How to Write a Business Plan (2025 Guide)

What is a business plan?

A business plan breaks down why your business exists, what you offer (and to whom), and how it all comes together to create value. Companies use business plans to pitch investors and secure funding, but they’re just as helpful for internal purposes, too. 

It's different from an operating agreement, which outlines your business' legal structure and ownership terms. A business plan is more about helping you see the bigger picture—namely, how your company will grow, compete, and succeed over time. 

Why you need a business plan in 2025

A business plan is a must if you’re trying to raise money, as most investors or lenders won’t consider a business without one. Even if this isn’t an active priority, taking the time to write a thoughtful business plan is still one of the smartest things you can do for your company. Here’s why: 

• Clarifies vision and direction. You define what success looks like and focus on what really matters to move your business forward.   
• Identifies potential challenges. Putting your business idea into words helps you spot risks before they become real problems. 
• Serves as a benchmark for growth. You have a point of reference to track what’s working, what’s changed, and where you need to adjust. 
• Narrows your priorities. You align the business’ focus on the same mission, which gives everyone on your team a clear purpose (even if it’s just you). 

If nothing else, a business plan shows that you’re thinking ahead and have a clear strategy to grow your business.

How to make a business plan in 8 steps

There’s no single right way to make a business plan, but it’s a good idea to start with a traditional plan—that is, a more detailed version typically covering nine sections. From there, you can adapt it into shorter formats (like one-page business plans), depending on your audience or use case.

Here’s how to get started. 

1. Map out your business goals

First, write out what your business does and where you are now. Consider where you want to go over the next 3–5 years, thinking in terms of impact and outcomes. To start, what problem are you trying to solve? What kind of change do you want to create? 

For example, a tech company might set a goal to build the fastest computer on the market. That’s important, but the bigger mission might be unlocking once-impossible capabilities or giving people back hours of their lives. 

The key here is to set tangible goals for your business, but try to center them around the difference you want to make in your customers’ lives. 

2. Get to know your market

Market research comes down to learning who your ideal customer is, what they care about, and how many people out there might want what you’re offering. To keep it simple, focus on the following: 

• Demographics. Who are your customers? Consider your audience’s age, gender, income level, location, family status, and similar characteristics. 
• Customer behavior. What do your customers value? How do they make buying decisions? What motivates them to choose one product or service over another?
• Market size. How big is the opportunity? If you don’t have much business data to work with yet, you might start by estimating demand in your area, analyzing seasonal trends, or measuring how often people purchase similar products or services. 

You don’t necessarily need to invest in fancy tools to get started. "If you operate a brick-and-mortar business serving local customers, go to the U.S. Census Quick Facts page and enter your ZIP code to find the demographic profiles of the areas you are serving," says Dave Lavinsky, president of Growthink. 

Lavinsky also recommends generating reports for competitor website URLs through tools like SimilarWeb, as well as looking for market information on industry association websites and in research reports.

Linda Murray Bullard, chief business strategist at LSMB Business Solutions, also says to check with your local library reference desk. "The local Small Business Administration office or small business development center has a wealth of information that can help, too, and some will even do the market analysis for you," she says.

3. Clarify your products or services against the competition

Next, think about what you’re offering and what makes it stand out in your market. If possible, focus on one core product or service. This is easier to articulate (and stand behind) than trying to explain everything you offer at once. Then, you’ll need to consider how your specific offering fits into the market. 

"What's the market value, how does it operate, what are the needs, and who are your direct and indirect competitors? You need to understand the ins and outs of how the market works, and how the profit is made," says Zohar Gilad, CEO and co-founder of InstantSearch+ (now known as Fast Simon). 

Reuben Yonatan, founder and CEO of GetVoIP, recommends categorizing competitors as primary and secondary. Learn as much as you can about your primary competitors because they often represent your end goal, but don't overlook the others. "With secondary competitors, extract as much insight as possible. For example, try to determine why they are not at the top of the food chain. Could it be their pricing?" he says.

Talk to their vendors and customers, and study their website, marketing materials, and press releases. How are their offerings different from yours? How are they the same? This information will help you explain your differentiation in the business plan.

4. Figure out your marketing strategy

A marketing strategy demonstrates how you’ll reach your target audience. Consider where they spend their time online or in person, what media they consume, and what trends or communities they’re part of. Can you connect with many of them at once—whether through social media, email, local events, or search keywords? 

Audience insights data from your Facebook business page will provide valuable intelligence, as will customer insight tools like SparkToro and Audiense. Use the demographic information you find through these platforms, along with other research such as surveys, one-on-one conversations, and focus groups, to shape a clearer picture of your ideal customer.

From there, consider how your target customers will first learn about your business, how you’ll stay on their radar, and how you’ll encourage them to take action. In other words, how will you generate leads and then convert those leads into paying customers?

5. Decide on your business structure

Your business plan will outline how your company is set up legally and operationally. You’ll specify the business structure (e.g., a corporation or LLC) and explain who’s responsible for running it. Start by considering the core areas of your business, such as:

• Operations. Who handles daily tasks and manages the business? 
• Marketing and sales. Who is in charge of attracting customers, promoting the business, and closing sales?
• Finances. Who tracks expenses, sets budgets, and ensures the business stays financially healthy? 

Even if it’s just you (or you and a partner), it helps to break down the business’ primary responsibilities to stay focused and hold everyone accountable.

6. Prepare your finance projections

For new businesses, it can be tough to pin down exact financial projections right away. Even if you’re unfamiliar with the typical financial statements for a business, you can start by including what you do know now. This might be how much it costs to make your product, what similar products typically sell for, or how many units you could realistically handle. 

The primary purpose of the financial plan, says Phil Santoro, co-founder of startup studio Wilbur Labs, is to document how much money you need to start the business, and how or when the business will generate revenue and profit.

Santoro recommends working backwards from where you want the business to be in three to five years. "Working backwards like this allows you to look at the different workstreams required for each phase of the business," he says. "Most importantly, working backwards lets you create projections based on achievable assumptions. A plan is only as good as the assumptions that go into it."

You can also base your financial projections on verified data from Dun & Bradstreet Key Business Ratios, says marketing consultant Marsha Kelly of Best4Businesses. "This verifiable information is dependable to make business projections and to assure banker investors of the trustworthiness of the business plan," she says.

You might look into other resources like LivePlan and Bizminer. And when in doubt, bring in professional help—especially for financial planning, business compliance, or if your plan is going in front of banks or investors.

7. Write an executive summary

Even though it’s the first section in your business plan, we recommend writing the executive summary last. It’s a high-level overview of everything you’ve researched and compiled—your mission, what you offer, and why your business is worth paying attention to. 

Keep in mind this is supposed to be a quick, compelling summary of what makes your business valuable. You’ll want to touch on your goals, target market, main product or service, and financial outlook, but keep it brief—the goal is to give just enough information to encourage further reading. 

8. Revise, revise, revise

Writing always improves with time and distance. Once you’ve drafted your business plan, try to keep refining it until it reflects the best version you’re capable of. Step away, revisit it with a fresh set of eyes, and bring in other people you trust for feedback. If something isn’t clear or convincing, don’t be afraid to rewrite it. 

You want to make it count—someone may only read your business plan once and make a decision based on that single pass. 

After you've written the plan, don't tuck it away. Think of it as an organic document that grows with the business. For this reason, you'll want to update and refine it as you learn and succeed.

Key sections for your business plan template

Once you’ve completed your research and mapped out your goals, it’s time to organize everything into a structured plan. The typical business plan includes these elements.

• Executive summary: A brief overview of your business, mission, product or service, and key information. 
• Company description: Details about what your business does, its purpose, and the problems it aims to solve. 
• Market analysis: Insights into your industry, target market, and competitors.
• Organization and management: Your business structure, ownership, and main stakeholders of the company. 
• Products or services: Description of what you offer and what makes it different or valuable—your unique value propositions. 
• Marketing and sales strategies: How you’ll enter the market, attract customers, and drive sales. 
• Funding request: The amount of funding you need and how it will be used (if applicable). 
• Financial projections: Forecasts to back up your business model, including projected income statements, cash flow statements, and balance sheets.​
• Appendix: Supporting documents like resumes, legal documents, or additional data.

You can find templates online to help you structure these sections. If you’re seeking funding, it’s also helpful to review example business plans from notable companies, such as AirBnB’s pitch deck. Though not the same format discussed, it’s a great representation of how to quickly communicate and illustrate the value of a new company. 

Do’s and don'ts for making a strong business plan

As you write your business plan, keep these general tips in mind. 

Do’s

• Be concise and focused. Avoid fluff and stick to one core message. 
• Use credible sources. Rely on verifiable data, realistic benchmarks, and grounded assumptions to support your projections. 
• Tailor it to your audience. Think about what readers want to see (whether investors, banks, or partners) and how to speak directly to their needs. 
• Emphasize what makes you different. Be clear about your competitive advantage and what makes your solution unique. 
• Set achievable goals. Ambition is good, but make sure your targets are realistic and within your control. 

Don’ts

• Dismiss red flags. If your research points to issues for your business concept, be honest about them—it’s easier to pivot early than correct too late. 
• Overcomplicate it. Use everyday language that most people can understand, especially if you’re trying to reach people outside your industry. 
• Neglect the executive summary. Many readers won’t turn to the next page if the executive summary isn’t compelling enough, so make it count. 
• Ignore your competition. Even if you don’t have many direct competitors, acknowledge any alternatives in the market that may indirectly compete with you. 
• Follow a flawed plan. Don’t be afraid to go back to the drawing board and adjust your plan if something’s not working. 

Create your business plan with LegalZoom

A business plan is just one of several things your company might need in the early stages. LegalZoom can help you protect and run your business with these services. 

• Nondisclosure agreements (NDAs): Get an NDA for your business plan to safely share it with others. 
• Operating agreements: Protect your ownership interests and limited liability status with a personalized operating agreement. 
• Compliance coverage: Track your business filings, find required licenses and permits, or get help from a dedicated concierge with our Compliance Filings plans. 
• Business attorney plans: Speak to an attorney who can offer legal advice, review documents, and meet for unlimited 30-minute consultations.

LegalZoom has helped millions of small business owners since 2001, and we’re here to support your business goals from the very beginning. You don’t have to take our word for it—see what actual LegalZoom customers have to say.  

FAQs

What are the different types of business plans?

For small businesses, traditional and lean startup plans are more common. Others include feasibility, strategic, internal, one-page, and 5-year plans. Each has a different purpose, so you can choose the format that fits your goals and audience best. 

When should I create a business plan?

Ideally, you should create a business plan before offering your product or service. This helps you set goals and assess your idea’s viability, which you might overlook if you jump right into it. Nonetheless, you can create one even if you have an existing business, which can help clarify your direction and guide future decisions. 

Can I write a business plan myself?

Yes, you can write your own business plan using online templates or starting from scratch. Just make sure to gather feedback from others—outside perspectives can help you improve your plan before putting it to use. 

How long should a business plan be?

Most traditional business plans fall between 15–20 pages long, but the right length depends on your audience. A shorter plan is fine if it’s clear and complete, while more complex business plans can be significantly longer (sometimes up to 40 pages).

Sandra Beckwith contributed to this article