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Create Your Business Plan: A Step-by-Step Guide & Template to Successful Planning

Create Your Business Plan: A Step-by-Step Guide & Template to Successful Planning

If you are a business owner or thinking about starting a new venture, then you’ve probably heard about the importance of creating a business plan. This vital document records the purpose of your operation, what you hope to achieve and how you plan to do it.

However, a business plan also acts as an accountability tool for the organization, by creating a roadmap of goals and steps of action. Most importantly, this planning tool is critical to get funding or applying for financing.

So, what does a business plan entail? It can vary based on the industry and the size of your operation.

Below, we’ve provided a step-by-step guide to creating a business plan that can be used to direct your company’s future and help you secure future financing.

Step 1: Define the Market Opportunity

Before you begin to write your business plan, it’s important to understand the market. This will help you to vet the opportunity before you expend significant resources on writing your plan or starting your business operation. To start, research and record high-level details, such as:

  • Market size in revenue
  • Whether the market is growing, stable or declining
  • How stable the industry is overall
  • The specific market segment, identified by demographics and buying behaviors that you intend to target

The point of conducting market research and a competitive analysis is to identify where you are most likely to find success. To illustrate the point, we’ll use an imaginary company called Tough Chews. Tough Chews has developed a proprietary fabric and construction technology, allowing them to make indestructible chew toys for dogs.

Pet products are part of a $103.6 billion industry.[i]  Without narrowing in on specific customer segments, our dog toy manufacturer is likely to get lost in the competition.

However, by reviewing consumer trends and statistics, Tough Chews can see that affluent households spend triple that of lower income brackets on pet products.[ii] Deep investigation reveals that 92% of millennials buy gifts for their pets and 50% do so monthly.[iii] By narrowing in on affluent millennials, Tough Chews could corner a segment of the national market.

To do so, Tough Chews will need to do more research on their target segment, determining other demographic factors, such as where consumers are most likely to live, how they purchase pet products, and the size of this niche market.

From there, Tough Chews can take a look at the top competitors serving their targeted segment, asking the same questions above about their business operation and tactics. By assembling this information up front, the business can later determine their go-to-market strategy, including how they will spread awareness of their business and bring products to market.

Step 2: Start Writing Your Plan with an Overview of Your Objectives

While your final business plan will start with an executive summary, it is actually easier to write this statement last, once you’ve had an opportunity to work through your goals, objectives, assets and capabilities. As a result, we’ll begin by writing the overview and objectives of your organization first.

The overview and objectives section of your business plan has 4 parts:

  • Overview
  • Product
  • Customers
  • Distribution

To begin this section, you’ll deliver a brief synopsis of your company, including where it is located, the industry of operation, the product or service you provide, and the market you target. 

Next, you will need go into greater detail on the products or services you will offer to customers and how you will deliver them, utilizing data drawn from the market analysis you created in the first step above.

Next, you’ll write a summary of your market. This section provides an overview of the customers that you will target with your product. While it helps to provide some detail in this section, it is not the place to dig deep on the business landscape. You will discuss this in greater detail later, when you write the competitive analysis section of your plan.

To complete this section, you will outline how you plan to distribute your products to your customers. Tough Chews, for example, will need to market through established pet retailers, since nearly 60% of consumers who purchase pet toys do so at retail location.[iv] However, the online market for pet sales is growing, so Tough Chews should also state its intentions for approaching this demographic.

Step 3: Define Your Product or Service Line

The previous section of your business plan is meant to provide a summary of your business concept and opportunity. In the following sections, you’ll supply specific details about your business operation as well as your go-to-market strategy, including:

  • List of products or services you are currently prepared to offer
  • Product pricing

For our sample company, Tough Chews, the first section would be relatively short, listing each product by name with a simple description. However, for a larger company, such as a jet ski retailer, the list could be more extensive and include multiple manufacturers as well as each model the company intends to carry.

A separate section can be used to display product pricing. This is beneficial particularly for service companies who may charge customers on an hourly basis. For example, a marketing consulting firm may offer assistance with annual planning and advertising, but price their services on an hourly basis, depending on the level of experience of each person employed by the firm.

While their list of services may look something like this:

  • Advertising
  • Annual marketing plans
  • Content development

Their pricing structure section of the business plan may be presented like this:

Expo Marketing will offer its services at an hourly rate using the following labor categories:

  • Principal, $150/hour
  • Account Executive, $140/hour
  • Project Manager, $135/hour
  • Project Coordinator, $100/hour
  • Writer, $95/hour

Step 4: Putting Your Competitive Analysis to the Test

Once you’ve explained your basic products or services and pricing structure, it’s time to use the market analysis you performed in step one to define the market opportunity and your go-to-market strategy. To do this, you’ll provide information on three categories:

  • Target market segment
  • Market trends
  • Business requirements

This section of your plan will start with a market summary. Plan to write a paragraph or two describing your targeted market segment, with details such as location, size, and market expectations.

Jeff Haden of Inc. Magazine, provides the following example for a bike rental company serving a large tourist destination:

Consumer spending on cycling equipment reached $9,250,000 in the states of VA, WV, MD, and NC last year. While we expect sales to rise, for the purposes of performing a conservative analysis we have projected a zero growth rate for the next three years.

In those states, 2,500,000 people visited a national forest last year. Our target market includes customers visiting the Shenandoah National Forest; last year 120,000 people visited the area during spring, summer, and fall months.

Over time, however, we do expect equipment rentals and sales to increase as the popularity of cycling continues to rise. In particular we forecast a spike in demand in 2015 since the national road racing championships will be held in Richmond, VA.

The next step in completing this section is to identify the market trends that favor your business opportunity. For the biking rental company above, this may include statistics related to the growth in cycling popularity as well as those related to tourist demand in the area. Be sure to include any factors related to growth in the market on which your business could capitalize.

Last, discuss your business requirements. This section will explore what your business will need in order to compete in the market defined above. For Tough Chews, that could include access to large retailers as well as the equipment and facility needed to manufacturer dog toys at scale.

On the other hand, an organic grass-fed beef operation would need access to large parcels of land to rotate cattle and possibly a storefront, as well as the animals themselves.

Having a great idea is only the first part of starting a business. To be successful, customers must know your products exist. The next section of your business plan will require you to create a marketing plan.

Step 5: Define Your Sales and Marketing Strategy

Having a great idea is only the first part of starting a business. To be successful, customers must know your products exist. The next section of your business plan will require you to create a marketing plan. The purpose of this section is to explain your brand positioning, the goals you aim to achieve and channels of distribution, as well as how you will measure success.

According to HubSpot, your marketing plan should include:

  1. Your marketing mission: Provide an overview of your marketing goals. Hubspot offers the following example:

If your business's mission is "to make booking travel a delightful experience," your marketing mission might be "to attract an audience of travelers, educate them on the tourism industry, and convert them into users of our bookings platform."[v]

  1. Your mission’s KPIs: Identifying the key performance indicators of your marketing plan is critical to success. For the travel industry used in the example above, this could include the number of website visits and bookings.
  2. Your buyer personas: While your target demographic is a general market segment, such as affluent millennials with an annual income above $100,000, there are several sub-segments that you can target within that larger grouping, known as buyer personas. Defining factors can include age, sex, location, family size, job title, and more. This section should detail the specific buyer personas that you intend to target with your marketing campaigns.
  3. Your budget: To meet your goals, you will likely need to spend money. Use this section to document the costs to execute your marketing vision, including advertising fees, software acquisitions or even new hires, as well as how you plan to compensate existing sales teams.
  4. Your pricing strategy: In addition to your marketing strategy, this go-to-market segment of your plan should also include details on your pricing strategy. Start with an overview of your approach. Do you plan to be a low-cost provider or fulfill demand for mid- to high-end products or services?
  5. Competitor profiles: A profile of each current competitor will help you to validate your marketing strategy. Include details on annual revenues, market penetration, how their prices compare to yours. Then, detail their strengths and weaknesses and how you plan to compete or capitalize on the opportunities.
  6. Sales forecast: Last, provide monthly projections for sales over the next year. You will provide two forecasts, one incorporating your best-case scenario and the other utilizing worst-case possibilities.

If you need help constructing your marketing and sales strategy, consider consulting a marketing professional. Hubspot also offers a marketing plan template to help you complete this step on your own.

Step 6: Detail Your Operations Plan

An operations plan explains how you will handle the day-to-day running of your business, including details such as staffing, manufacturing, fulfillment and inventory. You’ll need to answer the following key questions:

  • Location: where is your business located, including details such as size of physical property and structures, type of building, such as retail or industrial, zoning restrictions and the associated costs, such as rent, maintenance, utilities and insurance.
  • Production and Quality: What facilities, supplies and equipment will your business need to create your product or offer your service? How will you ensure quality throughout the process?
  • Personnel: What is the organizational structure of your company, including who will handle each key responsibility? What are your initial staffing needs and how will you fulfill them?
  • Vendors or Suppliers: If you need vendors or suppliers, how will you identify these companies and establish relationships?
  • Legal Considerations: In this section, outline any legalities that you will need to adhere to, such as licensing, permits, trademarks, copywrites, patents and special regulations impacting your industry. Also detail the insurance you will need to procure to cover your business against liability arising from any environmental, health or workplace conditions affecting your industry, and bonding requirements if applicable.
  • Inventory: Describe what kind of inventory you will keep on hand, including raw materials, supplies and finished products and the average value of this inventory. Then outline the expected rate of inventory turnover and lead time for ordering new inventory.
  • Capacity: Along with understanding your inventory, you will need to have a good understanding of the capacity of your team and how much of your product you can produce. For example, if Tough Chews can only produce 500 toys per month but their sales team is signing deals to provide 1,000 toys per month, your business will encounter issues.
  • Organizational growth: How will you evolve as your company grows, or unfortunately fails to meet growth expectations. Where will you invest profits to ensure future growth or cut costs to keep your company running?

In this section, you will also provide an accounting of your management team with a detailed summary of their experience and qualifications. Both investors and commercial lenders will consider the strength of this team when evaluating funding opportunities, so it’s best to be as detailed as possible.

Step 7: Explain Your Financials

One of the last steps to creating a business plan is to provide a financial analysis. This critical evaluation will help you determine whether your opportunity is viable and will be used by investors and lenders as you seek funding for operational or startup costs.

As such, it’s important to address the 5 Cs of credit in your business plan:

Capacity: Defined as your business’ ability to repay credit, this is likely the most important of the 5 Cs. You’ll want to provide information on expected revenue, expenses, cashflow as well as detailed steps on how you plan to repay loans. 

Capital. While many businesses will need a cash infusion to get started, it’s also essential that you provide for some of your own startup costs. The financial contributions you make toward your business are called capital and show that you have enough invested in your operation to be dedicated to its success. Be sure to list all of your financial contributions in this section.

Collateral. No business seeks financing with the intent to shirk on their obligation, but if the unforeseen should occur, your financial institution will be looking for some form of assets that can be used to recover what you owe. This could include real estate property, manufacturing equipment or other inventory and supplies.

Conditions. In this section, you will need to explain why your business is likely to succeed, by highlighting all of the prominent factors. These can include the experience of your management team in your selected industry, the market demand, lack of real competitors or any other factors that make it likely for you to grow your business.  

Character. The final C looks past the business opportunity, and instead looks at you as a borrower. While not directly related to your business, it’s best to detail the educational background, business experience and personal credit history of each individual who will be listed on any loan documents.

Step 8: The Executive Summary

Now that you’ve analyzed your opportunity against your strengths, weaknesses and financial capacity, it’s time to finalize your plan by summarizing your goals and plan of action in an executive summary. While this is actually the very first section of your plan, it’s easier to write it at the end, once you have a clear vision of the opportunity.

The executive summary should include your mission statement. This is a short sentence or paragraph—usually no more than 100 words—outlining the what, who and why of your company, as demonstrated by LinkedIn’s mission statement:

“To connect the world’s professionals to make them more productive and successful.”

Outdoor clothing company, Patagonia, also offers an example of a mission statement that successfully describes the company’s goals and culture:

“Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”

Some businesses will also include a vision statement in the executive summary, explaining the future for the organization and what it hopes to become. For example, Southwest Airline’s mission statement focuses on explaining what the company hopes to become and the value it will deliver to its customers:

“To be the world's most loved, most efficient, and most profitable airline.”

Your executive summary should also briefly summarize the following sections of your plan:

  • Your products and services
  • Business objectives
  • Description of the market
  • Justification for viability, including a quick description of your competition and your competitive advantage
  • Growth potential
  • Overview of funding requirements

The Final Step: Putting it All Together

Once you’ve written the sections outlined in the steps above, it’s time to assemble your final business plan, aligning the segments as follows:

  1. Executive Summary
  2. Overview, Products and Services
  3. Service or Product Line
  4. Competitive Analysis
  5. Sales and Marketing
  6. Operations
  7. Financial Analysis

To make compiling your plan a little bit easier, FNBO has created the “Business Plan Working Template” below for you to use. Simply fill out the form and you’ll receive the easy-to-use template on the next page.

While it might take time and considerable energy to create a business plan, it is well worth the effort, providing you with a strategic blueprint as well as a critical document for seeking investors and funding.

Looking for additional support? Learn how FNBO supports small business.

Download your “Business Plan Working Template” by filling out the form below.


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Additional Resources

Resources are available to help you with your business planning. The organizations listed below can offer additional support and guidance should you need it.

  • Small Business Development Center: Your local small business development center offers online resources to assist in business planning, including information on conducting a competitive analysis and writing your plan.
  • SCORE: Gain one-on-one personal guidance from a SCORE mentor to help you optimize your business plan.
  • University of Nebraska Omaha Business Development Center: NBDC helps small businesses find personalized guidance on topics related to business planning, including financial forecasting.

[i] Michael Browne. “Pet Industry Sales in 2020 Surpass $100 Billion for First Time.” Supermarket News, Mar. 29, 2021. Web.

[ii] “Pet Market Sales in the United States from 2011 to 2021, by Category (in Billion U.S. Dollars). Statista, 2021. Web.

[iii] I. Mitic. “15 Insightful Pet Spending Statistics: Americans are Spending More on Pets Than Ever.” Fortunly, Jan. 26, 2021. Web.

[iv] “How Did You Purchase Each of the Following for Your Pet Most Recently?” Statista, 2021. Web.

[v] Clifford Chi. “What Is a Marketing Plan & How to Write One [+Examples]”. Hubspot. Retrieved from

The articles in this blog are for informational purposes only and not intended to provide specific advice or recommendations. When making decisions about your financial situation, consult a financial professional for advice. Articles are not regularly updated, and information may become outdated.