How to Prepare a Business Plan the Right Way
A clear, data-backed business plan aligns your team, persuades investors and lenders, and helps you prioritize what creates value. Use the outline below to build a concise, decision-ready document that you can update as you learn.
1) Purpose and audience
- Define the primary goal: fundraising, bank loan, partner onboarding, or internal planning.
- Tailor tone and depth: investors want growth drivers, risks, and returns; banks prioritize repayment capacity and collateral.
- Set scope: 15–25 pages plus appendices is enough when backed by solid data and clear visuals.
2) Executive summary (write it last, place it first)
- One page covering: problem, solution, target customer, market size, traction, business model, competitive edge, financial highlights, funding ask, and use of funds.
- Make it skimmable. Use numbers: revenue to date, growth rate, gross margin, pipeline, pilots, or partnerships.
3) Market and competition
- Customer and pain: define ICP (ideal customer profile) and jobs-to-be-done; quantify urgency and willingness to pay.
- Market sizing: TAM, SAM, SOM with transparent sources and assumptions.
- Competitive landscape: direct and indirect competitors, substitutes, entry barriers, your positioning map.
- Regulatory or compliance constraints that influence adoption and pricing.
4) Business model and unit economics
- Revenue streams and pricing logic (subscriptions, usage, licensing, services, marketplace fees).
- Unit economics: CAC, LTV, payback, churn, gross margin, contribution margin, capacity utilization.
- Supplier terms, payment cycles, and implications for working capital.
5) Go-to-market
- Primary channels: SEO, content, paid ads, partnerships, field sales, marketplaces, outbound, events.
- Funnel metrics: visit-to-lead, lead-to-opportunity, win rate, sales cycle, average contract value.
- Territory or segment strategy, onboarding and customer success to drive retention and expansion.
6) Financial projections
- 3–5 year model with clear drivers: pricing, volumes, conversion, retention, headcount plan.
- Statements: P&L, cash flow, and balance sheet; break-even, runway, and burn.
- Scenarios: base, upside, downside; sensitivity to key assumptions (CAC, churn, price).
- Funding plan: amount, instrument, valuation logic, use of funds by category, and expected milestones.
7) Risks, milestones, and KPIs
- Key risks: market adoption, technology, supply chain, regulatory, concentration, financing.
- Mitigation: pilots, patents/IP, diversified suppliers, compliance roadmap, credit insurance.
- Milestones with dates and owners: MVP, beta, GA, revenue targets, hires, certifications.
- North-star and operational KPIs: ARR/MRR, gross margin, NRR, NPS, CAC payback, inventory turns.
8) Formatting tips and quick checklist
- Keep it concise, visual, and consistent. Use charts for trends and tables for assumptions.
- Label assumptions, cite sources, and separate facts from hypotheses.
- Put detailed research, resumes, and legal docs in the appendix. Link from the main text.
- Version-control your plan and track changes to assumptions.
Checklist
- Clear audience and goal defined
- One-page executive summary with numbers
- Market size and competition with sources
- Unit economics and pricing logic
- GTM channels and funnel metrics
- 3–5 year financial model, scenarios, and funding ask
- Risks, milestones, and KPIs
- Clean layout, consistent visuals, appendices
FAQ
How long should a business plan be? 15–25 pages plus appendices is typically enough if it is focused and supported by data.
How often should I update it? Review quarterly or whenever a key assumption changes (pricing, CAC, churn, supply costs).
Do I need a template? A template saves time, but tailor sections to your model and audience. Use this outline as a starting point.
Use this outline to build a living plan that guides decisions and secures confidence from stakeholders.