Most people think that writing a business plan has to be hard. I’m here to tell you that it doesn’t have to be.

In fact, it’s possible to write your initial business plan in less than an hour. After all, you’re always thinking about your business and the strategies you’re going to use to grow, so getting those ideas down on paper shouldn’t be hard—it can even be an enjoyable experience.

Listen to Peter and Jonathan discuss this article and try to make their own business plan on the second episode of The Bcast, Bplans official podcast:

Click here to subscribe to The Bcast on iTunes »

A new kind of business planning

A business plan no longer needs to be a long document that takes weeks to write and research. It’s not something that you print, bind professionally, and then stick on a shelf. You probably only need a formal, traditional business plan if you’re seeking a bank loan or outside investment—you’ll be expected to provide one in those instances.

But for most businesses,  business planning should be a simple, ongoing process that helps you discover your ideal business strategy. It’s a lot less about putting together a document, and more about frequently reviewing your strategy and financials so you can respond quickly to challenges and opportunities. Plus, just doing the process of business planning has been scientifically proven to make you more successful—and there are a lot of other reasons why having a business plan is important as well.

I encourage you to embrace a concept called Lean Planning—it has all the benefits of traditional business planning without the pain and hassle of creating a long business plan document.

You’ll start with a short overview of your business—a Lean Plan. It’s your business strategy, written in brief, with just the essential business plan components, so that you can update quickly and easily as you learn more about your business, your customers, and yourself. It’s also a great starting place for making sure your amazing business idea is really viable.

What to include in your Lean Plan

When you’re writing your Lean Plan, channel Twitter and try and keep each business plan section as short as possible:

Value proposition

One sentence that describes the value you provide to your customers. If you were composing a tweet to tell people about your business, what would you say? With only 140 characters, describe what you do and what makes you unique. Your goal is to communicate the value you are providing to your customers in a way that they will understand.

Market need

What problem does your business solve for your customers? If you aren’t solving a problem for your customers, you are going to have a hard time building your business. If you’re not sure, try talking to your potential customers and ask them what they like about your products or services. Why do they choose you over other alternatives?

Your solution

How do you solve your customer’s problem? What products and services are you offering? Describe your product or service and why it’s better than the alternatives. Essentially, if someone asked you what you sell, what would your answer be?

Competition

What products and services do your customers choose today instead of yours? How are you different? What makes your business and products better than the alternatives that are out there?

Target market

Who is your ideal customer? Describe your ideal customer. Who are they? Be as specific as possible—age, gender, shopping habits, and so on. If you target different types of people, create market segments for each group.

Sales and marketing

How do you market your products and services to your customers? What are your sales channels, or the places where you will sell your products? If you’re selling online, your online store is a sales channel. If you also have a physical store, that’s another sales channel. What will you do to market your business?

If you plan on buying advertising, list the types of advertising you plan on doing here. Remember, different target markets might need different types of marketing activities to get your product in front of them.

Budget and sales goals

How much do you think you will sell and how much is it going to cost you to make your product or deliver your service? What other key expenses will you have when your business is up and running? What sales goals do you need to reach for your business to be a success?

Don’t sweat the details to start and just think in broad strokes to get a rough idea of how your business will work financially. You can refine the details later.

Milestones

What have you achieved so far and what are your major goals for the next few months or years? This will help you stay on track and meet your goals. Make sure to assign milestones to people on your team so you have real responsibility and accountability.

Team

Why are you and your business partners the right people to make your company successful? Even if you’re starting out with just you, write a few quick bullets about why you’re the right person to run this business. If you need to hire key people in the future, list those positions as well, even if you don’t know who specifically will fill those positions right now.

Partners and resources

Do you need to work with other companies or organizations to make your company a success?

Funding needs

This is optional; if you need to raise money for your business, how much do you need and what will you use it for? Even if you’re starting your business with your own savings or using credit card debt, it’s a good idea to plan on how you will use the funds until you start making sales.

Start with your Lean Plan—save the detailed business plan document for later

As you think about each of the areas above, don’t think “business plan.” Instead, imagine that you are having a conversation with someone at a cocktail party and you’re explaining your business to them in simple terms.

It’s much better to approach this as though you’re “pitching your business.” After all, the idea of pitch first, plan second is a best practice in business and is a much faster and more effective path to success than the traditional business plan.

Here’s an example of a Lean Plan I built in 27 minutes:

I’ve always wanted to own a bike shop, so here’s a Lean Plan that I built in 27 minutes, well short of one hour. As you can see, a Lean Plan doesn’t have to be complicated, and I still had time left over to do another one and try another business idea on for size.

I admit, I cheated a little bit and used LivePlan to create this Lean Plan which made the process easier, but you can create your own Lean Plan just as easily using our free template or just by writing down your notes for each business plan section in a document.

The key is to remember to keep each business plan element brief. Don’t add more than is necessary.

Get started

If you’re ready to start working on your own Lean Plan, download our free template and get started right away. Use markers or sticky notes to jot down your ideas quickly. If you want an online version that you can share with business partners, give LivePlan a try.

And, if you need a more traditional business plan, you can download our free template or browse through over 500 complete business plans. If you decide to leave it up to the pros, try LivePlan’s business plan consulting—you’ll get an MBA-written, long-form business plan in five business days that will be perfect for bank loans and investors.

Do you think you can use this format to plan your business faster and more efficiently? Share your thoughts with me on Twitter @noahparsons and feel free to ask questions, too. I’ll make sure to answer them as they come up!

Editor’s note: This article was originally published in 2018 and updated for 2021.

• A traditional business plan takes too long to write.
• Most people won’t even read it from cover-to-cover.
• It’s often outdated by the time you finish writing it.
• It doesn’t lend itself to frequent and easy updating—and that’s the core of the problem.

Historically, entrepreneurs have taken months to craft detailed plans without even gathering feedback from potential customers. They’ve viewed business planning as a single hurdle to get their business up and running or a thick wad of paper to shove across a banker’s desk in order to get the funding they need.

These business plans end up as just a collection of guesses and assumptions, instead of a proven roadmap for growth. 

But planning is still critical, even if the business plan might be broken. Studies have shown that businesses that set goals and track their progress grow 30 percent faster than those who “just wing it.” Furthermore, even established businesses grow faster when they have a plan. 

So what if I told you there was a better way to do business planning? One that lets you adjust and refine your plan as you gather more information about your business and your customers.

A method known as Lean Planning.

Welcome to the Lean Planning method 

Lean Planning is a 4-step process that helps you discover a business model that works and manage your company successfully.

Here’s the Lean Planning process:

1. Create a Lean Plan
2. Test the plan
3. Review your results
4. Revise your plan

These 4-steps replace the traditionally lengthy business plan with a 20-minute planning process. This ensures that you are taking small steps, reviewing your results, and creating incremental improvements—all while reducing your risk of failure.

It’s also simpler and faster than writing a traditional business plan. And, possibly the greatest benefit is that this method can benefit both startups and established businesses. 

If you’re a startup

Lean Planning helps you quickly figure out if your idea is any good and what you need to change to build a viable business.

If you’re an established business

Lean Planning works even if you’re already up and running. It helps you continually refine and tweak your strategy while measuring your progress toward your goals. After all, planning is about making better management decisions, not about producing a thick document that sits in a drawer.

Read on to learn how to make the lean model work for you by creating your own Lean Business Plan.

Step 1: Create a Lean Plan

The Lean Planning methodology starts with a one page Lean Plan that you can create in 20 minutes.

That’s right—one page. Lean Planning is a simple methodology and your Lean Plan should be simple, too. You can download a Lean Plan template and fill it in as you follow the steps below.

If you choose to build your Lean Plan in LivePlan, our business planning tool, it’s called a “Pitch” there, but it’s the exact same thing.

What to include in your Lean Plan

• Strategy: What you’re going to do
• Tactics: How you’re going to do it
• Business model: How you’re going to make money
• Schedule: Who is doing what and when

Let’s dive into each section.

Your business strategy

Your business strategy is simply an overview of what you want to do and who your customers and competitors are. Start by identifying the problem you are solving for people and follow up by explaining your solution to this problem.

The problem you’re solving

Businesses exist to solve problems for customers. Their products and services fill a need or satiate a desire. If all you have is a solution that is in search of a problem, you’re going to have a hard time building a successful business. So, start with the other side of the equation and focus on how you can help your customers solve a problem.

Start small with just one or two sentences or a few bullet points to identify the problem you are solving. Do the same thing to describe your solution.

Your ideal customer

Now, quickly describe your target market. Who is your ideal customer? If you know how many potential customers are out there, great. If you’re in the early stages of fleshing out your business idea, don’t worry too much about detailed market research. Instead, focus on defining your ideal customer—who are they, and what are their key attributes?

Your competition

Finally, create a shortlist of your competition. How do your potential customers solve their problems today?

That’s it. A business strategy doesn’t have to be complicated with Lean Planning. It’s just a few bullets points that describe the essence of your business: what you’re doing and who you’re doing it for.

Tactics

The next section of your Lean Plan is a short outline of your business tactics. This is just an outline of how you’re going to make your strategy happen. You’ll be thinking about sales, marketing, the team you might need, and any partners or outside resources you’ll need to leverage.

Your sales strategy

Start by thinking through your sales strategy. Are you selling online or building a physical store? Maybe both? Or, perhaps your product will be sold in stores owned by other companies.

Your marketing strategy

Next comes your marketing strategy. How are you going to reach your customers? How do they find out that you exist and that you solve their problem?

Your team

If you need to build a team to grow your business, who are the key people that you’ll need to hire? If you’re an existing business, who are the critical employees that run the company and execute your strategy?

Key partners and resources

Finally, think about other businesses that you might need to work with to make your strategy happen. Are their key suppliers or distributors that you’ll need to have relationships with?

Remember, this is a Lean Plan, so each of these sections should just be three to five bullet points each.

Schedule

Now it’s time to build a schedule for your Lean Plan. Lean Planning is all about getting things done, so including a schedule is one of the most important things to include in your Lean Plan.

If you’re a startup

Your next step is to get out from behind your desk and go talk to your potential customers (I’ll go into more detail on this in a moment). Your goal will be to verify that you’ve defined a solid strategy. To that end, a startup’s schedule should include things like conducting customer interviews, sending out surveys, researching physical locations, interviewing potential suppliers, and so on.

If you’re an established business

Your schedule will probably be focused on specific business milestones that are related to executing your strategy and implementing your tactics.

It’s critical to have accountability here. Your schedule should have dates and people responsible for completing each task.

Finally, make sure to include a time to regularly review your Lean Plan. You’ll want to review and revise this plan frequently, so having a regular review point is critical. I recommend a monthly review cycle, but reviewing more frequently is fine, too.

Business model

Even if you have a problem that’s worth solving, a solid solution to the problem, and a target market that needs your solution, you don’t have a business unless the numbers work out. You need a business model that works. The last component of your Lean Plan is a basic forecast and budget to ensure that a great idea can actually lead to a great business.

Yes, forecasting and budgeting do mean looking into the future, and no one knows the future (at least I don’t!). But, it doesn’t have to be as difficult as it sounds.

Putting together some basic, bottom-up sales forecasts and a basic budget for expenses will quickly tell you if you have a business model that works—one that can create a viable business that will pay the bills.

At this stage, it’s important not to paint an incredibly rosy picture of your financial prospects. Instead, the sales forecasts should be as realistic as possible. Assume that not nearly as many people as you think will show up in your store. Assume that your website won’t get mainstream press coverage.

With this “realistic” forecast, do you still have a viable business? Can you turn a profit? If you can only be successful with incredibly high volumes of customers, you may need to take a second look at your pricing, expenses, and other aspects of your business model. Or, make sure that you get the kind of funding that’s needed for large marketing and PR campaigns.

You can get started on your Lean Plan right away by downloading our free template. Your Lean Plan will fit on one page and you’ll be able to complete an initial draft in under an hour—that’s much faster than writing a traditional business plan.

Step 2: Test the plan

Now that you have your Lean Plan in hand, you’re ready to start putting the plan into action to see if your ideas will work.

Depending on your business stage, you’ll do this in different ways. If you’re a startup with an unproven idea or an existing business that’s considering a new strategic direction, your next step is to validate the ideas in your Lean Plan.

Your Lean Plan is just a set of assumptions about a business. Ask yourself:

• Do the target customers actually have the problem that you think they have?
• Does the solution you’re proposing actually solve their problem?
• Do your target customers want to pay for your solution? How much?

Reducing risk is your goal in the early stages of starting a business

Starting a business is full of risks. There are just so many unknowns, and it’s incredibly risky to just build your business based on a set of assumptions about your target market, their problems, and how they’ll react to your solution.

Your Lean Plan is a really just a set of educated guesses that need to be answered and then revised on a continuous basis until most unknowns are removed. That’s how you reduce risk.

So, you need to take the very simple, but very challenging step of actually talking to your potential customers.

Look at your first version of your Lean Plan as a set of assumptions that need to be proven true or false and then go back and revise your assumptions as you go. Refining your plan so that it’s a collection of facts instead of guesses can be the difference between a successful business and a failure.

If your business is up and running, focus on implementation

For more mature businesses that already know a lot about their target customers, the goal of the plan is to help guide implementation. In this situation, use a Lean Plan to get everyone on the same page, set goals, and manage the business.

Step 3: Review your results

Both Silicon Valley startups and Main Street small businesses need to know how they are doing. Which means  Are they growing according to plan? Why or why not? If not, what changes need to be made? Should the plan change?

For new startups

If you’re just getting started and don’t have many (or any) metrics to track yet, you should be reviewing the results of your customer interviews and any other information that you’ve gathered that would change your strategy. Perhaps you’ll be refining your solution or even tweaking the definition of the problem you are solving. Perhaps you’ll refine your marketing and sales strategy.

For established businesses

Beyond tracking key financial metrics such as cash, sales, expenses, accounts receivable, and accounts payable, businesses must track the other key metrics that are critical to their success. These other key metrics might be website visits, foot traffic in the store, tables turned in a restaurant or any other core number that drives business success.

Reviewing your results regularly is key to better management and success. These metrics should be reviewed at least monthly in a regular plan review meeting with key business partners and employees. This is when you refine your plan and your pitch if necessary and track your ongoing action plan.

Step 4: Revise your plan

Lean Planning is a process, not just a document. It’s is all about continuous improvement. You’re quickly defining a strategy, experimenting to see if that strategy works, reviewing the results, and revising the plan before you start again.

Lean Planning is never finished. It’s simply a process for running your business better, more efficiently, and setting you and your team up for success.

What if you need a more detailed business plan?

There may be a time when you need a more detailed business plan. There’s nothing wrong with that. Some people might want to read it, you may need to submit a full plan for funding and you might even want to document your strategy in more detail. 

Your detailed business plan will be born from your Lean Plan. The ideas in your Lean Plan will transfer from bulleted lists to sentences and paragraphs. You’ll add more detail to your sales and marketing strategy, your pricing strategy, and perhaps your manufacturing plans and distribution strategy.

For a step-by-step guide to creating a detailed business plan, check out our guide.

Lean Planning templates and tools

To support Lean Planning, we built LivePlan. It’s a planning tool that helps you build a one-page Lean Plan, collaborate with business partners, and build solid financial forecasts. When you’re up and running, you can easily track your progress against your goals just by connecting your accounting software to LivePlan. It’ll do all the hard work of crunching the numbers and give you the reports you need.

Of course, you can also do all of this on your own if you’d prefer. We have all the templates and tools you need to do it yourself—all for free. We also put together a list of our best Lean Planning resources all in one place.

If you’ve been putting off writing your business plan, you’re not alone. Writing a traditional business plan can seem like a daunting task, and lots of entrepreneurs avoid it for this reason.

But it doesn’t have to be. An easy way to start is with just one page.

What is a one-page business plan?

The one-page business plan is a simplified version of traditional operational plans that focuses on the core aspects of your business. While it may be a shorter business plan, it still follows the structure of a standard business plan template and serves as a beefed-up pitch document. 

There’s really not a lot of difference between a single-page business plan, a Lean Business Plan, and a good executive summary. 

The only real possible difference is that a single-page plan must absolutely fit on one page in a font (11 or 12 pt type) that most people can still read. A Lean Plan can be slightly longer but still uses summaries and bullet points, while a traditional executive summary can extend to two or three pages—and it will usually use full sentences rather than bullets.

However, by starting with a one-page plan, you give yourself a minimal document to build from, making it much easier to elaborate or expand sections into a longer-form business plan. 

The benefits of a one page business plan

There are plenty of good reasons why having a business plan is important for your business’s success—just going through the process is proven to help businesses grow faster, for example. These same reasons extend to the one-page model, but it includes a handful of additional benefits to keep in mind.

Simple presentation — Investors don’t have lots of time to read and one page can get the idea of your business across quickly and succinctly. 

Approachable pitch — Having a one-page plan makes it easier to share, even if you’re not pitching in front of investors. You can quickly send it as an email attachment, throw it into a slide deck and even have it printed off as an easy read for interested parties.

Focus on what’s important — It’s actually a very good exercise to trim it down to the absolute minimum, and doing so forces you to trim needless words and communicate your business idea clearly, with minimal clutter. 

What to include in your one page plan

Here at Bplans, we’ve developed a formula that helps you quickly put together all the critical information that you need to define the strategy for your business. 

Some people like to call this your “business model canvas,” but it’s really the same thing. Here are the eight necessary sections to include when developing your one page business plan. 

Note: This is a short business plan model meaning you won’t have room for lengthy paragraphs of information. Try and keep each section limited to 1-2 sentences or 3-4 bullet points to assure you stay within one page. It’s always easier to add more later rather than cutting back from lengthy sections.

1. 1. The problem: A description of the problem or need your customers have and any relevant data that supports your claim.
   2. The solution: Your product or service and how it solves the problem.
   3. Business model: How you will make money, including the costs of production and selling, and the price that customers will pay.
   4. Target market: Who is your customer and how many of them are there. It’s best to define your ideal customer by starting with a broad audience and whittling down using the TAM, SAM, SOM model. This also gives investors a clear picture of your thought process and understanding of the greater consumer market.
   5. Competitive advantage: What makes you different from the competition and how will this lead to greater success, customer loyalty, etc. 
   6. Management team: The management structure of your business, including currently field roles, ideal candidates, and any management gaps.
   7. Financial summary: Key financial metrics including profit and loss, cash flow, balance sheet, and your sales forecast. This section may be the most difficult part to condense, so try and focus on standard business ratios to get the point across. You can always share broader financial information if requested.
   8. Funding required: Have what funding you need front in center to clearly display what you need from investors.

Another best practice when developing the one-pager is to focus on the strengths of your business. If you currently have a stronger market analysis or financial projections, add more to those sections. Since this will most likely serve as a pitching tool, you’ll want to lead with the winning aspects that set your business and planning apart from the pack.

How to write a simple one page business plan

If you feel like you have writer’s block, or you don’t know where to start, I have a couple of suggestions.

First, you can start with a detailed, step-by-step set of instructions for building a business plan on one page. You’ll be able to do it in under an hour.

Second, you can download our free, simple business plan template and use that as a starting point.

Third, you can try out LivePlan’s Pitch feature. Just answer the questions it asks and click “publish,” and you’ll have a professionally designed, single-page business plan that is easy to share and covers everything an investor wants to know. Another good option is to follow my colleague Caroline Cummings’ advice and write your business plan like it’s a series of tweets (seriously, it works).

The content of your plan is by far the most important thing—don’t stress about the design. Think carefully about what you are trying to communicate. Too many companies spend time focusing on the presentation and graphical display of their plans when what they are saying and how they are saying it is really the most critical aspect of it all.

Don’t get me wrong—you don’t want to have an ugly presentation. But focus on the content, because it’s more important than anything else, and visuals can be reviewed and revised at a later date.

Remember: The executive summary is usually your introductory communication with investors, so it will be your first impression. Investors will use this document to get an understanding of your communication skills as well as your ability to think critically about your business. You should spend more time on this part of your plan than on any other section.

Writing your business plan on one page will be an extremely useful tool to help you refine your business strategy quickly and easily. It might even be all the business plan that you need.

But, if you do need to expand your business plan beyond one page into a more full-fledged plan that includes more details on your company and your target market, you can follow our step-by-step guide for writing a detailed business plan, download our free business plan template, or review any of our more than 500 complete sample business plans. These resources are all free, and if you have questions, please reach out on Twitter @Bplans.

Editor’s note: This article was originally published in June 2012, and was updated in 2021. 

Whether you’re developing a traditional business plan or just a Lean Business Plan, remember that direct costs matter.

Sourcing and fulfillment (which are direct costs) are the other side of the “what do you sell” question: How do you build that product? How do you fulfill that service? What does it cost you? Where do you buy the components? They’re critical factors for any business. 

In a Lean Plan, sourcing and fulfillment costs might be merely implied in the direct costs section of the forecast, or in a few bullet points in tactics, or operations. In a full formal plan, it might be included in the section on the operations. If you’re using LivePlan, you’d add sourcing and fulfillment as a topic within the operations section in the Execution chapter of your plan. Keep in mind, not every business will need a sourcing and fulfillment section in their plan, so only include it if you need it. 

What are sourcing and fulfillment?

Sourcing or fulfillment are descriptions of where you get the products you sell (sourcing); how you fulfill the services you sell (fulfillment); or how you package, assemble, and ship products you sell online (fulfillment).

For products, sourcing commonly covers how you purchase from distributors, vendors of raw materials, suppliers, and so forth. For services, fulfillment commonly includes how you work with subcontractors, drivers, analysts, research sources, and so on. Fulfillment also applies to assembly, packaging, and shipping for online product businesses.

However, whether or not you include a section on sourcing and fulfillment in your business plan depends of course on the exact nature of your business.

Sourcing is important for most product businesses, but maybe not for the craftsperson selling handmade goods or hand-painted greeting cards at a local flea market. Fulfillment is important for most service businesses, but maybe not for the self-employed management consultant who does the work alone. It’s important for some product businesses—those that take orders and ship, or those that assemble products, might have both sourcing and fulfillment.

Use your common sense as you decide what works for your plan. If you are developing a more traditional plan, then the title of that section is normally “Sourcing” for products, “Fulfillment” for services, and “Sourcing and Fulfillment” if you sell products and services, or if the products you sell need to be assembled and shipped, or if you need to deal with packaging and shipping for online orders.

None of this is an exact science or strictly required. Use your common sense to decide whether or not this section applies to your business and your business plan.

Manufacturing businesses

Sourcing is likely to be important to a manufacturing company. Your vendors determine your standard costs and hold the keys to continued operation. Analyze your standard costs and the materials or services you purchase as part of your manufacturing operation. Include spreadsheet lists, bills of materials, and standard cost breakdowns. Include unit economics.

You may have additional documentation you can copy and attach as appendices, perhaps even contracts with important suppliers, standard cost breakdowns, bills of materials, and other information.

Where materials are particularly vital to your manufacturing, you might discuss whether second sources or alternative sources are available, and whether or not you use them or maintain relationships with them. This is also a good time to look at your sourcing strategy, and whether or not you can improve your business by improving your product sourcing.

Product sales, retail, distribution, resale

The bookstore needs to buy books. The restaurant needs to buy raw foods. The hardware store needs to buy everything it sells to have the goods on the shelves. So, resellers should explain how they work with distributors if they do.

They can also call out the most important distributors, and explain the discounts and margins involved.

Fulfillment for products includes assembly, packing, and shipping

Some product businesses include a fulfillment function related to assembly, packing, and shipping.

For example, one of the early strategic decisions we took at Palo Alto Software was not to assemble physical products and pack and ship from our offices. Instead, we used an outside vendor, called a fulfillment house, that stored components (disks, boxes, packing materials) and did assembly and shipping on-demand, for a fee. That allowed us to focus on the software without having to manage those fulfillment functions.

The per-unit costs were higher, but we didn’t have to worry about capital costs for shrink wrapping equipment or fixed costs of employees and managers.

Services have sourcing and fulfillment too

Sourcing is not just for product-based companies. For example, a professional service company, such as an accounting practice, medical practice, law practice, management consulting firm, or graphic design firm, is normally going to provide the service by employing professionals. In this case, the cost is mainly the salaries of those professionals.

Other service businesses are quite different. The travel agency provides a service through a combination of knowledge, rights, and infrastructure, including computer systems and databases. A restaurant is a service business whose costs are a combination of salaries (for kitchen and table waiting) and food costs.

How to include sourcing and fulfillment in your plan

For a traditional business plan, “Sourcing,” “Fulfillment,” or “Sourcing and Fulfillment” will be a section in the product description. Include details, such as bill or materials, or distributor or vendor relationships, as needed to serve your business plan purpose.

For a Lean Business Plan, you might have sourcing and fulfillment metrics and milestones included in your metrics and milestones lists. Important decisions and tradeoffs related to sourcing and fulfillment might be included as bullet points in the list of tactics, or even in some cases in which your decisions in this area might be included in milestones and metrics or tactics.

Editor’s note: This article was originally published in 2016. It was updated in 2019. 

First, why are you writing a business plan? Usually, the reasons fall into one of the following areas:

• For idea validation: You have a business idea and just need to get all the details on paper so you can start to really understand whether you have a good business model.  
• For a bank: Do you need a formal business plan to give to your bank as part of your small business loan application?
• For investors: Are you seeking funding for your startup from angel investors or venture capitalists?
• For strategic reasons: Does your company need an internal roadmap for growing and managing your business?

How you format your plan and how detailed it will depend on why you’re writing it and who will look at it when you’re done. If you’re looking to validate an idea, start with a very simple one-page pitch. If you’re seeking funding, you’re probably going to need a traditional, formal business plan. If you want to use your business plan as a tool for strategic management and growth, write a Lean Plan so you can update it easily and often.

Here, you’ll find a checklist for writing each of these types of plans, so you can choose the one that fits your particular needs.

If you have any questions, be sure to reach out to us on Twitter @Bplans and we’ll be happy to point you in the right direction.

1. The simplest business plan: A One-Page Pitch

A One-Page Pitch is the simplest business plan you can write.

There’s not much difference between it and the executive summary in the standard business plan—though of course, as the name implies, it should fit onto just one page.

You can use this version of the business plan to validate your idea (more on that here), or to provide investors with a clear and succinct introduction to your business.

You can also use it to get all of your ideas onto paper and distill your thoughts into the essential business plan elements before you begin writing a standard plan. You can create a One-Page Pitch in LivePlan, use this free template, or follow along with the checklist below.

One-Page Pitch checklist:

• Describe your business in one sentence (what do you do, and who do you do it for?)
• Describe the problem your potential customers have
• Describe your solution to the problem—this is your product or service (how does it solve your customer’s problem?)
• Explain who your target market is and how large it is
• Describe your competitive advantage (talk about how your customers are solving their problem currently as well)
• Describe how you will sell to your customers (will it be directly, or via a storefront, distributors, or a website?)
• Describe what marketing activities you will use to attract customers
• Detail your business model—this is how you will make money (what are your revenue streams?)
• List your major initial expenses—startup costs (don’t go into a lot of detail here—it’s early days at this point)
• List your primary goals and milestones that you want to accomplish over the next few months
• Outline your management team and any people you want to hire to help you launch your business
• List any partners and resources you need to help you launch

2. A Lean Plan: A nimble tool for growing your business

Lean Planning is a methodology that will help you grow a better, smarter business a lot faster.

While you can use Lean Planning to help you produce a business plan document, you should think of Lean Planning as a tool, rather than a path to a finished product. If you’ve heard of a business model canvas, a Lean Plan is really a better, more useful version of that idea.

The goal here is to write a business plan that has more detail than a one-page pitch, but that’s still quite brief. It should be a truly useful tool that you review and update regularly. It’s a great framework for reviewing your financial goals and progress on a regular basis. For more resources on Lean Planning, check out this guide.

Lean Business Plan checklist

• Write a One-Page Pitch (as outlined above—this is how every Lean Plan begins)
• Test your idea (get out and talk to your potential customers—make sure you’re on the same page as they are)
  • Do they have the problem you think they have?
  • What do they think of your solution?
  • What’s the best way to sell to them?
  • What marketing tactics will work? What won’t work?
• Review your results (you will likely do this throughout the life of your business)
• Review your financial performance if you’re already up and running
• Revise your plan based on what you’ve learned and set new milestones
• Set your sales forecast and create a budget for your expenses
  • Build a sales forecast
  • Build an expense budget
  • Build a cash flow forecast
• Once you’re up and running, be sure to hold regular plan review meetings to ensure you stay on track

3. The standard business plan

For most people who are pitching a bank or an investor, a standard business plan will be the required format for the business plan. This is the version of the plan these investors are most familiar with, and the version that will give them the most information. It contains all the needed business plan components that banks and investors expect.

If you want to increase your chances of getting funded, follow this format. Check out our definitive guide on how to write a business plan. You can also download a free business plan template here, or use LivePlan to walk you through writing an investor-ready business plan.

• Define the opportunity
  • Go into more detail here about the problem and why it is worth solving
  • Discuss your solution to the problem (your product or service)
  • Talk a little more about how you validated your idea and what your future plans look like
• Write the market analysis summary
  • Include more detailed information about your market segmentation and your target market segment strategy, key customers, future markets, and the competition
• Outline how you’ll execute the plan
  • Discuss your marketing plan and your sales plan
  • Include information about your location, facilities, technology, equipment, tools, key metrics, and important milestones
• Write the company and management summary
  • Write about the organizational structure of your company, the management team, any gaps in the team, and your personnel plan
  • Include information on your company’s history, as well as information about ownership
• Write the financial plan
  • Arguably one of the most important business plan components, this will include:
    • Profit and loss statement (here’s a free P&L template)
    • Cash flow statement (here’s a free cash flow statement template)
    • Balance sheet (here’s a free balance sheet template)
    • Sales forecast
    • Personnel plan
    • Business ratios and/or a break-even analysis
• Write the appendix
  • This is the spot for anything that’s important, but that would otherwise bog down someone reading your business plan for the first time; include extra detail, charts and graphs here
• Write an executive summary (this goes at the beginning of the plan document, but we recommend you write it last)
  • Talk about the problem you are solving, what your solution is (your product or service usually), the market, the competition, and some key financial highlights

Whatever your reasons are for writing a business plan, you should know that it’s scientifically proven that planning makes you more successful. If you’re looking for more information on how to write a business plan, check out our business plan writing guide.

If you have any questions about writing your business plan, or about what format to use, be sure to reach out to us on Twitter @Bplans.

In the Lean Startup methodology, one of the most important elements is getting out of the building. You must conduct client interviews, website usage tests, and maybe even set up a small PPC campaign to figure out whether or not the market is interested in you offering.

In this article, I’ll give a quick overview of the best practices for validating your business idea in use today. Ideally, you will be able to use the results for your business plan and your pitch deck to convince investors and other business plan recipients that your idea is worthy of investment.

The importance of speaking with potential customers

When you validate your idea in a way that allows for a dialogue with your potential clients, you get the chance to pivot your offering and revise the market launch strategy before investing and (perhaps sinking) too many resources in the wrong place.

Idea validation and Lean Planning

Idea validation is a practice which has been gaining more and more popularity as Lean Startup and Lean Planning methodologies have changed the way new business concepts are conceived.

However, it goes beyond the Lean Planning process: The lessons learned from validating your idea can also be applied for investor pitching and market entry strategy. Idea validation should not just aid you in conceptualizing, but actually yield a hard return in other aspects of the startup process.

Therefore, always try to embed lead-capture opportunities in your surveys, interviews, and test sale posts where possible or else create the chance for some kind of follow-up.

After all, you should be talking to a portion of your target audience when validating—why not attempt compiling a batch of test users or test buyers while you’re already at it?

Startup validation tactic 1: Interviews and getting out of the building

This is an old one—we’ve mentioned it on Bplans before—and so I will focus on giving a few recommendations about the actual process to complement the knowledge already amassed.

Ask open-ended questions

Interviewing as a Lean Planning validation tactic is commonly practiced to yield quality feedback (versus quantity feedback).

One very important rule when compiling your interview script is to, therefore, have very few yes/no questions and many open-ended questions. These ideally do not give anything away about the solution you had in mind, but should rather give you more insight into your prospective client’s take on the problem your solution should solve, as well as consumption habits.

Avoid collecting biased responses

Interviewee bias is real, and so ideally the person you’re interviewing shouldn’t necessarily know that you’re considering starting a business.

If they’re aware of your plans, will give you all kinds of positive indicators that will lead to you falsely validating the idea for yourself. Then, when the day comes, you’ll be entering the race on a dead horse—because perhaps no one was ever really going to spend money on your solution.

Everyone just wanted you to feel good and confident about your business endeavor because you’re such a likable person, and in consequence, you now have a big problem. Not a good place to begin from!

Startup validation tactic 2: Social media surveys

The beauty of social media surveys (for all of the founders who either have their own following, or are somehow able to garner enough support to hijack other channels or groups for a serious social gauging) is that they’re quick and easy to execute.

Collect qualitative data wherever possible

Social media surveys easily give fairly reliable quantitative data from actual people. That being said, some survey situations even allow for a little bit of qualitative data.

Popular, for example, is the small text field for comments, suggestions, or even audio memos which usually concludes the survey. Facebook surveys can, by the way, be set to allow for participants to add answer fields by themselves, a feature that can sometimes also deliver valuable insight.

Focus on asking the right thing the right way

When designing social surveys, make sure you’re asking the right thing of the right people in the right way. Social channels are as agile as they are flaky—one wrong word can make all the difference between massive participation rates (which can also lead to comments and shares), and being ignored.

An example of a good approach would be to ask a specific group for people with lower back pain about the worst aspects of being a chronic back pain patient, perhaps using common keywords used by the group along with empathetic language.

An example of a bad approach would be asking in a general group of digital nomads whether people prefer Apple or Microsoft, while also mentioning that you’re developing a hardware product. You’ve not only exposed your commercial interest, but you’ve also asked a question that is asked every other week for a variety of reasons, and so people will likely not be very engaged.

Startup validation tactic 3: PPC (pay-per-click) test campaigns

This is a big one and should be a top priority, because in many cases you will be using PPC campaigns for the actual thing.

Pay attention to your copy and image elements

If you cannot get any traction with a $100 test campaign, either your ad is flawed, or your idea is.

The former should be avoided by basic competitor and target group research, and testing different copy and images in the same campaign (two to three test ads).

The latter is more serious—if $100 in a PPC campaign cannot give you one lead, you’d better pivot hard.

This validation tactic helps you shed a glaringly honest light on your client acquisition cost, distilling from CPC (cost-per-click), to CPA (cost-per-action), and the various other conversion steps. The nature of the conversion and therefore the interpretation of a cost figure can vary a lot depending on whether you’re looking for signups, purchases, downloads, or what have you.

Make sure you have a following and website to support your tests

As Facebook and Google try to deliver higher quality ads to their users, it has become more difficult to stage test campaigns with strapped resources. During a seminar I attended, it was suggested that businesses need Facebook fan page with at least 1500 likes to get any decent displaying reach. For Google Adwords, you need a fully functional and content-equipped website.

While the more targeting-friendly Facebook will usually not reject ads pointing to your landing pages made with tools such as Unbounce or Launchrock, Adwords will usually not accept these. It’s a good idea to learn more about the basics of PPC marketing, as it will likely come in handy further down the road.

Startup validation tactic 4: Email test campaigns

If you’re lucky enough to either already have a big list or the ability to access one through an associated list owner, this one could be a great idea for you. Make sure you segment your list smartly, put a lot of effort into crafting a compelling subject line, and polish the email text.

Set up tracking from the start

Make sure you track opens and click-throughs, either using integrated plugins such as Yesware or built-in analytics of your chosen email marketing provider.

If you have made it to here, I’m sure you can use your expertise and imagination to come up with various funnel paths you want the mail recipients to flow through. When emailing, think both quality and quantity validation, and you’re on the right track.

Startup validation tactic 5: Test sales

What keeps you from propping up a stand at your local flea market, supermarket ads board, or other designated communal usage space and putting up a big, attention-grabbing sign outlining your business offer?

Why not use situations such as people waiting in line in front of a club, stadium, or concert to act as an ambulant salesperson and try and push-sell your offer? You might need a permit, but perhaps you can ask the organizer or other person in charge and they will give you permission for a short 30 to 60 minute experiment.

The idea is to experience the exhilarating feeling of watching someone get out his or her wallet and hand you some money. It is the ultimate validation to get someone to put actual hard-earned money into your hand in exchange for maybe even just a promise that you will sign them up for a course (perhaps consider asking for a 20 percent deposit—psychologically this is easier to rationalize for most people and you will encounter less resistance).

Consider trade fairs or cold calling

If you’re good with the phone and your solution is B2B, nothing keeps you from going through some industry association’s directory or trade fair floor plan and look for ideal clients. Ring them up, rehearsed sales script in hand, and try and get some purchase orders. It’s a thrill, it can be fun after a few times, and you’re doing the one thing you’re absolutely going to need for your business to thrive—you’re selling!

Startup validation tactic 6: The Mechanical Turk or Concierge Method to test your MVP

This one tactic is for those who are putting together a technology product, usually software, but could have use cases also in other industries. I want to specifically go over it in connection with the preceding advice. If you’re struggling with putting together something that you can offer as an MVP (minimum viable product) for validation purposes, consider using manpower to bridge the tech development gap.

For example, say you’re building a fintech app that uses AI to help people find exciting investment opportunities based on their interests. Before paying a developer, you could:

1. Come up with a good “signup bribe” (an ebook, for instance).
2. Put it up on a squeeze page using for example free trial versions of Unbounce/Mailchimp.
3. Post the link guerrilla marketing style (think Bit.ly so you can later easily redirect all the links you built to your future homepage for SEO) up and down in financial forums and social groups.
4. As you keep an eye on user engagement analytics, perhaps testing two to three different headlines, eventually leads should start dribbling in.
5. Now you have to sit down in front of your computer and manually piece together what your software would otherwise compile automatically.

Et voila, you have some solid validation. If you’re pitching, make sure you dedicate a portion of your business plan or pitch deck to expose these findings to your potential stakeholder. Personally, I find such data considerably more exciting than any market volume and growth statistics scraped off the internet.

Mechanical Turk MVP or Concierge Testing as opposed to the more minimalistic, superficial test pages with no actual benefit to the user has a lot of advantages. Not only do you maintain your credibility in the forums and social channels, but you also learn much more about your clients’ patterns of thought and action. Lots of insight and much stronger validation for your idea!

Create validation you can depend on

Do not chase vanity metrics and warm fuzzy feelings when setting out on your quest for ultimate validation. Gauge the real interest and be extra-prepared to abandon your idea if you can neither get validation nor pivot smartly. There are millions of opportunities out there, and you deserve to have your time and effort pay off. As fashionable as failing seemingly has become in the startup world, the validation process should not be your first blunder to begin with.

More than in any other moment in the history of business, you are able to cheaply and quickly get any message in front of custom-tailored audiences in an easily scalable way. This is a power not to be handled lightly. Always keep in mind that well-executed validation is also your strategic foundation for successful market entry in so many other ways.

It’s smart to test the ice by tipsy-toeing; big leaps will come soon enough to the entrepreneur who understands this concept.

I invite you to be that entrepreneur: Validate like your life depended on it. Because in 21st-century business, it does.

Lean Planning is a concept that we introduced back in 2012 as an evolution in business planning. The traditional business plan just wasn’t fitting the needs of modern, fast-moving companies and it was time to bring more of a scientific approach to business planning.

There’s nothing wrong with planning—it’s just that the tools and methods for planning needed to evolve. In fact, multiple scientific studies hold up the fact that planning leads to greater success.

However, the traditional business plan took too long to write, often wasn’t read by anyone outside the business, and wasn’t used properly to start, grow, and manage businesses.

We proposed Lean Planning as the next step in business planning. But, where did Lean Planning come from?

Here’s a quick history of how we developed Lean Planning.

It starts with “Plan-As-You-Go”

Lean Planning started with Tim Berry’s 2008 book, “The Plan-As-You-Go Business Plan,” which was a new way for entrepreneurs to think about planning. Instead of encouraging entrepreneurs to focus on developing long, in-depth, static business plans, Berry advocated for a simpler approach:

• Define your business identity: What’s your value proposition to your customers?
• Determine your target market: You need to know and understand your customers.
• Build an action plan: How are you going to validate your assumptions and measure progress?
• Develop a forecast: Basic forecasts and budgets are critical; tracking them is even more so.

The idea here was that business plan should no longer be just a single event. Instead, it should be a living tool that is revisited on a regular basis. “Plan-as-you-go” planning is about setting goals and objectives, defining accountability, and then revisiting and revising the plan as new information is discovered.

Here at Palo Alto Software in 2007 and 2008, we embraced these planning concepts and moved toward a more agile planning process. Instead of detailed documents, we focused on tracking our performance to our plan and managing to regularly updated schedules and milestones. At the time, we used Business Plan Pro and Basecamp for this. We’ve since transitioned to a modern system that’s much easier to use (more on that in a moment).

Can the Business Model Canvas replace the business plan?

In 2010, Alex Osterwalder published his book, “Business Model Generation,” wherein he created a framework for what Tim Berry calls “business identity.” Osterwalder defined a template called Business Model Canvas for documenting business models. This form of planning condensed the business model onto one page and is most useful for high-growth, technically-focused startups (think Silicon Valley).

We really liked the concept of condensing a business model onto one page, but as we worked with startups, small businesses, and academics, the tool proved to be not quite the right fit for all business types. It was also difficult for small businesses to make use of the canvas without coaching.

For example, many businesses have a difficult time arriving at their key value proposition without first thoroughly understanding the customer problem. Also, the “customer relationships” section didn’t seem to fit for many traditional businesses. Finally, while the Business Model Canvas asks for a basic list of expenses and revenue streams, it doesn’t help entrepreneurs determine if their company is truly financially viable.

Do startups have a manual?

In 2012, Steve Blank synthesized the ideas from his first book, “Four Steps to the Epiphany,” with The Business Model Canvas in his “Startup Owner’s Manual.” Blank’s main innovation here is what he calls “customer development,” which is a methodology for learning and validating market needs through detailed customer communication and follow up.

For us, this methodology made sense for high growth technology startups seeking to define and prove a new business model. But, it stopped short of the tracking and accountability that we really liked from “Plan-As-You-Go” planning.

Lean Planning is born

We felt that there was a need to pull all of these concepts together and create a methodology and set of tools that both startups and existing businesses could use—a tool set that would work for both Silicon Valley startups and Main Street small businesses.

So, we developed the concept of Lean Planning, with its foundations in “Plan-As-You-Go” planning and incorporating the idea of documenting a business model in a simpler format so entrepreneurs could find success faster.

If you want to learn more about Lean Planning and how to make it work for your company, you can read our full introduction and guide. You should also check out Tim Berry’s complete book on Lean Planning.

Usually, a Lean Plan will include your “pitch”—an overview of your strategy, tactics, and business model, and a schedule of who is doing what and when—as well as some core financials like a sales forecast, an expense budget, and a cash flow forecast. You will test your ideas and hold monthly plan review meetings to ensure that you are still on track to meet the goals you assigned yourself or your team.

To give you a better overview of Lean Planning, the necessary business plan sections for a Lean Plan, and how it can help your business, we’ve curated a list of some of our best articles on the topic. If you have any questions about the process, let us know!

All about Lean Planning

Introducing Lean Planning: How to Plan Less and Grow Faster

What is Lean Planning, where did it come from, and how do you use it to your advantage?

In this comprehensive guide, Noah Parsons, COO of Palo Alto Software, walks you through the origins of Lean Planning and how to do it, step-by-step.

If you know nothing about Lean Planning, this is a good place to start. Our introductory guide to Lean Planning on the LivePlan blog is also a great primer on the topic.

Why Lean Planning?

If you’re looking for a little more detail on the benefits of Lean Planning and the Lean business plan components (and maybe even some information on when you need more than a Lean Plan), this article will give you a good overview.

If you’re a visual person, there are plenty of illustrations to help you understand the methodology even better. Auditory learner? Check out Tim Berry’s video on Lean Planning, or listen to his interview on the Bcast.

How to Plan, Start, and Grow a Successful SaaS Company

One of the great things about the Lean Planning methodology is how suited it is to companies that to iterate on their ideas fast and often—in this case, the software and startup industry.

In this guide, you’ll learn a lot more about how to use Lean Planning to test your ideas, as well as manage your business.

Validate your idea using Lean Planning

Going Beyond the Napkin: How Do You Know If Your Idea Is Any Good?

To figure out whether or not you have a good idea for a business, your first step is going to be getting the idea out of your head and onto paper.

Now, you don’t need a detailed plan including all the necessary business plan sections to do this—you simply need to write a “pitch,” or a one-page overview of your business, including the problem you’re solving, your solution, an overview of your market, your competition, and your team. By writing a Lean Plan, you can quickly sort the wheat from the chaff, so that you end up with a business idea you can really get behind.

Start writing your Lean Plan

Free Lean Plan Template

The first step in the Lean Planning process is documenting your business idea. You can do this using a Lean Plan, which is your best guess at the problem you’re solving and a summary of your solution, as well as an overview of your intended target customer.

Write Your Business Plan in Under an Hour

If you want to figure out your business strategy right from the start, this article will explain how to do just that. Within one hour, you’ll have something to work with!

Manage your business using Lean Planning

How to Run a Monthly Plan Review Meeting

If you read our introductory articles above, you will know that part of the Lean Planning process is adjusting your plan on a regular basis so that you’re still on track to meet goals.

We advocate for reviewing your plan once a month, though you can set your own timeline. In this article, COO Noah Parsons walks you through the things you need to consider in one of these meetings.

Got any questions about Lean Planning? We’d be happy to answer them. Get in touch with us on Twitter.

Company history in a business plan? Yes, it’s a good addition to some business plans, but not all.

For this article, I want to look at how to decide whether or not you include company history, and if you do, what to include and where to put it in the plan.

The purpose of the business plan

When considering what to do with company history for your business plan, first consider the use of your business plan.

• For the traditional business plan to be used as a business summary for potential investors, bank loan managers, partners, or legal requirements, a short summary of company history is usually appropriate.
• For lean business plans, operational plans, and strategic plans to be used by startup founders, owners, and management team, company history may be overkill. Include it in your plan only where it relates to actual future business. That might be with strategy, tactics, milestones, metrics, or projected sales and spending. In those cases, there should be some direct connection between history and future business.

Focus business history on what matters to planning

As soon as history is relevant, of course, you cover the basic information. That includes when and where the business started and who started it. If the business has changed its formal legal entity, such as going from fictitious business name to LLC or corporation, that should be included.

Beyond those essentials, you use your judgment about what matters to the specific business purpose. Not everything does. Some details matter more than others. Businesses that have been around longer accumulate history as they go. They have their founders, their early days, initial launches, changes in strategy, milestones such as new products or new locations, investments, and partners joining and leaving. Some businesses moved from one state to another. Other businesses have changes in ownership, big investment moments, awards, problems overcome, and so forth.

Don’t assume that a brand-new startup has no history. Startups don’t typically have long histories, but even a startup has its history of who came up with the idea, how that person came up with it, and how and why other people joined. This can matter to investors.

Stay flexible as you describe history. Always keep your specific business purpose and your target reader in mind. If you have a longer history, then you probably have highlights you want to include, and some key points you want to make. Never bore people with information that has no connection to business decisions.

Where to put history in your business plan and pitch

In a business pitch, which is presumably a slide deck that guides an in-person pitch, history comes early or not at all.

If your history adds some differentiation about your commitment, your mission, your unique identification with the problem you solve and how you solve it, then that’s a good starting point. When it’s a good story, you should tell it. But if it doesn’t add power and just distracts, then leave it out.

In a traditional business plan, include your business history in a section that focuses on the business itself. In the classic business plan outline I used for decades, a business plan outline included a company section, usually placed second in the document, right behind the executive summary. It includes details about the legal entity, ownership, history, intellectual property, and important assets.

In a lean plan, for owners and management team, history is rarely relevant. Include only the part of history that might relate directly to strategy, tactics, milestones, or metrics. If it’s relevant, include the history detail in a bullet point related to actions or the future.

Often, a business plan introduces a new technology that requires some explaining.

On one hand, as a reader of business plans for investors, I see way too many business plans that ask a reader to wade neck-deep through technology to get to the business. That’s a great way make your reader run in the other direction! It’s a business plan, not a term paper or thesis. Establish technology as a differentiator, when it is. Tell me about it in relation to its importance to the business. Don’t force me to understand it when I don’t need to.

On the other hand, as a writer, manager, and user of business plans as tools for steering a business, I believe you should discuss your technology in the plan for any business. Even if technology isn’t the driving force of your business or your main differentiator, these days, almost all businesses have to manage technology as part of branding, marketing, and communications.

To the extent that technology matters, I want to see it in the priorities and in specific milestones. Are we developing what we should? Are we using what we should? Are we competitive with tools and process?

Let your business purpose be your guide

The point of my opening paragraphs is that the right way to handle technology in a plan depends on the context of the plan. As always, in business, form follows function.

As you develop technology descriptions, priorities, milestones and such in your own business plan, consider first the business plan’s purpose.

Business plans aren’t all the same. They are used for different things, such as:

• Some business plans are intended for outsiders, as summary and description of the business, to serve the purpose of raising money with investors, backing up a commercial loan document, and so forth. In these cases the purpose of describing your technology is validation, proof of value; you’re making your technology part of the reasons that your business is a good investment or a good risk for a loan.
• Most business plans are intended to optimize management and allow business owners and management teams to better steer the business. For these plans, technology is not describing, but rather planning, setting milestones, dates, priorities, directions, and so forth.

Technology in a plan for outsiders

Investors, bankers, and other outsiders look at technology as part of the secret sauce, the things that make your business better than competitors, defensible, or differentiated. They want to know about the technology for its business impact. But they rarely want to wade through the ins and outs of how that technology works and evaluate it for themselves. They want to know about the technology, not know the technology. The only exception is the technology they know and work with themselves.

To explain the difference, let’s take me as an example:

I’m a software entrepreneur, and, in recent years, a member of an angel investment group. I looked to scientists in the group to evaluate technology when we invested in molecular chemistry that can ease the pain of chemotherapy. I get involved in detail when the group is looking at startups in software, web, mobile apps, or financial forecasting.

When a business plan involves expertise in software, the web, apps, and technologies related to financial forecasting, I’m curious, and I’ll look for an appendix with interesting details. I’ll join in the due diligence for my angel group, test for myself, and develop my informed opinion. In fact, during my consulting years in the 1980s and 1990s, I had multiple consulting engagements with venture capital firms that contracted me to evaluate software as an expert.

When a business plan involves pharmaceuticals, medical electronics, biotechnology, clean energy, and so many other technologies that aren’t within my areas of expertise, I validate as I suggested above, with background checks, patents, and so on. I don’t, however, wade through scientific documentation.

I’m comfortable with what I don’t know. When it involves my specific investment group, I trust other members who do know.

The detailed look at the technology comes during due diligence, not in the plan or during the pitch. For plans and pitches, we look for the patents, customer testimonials, and backgrounds and achievements of the team as validators. We want to see those for sure, and we expect good summaries as part of the business plan discussion of product-market mix, or company background (in either section, whichever seems better to the founders). Technical background and technical details go into appendices, or extra docs used for due diligence, not the main body of the plan.

Technology in business planning for owners and managers

For business owners, I recommend a lean business plan as a dashboard and GPS. It’s just big enough to steer the business. It skips the text summaries and descriptions you won’t need because it’s for your own use only. It’s reviewed and revised frequently. It includes strategy and tactics as summary bullet points to serve as reminders. It includes milestones and schedules too.

Since the lean plan is just for you and the team, not for outsiders, it doesn’t necessarily include or cover your technology. Does your technology differentiate your business from all others? Is it vital to staying competitive? Does it create barriers to entry? Does it create competitive advantage? If you answer yes to any of those questions, then you are probably already managing technology as part of your strategy and tactics. So you include bullet points related to technology in your lean plan, in strategy, tactics, milestones, and schedules.

For example, tech businesses managing product development road maps, research and development teams, extending software features or tech features in hardware would be likely to build strategy and tactics around technology. More traditional businesses, on the other hand, such as real estate, restaurants, or personal training, would be less likely, on average.

But, even within traditional businesses, some innovative leaders set themselves apart for the use of new technology. Maybe the real estate brokerage is working on its app to show houses, or the restaurant is developing new techniques for cold pressed processes. Maybe the personal trainer is offering subscriptions to remote workouts.

The key to where technology goes into your lean plan is the execution and management. You don’t describe for description only. Instead, you list tasks and deadlines and action points. If there are none of those related to technology in your business, then leave it out of the lean plan.

Stick with the business purpose

Remember, a business plan is about business. It’s not a forum for showing off. Even in the case of a show-off business plan for angel investors, keep to the business side of it. The business plan is about what you’re going to do, not what you know.

Give the investors what they need to know, and spare them from the rest. They’ll thank you. For you business owners and managers, how you develop and manage technology is a critical factor for steering the business. Make sure you plan for it, with reinforcement in strategy, tactics, and milestones to develop accountability and keep you on track.