A Business Plan is a great way to start with funding options. Most lenders and investors will require some type of business plan before they will consider funding your business venture. The technical definition of a business plan is “a document setting out a business’s future objectives and strategies for achieving them.” These plans are great for securing funding, but they are also helpful in planning out your business, how you plan to make money, laying out specific product choices, your management team and many other factors that will ultimately help you create a business that has a chance to succeed in this world.
Is there more than one type of business plan?
There are two major types of business plans. There is a traditional plan and a lean startup plan. Both have their advantages and disadvantages. Here is a bit about both types:
Traditional Business Plans: This type of plan is very detailed, takes more time to write, and is comprehensive. Lenders and investors commonly request this plan.
Lean Startup Plans: This type of plan is a high-level focus, fast to write, and contains key elements only. Some lenders and investors may ask for more information.
Most investors and lenders will want a Traditional Business Plan, or if presented with a Lean Startup Plan, they may request additional information on finances and startup costs.
What does a plan need to include?
There is a lot that goes into both versions. With a traditional business plan, you will typically want the following:
- Executive summary
- Company Description
- Market Analysis
- Organization staff and management
- Service or product line
- Marketing and sales
- Funding request
- Financial projections
- Supporting documents
While in a Lean Startup Plan, you’ll want information such as:
- Key Partnership
- Key activities
- Key Resources
- Value proposition
- Customer Relationship
- Customer segments
- Channels
- Cost structure
- Revenue streams
Information can be found on sba.gov for more information on both of these plans and some example of them can be found here. There is a lot that goes into business planning and as an added note, most lenders and some investors may require a life insurance policy on you, the business owner, or your key person. In the event something happens to you the investors or lenders can recoup their money.
Planning for Growth and Risk
Additionally, a well-developed Business Plan is not a one-time document—it should evolve as your business grows. Regularly revisiting and updating your plan allows you to adjust for market trends, shifts in consumer behavior, and changes in your financial position. This ongoing refinement helps business owners stay aligned with their goals and make informed decisions backed by data rather than assumptions. It can also improve communication with stakeholders, as a clear and updated plan demonstrates accountability, preparedness, and long-term vision.
Another critical component to consider is risk assessment. Identifying potential challenges, such as economic downturns, competition, or operational disruptions—within your Business Plan allows you to proactively develop contingency strategies. This not only strengthens your credibility with lenders and investors but also increases your resilience as a business owner.
Research also supports the value of formal planning. A study published in the Journal of Management Studies found that entrepreneurs who engage in business planning are more likely to achieve growth and secure funding compared to those who do not.
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This article was updated on 4/27/2026.