future. These details could also include how your products or services benefit your target customer and the pricing strategy being used (e.g., economy, premium, promotional, etc.).

When should I use a Business Plan?

You should use a Business Plan whenever you’re starting a new business, you’ve purchased a company, or you're looking to improve or expand your current business. It’s intended to help build a framework for your enterprise and set goals. For example, you can use it when:

• Launching a startup (e.g., AI technology or SaaS companies)
• Starting a small business (e.g., coffee house, bar, home business)
• Providing freelance services (e.g., consultants, independent contractors)
• Entering a partnership with another individual or company
• Establishing an LLC or corporation

A Business Plan can also help secure funding from investors. You can use your plan to present your ideas, sales projections, and strategies for achieving your objectives to potential investors, helping them decide whether to become involved with your business.

If you’re still in the early stages of planning a new business, use LawDepot’s Startup Cost Calculator alongside our Business Plan template to estimate the amount of funding you may require to launch and operate your new business. 

Types of Business Plans

There are two common types of Business Plans you can create for your new or existing business:

1. Traditional Business Plans: A detailed, comprehensive document that addresses the major aspects of a business (e.g., details about the products or services, marketing, operational facilities, personnel, etc.). This is the format typically requested by banks and other lenders, and may also be requested by investors.
2. Lean startup Business Plans: A more concise, high-level outline that focuses on the key elements of the business model and strategy, such as business opportunities, sales projections, and marketing strategies. It is often about one page long and may be particularly useful for internal planning, testing a new business idea, or presenting an early-stage business model.

If you’re looking for a more concise version of our Business Plan to create more succinct documentation, try using LawDepot’s One Page Business Plan template.

How can I write my own Business Plan?

Prepare a Business Plan for your new or existing business with LawDepot’s Business Plan template. Customize your document to your company’s needs with easy-to-use questions and guidance, so you can have your plan ready in minutes. 

Select the industry your business will operate in, and complete the following steps:

Step 1: Provide company details

Select whether your plan is for a new or existing company and the type of business you have (e.g., an LLC, sole proprietorship, partnership, or corporation). This will customize the wording for your document.

Then, add details like:

• The business name and address
• Background (e.g., when it was founded, who founded it, and inspiration for the business)
• Goals (e.g., what the business can reasonably accomplish, sales forecasts, 12-month goals, and 5-year goals)

Step 2: Describe products or services

Determine if you will provide products, services, or both, and give thorough descriptions. If your company already has plans for new or improved products, potential investors will likely want to hear about them too.

Include any proprietary rights (e.g., trademarks, patents, or other intellectual property) your company possesses.

Step 3: Outline a pricing and advertising strategy

Next, determine the pricing strategy for your products or services. This can be economy, premium, or promotional pricing. You can also add extended details about your pricing plans. 

Then include the company's advertising plans and budget. You can add marketing plans like:

• Emails
• Online channels (e.g., website or Google Ads)
• Social media
• Print ads
• TV or radio

Step 4: Add customer and competitor details

Name your target market, including key factors such as age, gender, income, and occupation. 

Then, identify your competitors and describe which businesses compete most directly with yours. This can help you understand what other companies are doing well and why potential customers may choose them instead of your business. 

You can also include your business’s location and explain how it may provide a competitive advantage.

Step 5: Provide a SWOT Analysis

Include a SWOT Analysis to identify and assess the critical issues in a new or existing business. This analysis can aid in predicting viability and bring strategic focus to your planning. By objectively identifying yourself among your competitors, you can position your company to compete successfully in your market.

Step 6: Outline operations

Provide a breakdown of your company’s operations. This can include:

• Facilities: The facility’s location and size, any required renovations, and its availability for use.
• Suppliers: Who the suppliers are and their dependability, where they’re located, how many years they’ve been in business, and who your backup suppliers are.
• Day-to-day operations: What a typical day looks like for your business.

Step 7: Give information about personnel

Name the owners of the business, and choose to describe the relevant training and experience they have to help showcase their skills to potential investors. 

Next, include who will manage the business, any other personnel related to the business type (e.g., board members, shareholders, LLC members), and whether there are any staff requirements.

Step 8: Summarize finances and assets

To complete your Business Plan, outline your finances and assets, including:

• Any company assets (e.g., equipment, inventory, real property, shares or stocks).
• Capital requirements, including whether any owners invested money in the business, and whether a loan is needed.
• An income statement detailing or projecting how your business can be profitable over a reporting period, showing revenue minus expenses and losses.

Business Plan FAQs