Business Planning Steps: 3 Effective Ways to Write a Business Plan

According to surveys by many startup support organizations, more than 50% of small businesses fail within the first 5 years, and one of the most common reasons is the lack of a clear business plan. Many people start a business based on inspiration but lack specific direction regarding finance, market, and operations.

If you are researching the steps to create a business plan, and want to know how to write a professional plan to raise capital, manage costs, and achieve sustainable growth, then this content is for you.

This article will help you understand:

• What a business plan is and why it's essential

• How to define financial goals and market positioning

• Step-by-step guide to building an actionable plan for small businesses

• How to turn ideas into concrete action strategies

Instead of complex theories, you will be guided step-by-step through business planning in a simple, practical way in Vietnam, helping you confidently start or optimize your current business operations.

Method 1: Preparing to write a business plan for a small startup

Step 1: Choose the right type of business plan

1. Mini plan

Suitable when you are testing an idea or just starting to explore the market.

• Typically under 10 pages long.

• Focuses on: business idea, target customers, competitive advantages, and initial cost estimates.

• Used for:

  • Sounding out partners or investors.

  • Drafting before developing a more detailed plan.

  • Initial feasibility testing of the business model.

This is an ideal starting point in the steps to create a business plan for newcomers, helping to avoid investing too early without market clarity.

2. Working plan

This is a comprehensive plan for operating the business in reality.

• Clearly outlines:

  1. Business model.

  2. Market and competitor analysis.

  3. Marketing and sales plan.

  4. Financial forecasts and cash flow.

• Does not overly emphasize format, prioritizing practicality and implementability.

• Used internally to monitor progress, control costs, and achieve revenue targets.

If you are building a business plan for a small business, this is the document you will use most frequently.

3. Presentation plan (for fundraising)

This is a modified version of the detailed plan, but it focuses on persuasiveness.

• Written for:

  • Investors.

  • Banks.

  • Strategic partners.

• Emphasizes:

  • Growth potential.

  • Projected profit.

  • Market expansion strategy.

• Professional presentation, clear data, standard business language.

If your goal is to raise capital or apply for a bank loan, optimizing your fundraising business plan is a decisive factor in its approval.

Step 2: Basic structure of a business plan

1. Business concept

This is the foundation of the entire plan.

• Clearly answer:

  1. What business does your company operate?

  2. What problem does your product/service solve for customers?

  3. Who is the target market?

• Clarify:

  • Business model (retail, online, franchise, etc.).

  • Organizational structure and management team.

  • Competitive advantages over rivals.

This section helps readers quickly understand your business's purpose and potential. If presented vaguely, the entire business plan for a small business will lack persuasiveness.

2. Market analysis

Many businesses fail not because of poor products, but because they misunderstand the market.

In this section, you need to clarify:

• Characteristics of target customers:

  • Age, income, living area.

  • Purchasing habits and behavior.

• Customers' real needs and problems.

• Competitor analysis:

  • What are they doing well?

  • What weaknesses can you exploit?

• Market size and trends.

This is an important part of the steps to create a business plan, as it determines future marketing strategy, pricing, and product development.

3. Financial analysis

If the first two sections answer "who to sell to and what to sell," this section answers "how to make money."

A financial plan within a business plan needs to include:

1. Revenue and cost forecasts.

2. Projected monthly/quarterly cash flow.

3. Initial investment costs (capital, equipment, marketing, etc.).

4. Break-even point.

5. Capital utilization plan if raising capital or taking a bank loan.

For new businesses, the numbers are forecasts but must be based on real data such as market surveys, average selling prices, and specific operating costs.

Step 3: Find appropriate support when creating a business plan

Once you understand the major components, you will detail them into the 7 sections below. This is a common structure in most business plan templates for small businesses today.

1. Company description

   • Introduce the industry your business operates in.

   • Vision, mission, and development goals.

   • Core competitive advantages.

2. Market analysis

   • Target customer profile.

   • Industry trends and market size.

   • Competitor analysis.

3. Organizational structure and management

   • Organizational chart.

   • Roles of each key position.

   • Competence and experience of the management team.

4. Products and services

   • Detailed description of products/services.

   • Differentiation from the market.

   • Product lifecycle and development plan.

5. Marketing and sales strategy

   • Customer acquisition approach.

   • Sales channels (online, offline, distributors, etc.).

   • Pricing and promotion policies.

6. Request for funding

   • Capital needed.

   • Purpose of capital use.

   • Repayment plan or profit sharing.

7. Financial projections

   • Revenue, cost, and profit forecasts.

   • Cash flow by period.

   • Break-even point.

Throughout the steps to create a business plan, clearly understanding these 7 sections will help you write with focus, avoid missing important points, and easily adjust when seeking funding or scaling up.

Method 2: Tips for writing a detailed, actionable business plan

Step 1: Presenting the business plan correctly

A professional business plan is not only about content but also presentation. When working with banks and investors, I've noticed that a document with a clear structure and scientific numbering instills confidence from the first glance.

You should present the sections in Roman numeral order to ensure standardization and easy readability.

Example basic structure:

I. Company Description
II. Market Analysis
III. Organization and Management
IV. Products and Services
V. Marketing and Sales
VI. Request for Funding
VII. Financial Projections

This numbering helps readers quickly find content, which is especially important when you are preparing a business plan to raise capital or applying for a loan.

Executive Summary should be written last

Although Section I is often the Executive Summary, you should actually write this section last.

The reason is simple:

• This section summarizes all content from the other sections.

• It requires complete financial data, marketing strategies, and market analysis to be written accurately.

• This is the first part investors read but depends 100% on the content that follows.

When completed, the Executive Summary in a business plan should:

1. Summarize the business model.

2. Clearly state the target market.

3. Present key competitive advantages.

4. Outline funding needs and profit potential.

A concise, clear summary will determine whether the reader continues to review the entire document. In practice, when implementing the steps to create a business plan, many people make the mistake of writing this section too early, leading to inaccurate content or requiring multiple revisions.

Step 2: Write a clear and persuasive company description

1. Company Overview

• Company name and industry.

• Scale (small business, individual shop, startup, etc.).

• Business location or service area.

The goal is to help the reader immediately understand what you do within the first few lines.

2. Identify market needs

• What problems do your products or services solve?

• What is currently lacking in the market?

• Why do customers need your solution right now?

This section helps make a business plan for small businesses practical rather than just an idea.

3. Describe the target customer

• Who are they (age, occupation, income)?

• Where do they usually shop and why?

• What motivates their purchasing decisions?

The more specific, the more persuasive the customer analysis in the business plan will be.

4. State competitive advantages and success orientation

• Favorable location?

• High-quality products?

• Competitive pricing?

• Superior customer experience?

You need to show why the business has the potential to survive and grow.

Simple illustration:

"Moc Coffee is a small-scale cafe located in the city center near University X. The cafe focuses on serving high-quality roasted coffee and fresh pastries in a quiet, modern space. The main target customers are students, lecturers, and office workers in the surrounding area. With the advantage of a convenient location, comfortable study space, and friendly service, Moc Coffee aims to become a familiar destination for studying, working, and meeting."

Step 3: How to write market analysis in a business plan

1. Clearly define the target market

You need to answer the following questions specifically:

• Who are the target customers?

  • Age, gender, occupation, income.

  • Area of residence or work.

• What are their needs?

• What do they care about when buying a product/service?

• Where do they usually buy and through which channels (online, store, e-commerce platform)?

In the steps to create a business plan, this section helps you avoid the situation of “selling to everyone but not truly fitting anyone.”

Example: If you open a coffee shop near a university, your target customers might be students aged 18–24, prioritizing reasonable prices, a quiet study space, and stable Wi-Fi.

2. Analyze market size and trends

• Is the market growing or saturated?

• What are the current consumer trends?

• Are there technological factors or behavioral changes affecting the industry?

This section helps a business plan for small businesses have a long-term strategic perspective rather than just a short-term view.

3. Competitive analysis

This is a section many people rush through, but it is very important.

You need to:

• List 3–5 direct competitors.

• Analyze their strengths:

  • Strong brand?

  • Low price?

  • Good location?

• Analyze their weaknesses:

  • Poor service?

  • Little product innovation?

  • Ineffective online presence?

Then, answer the most important question:

How will your business gain market share?

• Focus on a niche segment?

• Enhance customer experience?

• Improve product quality?

• Optimize pricing or operating model?

A good competitive analysis in a business plan not only lists competitors but also outlines specific strategies to leverage their weaknesses.

Step 4: How to describe the organizational structure and management of the business

1. Introduce owners and key management team

You should clearly state:

• Who is the founder or business owner?

• Specific roles of each person in the company.

• Professional experience relevant to the industry.

• Achievements or previous projects.

If the team has many years of experience or has successfully managed similar projects, highlight that. This factor increases the credibility of the entire business plan for fundraising.

2. Present the team's expertise and capabilities

Beyond listing job titles, you need to clarify:

• Core skills of each position (finance, marketing, operations, etc.).

• Competitive advantages from practical experience.

• Industry connections (if any).

In practice, when implementing the steps to create a business plan, investors often care about whether the team has sufficient capacity to handle risks and achieve long-term growth.

3. Decision-making and operational processes

You should briefly describe:

• Who is responsible for strategic decisions?

• What is the financial approval process?

• What are the reporting and internal control mechanisms?

This section helps demonstrate that the business operates systematically, not solely based on personal intuition.

4. Organizational chart

If available, you should include:

• A chart showing the relationships between departments.

• Direct reporting lines for each position.

For a professional business plan, a clear organizational chart helps readers quickly visualize the operational structure and responsibilities of each department.

Step 5: How to describe products or services in a business plan

1. What are you selling?

Clearly describe:

• Main product or service name.

• Key features.

• Price segment (premium, mid-range, mass market).

Avoid vague descriptions. In the steps to create a business plan, specificity increases credibility and the feasibility of implementation.

2. Unique value proposition of the product/service

You need to answer:

• What problem does your product solve?

• What differentiates it from competitors?

• Why will customers be willing to pay?

It can be differentiated by:

• Higher quality.

• More reasonable price.

• Better experience.

• High convenience or personalization.

In reality, the clearer the competitive advantage, the easier it is to build the marketing strategy in the business plan.

3. Specific benefits customers receive

Don't just talk about features, talk about benefits.

For example:

• Save time.

• Reduce costs.

• Improve experience.

• Increase work efficiency.

Customers buy benefits, not just products.

4. Comparison with competitors

You should point out:

• What are competitors offering?

• How is your product superior?

• What gap in the market are you exploiting?

This section needs to be consistent with the market analysis in the business plan to ensure logical consistency.

5. Product lifecycle and development plan

This is an element many people overlook but is very important.

You should mention:

• What stage is the product in (idea, testing, already on the market)?

• Are there plans to launch new versions or expand the product line?

• Are there any registered copyrights, patents, or trademark protections?

• Are you developing a prototype if it's a new product?

This information helps increase the professionalism and credibility of the entire business plan for fundraising.

Simple illustrative example

If writing for a coffee shop, you could present:

• Offering 5 main beverage groups: roasted coffee, tea, smoothies, soft drinks, and hot chocolate.

• Positioning as a cafe with a diverse menu serving students and office workers.

• Differentiators: quiet study space, strong Wi-Fi, richer menu than nearby cafes that only focus on traditional coffee.

After the summary of differentiated value, you can attach a detailed menu.

Step 6: How to build a marketing and sales strategy

1. Market entry strategy

You need to define:

• Priority customer segments to target first.

• Competitive advantages used to attract initial customers.

• Pricing policy at launch (penetration pricing, grand opening promotions, etc.).

For example: focusing on young customer groups, using launch offers to generate initial traffic.

2. Communication and promotion plan

In the marketing strategy section of the business plan, clearly state the channels used instead of being vague.

You can choose:

• Social media marketing (Facebook, TikTok, Instagram).

• Paid advertising (Google Ads, Facebook Ads).

• Flyer distribution in target areas.

• Placing signs, billboards in crowded locations.

• Collaborating with KOLs or local partners.

Clarify:

• Estimated budget for each channel.

• Implementation timeline.

• Specific goals (increase brand awareness, generate leads, boost sales).

3. Sales strategy

This is an important part of the business planning steps because it directly impacts cash flow.

You need to answer:

• Direct sales in-store or online?

• Is there a sales team?

• Will collaborators or distributors be used?

• What are the commission policies and sales bonuses?

If selling online, specify:

• Selling through your own website or e-commerce platforms?

• What is the order processing and after-sales care procedure?

4. Growth management plan

A professional business plan not only talks about the initial phase but also needs to consider expansion.

You should identify:

• When revenue reaches X, new branches will be opened or production increased.

• When customer volume is stable, expansion into new segments will occur.

• Profit reinvestment plan.

5. How to communicate and retain customers

The cost of retaining old customers is often lower than acquiring new ones. Therefore, it is necessary to clarify:

• Customer care policy.

• Loyalty programs.

• Collecting feedback and improving service.

In summary, the marketing and sales section of a fundraising business plan needs to be specific, with clear channels, a budget, and measurable goals. If you can present a realistic and feasible market approach, the plan will be much more convincing than vague commitments.

Step 7: How to write the funding request section in a business plan

1. Determine the capital needed to raise

You need to clearly state:

• Total amount needed to start the business.

• Capital needed to sustain operations for the first 6–12 months.

• Self-owned capital and additional capital needed to raise.

In the actual implementation of business planning steps, the more specific the numbers, the more credible it becomes.

2. Present detailed use of funds

Create a table for fund allocation by category, for example:

• Rent costs.

• Equipment and machinery.

• Initial raw materials.

• Marketing costs.

• Personnel costs for the first 3–6 months.

• Risk contingency.

Clearly itemizing helps investors see that you have made realistic calculations, not emotional use of funds.

3. Provide a timeline for fund utilization

You should state:

• When will funds be received?

• Which categories will be spent on in the first 3 months?

• When will stable revenue generation begin?

This section shows that you have a concrete implementation plan instead of just an idea.

4. Prepare supporting financial reports

This is a mandatory part of the financial plan in a business plan.

You need to prepare:

• Profit & Loss Statement.

• Balance Sheet.

• Cash Flow Statement.

• Operating expense projections.

If the business is already operating, provide historical data.
If it's a new business, you need to provide financial forecasts based on market analysis and sales strategy.

In the first year:

• Present reports monthly or quarterly.

From the second year onwards:

• Present reports annually.

These documents are usually placed in the appendix of the business plan for small businesses.

5. Long-term cash flow forecast

To increase professionalism, you should:

• Forecast cash flow for at least 5–6 years.

• Determine the break-even point.

• Show the stable growth phase.

If possible, you should include a business valuation method based on Discounted Cash Flow. This is especially important when you are building a business plan to raise investment capital.

6. Consider hiring expert support

If you do not have a strong financial background, you should:

• Ask an accountant to prepare standard reports.

• Consult with a lawyer on capital contribution and share structure.

The initial cost of hiring specialists may be high, but it will make your dossier more professional and reduce legal risks later on.

Step 8: How to write the executive summary in a business plan

1. Overview and company mission

• Company name and industry.

• Mission statement (why the company exists).

• Core values and long-term vision.

This section helps readers quickly understand the goals and vision in the business plan for small businesses.

2. Product or service summary

• What product/service do you offer?

• Key differentiators compared to competitors.

• Main benefits for customers.

This should be concise yet convincing enough to demonstrate competitive advantages.

3. Target market

• Who is the main customer?

• Market size and potential.

• Industry growth trends.

This section helps the fundraising business plan demonstrate real growth opportunities.

4. Objectives and development orientation

• Revenue targets for 1–3 years.

• Scaling plans.

• Key growth strategies.

This section should be consistent with the financial forecasts and marketing strategy presented previously.

5. Additional content by business type

For established businesses:

• Establishment date.

• Important growth milestones.

• Current revenue or growth rate.

• Major contracts, key customers.

For startups:

• Industry analysis and market opportunities.

• Legal structure (sole proprietorship, LLC, joint-stock company…).

• Amount of capital to be raised and purpose of funds.

• Whether or not to allocate shares to investors.

6. Achievements and future plans

Both new and established businesses should:

• Highlight notable achievements (awards, contracts, rapid growth…).

• Summarize upcoming development plans.

In summary, the executive summary section in the steps to create a business plan needs to be concise, clear, and strategic. If well-written, this will be the section that "sells" your entire idea in just the first few pages, creating a professional impression and significantly increasing the likelihood of funding approval or collaboration.

Method 3: Perfecting your Business Plan to convince investors

Step 1: How to build an appendix in a business plan

1. Supporting financial documents

The appendix should include:

• Income statement (if the business is already operating).

• Balance sheet.

• Cash flow statement.

• Detailed revenue and expense forecasts.

• Budget by item.

These documents help increase the credibility of the financial plan within the business plan.

2. Legal documents and licenses

You should attach:

• Business registration certificate.

• Operating license (if required by the industry).

• Lease agreement.

• Cooperation or supply contracts.

These documents prove that the business operates legally and has a practical foundation.

3. Contracts and revenue commitments

If available:

• Principal agreements with customers.

• Strategic cooperation agreements.

• Pre-orders.

Include these in the appendix to demonstrate that revenue forecasts are not just estimates but have concrete basis. This is especially important in a fundraising business plan.

4. Key team profiles

This section should include:

• Biographies or CVs of founders.

• Management team profiles.

• Notable achievements related to the industry.

This helps reinforce the organizational structure presented previously.

5. Presenting risks and mitigation plans

A professional business plan for small businesses does not avoid risks but needs to clearly identify:

• Market risks (declining demand, strong competition).

• Financial risks (cash flow shortages, rising costs).

• Legal risks or policy changes.

• Operational risks (staff shortages, supply chain disruptions).

After each risk, you need to clearly state:

• Contingency plan.

• Financial reserve fund.

• Adjustment strategy when the market fluctuates.

Proactive risk analysis shows that you have thought long-term and prepared contingency plans, rather than just focusing on optimistic scenarios.

Step 2: Review and revise the business plan before finalizing

1. Check for spelling and grammar errors multiple times

• Reread the entire document at least 2–3 times.

• Check for typos, incomplete sentences, or repetitive words.

• Ensure financial and business terms are used consistently.

In a fundraising business plan, even small errors can reduce credibility.

2. Edit from the reader's perspective

Especially important if you are writing a presentation for investors.

Ask yourself:

• Is the content clear to someone who knows nothing about the business?

• Are the benefits and potential highlighted?

• Are the figures logical and easy to understand?

If necessary, rewrite some sections completely to increase persuasiveness. An effective business plan for a small business is one that is easy to read, not the longest.

3. Read the document aloud

It sounds simple but is very effective:

• Helps detect awkward phrasing.

• Identifies verbose or unclear passages.

• Catches grammatical errors that might be missed when reading silently.

This is a practical step in the business planning process that many overlook.

4. Ask others for feedback

You should:

• Print a complete draft.

• Send it to someone with business or financial experience for review.

• Ask them for honest feedback on logic and feasibility.

Objective feedback helps you identify missing points or unconvincing arguments.

5. Protect your idea with a Non-Disclosure Agreement (NDA)

If the content contains creative elements or sensitive strategies:

• You may require readers to sign a Non-Disclosure Agreement.

• This helps protect information before you officially raise funds or make it public.

In conclusion, the revision phase is the final step in creating a professional business plan. A clear, coherent, error-free, and verified document will significantly enhance your credibility in the eyes of investors, banks, and partners.

Step 3: How to design a professional business plan cover page

1. Mandatory content on the cover page

The cover page should include:

• The phrase “Business Plan” centered on the page, bolded, large font size.

• Company name immediately below or above the title.

• Company logo (if any).

• Contact information:

  • Representative's full name.

  • Phone number.

  • Email.

  • Business address.

If it's a fundraising business plan, you can add:

• Document version (Version 1.0…).

• Date of issue.

2. Suggested layout

The cover page should be arranged as follows:

• Middle of the page:
  BUSINESS PLAN
  Company Name

• Bottom of the page:
  Logo
  Contact Information

Avoid putting too much information on the cover page. This is not the place to present strategies or objectives.

3. Simple but professional design

When creating a business plan for a small business, you should:

• Use a maximum of 1–2 main colors according to your brand identity.

• Choose an easy-to-read, formal font.

• Avoid busy backgrounds or too many effects.

A clean cover page helps your document stand out and creates a sense of reliability from the start.

Further resources and tools for business planning

1. Refer to guidance from the Small Business Administration (SBA)

The Small Business Administration is an agency that supports small businesses in the United States, providing very detailed planning documents and templates.

You can:

• Refer to the “Create A Business Plan” document set for professional presentation examples.

• Compare the document structure with your own to avoid omissions.

• Learn how to build financial forecasts according to international standards.

Even if you operate in Vietnam, you can apply the logical structure and presentation methods from this source to improve the quality of your business plan for fundraising.

2. Seek support from local agencies

If you are developing a business plan for a small business, you should proactively research:

• Local business support centers.

• Departments of Planning and Investment.

• Young Entrepreneurs Association.

• Chamber of Commerce in your area.

These entities often provide:

• Startup training courses.

• Legal forms and templates.

• Free or low-cost consultations.

Leveraging the support ecosystem will help you avoid many mistakes in the early stages.

3. Apply Business Model Canvas for startups

If you are a startup, instead of immediately writing a long plan, you should start with a lean model using the Lean Startup methodology.

The Lean Startup introduces this approach, focusing on rapid experimentation and continuous adjustment.

Business Model Canvas helps you:

• Summarize your business model on one page.

• Clearly define customer segments, core value, and revenue streams.

• Test feasibility before making large investments.

In reality, many investors highly value startups that use the Canvas before developing a full, professional business plan.

References

1. CDFI Fund. (n.d.). Business plan outline. U.S. Department of the Treasury. Retrieved from https://www.cdfifund.gov/sites/cdfi/files/documents/business-plan-outline.pdf
2. Entrepreneur. (n.d.). How to write a business plan. Retrieved from http://www.entrepreneur.com/article/38290#sec2
3. Entrepreneur. (n.d.). First steps: Writing the executive summary of your business plan. Retrieved from https://www.entrepreneur.com/starting-a-business/first-steps-writing-the-executive-summary-of-your-business/241071
4. Helena Ronis. (n.d.). Business advisor: Expert interview.
5. Indeed Editorial Team. (n.d.). Parts of a business plan. Retrieved from https://www.indeed.com/career-advice/career-development/parts-to-a-business-plan
6. OpenStax. (n.d.). The business plan. In Entrepreneurship. Retrieved from https://openstax.org/books/entrepreneurship/pages/11-4-the-business-plan
7. Queensland Government. (n.d.). Writing a marketing strategy plan. Business Queensland. Retrieved from https://www.business.qld.gov.au/running-business/marketing-sales/marketing/strategy-planning/writing-strategy-plan
8. The Writing Center, University of North Carolina at Chapel Hill. (n.d.). Editing and proofreading. Retrieved from https://writingcenter.unc.edu/tips-and-tools/editing-and-proofreading/

Translation: Ashley Wright Nguyen.