How To Write a Business Plan in 10 Steps (2026)

Business plans do more than pave the way to secure loans or investments. A great business plan can also help entrepreneurs clarify business concepts, identify potential roadblocks, pinpoint target markets, devise growth plans, and more.

Researching and drafting your plan forces you to think through all the aspects of your business. At the end of the process, you’ll have a clear vision of your business idea and a concrete course of action.

This article will explain what a business plan is and why you should make one, plus offer a step-by-step guide to help you write your own.

What is a business plan?

A business plan is a strategic document that describes a company, its goals, and how it plans to achieve them. It typically covers areas such as market analysis, operations, and financial projections.

The US Small Business Administration (SBA) describes a business plan as a road map for how to structure, run, and grow a business. It helps owners plan each stage of launching and managing the company.

Lenders and investors may also use a business plan to evaluate a funding request. Even if you aren’t seeking outside funding, the plan can guide business decisions as the company grows.

How to write a business plan in 10 steps

Here’s your step-by-step guide to creating each component of a business plan:

1. Choose your business plan format and template
2. Think about your audience
3. Write a company overview
4. List your products and services
5. Perform a market analysis
6. Devise a marketing plan
7. Provide a logistics and operations plan
8. Make a financial plan
9. Draft an executive summary
10. Update and revise your business plan

1. Choose your business plan format and template

Decide on a format that fits your purpose:

• A traditional business plan is generally better for lenders and investors. 
• A shorter lean plan works for developing an idea or sharing essential information with employees and potential partners.

Next, choose a business plan template. Shopify’s free template includes traditional and lean formats, along with examples that show what to include.

AI tools like ChatGPT can help draft or refine sections of your plan. The Federal Reserve Banks’ 2026 Small Business Credit Survey found that 46% of employer firms were using AI. Among AI users, 83% used it for writing or marketing and 51% for planning or analysis. However, 46% identified accuracy as a top challenge. 

Treat AI output as a first draft, verify its claims, and replace generic language with details related to your business.

2. Think about your audience

Before you start writing the contents of your business plan, put yourself in the mind of your audience. What are they going to be looking for in a strategic business plan? For example, new hires might care more about your brand values, while investors might care more about your financials and points of differentiation in the market.

Imagine their possible objections or concerns. Get in front of those potential roadblocks by proactively addressing them in your plan.

3. Write a company overview

Your company overview should answer two essential questions: “Who are you?” and “What do you plan to do?” When a reader finishes this section of your business plan, they should have a clear idea of your company.

Here are the components you should include in your company overview:

Business name, location, and legal structure

Introduce your business by name, and give any relevant backstory on your business name. Note your headquarters location, any satellite offices or remote work, and where it will do business (if different from the first two). Finally, note your legal business structure. For example, is your company a sole proprietorship? An LLC? An S corp?

Business concept, model, and industry

Briefly describe what your company does and indicate your business model. There are five main types: 

• Business to consumer (B2C)
• Direct to consumer (DTC)
• Business to business (B2B)
• Consumer to consumer (C2C)
• Consumer to business (C2B)

Finally, note your industry and if you’re operating in a niche market. Will you disrupt an entrenched industry with cutting edge technology or new innovative business practices? Or will you create a new category of product within an industry?

Competitive advantage

A competitive advantage is what your small business has that others don’t. That could be lower prices (cost leadership strategy), higher quality (differentiation strategy), or branding that appeals to a particular group (focus strategy).

Mission and values

Craft a concise mission statement that explains why your company exists and what it aims to do. These are public-facing, idealistic statements, and they’re often just one to two lines long.

Then, outline your brand values, asking yourself, “What impact do I want my business to have on the world?” and “How do I want my company to treat its customers and employees?”

Short- and long-term business objectives

What do you hope to achieve in the next year, and what do you hope to achieve in the next one to five years? Make your objectives achievable by using the SMART goal-setting framework: 

• Specific: The goal is clear and actionable. 
• Measurable: The goal has a specific metric to measure again (for example, increasing TikTok engagement by 5%). 
• Attainable: The targets are realistic and achievable. 
• Relevant: The goals fit into your business’s overall mission. 
• Time-bound: There’s a clear deadline for your goals. 

Leadership and organizational structure

Introduce key members of your management team (even if that’s just you as a solopreneur) with brief descriptions of credentials and professional backgrounds. If you have employees or partners, list each person’s roles and responsibilities along with their salaries. Detail your company’s organizational structure, too.

4. List your products and services

Describe each product or service you sell or plan to offer. Explain what it does, who it serves, and its price.

Include your pricing strategy and explain how your costs, customers’ willingness to pay, and value proposition informed each price. If you charge more than competitors, state what justifies the difference.

Describe where each product sits in its life cycle and how you expect demand to develop. Include upcoming launches and any products you plan to update or discontinue. If research and development is involved, explain the work underway and the outcome you expect. Note any intellectual property that protects the product.

Finally, explain how you source or produce what you sell. List key suppliers or manufacturing arrangements and note any sourcing risks that could interrupt availability. For example, a dropshipping business would explain how its supplier fulfills orders and manages inventory.

5. Perform a market analysis

A market analysis tests demand for your product, defines your intended audience, and identifies your competitive position. 

Finding customers was tied for the top first-year challenge in Shopify’s Q4 2025 Survey of Store Owners, reported by 36% of respondents. A market analysis shows how your business plans to reach those customers.

Here’s what to cover:

• Analyze market size, growth, and trends. Detail the size of your market and any forecasted growth. Note any technological, economic, and social trends.
• Look for market opportunities. Identify market gaps or new opportunities linked to growing trends.
• Identify your target market. Use market research to substantiate your target market, including demographic info (age, gender, socioeconomic status, location, and education), purchasing habits (if they buy similar products and how often), and decision drivers (the pain points and values that guide their purchasing decision).
• Estimate market size. Perform an analysis of your total addressable market to approximate the size of your target market; this clarifies how big of an opportunity there is for your startup business.
• Conduct a competitive analysis. Analyze your competitors’ products, pricing, marketing strategies, and market share (use Shopify’s competitive analysis template and AI tools to streamline this research).
• Conduct a SWOT analysis. List your business’s strengths, weaknesses, opportunities, and threats (SWOT).

6. Devise a marketing plan

Your marketing plan explains how customers will discover your products and why they will buy from you. Build the plan around your target market. Choose channels based on where those customers spend time and how they research products. Before investing in a platform such as TikTok Shop, verify that your audience uses it.

Marketing was the top first-year challenge in Shopify’s Q4 2025 Survey of Store Owners,* reported by 37% of respondents. 

Include the following:

Product positioning and brand messaging

Explain your product’s value proposition and how it differs from competing options. Define the central brand messages you’ll use to communicate that value. Include proof that makes each claim credible.

Acquisition channels

Identify how you plan to attract customers through channels such as paid advertising, content, public relations, and social media.

Early-stage businesses can also build acquisition around referrals and communities. In Shopify’s Q4 2025 Survey of Store Owners,* 53% of merchants cited word of mouth as their most common first-year growth strategy. Explain how you’ll request referrals, collect customer reviews, or participate in communities relevant to your market.

Specific platforms and tactics

Describe how you’ll use each channel. If you choose search marketing, for example, identify the customer searches you plan to target and the content you’ll create for them.

Tools and technology

Assign ownership for each part of the plan. An Intuit SMB MediaLabs survey conducted in March 2025 found that 54% of small businesses placed advertising decisions with a dedicated team or team member. Business owners made those decisions at 37% of firms.

Shopify stores can plan around these native tools before adding third-party software:

• Customer segments. Group customers for targeted campaigns.
• Shopify Forms. Capture contact details and build subscriber lists.
• Shopify Messaging. Send email and SMS campaigns.
• Marketing automations. Trigger messages after customer actions.
• Shopify Campaigns. Track campaign traffic, orders, and sales.

Add third-party tools when your plan requires functions these tools do not provide.

Goals and evaluation

Define what each campaign must achieve and how you’ll measure it. Assign a metric and review schedule to every goal. For example, measure a retention campaign by its repeat customer rate rather than social media engagement.

7. Provide a logistics and operations plan

Your logistics and operations plan explains how you will source, produce, store, and deliver your products. It also identifies the resources required at each stage.

Document backup arrangements for any process that could interrupt operations. If you rely on one supplier, for example, explain how you would respond if that supplier could no longer fulfill your orders.

Include the following:

Suppliers

Detail where you will purchase finished products or raw materials. Name your primary suppliers and note whether you plan to import or export goods. Include backup sources for critical products or materials.

Production

Explain how raw materials or components become finished products. Describe the facilities, equipment, and production capacity involved. If another company manufactures your products, define its role in the process.

Shipping and fulfillment

Explain where you will store inventory, how orders will be packed, and which carriers or fulfillment partners you will use. Define who is responsible for each step and how you will handle delayed or failed shipments.

For eligible locations and carriers, Shopify Shipping lets merchants buy, print, and manage discounted shipping labels from the Shopify admin. If you plan to use it, find the carriers available for your fulfillment location and account for packaging and label costs.

Inventory management

State how much inventory you plan to hold and how you will track it. Set reorder points based on expected demand and supplier lead times. Explain how you will address excess stock or products at risk of selling out.

Shopify’s Q4 2025 Survey of Store Owners* found that inventory management challenges were associated with lower adoption of financial management practices and less frequent financial reviews. Your plan should define how inventory records feed into cash flow planning and financial reporting.

Shopify merchants can use Shopify Flow to create inventory and fulfillment workflows. Examples include low-stock alerts, reorder notifications, and workflows triggered by changes to an order’s fulfillment status.

8. Make a financial plan

A financial plan shows how your business earns, spends, and manages money. It gives lenders and investors a basis for evaluating your projections and funding request.

Shopify’s Q4 2025 Survey of Store Owners* found that cash flow challenges were associated with lower adoption of financial management practices and less frequent financial reviews. Include a schedule for reviewing actual results against your projections.

If you’re applying for an SBA loan in the United States, Canada, or Mexico, you’ll need to refer to the North American Industry Classification System (NAICS) to find your business’s NAICS code. Lenders and government agencies use this classification to determine your industry. You can find yours with the SBA’s NAICS lookup tool.

The required level of detail depends on your audience and operating history. Established businesses should include:

• A balance sheet. A document that records the company’s assets and liabilities.
• A cash flow statement. This tracks cash entering and leaving the business.
• An income statement. This reports revenue and expenses over a set period.

Your plan should also include financial projections for the next five years. Base them on documented assumptions and update them as actual results become available.

Revenue and sales projections

Estimate the revenue you expect the business to generate. New businesses can base projections on market research and planned sales activity. Existing businesses can use historical results.

Expense forecasts and burn rate

Forecast how much the business will spend and when those payments are due. If the company is not yet profitable, calculate its burn rate and how long its current cash will last.

Business capital

State how much capital the business currently has and where it came from. Include any additional capital you plan to raise.

Funding request and use of funds

Specify how much funding you need, the type of financing you’re seeking, and how you will use the money. The Federal Reserve Banks’ 2026 Small Business Credit Survey found that 60% of employer firms had applied for financing in the previous 12 months. Out of those applicants, 22% received none of the amount requested.

Supporting documents for your appendix

Collect documents that substantiate your financial statements and projections. These may include credit histories, contracts, and letters of intent.

9. Draft an executive summary

The executive summary appears first in your business plan, but write it last. Once the rest of the plan is complete, you can pull the most important information from each section: 

• Mission statement
• Business concept
• Business objectives
• Product or service
• Competitive advantage
• Target market
• Financial projections
• Funding request

Keep the summary short enough for a reviewer to understand the business before reading the full plan. 

Tailor the funding request to the investor or lender reading the plan. Determine how much capital you’re seeking and how you plan to use it.

10. Update and revise your business plan

Update your business plan as the company and its market change. Established businesses may review it annually. New or fast-growing businesses may benefit from quarterly reviews.

Compare your projections with actual results during each review. For Shopify stores, Shopify Analytics provides sales, traffic, and fulfillment data that can inform revisions. You can change the date range and compare performance across periods, such as:

• Quarterly. Review business goals, forecasts, and marketing performance.
• Annual. Review finances, market, products, SWOT, and strategy.

Quarterly reviews can address recent variances. Annual reviews provide an opportunity to reconsider the assumptions behind the full plan.

Changes that warrant an earlier review

A major disruption may require you to revise the plan before the next scheduled review. US Chamber of Commerce Foundation research published in 2026 found that 94% of small business leaders were confident they would completely recover from a disaster or major disruption. However, only 31% had a disaster plan and 20% had a disaster budget.

External triggers include:

• New competition. A competitor enters the market or gains share.
• Changing demand. Customer interest shifts away from your current offer.
• Supplier disruption. A key material becomes unavailable or more expensive.
• Regulatory changes. New tariffs or rules alter your costs.

Internal changes also warrant a review:

• Headcount growth. Hiring changes your costs and operating capacity. In February 2026, NFIB reported that 33% of surveyed small business owners had job openings they could not fill. A net 12% planned to create jobs over the following three months.
• New products. A new offer changes your sales and operational assumptions.
• Financial changes. New funding or a material change in revenue alters your outlook.

Red flags that weaken a business plan

Use this checklist before sharing your plan with lenders, investors, or partners:

• Unsupported projections. Check that every revenue forecast traces back to market data, historical performance, or a documented assumption.
• Goals with no measurement. Give each objective a specific target and deadline. “Increase sales” is vague. “Increase monthly sales by 10% within six months” is measurable.
• Missing competitive context. Name the businesses customers already buy from and explain what makes yours different. 
• Unproven customer demand. Back claims about customer interest with research or sales data. Product enthusiasm alone does not establish demand.
• Unchecked AI content. Verify every AI-generated claim, figure, and source, and remove any projection you can’t substantiate. The SBA recommends having another person review AI output to confirm that it represents the business accurately.

Business plan formats and types

There are two main business plan formats: traditional and lean. According to the SBA, traditional plans provide extensive detail, while lean plans summarize the business’s key elements.

Which should you use? Choose a traditional business plan for bank loans, SBA loans, venture capital, or other formal stakeholders. Use a lean plan for internal planning, idea validation, employee onboarding, or an early-stage business that may pivot.

Traditional business plans

A traditional business plan provides detailed information about your market, operations, marketing strategy, and finances. It may also include an analysis of your competitors and target customers.

Use this format when applying for financing or presenting the business to investors. Lenders and investors commonly request traditional plans because the additional detail helps them evaluate the business and its funding request.

Lean business plans

A lean business plan is a condensed, often one-page version of a traditional plan. It captures the central parts of the business model and leaves out details that the intended reader does not require.

A lean plan works well when validating an idea, revising an early-stage business model, or giving new employees an overview of the company. Its components commonly include:

• Key partnerships
• Key activities
• Key resources
• Value proposition
• Customer segments
• Customer relationships
• Sales channels
• Cost structure
• Revenue streams

You can also present these components in a business model canvas. This one-page visual makes the business model easier to review and revise. 

What a business plan helps you achieve

Investors and lenders use business plans to evaluate funding requests, but raising capital is only one reason to write one. A plan can also expose weak spots in your business strategy before launch and identify areas where you need more expertise. 

“Laying out a business plan helped us identify the ‘unknowns’ and made it easier to spot the gaps where we’d need help or, at the very least, to skill up ourselves,” says Jordan Barnett, owner of men’s leggings company Kapow Meggings.

A business plan can help you:

Plan strategically

Writing a business plan can help you grasp the amount of time, money, and resources you’ll need to build and grow your company. Surfacing these needs helps you adequately prepare for the future. A business plan also includes detailed financial projections revealing what will and won’t be financially possible in the future.

Evaluate ideas

When you research and write a business plan, you’ll have to consider key elements like market conditions, production logistics, and expenses, which helps determine whether or not your business concept is currently viable.

If you have multiple business ideas, drafting a rough business plan for each gives you the opportunity to examine which ones have the highest chances of success, allowing you to focus your time and energy on those with the most potential.

Clarify your selling points

Writing a business plan requires you to clarify your competitive advantage and brand pillars. These details help you pitch your company to both investors and consumers.

This effort lays the groundwork for your future brand strategy and marketing copy. If you plan to collaborate with other brands, you can also use these business plan elements to persuade other companies to partner with you, especially if you share similar missions and values.

Prepare for funding conversations

A business plan gives lenders and investors the information they need to evaluate a funding request. For a business loan, the SBA recommends preparing a business plan, an expense sheet, and financial projections for the next five years. These documents help explain how much funding you’re seeking and how you plan to use it.

The Federal Reserve Banks’ 2026 Small Business Credit Survey found that 60% of employer firms had applied for financing in the previous 12 months. The most common reasons were covering operating expenses (56%) and pursuing an expansion or new opportunity (46%).

Review your plan before meeting with a funder so you can explain your projections, funding amount, and assumptions clearly. For investor conversations, be prepared to discuss your company’s valuation and the ownership stake you’re offering.

What to do after creating a business plan

After creating a business plan, check its assumptions and use it to guide your next decisions:

1. Verify your assumptions. Check your sales forecasts, costs, and market estimates against current data. Make sure the financial projections reflect the pricing and hiring plans described elsewhere in the document.
2. Request outside feedback. Ask an accountant to review the financial section or contact an SBA counselor for general guidance. Give the reviewer questions about unclear sections and unsupported assumptions.
3. Tailor the plan to its audience. Emphasize repayment capacity when approaching a lender. For investors, focus on growth potential and expected returns. Remove confidential details the reader doesn’t need.
4. Gather your supporting documents. Collect the records that substantiate your claims. For a loan application, prepare an expense sheet and five years of financial projections. Place contracts and other evidence in the appendix.
5. Assign the first actions. Give each short-term objective an owner, deadline, and measurable result. Break larger goals into milestones so you can track progress before the final deadline.
6. Set a review schedule. Compare actual results with your projections each quarter if the business is new or changing quickly. Conduct a full annual review once operations are more stable.

*Based on a 2025 survey of 500 Shopify merchants conducted in English across Australia, Canada, the United Kingdom, Ireland, New Zealand, and the United States. Respondents were established merchants with two or more years on the platform. Results reflect the experiences of this specific sample and may not be representative of all merchants.