How to Write a Business Plan: A Coach’s Step-by-Step Guide (With Free Template)

When founders ask me how to write a business plan, I start with something I tell almost everyone who sits across the table from me: nobody is going to grade your plan on how pretty it looks. Instead, they are going to grade it on whether you actually understand your business.

That sounds obvious, but in practice it isn’t. Over the years I have read hundreds of plans, and the ones that fall apart usually look impressive on the surface. For example, I have seen forty pages of glossy charts and a mission statement that could belong to any company on earth. Then, when I ask one simple question like “Who is your first paying customer?”, the room goes quiet.

So if you are here because you want to learn how to write a business plan, good. In fact, you are already ahead of a lot of people who skip this step entirely. In this guide, I will walk you through the process the same way I would with a client in a coaching session. First, we will cover what a plan is really for. After that, we will go through each section, look at the mistakes I see most often, and finally I will hand you a simple template you can start filling in tonight.

So grab a coffee, and let’s talk.

Why a Business Plan Still Matters

There is a popular idea floating around that business plans are outdated. After all, why write a document when you could “just build it and see what happens”? I understand the appeal, because nobody wants to spend three months writing when they could be selling.

However, the research doesn’t support skipping the plan. A study by Francis Greene and Christian Hopp, published in Harvard Business Review, followed nearly 2,000 entrepreneurs. They found that those who wrote formal business plans were 16% more likely to achieve a viable business than those who didn’t. Sixteen percent is not a rounding error. For a lot of small companies, that is the difference between making it and closing the doors.

Moreover, the stakes are real. Data from the Bureau of Labor Statistics consistently shows that roughly one in five new business establishments doesn’t survive its first year. Furthermore, only about half are still operating after five years. (I break down those odds in more detail in my guide on how to start a small business.) Of course, a plan won’t guarantee you land in the surviving half. Still, it will force you to confront the questions that sink businesses early, such as whether there is real demand, whether you can price profitably, and how long you can last before cash runs out.

The Three Jobs a Business Plan Does

That is why I frame it for clients as a tool that does three jobs:

1. It clarifies your thinking, because writing forces you to turn vague ideas into specific decisions.
2. It persuades other people, since lenders, investors, partners, and even key hires want to see that you have thought things through.
3. It gives you a scoreboard, so that six months from now you can compare what actually happened against what you expected, and then adjust.

If your plan only does the second job, then it is really just a sales brochure. By contrast, the first and third jobs are where the real value lives.

Traditional Plan or Lean Plan? Pick the Right Format First

Before you write a single word, decide what kind of plan you need, because how to write a business plan depends heavily on who will read it. The Small Business Administration describes two main formats, and choosing the wrong one can waste a lot of time.

A traditional business plan is the detailed version. Generally, it runs somewhere between 15 and 40 pages and covers everything, including your company, market, team, products, marketing, funding needs, and financial projections. So if you are applying for a bank loan or an SBA loan, or pitching serious investors, this is typically what they expect.

A lean startup plan, on the other hand, fits on a page or two. Specifically, it focuses on the essentials, such as your value proposition, customer segments, key activities, revenue streams, and cost structure. Because it is faster to write and easier to update, it works well when you are still testing an idea or running a small operation that doesn’t need outside funding yet.

So what is my advice? Most first-time founders should start lean. First, get the core logic of your business onto one page. Next, pressure-test it by talking to real customers. Then, when you need money from someone else, expand it into a traditional plan. In this way, the lean version becomes the skeleton, and later you are simply adding muscle.

How to Write a Business Plan, Section by Section

Now for the part you came for. Below are the standard sections of a traditional plan, which follow the same structure recommended by the SBA and SCORE. For each one, I will explain what the section needs to do and also share what I look for when I review it.

1. Executive Summary

This is the first thing anyone reads and, frankly, sometimes the only thing. Therefore, it should give a reader the full picture in one to two pages: what your business does, who it serves, why it will win, what you need, and where you are headed.

Here is the trick most people miss when they learn how to write a business plan: write the executive summary last. After all, you can’t summarize something you haven’t figured out yet. Once every other section is done, however, the summary almost writes itself.

In addition, a strong executive summary answers these questions quickly:

• What problem are you solving, and for whom?
• Why is your solution better than the alternatives?
• What have you achieved so far, such as sales, customers, partnerships, or a working prototype?
• How much funding do you need, and what will it be used for?
• What do the next few years look like financially?

Above all, keep the tone confident and plain. If a busy banker can read it in three minutes and then explain your business to a colleague, you nailed it.

2. Company Description

This section tells the reader who you are. To begin with, include your legal business name, structure (sole proprietorship, LLC, corporation, and so on), location, the date you started or plan to start, and your mission.

More importantly, explain the problem you solve and the specific customers you serve. I push clients hard on this, because “small businesses” is not a target customer. In contrast, “independent dental practices with two to five chairs that still schedule appointments by phone” is a target customer. Consequently, the more specific you are here, the more believable everything else in the plan becomes.

Finally, mention what makes you different. For example, it might be your experience, a proprietary process, an exclusive supplier relationship, or simply a location nobody else is serving. Whatever it is, name it clearly.

3. Market Analysis

When people learn how to write a business plan, this is where a lot of plans get fuzzy, and it is also where lenders and investors dig in the hardest. Essentially, your job is to prove that there are enough customers who want what you are selling and are willing to pay for it. To do that, cover three things.

Your industry. First, is the industry growing, shrinking, or stable? Also, what trends are shaping it? Wherever you can, cite real sources such as government data, trade associations, or reputable industry reports. AI tools can speed up this research, but verify every figure against the original source before it goes in your plan.

Your target market. Next, estimate how many potential customers exist, where they are, and what they spend. A common approach is to start broad with your total addressable market and then narrow down to the portion you can realistically reach in your first few years.

Your competition. Finally, list who else is solving this problem, including indirect alternatives, along with their strengths and weaknesses. Please don’t write “we have no competition,” because every coach, banker, and investor I know reads that line as a red flag. Indeed, if nobody is doing what you do, then either the market doesn’t exist or you haven’t looked hard enough.

One more tip I give everyone: talk to real customers before you finish this section. In my experience, ten genuine conversations with people in your target market will teach you more than a hundred hours of desk research.

4. Organization and Management

People invest in people, so this section introduces your team and shows how the business is structured.

For instance, include an organizational chart if you have more than a few people. Then write a short bio for each key person, covering their role, relevant experience, and what they bring to the table. Likewise, if you have advisors, a board, or a mentor, mention them too.

If there are gaps on your team, say so and explain how you plan to fill them. Admitting that “we need an experienced operations manager within the first year” shows self-awareness. On the other hand, pretending you can do everything yourself does the opposite.

5. Products or Services

Describe what you sell in plain language. In particular, focus on the benefit to the customer rather than a long list of features. In other words, what does life look like for your customer after they buy from you?

Besides the description, also cover the following:

• Your pricing and how you arrived at it
• Where the product is in its lifecycle, whether that is an idea, a prototype, launched, or scaling
• Any intellectual property, such as trademarks, patents, or proprietary methods
• Your plans for future products or services

Now a quick word on pricing, because it is where I see the most damage. Founders underprice constantly, usually out of fear. Your price needs to cover your costs, leave room for profit, and reflect the value you deliver. So if your numbers only work when everything goes perfectly, the price is probably too low.

6. Marketing and Sales Strategy

A great product that nobody hears about is just an expensive hobby. That is why this section explains how you will attract customers, turn them into buyers, and keep them coming back.

To keep it simple, think about it in this sequence:

1. Positioning. First, how do you want customers to think about you compared to competitors?
2. Channels. Then, where will customers find you, such as search, social media, referrals, partnerships, trade shows, direct sales, or retail placement?
3. Sales process. After that, what happens between first contact and a closed sale, and who handles it?
4. Retention. Finally, how will you keep customers and encourage repeat purchases or referrals?

Also, put numbers on it wherever you can. For example, “we will use social media” is a wish. By contrast, “we will spend $1,500 a month on targeted ads, expect a cost per lead of around $30, and convert about 10% of leads into customers” is a plan. Your estimates may be wrong at first, and that is fine, because you will update them once real data comes in.

7. Funding Request

If you are seeking money, spell out exactly what you need. That means how much, in what form (a loan, equity investment, or a line of credit), over what time period, and what you will use it for.

Above all, be specific about the use of funds. For instance, lenders want to see something like “$40,000 for equipment, $25,000 for initial inventory, and $15,000 for working capital to cover six months of operating expenses.” In contrast, round numbers with no breakdown make people nervous.

However, if you are not seeking funding right now, you can skip this section. Alternatively, replace it with a short note on how you plan to finance growth, such as through reinvested profits or personal savings. If you use savings, keep your personal emergency fund separate and off-limits to the business.

8. Financial Projections

For most people learning how to write a business plan, this is the section they dread, and I understand why. Even so, it doesn’t need to be complicated, as long as it is honest and grounded in reasonable assumptions. If you have ever made a household budget, you already understand the basic logic.

For a new business, you will usually want projections for the next three to five years, broken out monthly or quarterly for the first year. In general, the core documents are:

• Income statement (profit and loss): revenue, costs, and profit over time
• Cash flow statement: when money actually comes in and goes out
• Balance sheet: what you own, what you owe, and your equity
• Breakeven analysis: how much you need to sell before you cover all your costs

In addition, if you already operate, include historical financials as well.

Here is the most important thing I can tell you about this section: your assumptions matter more than your spreadsheet. Therefore, list them clearly. How many customers per month will you win? What is your average order value? What growth rate do you expect, and why? A reviewer can disagree with an assumption and still respect the plan. However, what they can’t respect is a hockey-stick chart with no explanation behind it.

Meanwhile, pay extra attention to cash flow. Profitable businesses fail all the time because they run out of cash while waiting for customers to pay. So if you learn one financial lesson from this guide, let it be that one.

9. Appendix

Use the appendix for supporting material that would otherwise clutter the main plan. For example, this might include resumes, permits, licenses, letters of intent, product photos, detailed market research, legal documents, or credit histories. Still, only include what adds credibility, since more paper is not more convincing.

The Mistakes I See Most Often

After years of coaching founders on how to write a business plan, I keep seeing the same problems. Here are the ones worth watching for.

• Writing for yourself instead of your reader. A banker cares about repayment, whereas an investor cares about growth and return. Similarly, a potential partner cares about fit. Therefore, adjust your emphasis depending on who will read it.
• Overly optimistic numbers. Frankly, I have never once seen a first year go exactly to plan. For that reason, build a conservative scenario alongside your expected one. Then, if the business still survives in the conservative version, you have something solid.
• Vague target customers. “Everyone” is not a market. In fact, the narrower your first target, the easier it is to reach them and the more credible your plan looks.
• Ignoring competition. As I mentioned earlier, “no competitors” is a red flag rather than a strength.
• Treating it as a one-time document. A business plan that sits in a drawer after the loan gets approved is a wasted opportunity. In contrast, the best founders I work with revisit their plan every quarter.
• Making it too long. Length is not a sign of quality. Instead, say what needs to be said, back it up, and then stop.

A Simple Business Plan Template You Can Use Today

As promised, here is a simple template. If you are still figuring out how to write a business plan from scratch, just copy it into a shared cloud-based document and fill in each prompt, and then you will have a working first draft. I use a version of this with clients in our first planning session, and most people are surprised how much clarity they get in just a few hours.

Template Part 1: Your Business and Market

1. Executive Summary (write this last)

• Business name, location, and what we do in one sentence
• The problem we solve and for whom
• Why we will win, and what advantage makes that possible
• Funding needed and main use of funds
• Our key financial goal for year one

2. Company Description

• Legal structure and date founded (or planned launch)
• Mission statement and what makes us different

3. Market Analysis

• Industry overview and key trends, such as growth rate
• Target market size, location, and customer profile
• Top three competitors and how we compare to them

4. Organization and Management

• Owners and key team members, along with their roles and experience
• Advisors or mentors, as well as gaps we plan to fill and when

5. Products or Services

• What we sell and the main customer benefit
• Pricing, and how we set it
• Stage of development and any intellectual property

Template Part 2: Your Strategy and Numbers

6. Marketing and Sales

• Positioning statement, main channels, and monthly budget
• Sales process from first contact until the sale closes
• How we keep customers coming back after the first purchase

7. Funding Request (if applicable)

• Amount, type of funding, and timeline
• Detailed use of funds

8. Financial Projections

• Key assumptions, such as customers, pricing, growth, and costs
• Year-one revenue and expenses by month, then a three-to-five-year summary
• Breakeven point, as well as the lowest cash month

9. Appendix

• Supporting documents, such as licenses, resumes, and research

Need a Lean Plan Instead?

If you only need a lean plan for now, answer these nine prompts on a single page instead: value proposition, customer segments, channels, customer relationships, key activities, key resources, key partners, cost structure, and revenue streams.

For a more detailed starting point, SCORE offers free business plan templates and financial projection spreadsheets. Likewise, the SBA has a helpful walkthrough of both traditional and lean formats, and I have linked both in the references below.

How Long Should This Take?

This is one of the first questions clients ask when they learn how to write a business plan, and the answer depends on what you need the plan for.

For example, a lean plan can be drafted in an afternoon if you already know your business well. By contrast, a full traditional plan for a bank loan or investor pitch usually takes anywhere from a couple of weeks to a couple of months, mostly because of the market research and financial projections.

That said, don’t try to write it all in one sitting. Instead, I usually suggest founders tackle one or two sections a week. If you are writing from a home office, a few habits for staying productive working from home will help you keep that schedule. Start with products and services and your target customer, since you probably know those best. Then leave the financials and executive summary until the end.

Finally, get feedback, because nobody learns how to write a business plan well in isolation. Hand your draft to someone who will be honest with you, whether that is a mentor, an accountant, a business coach, or a free SCORE volunteer. After all, a fresh set of eyes will catch gaps you can’t see because you are too close to it.

A Final Word From the Coaching Chair

If you remember nothing else about how to write a business plan, remember this: a business plan is not a promise that everything will go the way you wrote it. Rather, it is a tool for thinking clearly, communicating convincingly, and adjusting quickly when reality pushes back.

In the end, the founders who do well aren’t the ones with the thickest documents. Instead, they are the ones who wrote down what they believed, went out and tested it, and then had the discipline to update the plan when the evidence changed.

So start small. If you have been putting this off, now is the time to stop procrastinating. First, fill in the template above. Next, show it to someone you trust. Then keep it close, because the plan you write this month is just the first version of many.

You’ve got this.

Frequently Asked Questions

What are the main parts of a business plan?

A traditional business plan usually includes an executive summary, company description, market analysis, organization and management, products or services, marketing and sales strategy, funding request, and financial projections, as well as an appendix. The SBA’s official guide breaks each of these down in detail.

How long should a business plan be?

A lean plan can fit on one or two pages, whereas a traditional plan often runs 15 to 40 pages. However, clarity matters more than length. For more direction on keeping plans focused, see the U.S. Chamber of Commerce’s CO guide.

Do I really need a business plan if I’m not looking for funding?

Yes, in most cases. Research published in Harvard Business Review found that entrepreneurs who wrote formal plans were 16% more likely to build viable businesses. So even a simple lean plan helps you make better decisions.

Is there a free business plan template I can use?

Yes. SCORE offers a free startup template along with financial projection spreadsheets. Alternatively, you can use the simple template included in this article.

What should I write first in a business plan?

Start with the sections you know best, which are usually your products or services and your target customer. Then write the executive summary last, since it summarizes everything else. LivePlan’s guide recommends a similar approach.

How often should I update my business plan?

Review it at least once a quarter. Also, update it whenever something significant changes, such as a new product, a shift in the market, or a funding round. That way, it stays a living document rather than a one-time exercise.

What do lenders look for in a business plan?

Lenders focus mainly on your ability to repay, so they look for realistic financial projections, a clear use of funds, solid cash flow, and a capable management team. If you are applying for an SBA loan, Guidant Financial’s SBA loan guide explains what lenders typically expect.

Can I write a business plan without a finance background?

Absolutely. First, start with clear assumptions and simple spreadsheets. Then lean on free help from SCORE mentors or your local Small Business Development Center. Finally, ask an accountant to review your numbers before you share the plan with lenders or investors.

References

• U.S. Small Business Administration. “Write Your Business Plan.” Available at sba.gov
• U.S. Small Business Administration. “Free Resources to Help You Write a Business Plan.” Available at sba.gov
• SCORE. “Business Plan Template for a Startup Business.” Available at score.org
• SCORE. “Business Plan Outline.” Available at score.org
• Greene, F. J., and Hopp, C. “Research: Writing a Business Plan Makes Your Startup More Likely to Succeed.” Harvard Business Review, 2017. Available at hbr.org
• Greene, F. J., and Hopp, C. “When Should Entrepreneurs Write Their Business Plans?” Harvard Business Review, 2018. Available at hbr.org
• U.S. Bureau of Labor Statistics. “Business Employment Dynamics.” Available at bls.gov
• U.S. Chamber of Commerce, CO. “How to Write a Business Plan: A Step-by-Step Guide and Expert Tips.” Available at uschamber.com
• LivePlan. “How to Write a Business Plan + Free Template.” Available at liveplan.com
• Shopify. “How To Write a Business Plan in 10 Steps.” Available at shopify.com