How to Write a Business Plan Step by Step

The exact steps to take to finish a business plan for your business (with a free checklist!)

When you are writing your own business plan for the first time, learning how to write a business plan step by step is not as painful as it sounds. As long as you have the right tools.

In fact, for entrepreneurs who have never written a business plan before, it can seem like a really big project because there are so many ways to get started. There are templates and guides out there, plus software options, not to mention firms who can do it all for you.

Yes, Written Success is one of those firms, BUT this post is not about that. If you would like to contact me to do your business plan for you, stop reading now and feel free to reach out!

This post focuses on inexpensive help options that you can use right now, even on a really tight budget. In this post, I will share with you:

  • two super cheap options for knocking out your business plan quickly
  • five tips for what to write
  • a bonus checklist of the 3 things you need to do before you start your business plan

My company is a proud affiliate of many startups and businesses, including those mentioned here. As you explore each affiliate linked below, note that my company may receive a commission for referring you to their services if you decide to become their customer.

I only recommend products, tools, services, and learning resources that I believe to be genuinely helpful. That being said, if you have a negative experience with an option I recommend, please feel free to reach out to let me know!

Read on, entrepreneur!

2 Super Cheap Options for Knocking Out Your Business Plan Quickly

The business plan world is full of frauds. There are “writers” who will write your plan for a low cost for you, but they have never actually started or run a business and have no real experience. Then there are big firms who over charge you, insisting you need to spend thousands when that may not at all be the type of package you need.
Instead of going down those paths, consider these two options that are better for most people who need a good business plan, need a bit of help, and do not have a ton of cash or time to spend.

Option 1: “How to Write an Exceptional Business Plan” Book & Template Kit

Many business plan books are written with painfully dry content, no real examples, and instructions that are really hard to follow. That was what led me to write this how-to, using real examples from the actual pages of my clients finished business plans.
This book was written for regular people with common sense. It is for every entrepreneur who needs straightforward help on a budget. It comes with a free template kit, and is the same template I currently use on all of my business plans I write today. This book is great for you if you want to use your business plan for a bank loan, for an investor pitch, or for building a solid operational strategy.
Now if you have a thousand thoughts in your head already – little pieces of your business plan that you need to get onto paper – then Option 2 may be the right fit!

Option 2: LivePlan Online Software

LivePlan is an online software that pre-organizes the sections of your business plan. It takes the guess work out of wondering where to put what, and it just guides you by saying “put your bio here” and “enter your mission statement here”. Then, when you finish, you can export it all into a PDF document, or share your login details so other partners or possible investors can take a look.

LivePlan is a great option because of the price point. While it can cost more than a book, depending on what package you buy, it is still extremely affordable compared to hiring a firm to do it for you. Plus, they offer a money back guarantee. So if it isn’t worth the $10, then you can rest easy that you can change course without risk.

Now, no matter how you move forward, you need to write the right content for your business plan. The next part of this post dives into the 5 tips to help you plug the best words into your business plan, whether you are using a template, a software, or are jotting things into a notepad for now!

5 Tips for Finishing your Business Plan

Usually starting a business plan is not the problem. The trouble comes with finishing. This is because there are key sticking places where most entrepreneurs feel unprepared. Often, these sticking places are:

  1. The bio section
  2. The competitor analysis section
  3. The sales goals and price points
  4. The costs and operational expenses in the financials section
  5. The cover letter (if you plan to show this to other people)

The following will get you past these sticky areas with some professional rules of thumb! And at the end of the post, be sure to download the bonus tips on the 3 steps to do before you write your business plan.

How to write a business plan step by step icon

How to Write a Business Plan Step by Step

Step 1: Start with you

When writing your business plan, the place I always recommend starting with is your own bio. In the Management Team section of your business plan, you should have no more than 250 words (aim for under 200 if you can). In this section, describe your role in the business and how your background will make the business a success. Do not just copy and paste your resume here. Sell yourself, feel free to brag on yourself a bit. You need to show exactly why you are the right boss for this business, and if you are confident in your abilities, it will shine through your words.

It is important to use powerful, memorable language when describing yourself and the founding team of your business.

This should be the easiest section for you to write and can get you amped to move onto the rest of the business plan.

 

How to write a business plan step by step icon

How to Write a Business Plan Step by Step

Step 2: Scope out your top competitors

You already know who they are and what they’re doing wrong. Those competitors are why you have a great idea to begin with! List them out, include their addresses and public reviews on Google, Facebook, etc. Make a chart of their prices and make a T-chart of where they are failing and where they are succeeding.

If you have more than 10 competitors, only include the details of the first 10 in your main business plan. List out the rest of them in an appendix. This makes the business plan easier to read through.

***If you have a “new” business, something that’s truly never been done before, you will have a harder task. This is especially true if you are planning to use your business plan for funding. Any new business needs to triangulate different parts of its business that are similar to existing businesses. No investor or lender will like to hear you say “My business is 100% unlike any other business.” They want to see you are being honest and realistic. They want to see you actually putting in the work to understand your market and learn lessons based on successes and failures from related businesses.

The process of running a business is going to be similar to something that has already been done before. Try to draw parallels even if another business or product is different than what you are doing.

The competitor research and market research are often the hardest parts for people. Just take it a step at a time and try not to let it overwhelm you.

How to write a business plan step by step icon

How to Write a Business Plan Step by Step

Step 3: Target your price point

When people wonder how to write a business plan step by step, often the real question is about how to do financials. I do have other posts that go into this in more detail, but to start with the absolute first step, consider starting with price.

Once you have your competitors and their prices, you have a place to benchmark your own prices based on value and market tolerance for a new entrant. What does this mean? Simply, think about what value you are bringing, and how much more or less a customer may be willing to pay for your offer compared to the competition.

Pricing strategy is a data-driven activity – be very careful not to “go by your gut”. There are actually several approaches you can take, so research the right pricing strategy for your business type.

***You may be wondering why I advise to focus on price before you review costs. Most businesses should not be using a “cost-plus” strategy. The customers won’t care about your costs – they care about value. Focusing on costs instead of market price can be one of the most devastating things a business can do, so try to keep cost and price independent from one another in your strategy planning.***

 

How to write a business plan step by step icon

How to Write a Business Plan Step by Step

Step 4: List your costs

This is a complex topic that seems simple at first. At the heart of every business plan is the financial pro formas. The quality of the numbers is always heavily weighted on cost assumptions. It can be extremely easy to under-project costs and one way to buffer this is to add a 20% contingency across the board to all costs.

Cost is something even the best-intentioned entrepreneurs get wrong. For example, I was supporting a strategy session for a client who wanted to test a location for a new outdoor eatery. He said he would simply sell snow cones out of a small building and see if he generates any interest before he dedicates to starting the eatery. “It’s ice and cheap syrup, my margins will be amazing and I can test the spot without actually doing the full eatery” he told me.

I challenged him to map out both scenarios. Together, we listed the costs for the snow cone stand and then the costs to do the eatery.

Long story short, it would be exactly as expensive to do the snow cone experiment since he would need the land, a structure, permits, a marketing budget and sales strategy. The only difference was cost of food. However, since the snow cones would be priced cheaper than the eatery items, it would actually take longer to recoup the costs.

 

Bottom line: do not assume. Map the scenarios out.

There is another thing I want to really make clear that will help you avoid the biggest problem people have with business plans.

Do not be okay with not knowing something. Avoid guessing wherever possible. If you do not know the cost of something, please look it up and only leverage credible sources. I promise the answer exists somewhere, in some form.

For example, did you know that there is a government website that shows you the average cost for different utilities by business type and state for brick and mortar businesses across the country? Information like that is extremely important for any brick and mortar business plan. It is even more important if you are trying to prove to investors or lenders that you’ve done your homework.

Want to make money with an app? Did you know there’s a way to predict conversions on an app if you are looking to launch in the US?

There is a ton of gold nuggets like these out there that answer exactly what you need to know so you can build a solid business plan and great financials. Getting the information isn’t your problem: knowing where to find it is the issue.

Even within the same industry, you will see completely different business plan requirements for similar businesses. For instance, a hand car wash and detail will have a totally different business plan than an automatic car wash or a conveyor car wash. Yet, one business plan “template” has the same instructions no matter the business.

This is typically the first moment when entrepreneurs see value in hiring an expert to help with their business plan. Especially if the plan will be used for funding.

How to write a business plan step by step icon

How to Write a Business Plan Step by Step

Step 5: Start with a Persuasive Cover Letter

Knowing how to write a business plan step by step is often something you can’t know until you go through it at least once from beginning to end. This is why the most experienced business plan professionals will tell you the most overlooked step is creating a killer cover letter. Your business plan layout, feel, and professionalism will all be judged at this step.

If you are using your business plan for funding, you need this step. Most first-timers miss the fact that a business plan for an investor or bank always starts with a great cover letter! You need a cover letter that:

  • is easy to read
  • lays the framework for your business plan
  • explains WHY you are worthy of getting funding
  • should be written in persuasive business writing format
Even though this is the first step in terms of importance, it is the last step in the process. Write this section when your business plan is finished.

 

How to write a business plan step by step icon

How to Write a Business Plan Step by Step

Bonus Tip: Find the “Easy” Answers

There’s so much information available that it almost sets you up for failure. There are easy answers everywhere. You just have to search smartly for them. A business plan takes a long time to create mostly because of the hunting effort. You have to hunt, dig, and confirm every precious detail in your plan and that simply takes time.

Whether you are an existing business owner or a startup, whether you need an investor, an SBA loan, or are just writing your business plan for your own strategy purposes…

…there are a few things you need to do BEFORE you even start your business plan.

And those few things are completely different depending on your situation. Like if you are an existing business owner or a startup, whether you need an investor, an SBA loan, or are just writing your business plan for your own strategy purposes – your pre steps will be unique based on your business and goals.

That’s why you need to download the checklist that’s best for you, so you know EXACTLY what 3 things to do before taking any more steps on your business plan.

how to write a business plan step by step

Click here to download your free Checklist – totally customized to help you meet your goals with your business plan. 

I hope you found this to be helpful! From one entrepreneur to another, congratulations on your success thus far, and stay positive. There are great things ahead, and your business plan is the gateway to making it all happen!!

 

Ashley Cheeks

Author Ashley Cheeks

Ashley Cheeks is a Business Plan Consultant. Her core business plan writer expertise is in designing business plans for bank and investor funding. She founded Written Success after years of being a professional business plan writer as a freelance consultant, and working for companies including GE and Fluor. She lives in Houston with her husband, daughter and son.

More posts by Ashley Cheeks

Join the discussion 4 Comments

  • anastasia branner says:

    heip i’m stuck, writing a business plan

  • Myra Cottnan says:

    Hello my name is Myra Cottman, Ian writing to u for your help in helping me to write a business plan please. I had no idea and writing a business plan. I do not know the first step the second step or the last step I am trying to write a business plan because I need a loan from Kiva. This is my first time as a entrepreneur my business is called Queens of beauty Boutique in my Boutique I would like to have clothing jewelry pocketbooks. I’m going to start from home then find me a building I also need my license computer laptop printer copy machine I need the tables the accessories for the jewelry to sit on the rats with the clothes to hang on along with hangers bags I need all the accessories to begin to start the business I have no money this is why I’m trying to go through Kiva to get a loan. I’m stepping out on faith I’m tired of working for people I just want to work for myself and then maybe add on people to work along with me or for me so this is why I am writing you for your assistance

  • Hi Anastasia,

    I would love to hear more about your business and what you are using your plan for (strategy versus bank loan versus investor funding). Your purpose and business type will impact how you should write your business plan. Please feel free to email me directly at [email protected] and we can discuss further!

  • Hi Myra,

    I love that you are going for a Kiva loan, Kiva.org is an option every entrepreneur should be aware of for funding since they give 0% interest loans to start a business.

    A business plan for Kiva is more aligned with building a business plan for crowdfunding, and you will want to show how your boutique will have short term success. This is important because your audience will want to feel comfort that your business plan and profits are going to show clear loan payback before the next 18 months (the most commonly approved loan duration for Kiva).

    For more information about other loan options in case something goes unexpectedly with the Kiva loan, please see the 2-3 minute videos that may also help tell you about funding options available:

    Crowdfunding Video (2 mins)
    Bank Funding (4 mins)
    Angel & Investor Funding (2 mins)

    Please also feel free to email me directly at [email protected] and we can set up a consult session if you need.