Have a business idea? Turning it into a business is hard work. You need to understand the market and get to product-market fit but that’s just the very beginning. What next? How does the right idea become a business? You might need a business plan.In this guide, we’ll discuss: Why a business plan is important in the first place What your business plan should include When it may not make sense to write a business plan Alternative ways of creating a business plan Business plans are formal documents that outline in varying degrees of detail aspects involved in the development, operations, and growth of a business. But in the startup space, you may more often hear people say that you don’t need one. And you probably don’t if you think of them as 100 page formal documents, but today, business plans also come in non-traditional one-page formats. So, what is a business plan and how do you make one that best suits your needs?Why you need a business planA business plan can help you think through and analyze the more tangible aspects of your business, such as your revenue model or financial viability, as well as act as a tool to communicate your business to others, including investors or banks. A study conducted by the University of Oregon found that the completion of a business plan was positively correlated with every success variable measured, including obtaining financing. Here’s when it’s highly recommended and even necessary to have a business plan:If you’re raising fundsInvestors will want to see a detailed plan to feel confident that they’ll see a return on their investment. They won’t necessarily trust your word: they want to trust the facts, even if business plans are built on projections and estimates. If you’re applying for a loan or grantIf you’re applying for financing from banks or government grants, one of the minimum requirements is often a formal business plan. If there are multiple people involved in the businessWhen multiple people are involved in the early stages of a business, a business plan is helpful in getting everything down in writing so that there are no gaps in knowledge between partners. While not legally binding, this can be a useful opportunity to align on key business information and strategies.What’s in a business plan?There are many resources available to help you write a business plan, and if you’re applying for a specific loan or grant, you may want to check to see if there’s a specific format you need to follow. Otherwise, here are the general components of a business plan:Executive SummaryUsually written last, an Executive Summary summarizes the key points in your business plan like a TL;DR. Here, you’ll want to provide an overview of your business concept, products and/or services, target market and key value propositions, as well as financial projections and key dates.Business OverviewAlso known as a Company Synopsis, this is where you’ll include details such as: Business history Vision and/or mission Long-term objectives Ownership structure This is not a summary of the business plan like the Executive Summary, but more like a business overview of key details.Products and ServicesGet more specific about the products and services you offer here, including the features, benefits, and competitive advantages. What’s unique? Include information about your revenue model too, or how your products and services will make money. Market ResearchWho are you customers and what are the trends that may affect your business? Provide an analysis of research you’ve gathered, both quantitative and qualitative, that support your expected demand. Why do you think your business will be successful in this market? Competitive AnalysisSome business plans include this as part of the Market Research section. Describe your competitors so that you are clearly identifying the key players in your market as well as analyzing their positioning to demonstrate your deep understanding of the market and how your company is positioned within that market for success.Customer Acquisition StrategyAlso known as a Marketing and Sales Strategy, here you should outline how you plan to reach your target market and how you’ll sell to them. You can break this section down based on the channels you’re planning to use to market and sell to your customers.Operations StrategyThis is where you’ll outline how your business will operate. Provide an overview of key dates, milestones, and a human resources plan. If you’re selling a product, include a production plan for how you’ll bring this product to market.TeamFor each of the key team members involved in the business, include a profile with their names, titles, and background. Here you should draw attention to the reasons why this team specifically is right for the business, otherwise known as founder-market fit. FundingThis is an optional section specifically for businesses that are seeking financing. Here you should outline how much funding you’re seeking and include a breakdown of what you’ll be using it for.FinancialsWhile the funding section covers funding needs, the financial section dives deeper into the overall financial picture of the business, and can include projected financial statements for various time increments such as one-year, two-years, five years and beyond, as well as cash flow statements and balance sheets. Having an accounting professional prepare these is suggested if you don’t come from a financial background. AppendixHere you may want to include additional reference material, depending on the goals of your business plan. This can include customer persona documents, business licenses, permits, IP documentation, or contracts.Need a template? You can find some sample business plans for various industries at Bplans.com. When might your startup not need a business plan?If you’re not seeking funding and are bootstrapping your business, and you’re doing it alone, you may not need a formal business plan. That’s time you could be spending talking to customers or building, right?Not quite. Even if you don’t need a business plan, it’s still handy to get a plan down in writing. Like Dwight Eisenhower says, “Plans are nothing. Planning is everything.”A business plan helps you think through your idea analytically, and helps you better communicate your business idea. That kind of clarity can help attract investors, yes, but also current and future customers, partners, and employees.Alternative ways to write a business planStudies show that it’s the planning process that improves business performance, not necessarily the content of the business plan itself. (See: The Journal of Management Studies) The business plan just happens to be a proven container to think through important business concepts and strategies. If writing business plans isn’t your forte, you may want to consider a business plan in a different format, a non-traditional approach that may work just as well or even better for your needs.Write a lean startup business planIf a traditional business plan is a formal document, a lean startup business plan is more like a short roadmap. In fact, they’re often just one page and can be done in an hour. You may hear them be referred to as a Lean Canvas or a Business Model Canvas (this link includes a visual template you can refer to). There are fewer details and it’s much less focused on analyzing every aspect of the business. However, you’ll find that many of the sections mirror what you’ll find in a traditional business plan, as you can see below in the nine components of a lean startup business plan: Problem Solution Key Metrics Unique Value Proposition Unfair Advantage Channels  Customer Segments Cost Structure Revenue Streams Create a pitch deck, even if you don’t have to use it Pitch decks are often used when pitching a business to investors, but even if you’re not seeking  funding, they can be a great stand-in for helping you think through some of the most important and key aspects of a business plan as well as streamlining understanding and communication around your business idea and strategy for yourself or others. Pitch decks are presentations typically with 10-12 relatively concise slides. The typical components of a pitch deck include: Thesis Vision Problem Solution Traction Team Timing Market Competition Financing Risks and Challenges However, there’s more leeway in how these components are presented in a pitch deck, as the format takes on more of a storytelling and narrative approach, making them more digestible for most people and a great choice if you don’t technically require a traditional business plan. Final tips for (successfully) writing a business planIterate as you goThe prospect of writing a formal document that could go up to 100 pages in some cases can be daunting, but you don’t have to get it all done in one go. Your first draft can be messy; use it as an opportunity to get down in writing everything you already know about your business and identify gaps in your knowledge to research and analyze further. You can always come back to edit your business plan and flesh out sections later on. Start and keep going. Don’t worry too much about making it perfect your first time through. Know your goals and your audienceLastly, understand the purpose of your business plan right from the start. There are many ways to write a business plan and its success is contingent on a clear understanding of your goals and audience. A business plan isn’t just an indication of a great plan and strategy (those fail all the time); it’s meant to be read and understood to help you achieve your goals, whether that’s obtaining funding, attracting your dream team, or even an exercise in developing conviction for your business idea. Know who you’re writing for, and write for them.