Different types of business plans, and which is best for you?

A business plan is primarily a simple document that covers about 9 to 12 components that one should consider while starting, running and/or expanding a business.

The level of details which is covered in the business plan, defines the type of business plan.

In other words, the purpose of which the business plan is used, defines the type of business plan.

So, the types of business plan are:

  1. Level 1 business plan – the one-page business plan
  2. Level 2 business plan – the investor presentation business plan
  3. Level 3 business plan – Vision to reality business plan


Level 1 Business Plan – The one pager:

This business plan is the one that every start-up starts with. They get a free online template off the net and fill in the spaces and soon they have their business plan.

This is a great start as it provides the individual a bird’s eye view of his entire business and help him/her to take some vital decision on how to proceed further based on what are his available resource and limitations.

The limitations of the kind of business plan is that it has no details of how to get the job done.


Level 2 Business Plan – The investor presentation business plan


This is a trick one, as there are different kinds of investors; like personal investors, family, relative or friends as investors, angel investors, venture capitalist and so on.

Each investor has their own agenda and their own take-aways from the business.

Hence the business plan has to be tailored accordingly.

The main scope of this kind of business plan is to show:

  • The investor the market potential
  • The approximate numbers of potential customers
  • How one plans to convert them to loyal customers
  • How soon and within how much investment.
  • This has to be shown as a break-up of stages of investment required against a measurable result

The limitation of this kind of business plan is that, the entire plan is based on hypotheses that are very hard to be proved.  For example; the total number of women who love apples in a given city. How can one prove that?


Level 3 business plan – Vision to reality business plan

This business plan is the most time consuming and most rewarding to do.

It is the blueprint for a business to take it from just an idea to a sustainable revenue making business plan.

This business plan would have each component broken up into various levels of details that are just a list of sequence of activities.

The person who is using this business plan just has to follow the list of activities in the to-do list to get things done. 


In conclusion:

The major 3 types of business plans are explained and its now up to you to decided which is your requirement.

If I were to sequence it:

  • It would be to first create a one pager business plan
  • Then create the level 3 vision to reality business plan
  • And then edit it for your level 2 investors business plan

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