How to Write a Business Plan: 10 Steps for Small Business Owners

Starting a new business is exciting. It comes with the freedom and flexibility to make decisions that impact not only your business, but also your financial well-being. While it can be an extremely rewarding experience, it can also feel completely overwhelming. So where should you invest your time to ensure your business’s success?

A good place to start is writing a business plan. Crafting a solid business plan doesn’t have to be complex or intimidating, but it is an essential first step to ensure you have a strategic foundation for future success. And it can be used to help secure a startup loan or whatever funds you need to turn your vision into a reality.

In fact, the best business plans follow a simple and straightforward format that you can easily adopt to suit your needs. It can be as brief as one page, or follow the more traditional business plan format — typically 10 to 15 pages in length.

Whether you’re a small business owner, entrepreneur, nonprofit leader or you’re simply looking to bring your idea to market, you can use this helpful business plan template for any business model.

What is a business plan?

A good business plan is a written document that goes far beyond your mission statement. It serves as a strategic plan that outlines your business goals, the methods for achieving those goals, and the timeframe for realizing them. Think of it as your roadmap — it tells you where you’re going, how you’ll get there, and why your business idea is worth pursuing.

Of course, you could start a business without having any type of business plan, but arriving at your final destination would likely take longer, require more effort and put you at risk to miss valuable opportunities along the way.

Why is a business plan important?

If you have an existing business and haven’t taken the step of drafting up a business plan — it’s never too late to start. By having a solid business plan, you’re not just increasing your chances of success — you’re also building confidence in your vision. Here are just a few reasons why having a business plan is crucial:

Clarifies your vision. It forces you to clearly define your business’s purpose and goals for your stakeholders, potential customers and may even help with hiring employees.

Helps secure funding. If it’s too early for your business to have built credit history, potential investors and lenders often require a strong business plan with detailed financial information before committing funds.

Tracks your progress. It serves as a benchmark to measure your growth, milestones and achievements.

Minimizes risks. Planning ahead helps you identify potential challenges so you can have the right legal structure and strategies in place to protect your intellectual property and liability.

How to write a business plan for your small business.

Follow these nine straightforward steps to create a winning business plan that will position you for success.

Step 1. Write an executive summary.

This is a high-level overview of your business, designed to grab attention quickly. Include the following in 1 – 2 concise paragraphs:

• What your business does
• Your target market
• Value proposition
• Your unique selling point (what sets you apart)
• Key financial highlights

Example:

“Fresh Green Juices creates organic, nutrient-rich juices to support busy professionals in living healthier lifestyles. Our unique cold-press method retains maximum nutrition, setting us apart from competitors. We’re targeting health-conscious individuals in urban areas, aiming to generate $100K in revenue within our first year.”

Step 2. Describe your business.

Provide details about your company using a company description. In your description, answer these questions:

• What industry are you in?
• Who are your competitors?
• Where are you located (physical or online)?

Keep the description simple but compelling.

Step 3. Write out your business goals.

Be clear about what you want to achieve in both the short term and long term.

Short-term goals: What do you want to accomplish in the first 6 – 12 months?
Long-term goals: Describe where you want the business to be in 3 – 5 years.

Step 4. Describe the business structure and organization.

This helps people evaluate your overall operation. Explain how your business is structured:

• Are you a sole proprietorship, partnership, limited liability company (LLC) or corporation?
• Who are the key team members? (Optional for solo entrepreneurs.)

Make it clear to readers who is responsible for what, and how the business is organized.

Step 5. Do some market research.

Show that you’ve done your homework. Conduct a market analysis to better understand your industry.

• Who is your target audience and what are the key customer segments?
• What problem(s) are you solving?
• What trends are shaping your industry?

Use bullet points or charts to present your marketing plan and marketing strategy in an easy-to-digest format.

Step 6. Conduct a competitive analysis.

Building off the prior step, which provides a current snapshot of the industry and space you’re in — now it’s time to focus on where and how your business fit in. Identify your competitive advantage by:

• Gathering the data: Who are your competitors? Who are their customers?
• Conducting a SWOT: Short for strengths, weaknesses, opportunities, and threats — consider this structure to analyze your competitors’ strengths, weaknesses, opportunities and threats.
• Knowing your competition: Understand their pricing and product strategies.

Then, write an evaluation that highlights your key competitive advantages. It could be customer service, pricing, brand perception or a combination of factors. Whatever you identify, just make sure they are distinct and carry broad appeal.

Step 7. Talk about your products or services.

Consider this your elevator pitch. Describe what your business offers and why it’s valuable:

• What’s your product line or service?
• What makes it unique? (e.g., quality, pricing, innovation)
• Why will your target customers love it?

If you have current offerings, add testimonials or feedback to boost credibility.

Step 8. Describe your marketing and sales strategy.

Explain how you plan to attract customers and generate sales.

• Marketing tactics: Are you using social media, email, SEO, or other channels to effectively grow your small business marketing?
• Sales approach: Will you sell directly through a website or via other platforms?

Tip: Keep your strategy realistic by building on your strengths and analyzing your audience’s behavior.

Step 9. Go over your business finances and make projections.

This section is especially important if you are in need of funding for your business whether through a business term loan or a business line of credit. It shows lenders and investors an overview of how you plan to make money and effectively manage your cash flow. In this section, you will want to be sure to include:

• Start-up costs (equipment, rent, raw materials, supply chain, etc.)
• Revenue streams (products, subscriptions, partnerships)
• Financial projections for the next 12 months and forecasts for 3 – 5 years

Don’t know where to start? Tools like Excel or online templates can make creating a financial plan and balance sheet much easier.

Step 10. Include additional information in the appendix.

Use this section for any extra details like images of your products, market research reports, graphs, resumes of team members or your management team, or legal documents. Focus on what strengthens your plan without overloading readers with too much.

OnDeck asks the experts: “What did you learn from writing your first business plan?”

Think of your business plan as a tool.

“My takeaway is that the business plan was not merely to impress the investor but was a tool that helped organize all my thoughts to formulate a solid vision. I ended up revisiting and adjusting parts of it multiple times as the business evolved, especially when it came to clarifying our sustainability goals and identifying how to best communicate that to our customers.

Looking back, I would have spent more time early on building out the financial projections and understanding the cost of scaling, particularly when it came to inventory and supply chain management. I had an idea of what it would take, but the reality of managing a growing inventory wasn’t as simple as I expected. In hindsight, I would’ve allocated more resources to financial tools that could help track expenses and predict cash flow more accurately. It’s been a learning curve, but that’s part of the journey of building something sustainable.”

Jehann Biggs, President & Owner of In2Green

Start when the time is right.

“You think you know your business until you see it all out on paper and are forced to confront the nitty gritty details, which indeed compound! In the past, I wrote the business plan before starting the endeavors I wanted to get into. The capital and other resources needed, learning curve of the industry I wanted to jump into, and so many other things became massive mental barriers — something that scared me off. But with Timberdog, I had an idea and pounced on it, and the business plan came much later. While the numbers are still intimidating, now I know I can keep going because I’ve come so far. So, that’s what I would advise to any entrepreneur out there. If you’ve got an idea that solves a problem out there, and no one else is doing it (or they’re doing it poorly and you’ve got a noticeably improved process or product), JUST START. You will eventually have to write a business plan, but for me, it has come at a time where I’m now raising my first round of equity.”

Leena Chitnis, Founder & CEO, Timberdog®

It’s more than just a piece of paper.

“Creating a business plan is not just putting down goals, it’s forecasting challenges and charting resources to overcome them. When I first started, I was too focused on the money and less on the customer experience. Throughout, I realized that a good plan has to address the what and the how. If I were to do anything differently, it would be to take more time to learn about market trends, not just look at competitors but dig deeper into customers’ needs and pain points. Writing a business plan forced me to really think through my value proposition and how to properly communicate it. As an entrepreneur, the largest lesson I learned is that a business plan isn’t a piece of paper. You have to change it with live feedback all the time. You don’t set it down one time and look at it, a business plan is your roadmap for adapting and morphing as you grow.”

Bennett Barrier, CEO, DFW Turf Solutions