Noah is currently the COO at Palo Alto Software, makers of the online business plan app LivePlan.
How to Format a Business Plan in 8 Simple Steps
8 min. read
Updated October 27, 2023
Your business plan should accomplish certain goals: raise money, guide your team, and set strategies for growth. The format of your business plan will help you achieve these goals, so it’s important to think about the plan’s structure as you build it.
There isn’t one right way to organize your plan, but you do need to make sure that it’s professional, includes the information your audience wants to see, and is formatted correctly. If you’re using your business plan to raise money, then your plan needs to impress (as well as contain specific business plan components). If you’re using your plan just for internal use, then maybe you can focus less on the final presentation.
Either way, getting the formatting right for your business plan is important. Here are my top eight tips to make sure your business plan accomplishes what it needs to do.
1. Always start with an executive summary
The executive summary introduces your business to your reader. If you don’t nail the executive summary, no one is going to read any further. It’s an essential business plan section to include—and get right.
Every executive summary should include a very brief overview of the following:
- The problem your business is addressing
- Your solution to the problem (i.e., your product or service)
- Your target market
- Why the timing is right for your business
- Financial forecast highlights
If you’re raising money or presenting your plan to outsiders, you’ll also want to cover:
- The team behind the business
- How much money you’re looking to raise
Ideally, your executive summary should fit on one or two pages. Keep things short and concise; your readers don’t have a lot of time and want to be able to get a quick overview of your business, so they can decide whether or not they want to read more.
Your executive summary should also be able to stand alone, without the rest of your plan. A common strategy is to send your executive summary out to investors and then send out the complete plan when more detail is requested.
Remember that people who are reading your executive summary don’t know anything about your business before they start reading. You need to explain things simply so that anyone can understand your opportunity.
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We have a more detailed guide on writing an executive summary if you want additional tips on this critical business plan section.
2. End with supporting documents
All business plans should start with an executive summary and end with your supporting documents—an appendix of key numbers and other details that support your plan. These are the key business plan elements that should start and end your plan.
At a minimum, your appendix should include your financial forecasts and budgets. Typically, you should include a Profit & Loss statement, a Cash Flow forecast, and a Balance Sheet.
You might also use your appendix to include product diagrams or detailed research findings, depending on your business and your industry.
Be careful not to cram your appendix with endless additional information—three to six pages should be plenty. Investors and other readers of your plan can always ask for more detail if they want it.
3. Keep it short
Let’s face it: No one has time to read a 40-page business plan.
If you’ve nailed your executive summary and convinced someone to read more of your plan, you’ll want to follow with eight to 12 additional pages, at most.
Instead of trying to cram everything in using small fonts and tiny margins, focus on trimming down your writing. Use direct, simple language that gets right to the point. Try not to repeat things, and omit needless words. Short paragraphs and bullet points are always a good option as well.
Remember, your goal is to communicate your business ideas, not to write the next “War and Peace.” Explain your business as if you are talking to a friend. Investors that read your plan are most likely going to skim it, so making it as short and readable as possible will increase the likelihood that they will have a solid understanding of your business.
4. Use visuals
As the old adage goes, “a picture is worth a thousand words.” This is especially true when you’re formatting your business plan sections.
Because readers will most likely skim your various business plan elements and not read every word, visuals will help communicate that extra information. Use charts and graphs to explain your forecasts. Add pictures of your product. Readers will always be able to understand your company and opportunity better if you “show” instead of just “tell.”
This isn’t just idle advice: It’s a proven fact that visuals are more effective at communicating information than text.
That said, don’t go overboard. You still want to keep your plan length reasonable, and images can take up a lot of physical space in a business plan document. But, used correctly, they can go a long way toward communicating what your business is about and how you’re going to grow sales and profits.
5. Write for the right audience
I can’t count the number of times I’ve picked up a business plan for a new medical device or breakthrough drug and just simply not been able to understand the details. The thing is, I’m not a doctor or a scientist, and I don’t have the background to delve into the nuances of a surgical procedure, or the granular details of how a new drug is going to work.
This story is familiar to anyone who reads a lot of business plans. The key to solving this problem for your reader is to understand who is going to be reading your plan and write for that audience.
If you know you’re going to be presenting your plan to readers that have an in-depth understanding of your industry, of course it makes sense to present technical details that your audience is going to understand. However, if your audience is a blend of people from different industries and backgrounds, you need to present your business ideas in a way that is clear to everyone.
This is not to say that you need to “dumb down” your ideas; you just need to save some of the granular details for your appendix, or a second document that explains in detail how your product works.
After all, if your readers can’t understand your business plan, it won’t be very likely that they’ll ask you to come in for a meeting, or consider investing in your business.
6. Don’t spend too much time on how the plan looks
You want your plan to be professional, but it’s really the ideas that matter. A beautiful business plan that talks about an ill-conceived business idea with incomplete financial forecasts is never going to beat out a plan that is formatted poorly, but discusses a great, clearly explained business idea.
Spending hours or days making a beautiful plan isn’t going to make your business ideas better. Instead, focus on polishing the words that you use in your plan. Trim extra content you don’t need, and make sure your ideas are presented clearly.
7. Keep your formatting simple
For general formatting, use single spacing with an extra space between paragraphs. If you’re printing your plan, use a nice serif font like Garamond or Baskerville. If your plan will mostly be read on a computer screen, go with a sans serif font like Verdana or Arial.
Why choose different fonts for on-screen versus off-screen? Well, the research shows that readers have much higher comprehension when they read a document with a serif font on paper, while they have higher comprehension reading with a sans serif font on a screen.
Don’t stress too much about this, though. Choose any one of the four fonts mentioned above and move forward.
For font size, 10 to 12 point is usually ideal and readable by most people. If you need to reduce the font size to make your plan shorter, then you should be cutting content, not adjusting the font size. The same rule goes for margins: Use typical one-inch margins to make the plan readable.
Cover pages are always a good idea, too. Use the cover page to show off your logo, your tag line, or your value proposition. Don’t forget to include your contact information; after all, you want feedback and follow-up on your plan.
Finally, make sure that all the business plan components flow well visually, and that it doesn’t have any “widows” or “orphans” when it prints out. A “widow” is when the last line of a paragraph appears alone at the top of a page, and an “orphan” is a single word that gets left behind at the bottom of a paragraph.
8. Get a second pair of eyes
The last piece of advice I have for formatting your business plan is to get a second pair of eyes. When you’re the only one working on your plan, you can become blind to some of the errors that you might have made.
Recruit a friend or family member, or even hire a copy-editing professional to read your plan and give it that last bit of polish.
There’s nothing worse than a plan with grammatical or spelling errors. A second pair of eyes will go a long way toward catching the majority of those potential problems.