Did you know that December is National Write a Business Plan Month? Perfect timing, right? With shorter days, end-of-year reflections, and goal-setting for the year ahead, there’s no better time to sit down and craft that all-important business plan.

But where should you start? While there’s no one-size-fits-all answer, most business plans fall into two major categories: traditional and lean startup. Whether you’re launching a brand-new business or refining your existing operations, understanding the differences between these types of plans will help you figure out which approach works best for you.

Below, we’ll cover the ins and outs of both traditional and lean startup business plans and guide you on writing one that sets you on the path to success.

What is a Traditional Business Plan?

A traditional business plan is the most commonly used format, often required by lenders or investors. These plans are highly structured, detailed, and provide an in-depth overview of your business. They can be anywhere from several pages to dozens, depending on your needs.

While drafting a traditional business plan takes a significant amount of time and effort, it provides a comprehensive roadmap for your venture. It’s particularly suited for businesses seeking funding, as it contains all the necessary details to show potential lenders or investors why you’re a safe bet.

How to Write a Traditional Business Plan

The traditional business plan format is typically divided into nine sections. While you don’t need to include every single section, these core elements offer the framework to build out your plan:

1. Executive Summary

Provide a brief yet engaging overview of your company, its mission, services or products, and your high-level growth plans. This section sets the tone for the rest of the document and should grab the reader’s attention.

2. Company Description

Go into detail about what your company does, the problems it solves, and who you serve. Highlight the strengths that set your business apart, like your leadership team, location, or unique value proposition.

3. Market Analysis

Dive into your industry and target market. What are the key trends, and how does your business fit into the competitive landscape? Show that you’ve done your homework and can leverage opportunities in the marketplace.

4. Organization and Management

Outline your business structure—partnership, LLC, S Corporation, etc.—and explain the roles of your team members. Including an organizational chart and resumes of key personnel can build confidence in your leadership.

5. Service or Product Line

What do you sell, and why should customers care? Detail your offerings, their benefits, and any intellectual property associated with them. If relevant, mention your research and development plans.

6. Marketing and Sales Strategy

How will you attract and retain customers? Map out your marketing approach and describe your sales process in detail. This section also lays the groundwork for your financial projections later.

7. Funding Request

If you’re seeking funding, specify how much you need, the terms you prefer, and how the money will be used. This could include operating expenses, equipment purchases, and even debt repayment plans.

8. Financial Projections

Show how your company is financially viable by including projected income statements, cash flow reports, and balance sheets for the next 3–5 years. Use visuals like graphs to make your case engaging and clear.

9. Appendix

Think of this as the “extras” section for detailed documentation, from legal contracts to product photos and reference letters.

The traditional business plan provides a full snapshot of your business. Though it takes time to assemble, it’s worth the effort if you’re serious about pitching to investors or shaping a polished, long-term strategy.

Check out this example of a traditional business plan.

What is a Lean Startup Business Plan?

If a traditional plan feels too time-consuming or overwhelming, a lean startup business plan might be a better fit. These plans are concise, flexible, and often just a single page. They focus on summarizing the most important aspects of your business and are adaptable for new or evolving businesses.

The lean startup format is perfect for entrepreneurs testing their concept, startups needing agility, or business owners who routinely tweak their strategies as conditions change.

How to Write a Lean Startup Business Plan

The lean startup format also includes nine sections, but it’s purposefully stripped down to keep things lean and actionable. Here’s what to include:

1. Key Partnerships

List the external businesses or services that support your operations, such as suppliers, manufacturers, or distributors.

2. Key Activities

Identify your competitive advantage–what you’ll do differently to attract customers or cut costs.

3. Key Resources

What assets (physical, human, or intellectual) will drive your product or service value? Include anything from your staff and funding to patents.

4. Value Proposition

What makes your business stand out? Identify the unique value you offer customers and why they should choose you over competitors.

5. Customer Relationships

Describe how customers will interact with your business. Will it be automated and scalable, or hands-on and personal?

6. Customer Segments

Define your target market with specificity. Who are your ideal customers, and how do they prioritize value?

7. Channels

Outline how you’ll deliver your value proposition to customers. Will you use e-commerce, social media, events, or other methods?

8. Cost Structure

List the primary costs of running your business, and decide whether you’ll be more focused on reducing costs or adding value.

9. Revenue Streams

Explain how you plan to make money. What are your primary revenue sources—direct sales, memberships, advertising, or something else?

Although shorter, lean startup plans provide a foundation that can grow and change with your company.

Check out this example of a lean business plan.

Which Plan is Right for Your Business?

Ultimately, the choice between a traditional and lean startup business plan depends on your specific needs and goals as an entrepreneur.

• Go with a traditional plan if…

You’re looking for funding or formalizing a detailed, long-term strategy for your business.

• Opt for a lean startup plan if…

You’re a new business owner, need a quick framework to get started, or like to keep things flexible and adaptable.

Whether traditional or lean, every good business plan serves as your north star, guiding your decisions and driving your success. Writing a plan may seem daunting, but it’s a small investment in time that can make all the difference for your business.

For more small business insights and resources, visit the Clementine blog.