A business plan is a strategic document that defines a company’s goals, outlines operations, and presents a clear path for growth. It demonstrates how businesses will generate value, attract investors, and sustain long-term success.
Keep reading to learn the key components of a business plan and how to structure and format each section effectively in Microsoft Word.
Ten key components of a business plan
Every business plan should follow a clear structure. A well-structured business plan helps investors, lenders, and partners quickly understand your vision and the steps you’ll take to achieve it. Explore the key components of a business plan and how to format your document to include the most essential details.
1. Executive summary
The executive summary sets the tone for the business plan. Keep it to one page, highlighting what the business does, what makes it unique, and the problem it solves. Share a mission, vision, and value proposition in simple terms that help investors quickly understand your business idea. End with a short explanation of how your solution stands out from competitors and what customers can gain from it. If you’re still not sure how to start an executive summary, use a fully customizable executive summary template in Word.
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2. Company description
The company description introduces a business to potential investors or partners and helps them understand the company mission, history, and goals. Include a mission statement, brief overview of how the company started, and measurable objectives for the future. Use the SMART framework (specific, measurable, achievable, realistic, and time-bound) to make goals clear and credible.
3. Market research and target audience
Once the foundations of the business have been established, it’s time to identify the target customer and persona. This section of the document should determine the potential target audience and the size of target market you’re looking to interest.
4. Competitive analysis
Identify and study competitors already serving your target market. Compare market leaders and local businesses to understand how they attract and retain customers. Include details such as their advertising channels, customer service performance, sales approach, pricing strategies, and third-party reviews to highlight market opportunities.
5. Products and services
Use this section to outline what the business offers. Explain the core benefits of the products or services, how they address customer needs, and what differentiates them in the market. Include key details about the production process, business model, and any intellectual property protections that enhance the company’s advantage.
6. Marketing and sales
After you have clearly identified the business’s offering, address the identified target market and customer segments. Specifically outline how the business intends to attract new and retain existing customers, including growth opportunities and advertising platforms.
7. Business financials
A business financial plan should always include budget preparation and running costs to guide decision making, sustain growth, and set financial goals. Include key financials like profit margins and debt levels within this section, so that potential investors or lenders can have a clear understanding of the financial health of the business and easily identify risks involved.
8. Management and leadership
This section outlines the key people responsible for running the business. Highlight the leadership team’s expertise, qualifications, and experience, showing how their skills align with the company’s goals. Include a clear overview of team roles, reporting structure, and any anticipated hiring needs or related onboarding costs.
9. Funding requests
The funding requests section outlines how much capital the business needs to meet its objectives. Include a detailed financial forecast that highlights funding requirements, projected returns, and repayment expectations. For transparency, present both best-case and worst-case financial scenarios to help investors understand potential outcomes.
10. Appendix
The appendix strengthens the business plan by adding supporting documents and references. It may include certificates, professional licenses, registrations, patents, trademarks, and intellectual property. Customer contracts, purchase orders, and external resource links can also be added to give investors additional context and credibility.
Business plan formatting guidelines
Draft business plans in a professional font and size: when creating a business plan, choose an easy-to-read font like Aptos, Arial, Calibri, or Times New Roman. Select an appropriate font size for the body of your text, like size 11 or 12, and create headings in no larger than size 14 or 16 font sizes.
Format documents with the right spacing and margins: keep business plans professional and consistent throughout the document with a 1.15 or 1.5 line spacing. Keep all text to the left side margin of the Word document.
Keep to an appropriate length: on average, a business plan should be between 10 to 20 pages long. Make sure to keep business plans brief but concise, covering all essentials in an orderly manner.
Proofread before saving: don’t forget to double-check your business plan for any spelling and grammatical errors. Use the AI-powered tool Microsoft Editor inside Word to easily improve and find any corrections, refinements, and similarities in your document.
Use correct naming convention: save the document in a format that’s easy to find, share, and read. For example, we recommend using the following formula, ‘[business full name] - [business plan] - [month and year]’.
Export business plans in the right file format: export and share business plans hassle-free as a PDF or DOCX from Word. These versatile file formats are easy to send via email and the web. There are also link-based sharing options if you would like to share a link instead of downloading a document.
Now you know how to write a business plan that highlights goals, strategies, and financial vision. Use the business plan to communicate the company’s direction and attract potential investors. Create a business plan in Microsoft Word and keep refining the plan as business goals evolve.
Frequently asked questions
What are different types of business plans?
There are many different types of business plans, all with different purposes, including traditional, lean startup, internal, strategic, operational, feasibility, growth, and exit strategy business plans.
What is the difference between a business plan and a strategic plan?
A business plan’s main priority is to educate and grow a business, while a strategic plan is a long-term direction and vision strategy. The main difference between a business plan and strategic plan is the timeframe. A business plan focuses on the short-term 1-3 years, whereas a strategic plan focuses on the long-term 3-5 years or more.
Should I write a business plan in the first person?
It is acceptable to write a business plan in the first person, for example, “we will”, “I plan to”, or “our goals are.” Make sure to maintain a professional tone throughout your business plan, even though it is written in the first person.
How often should a business plan be updated?
Update a business plan regularly to keep it aligned with current goals and performance. Review it annually to refine financials and long-term objectives, quarterly to adjust marketing and short-term targets, and monthly to track KPIs, cash flow, and inventory.
