You don’t have to write a Business Plan, but you should. Even if you are a sole proprietor, a Business Plan will help you to set concrete goals and plan the future of your business. A Business Plan will also make it easy for the investors you approach to say yes. Try to cover a span of approximately five years. Below are the steps you need to take to write an effective Business Plan.

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1. Identify Your Business's Primary Goals

First, identify your business's primary goals within the next five years. These goals should be stated at the beginning of your Business Plan, in no more than one paragraph. You may want to call out your goals by using bullet points or other organizational tools.

2. Provide an Executive Summary

The executive summary highlights all the information that you will present in the full-length Business Plan. This summary goes beyond the primary goals, but should be no more than two pages. If possible, make it no longer than one page.

3. Draft a Business Description

Write a description of your business, including information about your general industry, outlook, and current trends and competition within your niche. Your business description shouldn’t be longer than one page unless you are citing specific statistics and research.

4. Develop General Marketing Strategies

Your Business Plan should contain your general marketing strategies. To formulate marketing strategies, you’ll need to do a general market analysis as well, helping you to see the potential weaknesses in your current marketing strategies so that you can set realistic goals. You can make your marketing plan as long as you need it to be. Here, the more detailed you are, the better.

5. Provide a General Analysis of Your Competition

Research your core competition. Analyze what your competitors are doing well and where they are failing. If you can find weaknesses that you can capitalize on, make note of those weaknesses in your Business Plan. Be sure to highlight these. Take the time to differentiate yourself in the areas in which you are similar. Remember that this part of the plan will be of as much interest to potential investors as it is to you.

6. Set Out Your General Development and Operation Plan

It’s important to plan how you will help your business to succeed. Lay out the general tasks and functions that your business engages in on a regular basis. Include the formal organization of the business, responsibilities of administrators and employees, and ongoing development plans. Don’t forget to add your budget here, as well.

7. Examine Your Finances

Your financial analysis should be placed at the very end of your Business Plan. This section lays out your financial bottom line. List your financial assets and liabilities clearly. Be sure to also make it clear what you’re asking investors for, and the projected return investors can expect to receive for their investment. It's a good idea to include a budget here too, even if you already included a budget in the General Development and Operation Plan.

Putting together the specific figures that you need as well as a clear plan for how the money will be paid back can be quite effective in this section. Because financial information can be quite complicated and confusing, you should consider putting it in chart format. You can create a basic pie chart or graph sheet. If possible, use colors to make your visuals easier to read. You want investors to be able to understand your company’s finances at a glance.

Ready to get started? We have step-by-step guidance to help you create a solid Business Plan.

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