Business plans go by many names: Strategic plans, traditional plans, operational plans, feasibility plans, internal plans, growth plans, and more.
Different situations call for different types of plans.
But what makes each type of plan unique? And why should you consider one type over another?
In this article, we’ll uncover a quick process to find the right type of business plan, along with an overview of each option.
Let’s help you find the right planning format.
What type of business plan do you need?
The short answer is… it depends.
Your current business stage, intended audience, and how you’ll use the plan will all impact what format works best.
Remember, just the act of planning will improve your chances of success. It’s important to land on an option that will support your needs. Don’t get too hung up on making the right choice and delay writing your plan.
So, how do you choose?
1. Know why you need a business plan
What are you creating a business plan for? Are you pitching to potential investors? Applying for a loan? Trying to understand if your business idea is feasible?
You may need a business plan for one or multiple reasons. What you intend to do with it will inform what type of plan you need.
For example: A more robust and detailed plan may be necessary if you seek investment. But a shorter format could be more useful and less time-consuming if you’re just testing an idea.
2. Become familiar with your options
You don’t need to become a planning expert and understand every detail about every type of plan. You just need to know the basics:
What’s your biggest business challenge right now?
- What makes this type of plan unique?
- What are its benefits?
- What are its drawbacks?
- Which types of businesses typically use it?
By taking the time to review, you’ll understand what you’re getting into and be more likely to complete your plan. Plus, you’ll come away with a document built with your use case(s) in mind—meaning you won’t have to restart to make it a valuable tool.
3. Start small and grow
When choosing a business plan format, a good tactic is to opt for a shorter option and build from there. You’ll save time and effort and still come away with a working business plan.
Plus, you’ll better understand what further planning you may need to do. And you won’t be starting from scratch.
Read More: How to identify the right type of plan for your business
Again, the type of business plan you need fully depends on your situation and use case. But running through this quick exercise will help you narrow down your options.
Now let’s look at the common business plan types you can choose from.
Traditional business plan
The traditional (or standard) business plan is an in-depth document covering every aspect of your business. It’s the most common plan type you’ll come across.
A traditional business plan is broken up into 10 sections:
- Executive summary
- Description of products and services
- Market analysis
- Competitive analysis
- Marketing and sales plan
- Business operations
- Key milestones and metrics
- Organization and management team
- Financial plan
Why use this type of plan?
A traditional business plan is best for anyone approaching specific business planning events—such as presenting a business plan to a bank or investor for funding.
A traditional plan can also be useful if you need to add more details around specific business areas.
For example: You start as a solopreneur and don’t immediately need to define your team structure. But eventually you hit a threshold where you need more staff in order to keep growing. A great way to explore which roles you need and how they will function is by fleshing out the organization and management section.
That’s the unseen value of a more detailed plan like this. While you can follow the structure outlined above and create an in-depth plan ready for funding, you can also choose which sections to prioritize.
Read More: How to write a traditional business plan
The one-page business plan is a simplified (but just as useful) version of a traditional business plan. It follows the same structure, but is far easier to create. It can even be used as a pitch document.
Here’s how you’ll organize information when using a one-page plan:
- Value proposition
- Market need
- Your solution
- Target market
- Sales and marketing
- Budget and sales goals
- Team summary
- Key partners
- Funding needs
Why use this type of plan?
A one-page plan is faster and easier to assemble than a traditional plan. You can write a one-page plan in as little as 30 minutes.
You’ll still cover the crucial details found in a traditional plan, but in a more manageable format.
So, if you’re exploring a business idea for the first time or updating your strategy—a one-page plan is ideal. You can review and update your entire plan in just a few minutes.
Applying for a loan with this type of plan probably wouldn’t make sense. Lenders typically want to see a more detailed plan to accurately assess potential risk.
However, it is a great option to send to investors.
“Investors these days are much less likely to look at a detailed plan,” says Palo Alto Software COO Noah Parsons. “An executive summary or one-page plan, pitch presentation, and financials are all a VC is likely to look at.”
Creating a more detailed plan is as much about being prepared as anything else. If you don’t dig into everything a traditional plan covers, you’ll struggle to land your pitch.
If you don’t intend to seek funding, a one-page plan is often all you need. The key is regularly revisiting it to stay on top of your business.
Let’s explore two unique processes to help you do that:
Read More: How to write a one-page business plan
Lean planning process
Lean planning is a process that uses your one-page plan as a testing tool. The goal is to create a plan and immediately put it into action to see if your ideas actually work. You’ll typically be focusing on one (or all) of the following areas:
- Strategy – What you will do
- Tactics – How you will do it
- Business Model – How you make money
- Schedule – Who is responsible and when will it happen
Why use this process?
Lean planning is best for businesses that need to move fast, test assumptions, revise, and get moving again. It’s short and simple, and meant to get everyone on the same page as quickly as possible.
That’s why it’s so popular for startups. They don’t necessarily need a detailed plan, since they’re mostly focused on determining whether or not they have a viable business idea.
The only drawback is that this planning process is built primarily around early-stage businesses. It can be a useful tool for established businesses looking to test a strategy, but it may not be as helpful for ongoing management.
Read More: The fundamentals of lean planning
Growth planning is a financials-focused planning process designed to help you make quick and strategic decisions.
Again, it starts with a one-page plan outlining your strategy, tactics, business model, and schedule. The next step is to create a working financial forecast that includes projected sales, expenses, and cash flows.
From there, you run your business.
As you go, track your actual financial performance and carve out time to compare it to your forecasts. If you spot any differences, these discrepancies may indicate problems or opportunities that call for adjusting your current strategy.
Why use this process?
Growth planning combines the simplicity of the one-page plan and the speed of lean planning, with the power of financial forecasting.
This makes the process useful for every business stage and even allows you to skip to the forecasting step if you already have a plan.
With growth planning, you’ll:
- Regularly revisit your financials
- Better understand how your business operates
- Make quick and confident decisions
This process focuses on growing your business. If diving into your financials isn’t a priority right now, that’s okay. Start with a one-page plan instead, and revisit growth planning when you’re ready.
Read More: How to write a growth-oriented business plan
Sometimes you just need a business plan that works as an internal management tool.
Something to help you:
- Set business goals
- Provide a high-level overview of operations
- Prepare to create budgets and financial projections
You don’t need an overly long and detailed business plan for this. Just a document that is easy to create, useful for developing or revisiting your strategy, and able to get everyone up to speed.
Why use this type of plan?
The internal plan is a great option if you’re not planning to present your plan to anyone outside your business. Especially if you’re an up-and-running business that may have created a plan previously. You might just need something simple for day-to-day use.
Read More: 8 steps to write a useful internal business plan
5-year business plan
Some investors or stakeholders may request a long-term plan stretching up to five years. They typically want to understand your vision for the future and see your long-term goals or milestones.
Why use this type of plan?
To be honest, creating a detailed long-term business plan is typically a waste of time. There are a few exceptions:
- A long-term plan is specifically asked for
- You want to outline your long-term vision
- Your business requires an extended timeframe for investments to pay off, such as:
- Real estate development
- Medical product manufacturing
- Transportation, automotive, aviation, or aerospace development
The reality is, you can’t predict what will happen in the next month, let alone the next one, three, or five years.
So, when creating a long-term plan, don’t dig too deep into the details. Focus on establishing long-term goals, annual growth targets, and aspirational milestones you’d like to hit.
Then supplement these with a more focused one-page plan that actually describes your current business, which you can use in your business right now.
Read More: How to write a five-year business plan
Nonprofit business plan
A nonprofit business plan is not too different from a traditional plan. You should still cover all of the sections I listed above to help you build a sustainable business.
The main differences in a nonprofit plan are tied to funding and awareness. You need to account for:
- Fundraising sources and activities.
- Alliances and partnerships.
- Promotion and outreach strategies.
You also need to set goals, track performance, and demonstrate that you have the right team to run a fiscally healthy organization. You’re just not pursuing profits, you’re trying to fulfill a mission. But you cannot serve your community if your organization isn’t financially stable.
If you can use your business plan to show that you’re a well-organized nonprofit organization, you are more likely to attract donors and convince investors to provide funding.
Read More: How to write a nonprofit business plan
Resources to help write your business plan
Don’t get too hung up on the type of business plan you choose. Remember, you can always start small and expand if you need to.
To help you do that, I recommend downloading our free one-page business plan template. It’s especially useful if you’re exploring an idea and need a quick way to document how your business will operate.
If you know you’ll pursue funding, download our free traditional business plan template. It’s already in an SBA-lender-approved format and provides detailed instructions for each section.
Lastly, check out our library of over 550 sample business plans if you need inspiration. These can provide specific insight into what you should focus on in a given industry.
Remember, just by deciding to write a business plan, you are increasing your likelihood of success. Pick a format and start writing!
Types of business plans FAQ
The type of planning fully depends on your business stage and how you intend to use the plan. Generally, whatever format you choose should help you outline your strategy, business model, tactics, and timeline.
There are seven common types of business plans, including: traditional, one-page, lean, growth, internal, 5-year, and nonprofit plans.