Most Business Plans Fail. Here’s How to Write One That Doesn’t + Free Workbook
From Idea to Execution: How to write a business plan that sets you up for success
In previous articles we covered how to get business ideas and evaluate them. So, next up we’re going to dive into everything you need to know about creating a business plan. Learning to take your passion and turn it into a prosperous business is one of the most rewarding experiences you can have.
When starting a business the key factor to building a strong foundation is having a top-notch business plan. There are, however, some common challenges we’ve seen across the board that business owners face when starting a new business, such as:
Knowing where to start
So you have a business idea that seems perfect to you and you’re excited to bring it to life as soon as possible. But how, you find yourself asking…
Sometimes all you need is a proven roadmap showing the way forward from people who have succeeded. Writing the optimal business plan is one thing that can really kick off your start, and we will get to that below.
Properly prioritizing tasks
When you want to start a new business you may have a good idea of where to start and know everything that you have to do, but the biggest issue is figuring out what to do first. Properly prioritizing your tasks can make the difference between managing to start a successful business and getting overwhelmed with ideas without being able to bring any to life.
Mastering task prioritizing by differentiating the urgent from the not-so-urgent tasks and when each one needs to be done is key to building a strong foundation for your business and having a smooth creation process.
Finding the perfect place in the market
When you have gone through the previously mentioned struggles and managed to overcome them you will have everything mapped out and you’ll be ready to go into the business market. But the challenges don’t end here.
The next crucial step you will go through is finding the perfect place in the market. To do so you will have to ask yourself a series of questions like:
Who is the target audience, what is their location, how do I reach them?
What methods should I use? Social media, email marketing, advertising?
You might feel overwhelmed by all the questions but don’t stress too much, there is a solution to make everything better and we will discuss it very soon.
Making sales
After you have everything figured out and you are ready to launch your business you might feel scared that people will not appreciate it and you will end up making no sales. This is something most business owners go through in the beginning and it can be quite stressful.
The key to making sales is making sure that you are reaching the people who need your products/services and you market them in a way that appeals to them. Location is a very important aspect when it comes to this, your audience will not just come to you, you have to go to them and reach them by their preferred means.
For example, a younger audience would be better reached through a strong social media approach while a more old-school one would appreciate you having a professionally built website. Depending on what you are selling, you will have multiple things to consider when you want to start making sales. Having a well-built business plan will make things so much easier and help you reach those highly desired sales.
Overcoming self-doubt
One of the most terrifying challenges that you will experience as a new entrepreneur starting a business is overcoming your self-doubt and keeping your limiting beliefs from getting in the way of your success.
A big part of being successful is overcoming your doubt, even just temporarily, so that you can make the first action and then the second, and the third, and so on. Having a business plan can also help you feel more confident and overcome your self doubt easier.
So let’s dive into how to make the best business plan to ensure your business’ success.
Table of Contents
1. What is a Business Plan and Why Do You Need One?
Business Plan vs. Business Model: Key Differences
How a Business Plan Helps Avoid Costly Mistakes
Why Investors and Lenders Care About Business Plans
2. The 7-Step Framework for Writing a Business Plan
Executive Summary – Defining Your Business in a Nutshell
Company Description – Who You Are and What You Do
Market Analysis – Understanding Your Industry and Competitors
Organization & Management – Structuring Your Business for Success
Products & Services – What You Offer and Why It Stands Out
Marketing Strategies – How You Plan to Attract and Retain Customers
Financial Plans & Projections – Planning for Profitability and Growth
3. Why You Should Create a Business Plan
Testing Your Idea’s Viability Before Investing Time & Money
Avoiding Common Startup Struggles with Proper Planning
Setting Clear Goals to Keep Your Business on Track
Reducing Potential Risks and Managing Uncertainty
Using a Business Plan to Secure Funding from Investors or Lenders
4. Three Golden Rules for Writing a Strong Business Plan
Keep It Clear and Concise
Use Visuals to Strengthen Key Points
Highlight What Makes Your Business Stand Out
5. Common Mistakes to Avoid When Writing a Business Plan
Being Unrealistic About Market Size or Revenue
Writing a Weak or Confusing Executive Summary
Making the Plan Too Long or Overly Complex
6. AI-Powered Business Plan Writing: How to Use AI to Speed Up the Process
AI Prompts for Writing a Business Plan from Scratch
Using AI for Market Research and Competitive Analysis
Automating Financial Forecasts and Revenue Models
How AI Can Help You Perfect Your Business Pitch
7. Business Plan Checklist: Ensuring You Cover Every Key Detail
Defining Your Business Idea & Market Opportunity
Crafting an Effective Executive Summary
Structuring a Financial Plan for Growth & Stability
Developing a Scalable Marketing and Sales Strategy
Reviewing & Refining Your Plan for Clarity and Impact
8. Resources to Help You Write a Business Plan
Free Business Plan Templates & Tools
Recommended Market Research & Competitive Analysis Tools
Sample Business Plans for Different Industries
9. FAQs: Answering Common Business Plan Questions
What’s the Difference Between a Business Plan and a Pitch Deck?
Do All Small Businesses Need a Business Plan?
How Often Should You Update Your Business Plan?
10. Turning Your Business Plan into Action + Workbook
What Is a Business Plan and Why Do You Need One?
If you’re excited about your new business idea you may feel like wanting to dive straight into doing the work but that can make you miss some important steps or end up being overwhelmed by everything and even give up on the whole process. The purpose of building a business plan beforehand is to have everything mapped out so that when you start working on your business you know exactly what, how, and when to do everything.
All the challenges that we mentioned before can be easily overcome by following a well-built business plan. So why not make your life easier and avoid running into problems in your business creation process?
Maybe the concept of a business plan is unfamiliar to you and seems daunting but it is not as hard as you might think to develop a good plan. A business plan is like a roadmap that outlines your goals and the strategies you will use to achieve them.
Whether you’re launching a startup or a small business, having a well-structured business plan is essential. For startups and small businesses, it makes the whole creation process a lot smoother and can help attract investors, and maintain focus and drive growth.
7-Step Framework to Writing a Business Plan
The length of a business plan varies from business to business but we advise you to gather all the basic information into a 15 to 25 page document. A well-written business plan format consists of:
1. Executive summary
A brief explanation of what your company does, why it will be successful and what motivates you to bring it to life.
2. Company description
A description of the products and services your business offers or plans to introduce, including details on pricing, product lifespan, and unique consumer benefits.
3. Market analysis
An explanation of the current state of the targeted industry and your competitors that includes details like where your business fits in, the types of customers you plan to target, and how you plan to get market share from competitors.
4. Organization and management
An explanation of how your business will be structured and run.
5. Services and products
A description of what you will sell or the services you will offer.
6. Marketing strategies
An outline of your business plans to attract and keep customers including a description of the distribution channels that you will use to deliver your products or services.
7. Financial plans and projections
A brief outline of your financial targets and estimates for the first year in case of a new business or financial statements, balance sheets, and other relevant financial information in case of already established businesses.
Why Should You Create a Business Plan?
If you are still not convinced that it’s worth the effort to build a business plan here are the top 5 reasons why it will make your life much easier:
It will make you see if your idea is viable.
First and foremost, creating a business plan will help make your idea more real so you can see for yourself if it is a viable idea for a business. We all like to think that our ideas are the best but the reality is that sometimes we might not think things through when imagining things in our heads and it may all seem better than in reality.
This is a hard truth that maybe you will have to face but it should not discourage you. After all, it is better to see the flaws in your idea when you start creating it on paper rather than putting effort, time and money into starting a business directly for it all to go to waste. By creating a business plan and seeing any flaws in your idea that might arise while writing it can actually help you refine your idea and make it even better.
On the other hand, if your idea is truly a great one then by creating your business plan and seeing that it can work out you will feel more confident in your success and that will empower you even more to bring your business idea to life.
It will help you overcome different common struggles.
All of the common struggles that we mentioned above can be overcomed more easily by having a business plan. Having a step-by-step plan that you can go to whenever you feel unsure of what to do brings a great sense of security and confidence.
It takes some effort to create your plan in the beginning but then you can just smoothly go through all the steps and avoid running into difficulties along the way.
It makes it easier to set and reach important goals.
As a new business owner, much of your time will likely go towards managing daily tasks. Once your business is already up and running, making the time to set clear goals and milestones can become a challenge, with all that you will have going on to sustain your business.
Having a business plan is incredibly valuable because it gives you the opportunity to define key objectives in advance, clearly mapping out where you want to be in the future. Making sure to establish both short-term and long-term goals will help you keep your business on track for growth.
It helps reduce potential risks.
To protect your business from unexpected challenges it is best to do a thorough research before starting. In the process of creating a business plan you can identify potential risks which will allow you to address them proactively and keep them from influencing the development of your business.
Many new businesses fail to be successful because of insufficient capital, lack of market demand, poor pricing strategies, rapid and unsustainable growth, or strong competition. Financial struggles are one of the most common pitfalls so it is crucial to develop a clear revenue strategy. This is something that you will have to include in your business plan that will help manage your growth, lower risks, and support your long-term success.
It can help you get funding.
Since funding your business can prove to be a struggle when starting you might consider getting a loan, attracting angel investors, or securing venture capital. Having a solid business plan is essential, no matter the kind of funding you are looking to get.
Investors look for much more than a quick pitch, they want to see thorough research that shows them your product/service is a viable investment, and a well-thought-out marketing strategy with a strong focus on probable revenue.
When developing your business plan make sure to carefully assess the capital you require to launch and sustain your business. Outline the amount needed and how it will be used clearly, as this will prove to be crucial for securing and managing your funds effectively.
By now you’re probably more and more inclined to create a business plan to bring your business idea to life after learning about all the benefits so let’s dive straight into how to make the best plan.
Three Golden Rules for Writing a Business Plan
1. State everything clearly
A very important rule to consider when writing your business plan is to write everything as clear as possible from the start. Many new entrepreneurs fail to give a clear explanation of their product or service idea from the get-go.
It’s not uncommon to have to read through over 1000 words of an executive summary to have a clear understanding of the business’ purpose. That’s too much effort for the reader which can make possible investors give up. And even if you aren’t looking for investors, you should be able to say what your business does in just a few words.
A great tip to avoid being unclear in your plan is to explain your concept to someone who doesn’t know it and ask this person to tell you what they would say to other people to describe it and use that as a guidance too.
Being clear in your business plan will also help you go through the steps required to start your business more easily.
2. Show what you are saying
Another common mistake found in business plans is overcomplicating explanations with lengthy descriptions filled with jargon and buzzwords. It is important to communicate your idea thoroughly but make sure to keep it clear and concise too.
Adding visual components can often be far more effective. A clear sketch or image can instantly describe your concept and its impact, making it easier for others to understand.
Comparing your approach to existing solutions through side-by-side visuals is also a great idea. Even something as simple as two images can communicate what might take paragraphs to explain.
3. Say why your business stands out
This one is most important if you are looking to get investors interested in your business. Whether or not your executive summary creates excitement is one of the key factors that possible investors judge when going through your plan but this is often overlooked.
A major issue in most summaries is the lack of compelling reasons for starting your business, the emotional core that drives the business idea. If you define and communicate what drives you into business effectively it can give you a huge advantage to your competitors.
Don’t Make These Mistakes
When making a business plan there are some common mistakes many entrepreneurs make, such as:
Not being realistic
Being unrealistic is one of the most common mistakes people make. A solid business plan should be based on facts, not just best-case scenarios. Not asking yourself tough questions, doing proper research, and assessing real market conditions can lead to having unrealistic expectations.
Not writing a strong executive summary
A well-written, informative and clear executive summary is key to attract investors if you plan on getting funding for your business. A well-written summary should fit in two pages and convince readers to keep going.
Making it too long
For starting a small business, a well-structured plan should be 5-10 pages long. Avoid unnecessary lengthy sentences and keep things clear and concise. This will help you follow the plan more easily and spark the interest of potential investors.
AI Prompts to Help You Write a Business Plan
With AI being so advanced these days it can be a great help when creating a business plan, especially if you have no idea where to start. Here are some prompts that you can give ChatGPT to help you make the best business plan:
Writing the full business plan:
“I’m starting a [type of business] in [industry]. Can you help me outline a complete business plan, including market research, financial projections, marketing strategy, and potential risks?”
Getting a step-by-step guide to writing your plan:
“Can you create a step-by-step guide for writing a business plan, including key components like mission statement, competition analysis, revenue model, and growth strategy?”
Creating your executive summary:
“I need a detailed executive summary for my business plan. My company offers [product/service], targets [audience], and solves [problem]. Can you craft a compelling and concise summary that attracts investors?”
Doing market research and competitive analysis:
“I'm launching a [type of business] in [industry] and need to conduct market research. Can you help me analyze my target audience, competitors, industry trends, and potential market gaps?”
Planning your finances and revenue model:
“Can you guide me in creating realistic financial projections for my business plan? I need help estimating costs, setting pricing, forecasting revenue, and determining break-even points.”
Getting funding for your business:
“I need to secure funding for my business. Can you help me refine the funding section of my business plan, including investment needs, funding sources, and a compelling case for investors?”
Business Plan Checklist
Preparation
✅ Define your business idea clearly
✅ Identify your target market
✅ Research competitors and industry trends
✅ Establish short-term and long-term business goals
✅ Decide on your business structure (sole proprietorship, LLC, corporation, etc.)
Executive Summary
✅ Business name and location
✅ Business mission statement
✅ Brief explanation of products/services
✅ Summary of target market
✅ Key financial projections and funding needs
Business Description
✅ Industry overview
✅ Explanation of business model (e-commerce, retail, service-based, etc.)
✅ Unique selling proposition (USP)
✅ Short-term and long-term business objectives
Market Analysis
✅ Identify ideal customer demographics
✅ Research market size and growth trends
✅ Conduct a competitive analysis
✅ Define pricing strategy
✅ Identify market entry barriers
Organization & Management
✅ Define business structure (LLC, corporation, sole proprietorship, etc.)
✅ List key team members and their roles
✅ Define responsibilities for each team member
✅ Create an organizational chart (if applicable)
✅ Plan for future hiring needs
Products & Services
✅ List all products/services offered
✅ Define customer pain points your product/service solves
✅ Establish pricing strategy
✅ Outline production or service delivery process
✅ Identify potential product/service expansions
Marketing & Sales Strategy
✅ Define key marketing channels (social media, SEO, paid ads, email marketing, etc.)
✅ Outline a customer acquisition strategy
✅ Define sales strategy (direct sales, partnerships, referrals, etc.)
✅ Identify customer retention strategies
✅ Develop branding and messaging guidelines
Financial Plan
✅ Estimate startup costs (equipment, inventory, marketing, legal, etc.)
✅ Define revenue streams
✅ Create a budget and expense forecast
✅ Develop a profit and loss projection for the first year
✅ Determine break-even point
✅ Define funding requirements (if applicable)
✅ Identify sources of funding (loans, investors, grants, personal savings)
Operational Plan
✅ Outline day-to-day business operations
✅ Identify key suppliers or vendors
✅ Define logistics and fulfillment strategy
✅ Establish customer service protocols
✅ Plan for scaling operations in the future
Risk Management
✅ Identify potential risks to the business
✅ Develop contingency plans for major risks
✅ Secure necessary business insurance (liability, property, workers' comp, etc.)
✅ Plan for crisis management and emergency response
Final Review & Execution
✅ Review and refine each section for clarity and completeness
✅ Proofread for grammar, consistency, and professionalism
✅ Seek feedback from a mentor, advisor, or industry expert
✅ Prepare business plan presentation (if seeking funding)
✅ Develop an implementation timeline
✅ Regularly review and update the business plan as needed
Next Steps
✅ Register your business and obtain necessary permits/licenses
✅ Open a business bank account
✅ Set up accounting and bookkeeping systems
✅ Launch initial marketing campaigns
✅ Monitor financial performance and adjust as needed
By completing this checklist, you ensure that your business plan is comprehensive, actionable, and ready for execution.
Business Plan Resources
Here’s our recommended list of business plan templates:
Miro’s collection of business plan templates
Venturekit’s AI-generated templates
Bplan’s 500+ examples of business plans for different industries
PandaDoc’ collection of business plan templates
HubSpot’s collection of business plan templates
FAQs
What’s the difference between a business plan and a pitch deck?
As you already know, a business plan is a comprehensive document that outlines your business’ goals, strategies, market insights, and financial prospects. It serves as a strategic guide for long-term decision-making while also demonstrating your business’s viability to possible investors.
On the other hand, a pitch deck is a brief, visually engaging presentation designed to quickly spark the interest of possible investors. It highlights key aspects of your business, including the problem it solves, your solution, market potential, revenue model, and team. The primary goal is to secure meetings and get the attention of venture capitalists, angel investors, or judges in startup competitions. Small businesses don’t need pitch decks!
What’s the difference between a business plan and a business model?
A business model describes how your business creates value for your customers while making a profit. It usually includes key elements such as the value proposition and pricing strategy. In contrast, a business plan is a more detailed and complete roadmap for the business’ objectives and the strategies it will use to achieve them.
Turning Your Idea into a Successful Business
By now, surely you know how valuable a well-written business plan is in turning your idea into a successful business. Starting a business can feel overwhelming, but by creating a well-built business plan you can overcome all common struggles with more ease. If you follow everything that we shared in this article the process of starting your new business will be as hassle-free as possible and you will set yourself up for long-term success.
Our Free Gift to You: Business Plan Workbook
Get it over here 👇
👏👏
Great one!