Create a Startup Business Plan in Easy Steps

Start-up group creating a business plan portfolio by laying papers on the determine the flow.

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In addition to creating a business plan to use for getting startup financing, there are other good reasons to create a plan. Use a business plan template to look at all the areas of your most standard businesses. The template will help you make sure all areas are covered, so your startup goes more smoothly.

Small business expert Amanda McCormick suggests looking at five key assumptions to make sure you are ready to start and they will help you be more confident of success.

Probably the most important thing you can do with your business plan is to use it to build your startup business. Small business expert Susan Ward suggests creating goals for each section of your business plan and making an action plan to achieve each one of those goals.

Begin with a General Description of Your Business

The first step is to write a general description of your business. This exercise helps you distill your vision and will focus many other portions of your startup plan.

Type of Business

Describe what type of business you are starting, retail, manufacturing, industrial, construction, or some other type of services. Describe what the business will produce or sell.

Legal Organization

Discuss how the business will be organized. Corporations are legal entities that keep the business and personal liability separated. A limited liability company (LLC) is another way to separate business interests from personal. Other forms include the sole proprietorship, partnership, S corporations, and C corporations. The structure you choose will have legal and tax implications so, be sure you research and choose carefully. You may wish to talk to an accountant as you learn about which form your company will take.

Business Location

Describe the facility you will use for your business, including an address and information about the area. Include the square footage and a layout of the business, if this is available. If your business is in your home, describe the space you will use. Discuss whether this location will be purchased or rented and the terms for purchase or rental.

Licenses and Permits

Include information on local ordinances that pertain to your business, as well as licenses and permits you have obtained or need to obtain.

Management and Employees

Describe the owners and management of the business, along with the expected number and types of employees who will be working in the business. This will be a very brief description; you'll be doing a more detailed management plan in a later section. 

Specific Plan for Your Products or Services


  • A general description of each product
  • The pricing structure of this product and whether you will have different prices for various markets
  • Whether you will produce this product or purchase from a wholesaler to resell to your customers

If you are providing services, describe these services in detail, including:

  • A general description of each type of service and how it will be performed
  • Pricing for the various services you will be providing

Create Your Marketing Plan 

Create a description of your target market. This description should include:

  • A description of your "ideal" customer in terms of this person or company's characteristics, attitudes, and buying behaviors. This description should be as complete as possible.
  • A discussion of the information about the "population" to whom you will be selling, in terms of numbers and demographics (characteristics), like age, sex, education level, income level, and other important information
  • A description of the buying behaviors of your target market

Describe the Competition for Your Products or Services

Create a description of the competition for your products or services within your target market, including:

  • Numbers of competitors
  • Characteristics of your top three competitors
  • Unique points of difference between you and your competitors
  • The ways in which you will emphasize the difference between your products/services and those of your competitors, in terms of delivery, customer service, product differentiation, or other characteristics

Design a Business Marketing Strategy

The next step is creating a strategy for marketing and promoting your company's products or services to this market. Here are some items this marketing and promotion plan should include:

  • The top three ways in which you will initially inform your target market about the existence of your products and services.
  • The types of paid advertising you will use to promote your products and services.
  • The ways in which you will use publicity to promote your products and services.
  • The personal selling methods you will use to promote your products and services.
  • The types of materials (brochures, flyers, web site)you will use to promote your new products and services.

Along with your marketing and promotion strategies, you will need to create a budget for all of these activities, for the first three years of your business.

Necessary Financial Statements for Business Startup

The most important step in the process of creating your business plan is the creation of your financial documents. This section will also take the most time and effort. Here is the information you need to include in your financial plan:

Startup Costs Worksheet

This financial statement should include all of the equipment, supplies, and other items you will need to purchase for the startup, as well as fees and licenses, deposits, initial expenditures for advisers, and costs for creating your business structure.

Beginning Balance Sheet

You will need to prepare a startup balance sheet, showing assets, liabilities, and owner's equity as of the date of the startup.

Month-by-Month Budget for 1st Year

Include a detailed statement (sometimes called a "cash flow statement")showing month-by-month sales and collections, along with all monthly business expenses.

Pro Forma Income Projections

You will need to prepare a pro forma (projected) income statement (P&L) for the first three years of operations, showing income and expenses, along with pre-tax income, tax liability, and after-tax income for each of these years.

Break-Even Analysis

If you are selling products, you should create a break-even analysis, showing the point at which you expect to break even on product sales.

Sources and Uses of Funds

Many lenders request that you include this statement, itemizing all of your financial needs for the business, along with your personal investment in the business, and the financing expected from your lender or investor.

Personal Financial Information

If you take your business plan to a lender or investor, you will also be asked to provide personal financial information. Preparing this information for inclusion in your business plan will help you gain the trust of these individuals. Here is what you should bring with you to all owners for the last three years.

  • Tax returns for the past three years
  • A recent credit report, showing credit score
  • A personal financial statement -- you can use the SBA personal financial statement (PDF) template as a guide
  • A resume or curriculum vitae

Finally, you will need to create a management plan (who's running this company), an operating plan (how is it being run), and an executive summary.

Create a Management Plan

Create a description of the management of your business, including:

Owners and Directors

Describe the backgrounds and qualifications of the individuals who will own the company and make top-level decisions. This may include your Board of Directors if you are incorporating.

Managers and Employees

Describe the key management positions you will require; if you have any of these key positions filled, discuss the qualifications of the people who will fill them. Include an organization chart, showing the top positions and the types of employees who will be working in your organization.

Business Advisors

Include information about the key advisers for your business, including consultants, your CPA or financial advisor, attorney, insurance agent, and banker. If you have not selected some of these individuals, discuss the qualifications you will be looking for to fill these positions.

Create an Operating Plan

 Create a plan for operations for your business, including:

Day-to-day Operations

Describe how your business will operate on a daily basis. What production process will be used? What will you do to market and sell products and services? What hours will you be open?

Accounting and Financial Operations

Describe how your accounting, billing and collections, and other financial operations will be conducted.

Computer and Technology

Include a discussion of the computer and technological systems in your business. Will you operate a website? If so, who will maintain it? What computer hardware and the software will be used? What will your phone system look like? What office equipment will you need?

Create an Executive Summary 

The last step in preparing your business plan is to create an Executive Summary. This document summarizes the business plan information and is placed at the beginning of the document.

Your Executive Summary is important! It may be the only part of your business plan that a lender sees, so make it excellent.

The Executive Summary should be interesting to your reader and provide basic information about the business. In particular, the Executive Summary is intended to summarize your financial needs for startup or purchase. Here are the points you should emphasize in your Executive Summary:

  • Company information, including the company name, when it was founded or purchased when it will open for business, and the location and legal form of organization.
  • A one-sentence description of the products and services of the business.
  • Several sentences that discuss the purpose of the business, its mission/vision, and other information to interest your reader in the business.
  • A general description of your target market, your competitive position, and your unique differences from your competition.
  • A discussion of your specific financing needs, including your own investment in the business, startup/purchase funding, and needs for operating capital during startup.
  • A discussion of your own investment in the business and your expectations of when the business will break even or make a profit.

Now that you have completed writing your startup business plan, one more important task is ahead. 

Read, review, and revise. Make sure your business plan is 100% perfect. 

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