How to Write a Business Plan, Step by Step

To write a business plan, decide who will read it, research your market and costs, and then write these sections in order: executive summary, company description, market analysis, organization and management, products or services, marketing and sales, funding request, and financial projections, with an appendix for supporting documents. Write the executive summary last, even though it comes first. For most small businesses the finished plan runs about 12 to 19 pages before the appendix.

This guide walks through each section with what to put in it, how long to make it, and a sample line from a made-up business. At the end you’ll find the mistakes that sink most plans and a checklist to run before you send yours. If you’re new to the idea, start with what a business plan is and who reads one.

Before you start: who is the plan for?

A business plan is a document written for a reader. The reader decides how much detail you need.

A bank or government-backed lender wants to know you can repay. Expect them to read the funding request and the financial projections closely.
An investor wants to know how big the business can get and why your team can get it there.
You and your partners need a working plan: goals, numbers to hit and what to do first.

The U.S. Small Business Administration describes two formats in its guide to writing a business plan. A traditional plan is detailed, and the SBA notes that lenders and investors commonly ask for it. A lean startup plan is a one-page chart of key elements that the SBA says can take as little as an hour, though some lenders and investors may ask for more. If you’re asking anyone for money, write the traditional plan. That’s the format this guide covers. If you’re pitching one client on one job instead, you need a business proposal, not a plan.

The running example

To show what each section looks like, we’ll use one made-up business throughout.

Example (made up): Spoke & Wrench is a mobile bike repair service. The owner, a bike mechanic, drives a fitted van to customers’ homes and offices. She needs $50,000 to start: $15,000 of her own savings and a $35,000 loan.

All names and numbers in this example are invented for illustration.

How to write a business plan step by step

Writing the sections in the order they appear is the slow way. Do the work in this order instead:

Pick your reader and note what they’ll decide based on the plan (a loan, an investment, a go or no-go).
Research the market. Who buys, how many of them are near you, what they pay now and who else sells to them.
Build the numbers. List startup costs, then estimate sales and monthly costs for at least the first year. Many choices in the plan depend on these numbers, so do them early.
Draft the middle sections: company description, market analysis, management, products, marketing and sales.
Write the funding request once you know what you need and what it’s for.
Write the executive summary last, pulling the key facts from every other section.
Review it as the reader would. Check every number against the spreadsheet, and ask someone who doesn’t know the business to read it.

If you use an AI assistant to help draft, give it your real numbers and research, and check everything it writes. Our guide to writing a business plan with ChatGPT or Claude shows how.

Business plan sections in order

Here’s the standard order, with a rough length for a small-business plan. These lengths are a rule of thumb, not a requirement. A lender’s own template always wins.

#	Section	Typical length
1	Executive summary	1 to 2 pages
2	Company description	1 page
3	Market analysis	2 to 4 pages
4	Organization and management	1 page
5	Products or services	1 to 2 pages
6	Marketing and sales	2 to 3 pages
7	Funding request	1 page
8	Financial projections	3 to 5 pages, plus spreadsheets
9	Appendix	As needed

Add up the ranges and you get 12 to 19 pages before the appendix. Those first eight sections follow the SBA’s list of common traditional plan sections. The appendix is an extra that many plans include for documents that would clutter the main text.

1. Executive summary

What goes in it: what the business is, who it serves, why it will succeed, who runs it and where it operates. The SBA’s guide suggests your mission statement, your product or service, and basic facts about your leadership, employees and location, plus financial information and high-level growth plans if you’re asking for financing. If you’re asking for money, say how much and what for.

How long: one page is best. Two at most.

Example line: “Spoke & Wrench repairs bikes at the customer’s door. We’re asking for a $35,000 loan to buy and fit a van and tools; the owner is putting in $15,000 of her own.”

Tips:

Write it last, when every number is final.
Assume this is the only page some readers will finish. It has to make sense on its own.
Lead with facts, not adjectives. “Fifteen years as a bike mechanic” beats “passionate and experienced.”

Our guide to writing an executive summary has a fill-in-the-blanks template and two full examples.

2. Company description

What goes in it: the problem you solve, for whom, and how you’re different. Add the legal structure (sole proprietorship, partnership, corporation), location, and whether the business is new or already operating.

How long: one page.

Example line: “Commuters who ride every day lose a day or two each time a bike goes into the shop. We fix most problems in under an hour, in their driveway.”

Tips:

Name your competitive advantage in one sentence. If you can’t, the rest of the plan will struggle.
Keep the history short. Readers care more about the next three years than how you got the idea.

3. Market analysis

What goes in it: your industry and where it’s heading, your target customers, the size of the market you can reach, and your competitors with their prices and weaknesses.

How long: two to four pages. This is where readers check whether you’ve done your homework.

Example line: “Within our 20-minute service radius we found four bike shops, none offering on-site repair. Their basic tune-up costs $70 to $95 and takes two to five days.”

Tips:

Define the market you can actually serve, not the whole industry. A national figure says nothing about whether people in your area will buy.
Cite where every number came from: a government statistics source, an industry association, your own survey. Free government starting points include the U.S. Census Bureau’s County Business Patterns, which counts establishments with paid employees by industry, county and employment size, and Canada’s Canadian Industry Statistics, which you can search by industry name or NAICS code.
Show competitors fairly. Readers know they exist.

Our guide to market analysis for a business plan shows how to size your market and lay out the competition. Many plans end this section with a SWOT table (strengths, weaknesses, opportunities, threats); see how to do a SWOT analysis for a business plan.

4. Organization and management

What goes in it: who owns the business and in what shares, who runs what, each key person’s relevant experience, and gaps you’ll fill by hiring or with outside advisers (an accountant, a lawyer).

How long: about one page. Put full resumes in the appendix.

Example line: “The owner holds 100% of the business and does all repairs. A bookkeeper handles payroll and tax filings on contract, about four hours a month.”

Tips:

Match each person to a job the business needs done. Experience that doesn’t connect to the plan is padding.
Be honest about gaps. A gap with a plan to fill it reads better than a gap you hide.

5. Products or services

What goes in it: what you sell, what it costs the customer, what it costs you, and what’s coming next. Mention any suppliers you depend on, and any patents, trademarks or licenses.

How long: one to two pages.

Example line: “Our standard tune-up is $75 and takes about 45 minutes. Parts are billed at the supplier’s price plus 30%.”

Tips:

Describe benefits to the customer, not just features. “Back on the road the same day” is the benefit; “mobile service” is the feature.
Give prices. A plan with no prices can’t support a revenue forecast.

6. Marketing and sales

What goes in it: how customers will find you, why they’ll choose you, how a sale actually happens and how you’ll keep customers coming back. Include a rough marketing budget.

How long: two to three pages.

Example line: “We’ll sign up two office buildings with bike rooms for a monthly on-site repair day. Each building gives us 8 to 12 jobs per visit without paid advertising.”

Tips:

Tie the channels to the sales forecast. If you expect 1,900 jobs in year one, show where they come from.
Pick two or three channels you can afford and run well. A list of every possible channel tells the reader you haven’t chosen.

7. Funding request

What goes in it: how much money you need, whether it’s a loan (debt) or an ownership stake (equity), the terms you’d like, the time period the request covers and exactly how you’ll spend it. The SBA’s guide adds future financial plans, such as paying off debt. Show what you’re putting in yourself.

How long: one page.

Example (made up): Spoke & Wrench’s use of funds.

Use	Amount
Used cargo van, fitted with racks and a workbench	$28,000
Tools and starting parts stock	$9,500
Website and launch marketing	$3,500
Working capital (about three months of running costs)	$9,000
Total needed	$50,000
Owner’s contribution	$15,000
Loan requested	$35,000

Tips:

Every dollar in the request should appear in your startup costs and your cash flow forecast. Our guide to estimating startup costs has a worksheet for this.
Include working capital, so the business can pay its bills during the months before sales cover costs.
If you’re applying for a specific program, use its terms and forms. For example, if you’re in Canada and applying through the Canada Small Business Financing Program, see our guide to a business plan for a CSBFP loan.

8. Financial projections

What goes in it: forecast income statements (profit and loss), cash flow statements and balance sheets, plus the assumptions behind them. The SBA’s guide suggests covering the next five years, with quarterly or even monthly projections for the first year, and capital expenditure budgets. An established business also includes its past financial statements; the SBA suggests the last three to five years.

How long: three to five pages of summary and explanation, with the full spreadsheets in the appendix.

Example line: “Year one revenue: 1,900 jobs at an average of $75, or $142,500. We assume 40 jobs a week for 48 working weeks, less a slower first two months.”

That line checks out only if the assumptions add up, so here they are. Forty jobs a week for 48 weeks is 1,920 jobs. Subtracting 20 for the slow start leaves 1,900. And 1,900 × $75 = $142,500. Do this check for every number you quote.

Tips:

Lead with assumptions: prices, jobs or units per week, costs per sale, wages, rent. A reader who agrees with your assumptions will trust your totals.
Make the cash flow forecast monthly for year one. Profit on paper doesn’t pay the bills; cash does.
Show a cautious case as well as your expected case.
Say when you expect to reach your break-even point.

Our guide to financial projections for a business plan walks through each statement with a worked example.

9. Appendix

What goes in it: anything that supports the plan but would interrupt it: full resumes, the detailed financial spreadsheets, quotes from suppliers, permits and licenses, lease drafts, letters of intent from customers, photos of the location or product.

How long: as long as it needs to be, but every item should back up a claim in the main plan.

Example line: “Appendix C: Supplier quote for the van fit-out, dated and signed.”

How long should a business plan be?

Long enough to answer your reader’s questions, and no longer. The SBA notes that traditional plans can be dozens of pages long. A small business asking for a loan can usually make its case in 12 to 19 pages plus an appendix, following the lengths above. A plan only for your own use can be much shorter, even a single page.

If a lender gives you its own template or length limit, use it. Some programs and lenders publish their own forms. Canadian readers can compare free options, including the template from the Business Development Bank of Canada (BDC) on its templates page, in our roundup of Canadian business plan templates.

How do you write a business plan for a small business?

The sections stay the same; the scale changes. A small business plan for a bakery or a repair service doesn’t need a five-year industry forecast or a board of directors. It does need:

A clear picture of local customers and local competitors.
Prices and a sales forecast you can explain line by line.
A monthly cash flow forecast for the first year.
A funding request that matches your startup costs to the dollar.

Smaller plans get judged mostly on whether the numbers are believable and whether the owner knows the trade. Spend your time there.

Common business plan mistakes

These are the problems that make a reader stop trusting a plan.

Numbers that don’t match. The funding request says $50,000, the startup cost table says $47,500 and the cash flow starts with $45,000. Reconcile every figure before you send it.
No assumptions. Revenue appears with no price, volume or source behind it.
“We have no competitors.” Every business competes with something, even if it’s customers doing the job themselves.
A market that’s too big. Quoting the whole national industry instead of the customers you can reach.
Hockey-stick growth with no reason. If sales triple in year two, say what changes: a second van, a new contract, a new location.
Forgetting working capital. Plans that fund the equipment but not the months before sales cover costs.
Writing for the wrong reader. A lender doesn’t need your brand story; an investor needs more than your monthly rent.
Generic text. Paragraphs that could describe any business, often copied from a template or written by AI without your facts. Readers spot them quickly.
Typos and formatting slips. They suggest the numbers may be careless too.

Business plan checklist

Run through this list before you send your plan to anyone.

Structure

Sections are in order: executive summary, company description, market analysis, organization and management, products or services, marketing and sales, funding request, financial projections, appendix
The plan follows the lender’s or program’s template if one was given
Pages are numbered and there’s a table of contents for plans over 10 pages

Content

The executive summary makes sense on its own and fits on one or two pages
The company description states your advantage in one sentence
The market analysis names real competitors and cites a source for each number
Each key person’s experience connects to a job the business needs
Every product or service has a price
Marketing channels connect to the sales forecast
The funding request says how much, debt or equity, what for, and what you’re contributing

Numbers

Startup costs, funding request and opening cash all match
Assumptions are listed before the forecasts
The first year’s cash flow is monthly
Every table adds up (check the totals with a calculator, not by eye)
There’s a cautious case as well as an expected case

Final read

Someone outside the business has read it and could explain it back to you
All supporting documents are in the appendix and referenced in the text
It’s saved as a PDF, with a file name that includes your business name and the date

Getting help

Outside help is available. In the U.S., the SBA’s local assistance page points you to free or low-cost counseling and training in your area, through partners such as Small Business Development Centers and SCORE mentors. If you’ll borrow, the SBA’s loans page explains its loan programs, which are made through partner lenders rather than by the SBA itself.

In Canada, the Government of Canada’s planning a business page links to planning resources, including BDC’s template. Innovation Canada’s Business Benefits Finder builds a list of government programs that may apply to your business, which helps when you write the funding request.

For legal, tax or lending decisions, check with a qualified professional or the lender directly, since program rules and lender requirements change and vary from one lender to the next.