Business Plan Format (Plus Definition And Step-By-Step Guide)

By Indeed Editorial Team

Published 25 April 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

When starting a new business, expanding an existing one, or launching a new product, it is important to create a business plan that explains the organisation's revenue model, future growth, investment requirement and financial forecast. This plan serves as a reference for investors and partners to assess company progress and the value of investing in it. Creating a comprehensive business plan using the right format and style can improve your chances of securing funding from investors. In this article, we discuss the business plan format and explain how to write one.

Business Plan Format And Definition

Knowing the proper business plan format can help businesses plan, present and pitch their expansion activities effectively. Start-ups and new businesses often use a business plan document that gives potential investors an overview of the company, goals and growth strategies. This report also usually contains information about the industry, competitors, marketing and future projects. Here are some essential components of a business plan format:

  • Executive summary

  • Market and competitor analysis

  • Team structure and workforce management

  • Product offerings

  • Future planning, growth and strategies

  • Financial performance and records

  • Appendix

How To Write A Business Plan

Follow this step-by-step guide to write a comprehensive business plan:

1. Start with an executive summary

The executive summary, or the company description, explains the business, its goals, partners and future growth plans. Start with the company's mission statement, explain the purpose of the business and provide an overview of the company's operations. You can decide the components of the executive summary as per the requirements of the business proposal, but they usually include the following:

  • Company overview: when the company started, the number of employees and the unique aspects of the business

  • Customer challenge: the biggest consumer challenge that the business is trying to solve

  • Product offerings: a brief description of the products and services you provide

  • Financial history: a summary of recent financial performance, like revenue, profit and growth

  • Future plans: the future plan of how you plan to grow the business

2. Add a market and competitor analysis

An analysis of the market that the business operates in and a review of the closest competitors helps establish you as an expert who is aware of the latest trends in the industry. This also allows you to share the knowledge and expertise you have, along with showcasing why partnering with you can be beneficial. Here are a few things to include in this section:

  • Market size: the size of the industry, expected growth and economic potential

  • Target audience: the ideal customer of the business offering and a description about their demographics

  • Competitor details: a comprehensive list of all the closest competitors, along with their unique strengths and limitations

  • Unique selling point: the unique business strategy you plan to implement that differentiates your business from competitors

  • Price range and sensitivity: the pricing of similar products, information about margins and how to maximise the profit

  • Special considerations: special industry regulations or compliance issues that may be relevant for the business

3. Describe the company's management and team structure

After explaining the basic business information and details, it is important to discuss the organisation's team members, leaders and managers. Investors and collaborators usually want to understand the management system, shareholder structure and functional ownership while considering financial decisions. This section explains strategic decision-making in the organisation, highlights who takes ownership of goals and discuss how the business manages its human resources. You can include the following information in this section:

  • Current team size: the existing team members with information on the total team size, expertise and skills

  • Key leadership positions: senior leaders and managers, along with a short description

  • Board structure: information regarding the company's board members and other internal decision-making authorities

  • Hiring plans and strategy: current and future talent requirements and how you intend to grow the team

4. Explain key products and offerings

This section helps define the business problem in detail and explains how the products or services you offer can solve these issues. Highlight the benefits and unique features of your offerings and how you intend to improve them. Also, add what additional products, technology or support can make it easier for you to produce or deliver. In this section, you can discuss the following points:

  • Core product features: including what value it provides and how it differs from that of competitor businesses

  • Product development: whether the product is still under development, whether you have tested it and how you intend to manufacture it on a large scale

  • Product delivery and distribution: how you intend to distribute your products and services to customers

  • Production timeline: a realistic timeline of the product development, production and delivery

  • Intellectual property information: whether you have the required licenses, patents or permission to use the knowledge or technology

  • Use of third-party services: information about the partners, supplies and other contractors who you provide valuable services

5. Present a marketing and promotional strategy

Marketing is an integral part of establishing or growing a business as it can help increase the customer base, enhance brand recognition and improve the market share. Explaining how you intend to promote your product or service to customers and retain them is an essential component of any business plan. You can include the following information in this part:

  • Marketing plan: the main channel of marketing along with a strategy for engaging the target market

  • Lead generation: how you plan to attract leads and convert them into paying customers

  • Marketing budget: how much of the total investment or annual operating budget constitutes marketing purposes

Related: What Is The Difference Between Sales And Marketing?

6. Share the different stages of the sales funnel

As you discuss the marketing strategy, it also becomes essential to provide details about the sales process and different stages of the sales funnel. Sales in a critical business function that contributes towards revenue generation, and it becomes essential to discuss the same in business proposals. Considering highlighting these aspects of the sales strategy in this section:

  • Sales team: the composition and strength of the sales team, along with their roles and expertise

  • Sales funnel: different stages of the funnel and how you intend to encourage or nudge customers to move to the next stage

  • Sales timeline and cost: what is the expected timeline for a sales cycle to complete and the projected cost per acquisition

Related: What's The Difference Between Sales And Business Development?

7. Add financial forecast and growth potential

This section contains comprehensive information about how you plan to improve the sales, revenue and profit in the future. It also explains the current financial resources of the organisation alongside a section on how much returns potential investors and partners can expect. Here are a few data points to include in this section:

  • Current and historical financial performance: information regarding the financial stability of the business

  • Net operating income and profit: details about how much revenue, profit, margins and growth the company is currently recording

  • Financial records: all important financial documents like registration certificates and licenses

  • Growth projection: what is the expected growth of rate for specific products and the overall business over the next one, three and five years

  • Return on investment expected: the expected rate of investment that the business can provide in the short and long-term

8. Conduct a SWOT analysis

Towards the end of the proposal, you can include a SWOT analysis that showcases all critical strengths, weaknesses, opportunities and threats for the business. You can also include strategies to improve the business strengths, remove the shortcomings, leverage the opportunities and manage threats. Representing all this information in the form of a visual, graph or short bullet points can make it easier to convey it more effectively.

Related: SWOT Analysis Guide (With Examples)

9. Summarise the plan with a closing statement

In the last section, reiterate the most crucial information of the business proposal. Focus on highlighting the strengths and potential benefits of investing in the business, including the following information:

  • Progress: the current performance of the company and the successes achieved

  • Unique strengths: the unique benefits that your products or services offer customers

  • Potential: the potential for growth, return on investment and success

  • Demand: what you expect from the investor or partner and how it can help the business grow

10. Add an appendix

The appendix contains any supporting documents that add more details and context to the information in the business proposal. You can add any section that requires adding empirical proof, statements, audits or external reports in the appendix. Usually, the following documents can be a part of the appendix:

  • Facility maps and designs for future expansion

  • Contact information of team members, board members and existing investors

  • Audit reports and statements by external service providers

  • Research information about the market, including external charts and data sources

  • Licenses, contracts, certificates or patent documentation

  • Balance sheet and company account statements

11. Format and proofread the proposal

After writing the business proposal, review it once to ensure that all the information is complete and accurate. Use a professional template with aesthetic formatting and design elements. Edit and proofread the text using grammar checking tools to ensure that no inadvertent errors are present in the document. You can also ask a colleague to review the document and ensure that the presented information is easy to understand.


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