10 Types of Business Plans - Definition, Benefits, and more!

According to a study, businesses with plans grow 30% more quickly than those without.

But every time you sit down to plan, confusion takes over, leaving you unsure where to start, unclear on details, and fearing failure.

What adds to your fear is figuring out the type of business plan your business needs.

Frustrating, isn’t it? Not anymore!

In this blog, we’ll break down the different types of business plans and help you choose the right one for your business.

Let’s dive in.

What is a business plan?

A formal document that outlines your business strategies, target market, and financial projection to achieve your business goal is known as a business plan.

A well-crafted business plan serves as a roadmap for your business growth on how you’ll achieve your objectives over a specific period.

Remember, it’s a living document that needs updating as your business grows. Different plans, such as traditional, lean, and strategic, suit various stages of business development. Hence, understanding why these different types exist and what their purposes are is essential for selecting the right plan for your needs.

So let’s explore the next section for a better understanding.

Why do different types of business plans exist?

Here are reasons why there exist different business types:

Varied business goal

Businesses have diverse goals beyond just increasing sales and profit. They may focus on expanding their market reach or even enhancing brand awareness. Thus, each of these goals requires a different approach and strategies.

Different business stages

There are different types of business plans for startups and established businesses. A startup requires a business plan from scratch to outline its vision, secure funding, and validate its business idea.

Meanwhile, an established business needs a solid plan to focus on growth strategies, streamline operations, or even pivot into new markets.

Separate target audience

Business plans are tailored depending on whom you’re targeting. Whether they’re investors, partners, lenders, or internal teams.

Each audience demands a different style and focus, with changes in content and presentation to effectively communicate the business's goals and needs.

Distinct level of detail

A healthcare business requires an in-depth explanation of its operation and research hence the level of detail is high.

In contrast, a startup requires a more straightforward plan focusing on its core business idea, marketing plan, and basic startup costs and projections. Resulting in less detail.

The level of detail varies based on the industry complexity and specific business needs.

Constant evolving business growth

As market conditions change, businesses need adaptable plans that evolve with their strategies. Staying competitive requires new approaches to stay ahead in a dynamic market.

That’s about it. Now, let’s explore the different business plans.

Types of business plans

Here are the 10 types of business plans designed to address different needs and stages of business growth. Each type serves a unique purpose and provides a different level of detail.

1. Traditional business plan

Traditional business plans serve as the foundation for many entrepreneurs and growing businesses.

Its primary aim is to provide detailed insights into the business nature, market position, and competitive advantages. Such insights help businesses to craft a roadmap that offers growth, development, and prosperity to businesses.

Here are key components that are commonly included in a traditional business plan:

• A high-level overview (executive summary) of the business that includes the company’s mission, product or services, and key financial information.
• The business description provides detailed insights into the business's nature, market position, and competitive advantages.
• A market analysis that provides data on the industry landscape, target market demographics, and competitive analysis.
• Forecasts of revenue, expenses, and profitability to demonstrate financial viability.
• A description of your company's structure, management team, and key personnel.
• Your estimated income, expenses, and cash flow for the next several years.

2. Lean business plan

Unlike a traditional business plan which can be lengthy and complex, a lean business plan typically fits on one page.

It’s a simplified version of a traditional business plan that focuses on key elements like business model, target market, and essential finance.

A lean business plan is typically crafted for internal purposes or when experimenting with new products, services, or markets. The goal is to create a plan and immediately execute it to see if it succeeds.

Key features of a lean business plan are:

• Lean business plans focus on being short and to the point.
• They use bullet points and tables to share key information quickly and clearly.
• Lean business plans are designed to be easily updated as business evolves which allows for quick adjustments.
• A lean business plan focuses on practical steps like setting milestones and tracking performance to help businesses make smart decisions.

3. Internal Business Plan

The internal business plan is a strategic document that aims to bring management and employees on the same page and focuses on a common goal.

It’s designed to ensure that all team members understand their roles and stick to the roadmap to achieve the organization's vision effectively.

Additionally, the internal business plan outlines the resources available to the business. An internal business plan includes:

• Detailed plans for how to achieve those goals through day-to-day operations.
• Identification of potential challenges and strategies to mitigate them.
• Key performance indicators (KPIs) to track progress and success.
• A schedule outlining when key milestones will be achieved.
• Clarification of who is responsible for each part of the plan.
• Insight into the internal market dynamics.

4. Strategic Business Plan

A strategic business plan is a comprehensive document that outlines an organization's long-term goals and the strategies to achieve them.

It acts as a roadmap for decision-making, that helps your businesses align their resources and efforts with their overall vision.

The features of a strategic business plan include:

• Specific deadlines for achieving short-term and long-term objectives.
• Defines the business vision and states the mission statement.
• In-depth study of market trends, competition, and opportunities.
• Plans for allocating financial, human, and operational resources.
• Identification of potential risks and mitigation strategies.
• Strategy for differentiating the business in the market.
• Step-by-step plan to execute strategic goals.

5. Feasibility business plan

A feasibility business plan is a document or a plan that determines the practicality of a new business idea. It's a crucial step before investing significant time and resources into a venture.

A feasibility business plan helps entrepreneurs assess whether their proposed product or service has the potential to succeed in the market.

The feasibility business plan typically includes:

• A brief overview of the business idea, target market, and key financial projections.
• Details about the proposed offering, including its unique features and benefits.
• An assessment of the target market size, customer needs, and competition.
• An outline of the resources, processes, and infrastructure required.
• Identification of potential risks and mitigation strategies.

6. Operational business plan

An operational business plan is a detailed blueprint that outlines the specific actions and processes necessary to achieve an organization's strategic objectives.

It focuses on the internal operations of the company, including production, sales, marketing, and human resources. The purpose of operational planning is to streamline internal operations to achieve the desired goals effectively.

The operational business plan's purpose is to bring all team members on the same page and make them understand their roles and responsibilities in executing the company's goals.

Here are the key components of an operational business plan:

• Details the processes involved in producing goods or services, including equipment, materials, and staffing requirements.
• It clearly defines the roles of each team member, ensuring accountability and minimizing overlap in duties.
• Includes key performance indicators (KPIs) to measure progress and success.
• Explains the process of sourcing materials, managing inventory, and distributing products or services.
• Identifies potential risks and outlines strategies for mitigating them.
• Describes the technology infrastructure, systems, and software needed to support the business's operations.
• Outlines the strategies for reaching and acquiring customers, including sales channels, marketing campaigns, and pricing.

7. Growth business plan

A growth business plan outlines the necessary steps required to advance current business operations to achieve desired business goals. It serves as a roadmap for businesses looking to increase their market share, revenue, or customer base.

Importantly, a growth business plan focuses on identifying growth opportunities, developing strategies to capitalize on them, and allocating resources to support expansion.

The key components of a growth business plan include:

• Documents that examine the target market, including size, growth potential, and competition, to identify expansion opportunities.
• Blueprint that helps you identify the unique value proposition and competitive edge.
• Specific strategies for expanding the business, such as new product development, geographic expansion, or mergers and acquisitions.
• Updated financial forecasts that reflect the impact of growth.
• A clear roadmap for executing growth strategies, including timelines, resources, and key performance indicators (KPIs).

8. Startup business plan

A startup business plan is a foundational document that provides detailed information on the vision, objectives, and strategies for launching a new venture.

It serves as a roadmap for entrepreneurs, detailing everything from the business concept, techniques to deal with challenges to financial projections and growth plans.

The common components of a start up business plan include:

• Overview of business that includes your mission, product or services, target market, and financial goals.
• A detailed explanation of what the startup does, its unique value proposition, and how it solves a customer's problem.
• Detailed information on the company's structure, management team, and key personnel.
• The plan for reaching and attracting customers.
• Detailed forecasts of revenue, expenses, and profitability over a specified period
• An outline of capital needed to launch and what are the sustainable ROI.
• An explanation of the required resources, the duration for which the funds will be necessary, and how they’ll be utilized.

9. One-page business plan

A one-page business plan is a small version of the traditional plan that provides a quick overview of the business.

The purpose is to provide key information about the business clearly, which makes it easy for others to understand and make decisions quickly.

This format lets you quickly share your vision, strategies, and goals without overwhelming potential investors or stakeholders with too much detail.

The features of the one-page plan include:

• A short introduction to your business that includes mission, products or services, target market, and financial goals.
• A clear statement of the problem your business solves and the unique solution you offer.
• Overview of your target market, competitors, and industry trends.
• A brief introduction to the key members of your management team.
• If seeking funding, outline the amount requested and how the funds will be used.

10. Nonprofit business plan

Nonprofit organizations develop nonprofit business plans to achieve their social objectives. It serves as a roadmap for the organization, detailing how it intends to achieve its objectives, attract funding, and measure its impact.

The key components of a nonprofit business plan include:

• A clear and concise statement of the organization's purpose and goals.
• Detailed information about the programs and services offered.
• Identification of the specific groups or communities the organization serves.
• Plans for generating revenue, including grants, donations, memberships, and fundraising events.
• A summary of the organization's board of directors, management team, and governance policies.
• Estimated income, expenses, and cash flow for the next several years.

That said, let's see...

How to choose the right business plan type for your needs?

For a successful business plan, here's how to make an informed decision:

Understand your purpose

First, choose the right business plan to clarify your purpose. To do so, ask yourself what you want to achieve with the plan and why your business needs one.

Here are some aspects you should clear before you choose your plan:

• Is your goal to secure loans or attract investors?
• Are you aiming to expand your current business?
• Do you need a plan to guide your team and streamline operations?
• Are you exploring a new idea or project or thinking of launching a new product?

Consider your audience

Always consider to whom you’re addressing and what’s the purpose of addressing your business plan. Check out whether the business plan is for an investor, partner, lender, or internal team. Different audiences require different information and presentation styles.

Access your business scope

The complexity and scale of your business also influence the plan type you should choose. Hence, consider the following factors before choosing:

• Think about your business stage—whether you’re a startup, an established firm, or an expanding business. 
• Evaluate your market size—if it's highly competitive, you'll need a detailed, analytical plan, while a smaller market may require a simpler approach.
• Look into your product and service—They dictate the plan type. Every product and services need a different plan and strategies to move in the market.

Focus on the right format

Different business plans have different formats, each serving a specific purpose. Always choose the format based on your audience. 

For example, a one-page plan works for quick overviews, while a detailed plan is better suited for investors or lenders looking for in-depth insights.

However, consider the following aspects when choosing a business plan format:

• Audience you are addressing
• Font and layout choices
• Presentation style
• Length of the plan
• Presentation tone