Business plan template
Startup Business Plan Template
Updated · Team Fonda
Short answer
A startup business plan has ten chapters: Executive Summary, Problem & Opportunity, Solution & Product, Market Analysis, Competition & Differentiation, Business Model, Operations & Technology, Team & Organization, Financial Plan, and Risks & Mitigation. Because a startup has little history, each chapter should separate what you have evidence for from what you are still assuming, and say how you will test the assumptions.
Key takeaways
- A startup plan is a list of assumptions with evidence attached, not a forecast of certain results.
- Readers check the problem, the team and the unit economics before they look at five-year revenue.
- Size the market from the bottom up: reachable customers multiplied by what each pays.
- Tie the money you ask for to milestones: what it buys and what it will prove.
- Write the executive summary last and keep it to one page.
Who reads a startup business plan and what they look for
A startup is a new business built to grow quickly around something unproven: a new product, a new market or a new way of selling. That uncertainty changes what readers want. They cannot judge you on past sales, so they judge the quality of your evidence and your reasoning.
| Reader | What they look for |
|---|---|
| You and your co-founders | Agreement on the customer, the first product and what you will do in the next 6 to 12 months. |
| Angel investors and early-stage funds | A painful problem, a large enough market, a team that can build and sell, early signs of demand, and what the money will prove. Many read a pitch deck first and the plan during their checks. |
| Accelerators and incubators | A clear problem and a team that learns fast. Application forms often ask the same questions as chapters 2 to 5. |
| Banks and grant bodies | A complete written plan with financial forecasts. Public grants and startup visa programs often require one, in a set format. |
| Early hires and advisors | Whether the company has a believable path and where they fit in. |
The plan and the deck do different jobs. The deck is a short visual argument for a meeting. The plan is the full reasoning behind it. See how to create a pitch deck for the deck.
The startup business plan outline: chapters 1 to 5
The first half makes the case that a real problem exists and that you have a better answer. Fonda's business plan uses this same 10-chapter structure, with sources and an appendix, and you can read example plans there.
| Chapter | What to write for a startup | Questions to answer |
|---|---|---|
| 1. Executive Summary | One page covering the problem, the product, the customer, evidence so far, the business model, the team and the ask. Write it last. | What would a reader remember after one minute? What have you proven? What are you asking for and what will it achieve? |
| 2. Problem & Opportunity | The problem in the customer's words, who has it, how they cope today and why now is the right time. | How many customers have you spoken to and what did they say? What does the problem cost them in time or money? What changed to make a new solution possible? |
| 3. Solution & Product | What the product does, the first version (your MVP), what is built already and the roadmap for the next year. | What is the smallest version that solves the core problem? What stage are you at: idea, prototype or paying users? What will you deliberately not build yet? |
| 4. Market Analysis | The first customer segment, then market size at three levels, with sources and your working shown. | Who buys first and why them? How many such customers exist and what would each pay per year? Is the market growing, and who says so? |
| 5. Competition & Differentiation | Direct competitors, substitutes and doing nothing. A comparison on the things customers care about, and what makes you hard to copy. | What do customers use today? Where are those options weak? What do you have that a larger company could not copy in a few months? |
The three market levels are TAM, SAM and SOM: everyone who could buy, the part you can serve, and the part you can realistically win in the first years. The TAM SAM SOM calculator helps you build them from customer counts.
The startup business plan outline: chapters 6 to 10
The second half shows how the company makes money, who runs it and what could go wrong.
| Chapter | What to write for a startup | Questions to answer |
|---|---|---|
| 6. Business Model | Who pays, how much and how often. The cost to deliver, the sales channel and the cost to win a customer. | What is your pricing and how did you test it? Which one or two channels will bring the first hundred customers? Does a customer bring in more than they cost to win? |
| 7. Operations & Technology | How the product is built and delivered: technology choices, key suppliers, data and security, legal setup, milestones with dates. | What do you build and what do you buy? Which single dependency could stop you? What are the next three milestones? |
| 8. Team & Organization | Founders, roles, relevant experience, time commitment, ownership split and vesting, advisors, first hires. | Why is this team suited to this problem? Which skill is missing and when will you hire for it? How is equity divided and why? |
| 9. Financial Plan | Assumptions first. Then monthly forecasts for 12 to 24 months, yearly figures for three years, burn, runway, the amount you are raising and its use. | Which few assumptions drive the forecast? When do you run out of cash without funding? What does the raise buy and what will it prove? |
| 10. Risks & Mitigation | The main risks by type (market, product, team, money, legal), the evidence for each, your response and the signal that would trigger it. | Which assumption is most likely to be wrong? How will you find out cheaply? What is plan B? |
Show your assumptions
In the financial plan, put a short table of assumptions before any forecast: price, conversion rate, churn, cost to win a customer, hiring dates. A reader who disagrees with one number can then see what changes, instead of dismissing the whole forecast.
Key numbers a startup plan needs
| Metric | How to calculate it |
|---|---|
| Market size (bottom-up) | Number of customers in the segment x what one customer pays per year. |
| Customer acquisition cost (CAC) | Sales and marketing spend in a period / new customers won in that period. |
| Gross margin | (Revenue - direct cost of delivering the product) / revenue. |
| Customer lifetime value (LTV) | Average revenue per customer per month x gross margin x average customer lifetime in months. |
| LTV to CAC ratio | LTV / CAC. |
| CAC payback period | CAC / (average monthly revenue per customer x gross margin), in months. |
| Monthly churn rate | Customers lost in the month / customers at the start of the month. |
| Monthly recurring revenue (MRR) | Sum of what all active subscribers pay per month. For non-subscription businesses, use monthly revenue and repeat-purchase rate. |
| Net burn rate | Cash spent in a month - cash received in that month. |
| Runway | Cash in the bank / net burn rate, in months. |
Before launch, these are assumptions. Label them that way and say what evidence each rests on, such as a pricing test, a waitlist or interviews.
Free calculators for these include the unit economics calculator and the startup runway calculator. Do not paste in benchmark values, such as a target ratio or a typical churn rate, unless you can link where they come from and they apply to your type of business.
Example chapter: Risks & Mitigation for an imaginary startup
This is an example
Shelfwise is an imaginary startup that sells stock-ordering software to independent grocery stores. The details are invented to show the format.
| Risk | What we know | What we will do | Signal to act |
|---|---|---|---|
| Store owners will not pay for software | Say 11 of 18 owners interviewed said they would pay, and 4 signed up for a paid pilot. | Run the pilot for three months and charge from day one. | Fewer than three of four pilot stores renew. |
| Connecting to old till systems takes too long | Say two till systems cover most of the stores we interviewed. | Support only those two in year one. Offer spreadsheet upload for the rest. | A new integration takes more than four weeks of work. |
| Selling store by store costs too much | Assumed. We have no data yet. | Test a partnership with one regional wholesaler that already visits these stores. | Cost to win a store exceeds its first-year gross margin. |
| A large till provider adds the same feature | Not listed on the public pages of the providers we checked this month. | Focus on forecasting for fresh produce, where waste is highest and general tools are weakest. | A provider announces a comparable feature. |
| Only one founder writes code | True today. | Document the system and hire a second engineer with the first funding. | Founder unavailable for more than two weeks. |
Each row states evidence, an action and a trigger. That is more convincing than a list of risks followed by "we will monitor this closely".
Mistakes that sink startup business plans
- No customer evidence. A problem chapter based only on your own opinion is the weakest start. Talk to customers first. How to validate a startup idea shows how.
- Top-down market sizing. "If we win 1% of a huge market" is not an argument. Count reachable customers and multiply by price.
- "We have no competitors." Customers always have an alternative, even if it is a spreadsheet or doing nothing. Naming it shows you understand the buyer.
- Hockey-stick revenue with no stated assumptions. Readers discount forecasts they cannot trace back to price, conversion and churn.
- A product chapter that crowds out everything else. Ten pages of features and one paragraph on how you reach customers tells investors where your blind spot is.
- An ask with no milestones. State the amount, how many months it lasts and what will be true at the end that is not true now.
- Leaving out founder pay and the equity split. Both affect whether the team can last. Put them in chapters 8 and 9.
Frequently asked questions
Do investors still read business plans?
Many early-stage investors start with a pitch deck and a conversation, then ask for more detail later. Even when nobody asks for the document, the work behind it is what lets you answer their questions. Banks, grant programs and some visa schemes do require a written plan.
How long should a startup business plan be?
Long enough to cover the ten chapters with evidence and no longer. There is no required page count, unless a lender or grant program sets one. Put supporting material such as interview notes and detailed financial tables in the appendix.
What is the difference between a startup business plan and a small business plan?
A small business plan usually describes a known model, such as a cafe, and focuses on location, costs and steady profit. A startup plan describes an unproven model aiming at fast growth, so it puts more weight on evidence of demand, market size, unit economics and funding.
How far ahead should the financial forecast go?
Three years is common: monthly for the first 12 to 24 months and yearly after that. The first year matters most because it rests on assumptions you can test soon. Some lenders and grant programs set their own required period, so check.
Should I write the plan before or after building an MVP?
Draft it before, because it shows which assumptions the MVP needs to test. Then update it with what you learn. A plan written once and never revised is out of date after your first ten customer conversations.
Can I start with a one-page version?
Yes. A one-page plan or a lean canvas is a good first draft, and each box expands into one of the ten chapters when you need the full document.