A Business Plan is a written document that outlines a company's goals and how it plans to achieve them. It also encompasses several other aspects of a company's future agenda and can serve as a tool for internal decision-making or as a business proposal to pitch to potential investors.

Alternate Names

A Business Plan is also known as a:

• Business proposal
• Marketing plan
• Business strategy

• Marketing strategy
• Sales plan

Those who are starting a business or who have an existing business—including sole proprietors, general partners, limited liability company (LLC) members, and corporations—should have a Business Plan to map out their strategies and goals for their company.

A Business Plan is a useful tool when you’re launching a new business or managing an existing one.

If you’re a startup, you can use a Business Plan to present your ideas, sales projections, and plans for achieving your objectives to potential investors. With a detailed Business Plan, you’ll appear professional and prepared to potential investors. Plus, you’ll have ample data to help you create strategies for running smooth operations and maximizing your profit potential.

Whether you plan to launch a company, transition from freelancer to small business owner, or recreate, improve, and organize your current business, a Business Plan helps steer your business forward and inform others of your plans.

While Business Plans may vary depending on the size and purpose of a business, they typically include the following information.

Executive Summary

This portion of the plan introduces and summarizes your company. Generally, it includes an overview of your company's management structure (sole proprietorship, partnership, corporation, Limited Liability Company, etc.), products or services, company goals, current finances, and marketing strategies. In short, your executive summary pitches your proposal to potential investors.

Business Description and Mission Statement

This is a brief rundown of your business's history, ownership, and purpose. A mission statement, also called a vision statement, outlines who your target market and primary customers are, the area you serve (local, national, or international), and the products and/or services that your business produces.

Product or Service

This section describes the product or service that your business sells. The product description should highlight its unique features, any patents you may have, and ideas for future products that you want to develop.

Marketing Strategy

Your marketing strategy is how you plan to get your product or service in front of customers. This is where you can include advertising and promotional ideas, as well as your plan for selling your product or service (e.g. in a brick-and-mortar store or ecommerce website).

Competitors Analysis

This section describes your competition and how you intend to challenge their current strategies. When you analyze potential competitors, consider things like their establishment in the market you are targeting and how you can distinguish your company from them in terms of pricing, product or service quality, and customer support.

SWOT

SWOT is an acronym for "Strengths, Weaknesses, Opportunities, and Threats." A SWOT analysis evaluates these specific aspects of your business and helps you identify what your business is (or will be) good at and where you can improve. A SWOT analysis is a useful tool when deciding if your business is worth starting, or if you need to make significant changes to your overall business strategy.

Operations Overview

An operations overview provides a glimpse into the daily operations of your business, including the management and staffing structure, human resources plan, physical operational facility, and production methods (such as quotas or manufacturing details).

Financial Plan

Your financial plan may include your company's income (profit and loss) statements. It can also encompass your capital requirements if you are pitching your ideas to investors. In that case, describe the investment amount you require and how you plan to repay this capital in a repayment plan.

LawDepot's online Business Plan template guides you through the process of writing a Business Plan with a step-by-step questionnaire and allows you to customize your document specifically to your business's needs.

Chances are, you already have most of the information you’ll need to fill out LawDepot’s Business Plan template. For instance, let’s say someone opens a small restaurant business—a pizza shop. Since the pizza shop is a brick and mortar business, the owner decides that the best place to open is the downtown core of a city where many people go out to eat. The owner chooses a commercial property near a local university and signs a lease.

There are other restaurants in the area, but none of them specialize in pizza. While there is competition in this area, the pizza shop owner gains an advantage by serving a niche market a unique product.

Since the restaurant’s main customers will likely be university students, the owner plans to entice them by offering a discount if they show their student ID at the time of purchase. The owner also gets permission from the university to put flyers advertising their business on campus.

In this example, we’ve already identified several key aspects of the business, including the:

• Location
• Target customers
• Product
• Marketing strategy, including promotional and advertising ideas
• Analysis of potential competitors in the area

Now all that is left is to fill in the remaining details, like how the owner plans to fund the business, the operations plan, and the business’s mission statement.

The length of your Business Plan depends on the size of your company and how you intend to use your plan. It can be as simple or as comprehensive as you would like.

The more you put into it, the more your business may derive use from it because there is a clear strategy laid out for you to follow.

If you intend to use your plan as a business proposal to enlist investor funding, it’s recommended that you have a detailed plan.

Your Business Plan should be a working document that you refer to and revise as your situation changes. Whether this is once a year or every quarter, it's important to adjust your plan as necessary so it always reflects your business's current and future direction.

After you create your Business Plan, the next step is to secure funding. Most funding options require you to pitch your business idea to investors, and your Business Plan plays a crucial step in your presentation.

To impress investors, your Business Plan should accurately describe your company’s vision, goals, and strategies using clear and concise language.

The way you present your plan will also have an impact on whether you receive funding from a particular investor. For instance, if your business focuses on computer repairs, it’s better to find an investor that is interested in and knowledgeable about that particular industry. Pitching a computer repair business to an investor who typically invests in restaurants might not get you the results you’re looking for.

If you approach a bank, a Business Plan with a comprehensive summary of financial requirements and obligations is likely to secure the funding that you need.