Business Plan Format Guide

A comprehensive business plan format guide. A full guide to the business plan contents including the
standard business plan format for these 10 basic elements: The overview, executive summary; general
company description; the opportunity; industry and market; your strategy; the team; a marketing plan;
operational plan; financial plan and the appendix.
on
May 1, 2018
When it comes to a business plan format, there are ten basic elements
that must be covered when writing a business plan.
The standard contents of a business plan includes:

 an overview
 executive summary
 general company description
 the opportunity
 industry and market
 your strategy
 the team
 a marketing plan
 operational plan
 financial plan
 an appendix.

Download a Free Business Plan Template

Research has shown that having a business plan greatly contributes to the success of your
venture. There are no hard and fast rules for the the format of a business plan but this breakdown
is generally accepted as standard.
The cheat guide for you: View 50+ sample business plans here

Business Plan Format Introduction

What to Include in Your Business Plan
Before you physically start writing your business plan, you
need to spend some time doing in-depth research into your
industry and market. This is important regardless of whether
you have previous experience in that particular industry.
You can use the Internet, industry experts and associations,
suppliers and existing competitors for the information. Your
research will help you in putting the business plan together as
it will give you an understanding of the dynamics and forces affecting the industry.

Related: Free Sample Business Plans

All sections in the business plan format are interrelated, and cannot be written in isolation. Each should
be written by people who are fully aware of the contents and intricacies of the other areas of the plan so
that the different sections are all integrated.

The best option is to write the plan yourself as you know your business best.
Also, if you are responsible for writing the business plan, you could identify
certain challenges and find solutions to them, it will also ensure that you know
every single aspect of the business, which is critical when meeting with potential
investors.

You may need assistance putting together the financial information if you don’t have a financial
background, but make sure you get an accountant to explain what all the figures mean. Although there is
a fairly well accepted structure for a business plan format, there are many ways of putting it down on
paper.
There are three primary parts of a business plan:

1. The Business concept,

2. The Marketplace section
3. The Financial section.
Some of the contents will have different names and be presented in a different order but almost any
business plan will cover these broad areas:

Business Plan Format Contents

Table of Contents (1 page)
Your contents page should be the very last thing you write to ensure
that all the page numbers are correct. Make sure that you number
your pages correctly so that a person can quickly and easily find the
sections they are interested in._
1. Business Plan Format, Section 1:
Executive Summary (2 pages)
The executive summary is probably the most critical part of the business plan format. Many business
plan readers will read the executive summary and then decide whether to proceed further or discard the
plan.

The executive summary should be written last, once all the other sections are
complete. It should not exceed two pages and should eloquently summarise the
most important aspects of the plan.

Key elements that should be included in the executive summary are:

 Business concept: A description of the business, its products and the market it will serve. You
need to describe what will be sold, to whom and how it has a competitive advantage.
 Financial features: The summary should highlight the important financial points like sales, profits,
cash flows and return on investment.
 Financial requirements: You need to be clear about the capital needed to start and expand the
business, as well as how the capital will be used.
 Current business position: Provide an overview of the company, its legal form of operation, when
it was formed, the principal owners and key personnel.
 Major achievements: Highlight any developments within the company that are essential to its
success. This includes things like patents, prototypes, locations, contract that need to be in place
and results from test marketing already conducted.

2. Business Plan Format, Section 2:

General Company Description (1 – 2 pages)
The general company description section usually follows the executive summary in the started business
plan format. It is used to give a high level overview of the company and the business that it engages in.
This introductory section of the plan section should include:

 Name of the company, type of legal entity, ownership, significant assets

 Mission statement of the business
 Company goals and objectives
 The main features of the industry in which you will operate
 The most important company strengths and core competencies
Avoid getting into too much detail about the business in the general company description. It is often
tempting to try and cram everything about the business into this section but there are opportunities to get
into the details of strategy, marketing, operations, people and finances further on in the plan.

Related: The 4 Types of Business Plans

Rather focus on the description of the industry. Is the business retail, wholesale, food service,
manufacturing or service-oriented? Provide an indication of how big the industry is and why it has become
so popular. You can also highlight some of the trends currently influencing the growth of the industry. Try
as much as possible to prove how much opportunity there is in the industry – do so with statistics and
anecdotal information.

You should also explain the target market and how your product will be
distributed to the market, as well as the support systems including advertising,
promotions and customer service strategies. In the description you can include
the unique features setting your product or company apart from others in the
industry.

The business description should also answer the questions about how your business is going to make a
profit. If you are using the plan to apply for funding, explain why the money is going to make your business
more profitable.

The length of the description will depend on the complexity of your plan, if your plan isn’t complicated,
keep the description short by describing the industry in one paragraph, the product in another and the
business in three of four paragraphs_

3. Business Plan Format, Section 3:

The Opportunity, Industry & Market Description (2 – 3 pages)
This section of in the standard business plan format requires that you communicate some of the insight
that you got into the industry, the market and the opportunity from the systematic research you conducted
before writing the business plan.

Your research will determine your market strategies. The market analysis you do
should force you to become familiar with all aspects of the market, so that the
target market can be defined and your business can be positioned to garner its
share of sales.

It also helps you establish pricing, distribution and promotional strategies and gives you an indication of
the growth potential within the industry. Begin your market analysis by defining the market in terms of size
structure, growth prospects, trends and sales potential.

a) The Opportunity
Describe the gap that exists in the market and explain what has given rise to this gap, how it was identified
and how it can be filled. Answer the following questions:

 Where is the gap in the market?

 What has given rise to this gap?
 How was this gap identified?
 How will the gap be filled?
b) The Industry
Describe the forces affecting the industry in which you will operate. These forces are covered by
discussing barriers to entry, suppliers, customers, substitute products and competition. Answering the
following questions will enable you to cover the critical issues in discussing the industry:
Question 1: What are the barriers to entry in this industry?
 Consider whether any of the following exist for your company and others wanting to enter the
industry: high capital costs, high production costs, high marketing costs, consumer acceptance
and brand recognition, extensive training and skills, unique technology and patents, tariff barriers
and quotas, legislation or regulation.
 How will you overcome the barriers to entry?
Question 2: How much power do the customers have?
 Who are the customers?
 Do they have significant power or influence over the prices they pay?
 Do they have significant choice when buying the product or service?
Question 3: How much power do the suppliers have?
 Who are the suppliers?
 Do they have significant power or influence over the prices they charge?
 Is there a limited number of suppliers?
Question 4: Are there substitute offerings for the product or service?
 What is the likelihood that customers will switch to a substitute product or service? Will you have
important indirect competitors? (For example, video rental stores compete with theatres, although
they are different types of businesses)
Question 5: Who are the competitors and how strong is the competitive rivalry?
 What products and companies will compete with you?
 How will your products or services compare with the competition?
Question 6: What are the major changes affecting the industry?
 Consider changes in technology, in government regulations, in the economy
c) The Market
Present your insights into the market in which you will operate. Focus on the customers for your product
or service by addressing the following questions:

 What is the total size of the market?

 How fast is the market growing?
 What percentage share of the market will you have? (This is important only if you think you will be
a major factor in the market.)
 What are the major trends in target market – trends in consumer preferences, demographic shifts
and product development?

4. Business Plan Format, Section 4:

Strategy (1-2 pages)
Section 5 of in this standard business plan format covers Strategy. You need to describe to readers
how the business will compete in the chosen markets. Your positioning strategy will be affected by a
number of variables related to the motivations and requirements of your target market as well as what
your primary competitors are doing.

Before you position your product or service, you will need to know how your
competitors are positioning themselves, the specific attributes your product has
that your competitor’s don’t and the needs your product fills for your customers.

Once you have these questions answered in the research stages you can develop a positioning strategy
and illustrate it in your business plan. The positioning statement doesn’t have to be long or elaborate, as
long as it points out exactly how you want customers and your competition to perceive your product.

Related: Keep It Simple: How To Write A One Page Business Plan

This requires a description and explanation of the strategic choices that you have made as a business,
including:

 The focus of the business: broad mass market or a specific niche?

  How the business will succeed in the market? How will you create a unique and valuable position,
involving a different set of activities?
 What is unique about the business? How is the offering different from that of competitors?
 What is the value for the customers? Describe the value proposition for the customer?

Apps To Help You Write A Business Plan

If you have a killer idea for a start-up, but lack the time, resources and budget to develop a
business plan, a business plan-generating app can help you get your plan on paper and, ideally,
off the ground.

5. Business Plan Format, Section 5:

Business Model Explanation (1 page)
A business model is the profit-making engine of the business. It is central to a business’s success. The
business model you choose will be a strong determining point of the future the success of your business.

Your business model must include information on what your company offers in
terms of products or services; what makes your offering unique; who you sell
them to; and how you make your money.

The important aspects of a business model that should be presented in a consolidated framework include:
The sources of revenue

 The major costs involved in generating the revenue

 The profitability of the business (revenue less costs)
 The investment required to get the business up and running (to get to scale)
 The critical success factors and assumptions for making the profit model work
Good business model depend on three qualities, finding high-value customers, offering significant value
to customers, and delivering significant margins.

Related: Business Plan Examples To Get You Going

They also avoid three things that can derail a business, namely difficulties in satisfying customers, trouble
maintaining market position, and problems generating funding for growth.

6. Business Plan Format, Section 6:

Team: Management & Organisation (2 pages)
In this section of the business plan format you should provide a description of the people behind the
business. It should include:

 A list the founders including their qualifications and experience

 A description of who will manage the business on a day-to-day basis. What experience do these
individuals bring to the business? What special or distinctive competencies do they offer?
 An organisational chart if you have more than 10 employees, showing the management hierarchy
and responsibility for key functions (including position descriptions for key employees)

In this section you will also explain the logistics, including the responsibilities of
each member of the management team, the tasks assigned to each division of
the company (if applicable), and the capital and expense requirements for
operating the business.

Apart from the managers, you should also specify what type of support staff will be needed for the business
to run efficiently.
7. Business Plan Format, Section 7:
Marketing Plan (2 – 3 pages)
The marketing plan defines all of the components of the marketing strategy. The marketing plan should
draw on market research. It should disclose the important marketing decisions about:

 The product (or service) and why it is valuable to customers

 The focused and detailed description of the target market
 The positioning of the product or service – how it should be perceived by customers
 The pricing strategy with specific price points at which the product or service will be sold
 The sales and distribution channels that will be used to get the product or service to the customer
 The promotion strategy including public relations activities, specific promotions, advertising and
intended viral marketing activities
Your product’s pricing will play a role in the success of your business. You need to ensure that your prices
cover costs and find ways of lowering your costs. Your prices should also reflect the dynamics of cost,
demand, changes in the market and response to your competition.

When deciding on the distribution process of your product or service, analyse your
competitors to determine the channels they are using and decide if you want to use
the same or an alternative that could provide you with an advantage.

The channel you use will depend on the industry and size of the market, but some of the options available
to you include direct sales, OEM (original equipment manufacturer) sales, manufacturer’s representatives,
wholesale distributors, brokers, retail distributors and direct mail.

Your promotion strategy should be specific including the advertising budget, creative
messages for your advertisements and at least the first quarter’s media schedule.

You can also include a description of the packaging strategy and possibly even mockups of labels,
trademarks or service marks. You need to come up with a publicity strategy that includes a list of media
you want to approach and a schedule of planned events.

8. Business Plan Format, Section 8:

Operational Plan (2 pages)
Explain the daily operation of the business, its location, equipment, people, processes, and surrounding
environment. The operational plan in a standard business plan format describes how the business
functions on a continuing basis, as well as the capital and expense requirements related to the operations
of the business.

This section will vary depending on the nature of the business but some the more generic items that can
be presented include:

 A description of the operating cycle that describes what the organisation will do to deliver its service
or create and sell its product
 A description of where all the necessary skills and materials will be sourced
 What will be outsourced, what relationships are in place and how those relationships will be
managed
 The cash receipts and cash payment cycle of the business
You can include a number of financial tables in the plan, including the operating expense table, the capital
requirements table and the cost of goods table.
Related: 6 Questions Your Business Plan Must Answer
You should also highlight any potential benefits or pitfalls to the community such as new job creation,
economic growth and possible effects on the environment from manufacturing and how they will be
handled to conform with regulations._

Top 9 Business Plan Resources

A business plan is essential at every stage of your business, but writing one doesn’t have to be
confusing or difficult. Here are 9 top business plan resources to get you going.

9. Business Plan Format, Section 9:

Financial Plan (3 – 5 pages)
The financial plan is a reasonable estimate of your company’s financial future. Include a few paragraphs
on the main features in the financial plan and back this up with financial projections.

Don’t include too much financial detail in the body of the business plan. If you
have detailed projections and supporting calculations, place them in the
appendix.
The following are the most important financial documents to include in the financial plan:

 Start-up expenses and capitalisation: a description and explanation of what it will cost to launch
the business and where you expect to get this money
 12-month profit and loss projection (month-by-month) and a three-year profit and loss projection
(quarter-by-quarter)
 A 12-month cash-flow projection and a three-year cash-flow projection (quarter-by-quarter)
 A projected balance sheet at start-up and at the end of years one to three
 A break-even calculation
Astute investors will look at the charts, table, formulae and spreadsheets in your financial section very
carefully, so it is important to put sufficient effort into them. Investors will determine the odds for continued
survival based on the information provided in this section.

The three most important financial statements to include in your business are the
income statement, cash flow statement and balance sheet. Of these three, the income
statement is the best place to start. It is a simple and straightforward report on the
proposed business’s cash-generating ability. It’s a score card on the financial
performance of your business reflecting when sales are made and when expenses are
incurred.

In the business plan, the income statement should be generated on a monthly basis during the first year,
quarterly for the second and annually for each year thereafter. The information included is your financial
projections of income, cost of goods, gross profit margin, operating expenses, total expenses, net profit,
depreciation, net profit before interest, interest, net profit before taxes, taxes and profit after taxes. After
the income state, include a short note analysing the statement, emphasising key points.

The cash flow statement shows how much cash is needed to meet obligations, when it is going to be
required, and where it will come from. It should show a schedule of the money coming into the business
and expenses that need to be paid. The result is the profit or loss at the end of the month or year.

Related: What 10 Experts Have to Say about Creating a Winning Plan_

Profits and losses are carried over to the next column to show the cumulative amount. If you run a loss on
your cash flow statement, it is a strong indicator that you will need additional cash in order to meet
expenses. You will also need to analyse the cash flow statement in a short summary.

The balance sheet is generated only on an annual basis for the business plan and is basically a summary
of all the preceding financial information broken down into three areas: Assets, liabilities and equity.
 Investors might require a personal financial statement or
balance sheet instead of one that describes the business.
Again, you will need to create an analysis statement for the
balance sheet covering the key points.

10. Business Plan Format, Section 10:

Appendix
The appendix includes additional documents that the reader of the business plan may want to refer to.

Documents that could be included in the appendix:

 Brochures and advertising materials

 Industry studies
 Blueprints and plans
 Maps and photos of location
 Magazine or other articles
 Detailed lists of equipment owned or to be purchased
 Copies of leases and contracts
 Letters of support from future customers
 Any other materials needed to support the assumptions in this plan
 Market research studies
 List of assets available as collateral for a loan
 Detailed financial calculations and projections.
Instead of making one of the previous sections too long by including too much information, it is better to
highlight an aspect you are describing, mention that there are figures, examples or other proof and then
include that proof in your appendix.

All of these sections combine to create what is hopefully an exciting and viable story of
a business that is to be launched or a growth path that will take an existing business to
new levels of impact and success.

There are some important things to remember when writing your business plan. You need to be as realistic
as possible with all projections. The small details are important, so have the plan proof read by someone
with a good command of the English language to check for any spelling or grammatical errors.

Keep It Simple: How To Write A One Page Business Plan

Lengthy business plans are a thing of the past and there are sound business principles for why.
May 1, 2018

Burn Your Business Plan

There was a time when business plans were anything from 75 to 100 pages but today 10 to 15 can be
considered too long.

If you’re hungry for your piece of the business pie but don’t exactly want to spend a
couple months playing hit and miss with investors and potential customers then a one
page business plan could be the answer you’ve been looking for.

Being able to simplify your business concept is a useful skill to have and it was Alexander Osterwalder
and Eric Reis who decided that we should stop taking the long way around when it comes to business
plans and product development.
 “Founders go wrong when they start to believe their business plan will
materialise as written. I advise entrepreneurs to burn their business plan – it’s
simply too dangerous to the health of your business.” Alexander Osterwalder

The New Business Model Canvas Approach

Osterwalder created a model consisting of nine building blocks, which once put together give you an
overall picture of your strengths, weaknesses and how your business functions.

Related: 10 Reasons Not to Write a Business Plan

It can be used in your business plan as well as assist you with strategy and innovation in the future.

It consists of the following parts:

1. Customer Segments: Who are your mass and niche markets?

2. Value Proposition: What are you offering and why are you different?
3. Channels: Look at the phases your product goes through. This is everything from awareness and
distribution to after-sales service.
4. Customer Relationships: How are you building relationships with customers and is it working?
5. Revenue Streams: Look at what you are charging and if you could be charging more. How are
you receiving your payments and does it contribute enough to overall revenue?
6. Key Resources: What resources do you require to function? These can include physical, human,
financial and intellectual.
7. Key Activities: Ask yourself what activities need to take place in order to deliver on your value
proposition?
8. Key Partnerships: Write down who your key suppliers and partners are and how they contribute
to your overall goals.
9. Cost Structure: Look at fixed and variable costs so that you can see what can be improved upon.
If you feel that you would like to start planning your business using this method then Leanstack is a helpful
tool.
The Lean Start-up
Three years after the business model canvas was developed, Eric Reis introduced the learn start-up
concept and again, many were hesitant to try it out.
However, after it proved successful time and time again it fast became a logical way to develop products
in our ever-evolving and demanding society.

“Don’t be in a rush to get big, be in a rush to have a great product.” – Eric Reis

The idea behind the lean start-up is that instead of spending months developing a product/ business
concept only for customers to reject it, entrepreneurs should instead focus on experimentation, innovation
and feedback.

Related: How to Use Your Business Plan to Attract Finance

The lean start-up simplifies the early stages of entrepreneurship by eliminating long development times
and the need for large amounts of funding and instead building companies and launching products a lot
quicker.

“The same products, services or technologies can fail or succeed depending on the
business model you choose. Exploring the possibilities is critical to finding a successful
business model. Settling on first ideas risks the possibility of missing potential that can
only be discovered by prototyping and testing different alternatives.” Alexander
Osterwalder

The below video will give you a good idea of what the lean start-up is all about.

Related: What is The Lean Start-Up Movement?

Why Experts are Advocating a One Page Business Plan
With simpler, to-the-point methods becoming the norm, many entrepreneurs have turned to 1 page
business plans in order to get their businesses off the ground faster instead of opting for a detailed and
time consuming approach. In case you had any doubts, here are the advantages of a one page business
plan:

 Since your ideas are changing all of the time, it’s easy to update
 It provides clarity to whoever is reading it as important information sticks out
 It’s a good way to generate interest around a business concept
 It will assist you with your pitch
 It offers a more affordable approach to product testing and development
 It helps get your entire team onboard with the company vision and goals
 With the plan having very specific goals you can create a straight forward strategy around each of
them
 It eliminates the need to find an excuse not to plan and grow.

“Once you understand business models you can then start prototyping
business models just like you prototype products.” Alexander Osterwalder.

Simple Money-Making Ideas for Entrepreneurs

So you want to be an entrepreneur? You don’t like bosses or you’re newly retired but too restless
to just sit at home waiting for your kids to visit, or you need the extra cash.
How to Prepare a Business Plan
There are many different ways to structure a business plan but
the most common/effective sections to include are:
1. Vision. Your vision should get you fired up and be short and
to the point. Talk about what you are building.
2. Mission Statement. Your mission statement will describe
what you do, what your product/service is and who your
customers are.
3. Objectives. Next you can jot down your business goals for
the next week, month or year.
4. Strategies. Provide some insight into how you plan to achieve your objectives.
5. Action Plan. Explain the steps you will take to action your strategies and remember to add dates
to these items to give yourself a deadline.
Business Plan Example
Download this business plan sample to see exactly how you would layout and word your own plan.
Test-drive Your Business Plan Hypotheses
Now that you have your business plan, here are three simple ways that you can use it:

 Use this simplified plan to pitch investors. It goes hand in hand with your elevator pitch.
 Test drive your thinking. Get out in front of as many potential clients, partners and suppliers as
possible. In presenting and discussing your offering with them you will receive immediate
feedback. This kind of first-hand market research will be invaluable as an early indicator as to
whether or not your business plan is on track to becoming a profitable enterprise.
 Review your plan on a monthly basis to see if you are still on track and revise if need be. It’s also
easy to change things up if you decide a certain product or process is no longer relevant to or
working for your business.
 Share the business plan with your management team so that you’re all working towards the same
goals
Useful Tips
 Find out more about the investor you are pitching to make sure that they don’t prefer more detail
in a plan
 Do enough research to validate your objectives and strategies. You need to be able to answer any
questions about your idea, your market and your finances.
 Pair your business plan with your business model canvas to give investors and your team a better
idea of how the business will work
 Use the plan to build yourself and your team a to-do list
 Consider the lean start-up model if you are developing a new product or service offering and are
unsure about whether it’s what your customers are looking for.
Feel the Need to Elaborate?
If you feel that a the business plan is not enough to get your business started then there is the option of
writing a longer, more detailed business plan without drowning in countless pages.

Related: 5 Reasons to Start Your Business Today

You can download the business model canvas worksheet here and start building your own or if you want
more information on this model you can watch the below video.