How to Write a Business Plan

Creating a business plan can feel like a huge undertaking when you are starting a new business. And while developing one does require careful thought, studies show that entrepreneurs who have a formal plan are often more successful than those who don’t. Keep reading to see how a business plan benefits you and the details you should include.

Prefer to just get started? Start creating your business plan with the RBC Business Plan Builder.

What is a Business Plan?

Put simply, a business plan is a document that explains to others your vision for your business, the gap in the market your business will fill and the steps you will take to succeed.

Benefits of Writing a Business Plan

Writing a business plan can help you in several ways—here are just a few of the biggest benefits:

  • Provides a roadmap. A business plan requires you to be thoughtful about the direction of your business, consider the goals most important to you and how you will achieve them. Think of it as your step-by-step guide for success!
  • Reveals gaps or risks you need to address. By looking at your business critically, you’ll be able to identify your strengths as well as areas where you may be vulnerable.
  • Shows potential investors, stakeholders or lenders that you’re serious. Attract and engage those who may be interested in your business with all the important information they need to know.

Information to Include in Your Business Plan

Create an executive summary
Describe the current business environment
Outline your marketing and pricing strategies
Describe how your business will operate
Detail your financing and cash flow needs
Describe your team (even if it’s just you)
Identify risks and how you’ll protect your business
Write a conclusion
Include your contact information

Create an Executive Summary

After your cover page and table of contents, include an executive summary. Since this is the first thing readers will see, it should be clear, grab their attention and identify what your business does.

What to include:

  • Your industry, target market and how your business is different from the competition
  • Your business structure (sole proprietorship, corporation, etc.)
  • What stage your business is in
  • Your experience and credentials, as well as your team’s, if applicable
  • Financial projections for the business (or performance to date, if you’re already operating)
  • Calculate your estimated revenue - how to calculate revenue

Tip: Write your executive summary last and keep it to one page. While it’s structurally the first section, it will summarize everything else in your plan.

Describe the Current Business Environment

This should be a detailed history and summary of your business, identifying the product(s) or service(s) you’re offering and how you will solve a problem or need in the market. Be sure to include any pre-market research or testing you’ve conducted that speaks to the viability of your idea.

When you’re starting a business, your bank and potential investors don’t have historical data to review. Your plan must clearly convey your strategy, competencies and the reasons your venture will succeed. (If your business is already established, you’ll want to cover where you started and how you got here.)

What to include:

  • Where you want your business to go—and how you’ll get there. What are your goals? How will you generate sales?
  • What your business does. What needs does your business fulfill? Where will you sell your products or services?
  • Your business set up. How is your business structured? Are there other owners or shareholders?
  • How you know your business will work. What market research or testing have you done? Are there trends?

Tip: Revisit your business idea by asking yourself these 7 key questions or use our business idea checklist to see the steps you may need to take to get to opening day.

Outline Your Marketing and Pricing Strategies

This is your opportunity to explain how you’re going to get customers to buy your products or services. This section involves identifying your ideal customers, your pricing strategy and more.

What to include:

  • Your products, service and unique selling proposition. What are the features of your product or service and what makes it unique compared to what your competitors offer? How will you draw customers away from competitors?
  • Your pricing strategy. How will your pricing be competitive, but still allow you to make a profit? Check out how to decide on a pricing strategy.
  • Your sales and delivery strategy. How will you will generate sales? Will you sell directly to customers or through other businesses? How much will it cost to produce and ship your product?
  • Advertising and promotion strategy. Which advertising and promotion tactics (website, digital marketing, social media, email) will reach your audience most effectively?

Tip: Choose a few channels to do well instead of pursuing all of them at once. That way, you’ll be better able to direct your focus and monitor your progress.

Describe How Your Business Will Operate

The operations section of your business plan should describe what’s physically necessary for your business, as well as any partners who help keep things running smoothly.

This section contains four main categories:

  • Your stage of development. This should highlight what you’ve done to date to get the business operational, then follow up with an explanation of what still needs to be done.
  • The production process. This lays out the details of your day-to-day operations, manufacturing details, inventory, costs, outsourcing and more.
  • Getting products and services to customers. What is your supply chain and distribution strategy?
  • Partners and allies. Who are the people and organizations that support you? Who are key suppliers and vendors?

Detail Your Financing and Cash Flow Needs

Use this section to determine how strong your business is financially. Be realistic about expenses and projected income so you can properly assess your financial health early on and make sure you have enough cash for the first year.

What to include:

Describe Your Team (Even if It’s Just You)

This section should describe your current team as well as anyone you might need to hire to round out your company.

What to include:

  • Skills and strengths. What skills do you and/or your team have that are critical to the business?
  • Management style and structure. How will you manage your team? Who will employees report to?

Identify Risks and How You’ll Protect Your Business

Every business comes with some risk, so it’s better to be prepared for them now rather than be surprised later. Use this section to explore potential risks and how you’ll protect your business.

What to include:

  • Obstacles your business may face. How could the economy, your competition, supply chain or another circumstance affect your business? How do you plan to minimize and handle these and other risks?
  • How you’ll protect against losing market share (new competition). Do you have any agreements or vendors you’ll rely on?
  • How you’ll prevent critical data loss. Outline what you will do to reduce the impact of data loss, such as backing up all computer data regularly, using cloud providers, employee rules on installing software and other policies.
  • How you’ll protect intellectual assets. Will employees sign confidentiality agreements to protect processes, trade secrets and other intellectual property? See How Intellectual Property (IP) in Canada Works.
  • Compliance requirements. What rules, regulations and licences will you need to comply with to operate?
  • Insurance needs. Does your industry require specific coverage, such as professional liability or other insurance?

Write a Conclusion

This is the last thing readers will see, so you want it to be strong. Use your conclusion to reinforce your goals and objectives. If you need financing, clearly state the amount you need and how it will be used. As with your executive summary, your conclusion should be succinct, clear and leave a positive impression.

Include Your Contact Information

Potential investors and lenders need to know how to reach you. Don’t forget to include your business name, contact information, website and social media presence in your plan.

Create Your Plan with the RBC Business Plan Builder

This comprehensive template will guide you through a series of questions, resources and tips to help you write your plan. Best of all, you can go at your own pace and come back to work on it anytime.

Start Your Business Plan

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