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Can You Use ChatGPT to Write a Business Plan? Yes, Here's How [Updated Fall 2024]

Noah Parsons

24 min. read

Updated January 7, 2025

The new generation of generative artificial intelligence (AI) tools, like OpenAI’s ChatGPT and Google’s Gemini, are fundamentally changing how we create. They can competently write, generate ideas, develop recipes, and even help plan vacations. 

I’ve been looking into how these tools can help with business tasks, specifically business planning. Can generative AI take an idea for a business and transform it into a comprehensive business plan? Can it be used as a business plan generator?

The answer is “yes,” but it’s not as simple as pushing a single button and getting everything you need. 

You have to follow a process. Even then, ChatGPT can’t do everything necessary to create a complete business plan. Even more importantly, these tools can’t help you implement the plan and manage your business (yet!).  

In this article, I’ll guide you through using ChatGPT and provide business planning prompts to help you write each section of your business plan. You’ll learn how to quickly create a business plan using AI, understand its limitations, and forever banish writer’s block. 

For more on using ChatGPT to grow your business, check out our guides for creating a financial forecast and advanced ChatGPT prompts for better forecasting.

Note: I’ve revisited and updated this article in October, 2024 to reflect changes and updates to ChatGPT. In some places, the service and output has improved and that has been noted. In others, its output may have changed slightly, but the overall analysis is still valid.

What is ChatGPT?

ChatGPT is an advanced AI language model developed by OpenAI. It’s designed to simulate human-like conversations by processing text inputs, understanding the context, and generating appropriate responses. 

While not perfect, recent advancements have significantly improved its ability to provide accurate, relevant, and context-aware information—making it more effective in various personal and professional applications.

Related Reading: Best AI-Powered Business Plan Generators Ranked

3 tips to make ChatGPT business plan writing easier

Before we dive into the specifics of using ChatGPT to write a business plan, here are a few tips that will make the process faster and easier:

1. 1.Use a unique prompt for each section of your business plan instead of one large single prompt for your entire plan.
2. 2.Ask ChatGPT for revisions and adjustments to the output as you go. Asking the chatbot to adjust its output is easier than revising your initial prompt.
3. 3.Do some research from reputable sources up-front so that you can spot “hallucinations” in the output. ChatGPT is not perfect and doesn’t always provide factual information.

How to create a business plan with ChatGPT

1. Create a simple business plan outline

Don’t go straight to ChatGPT and ask it to write you a complete business plan. This task is a bit too big for it—at least right now—and you’ll end up with a simple, shallow, and generic overview of your business. 

Instead, divide the business plan into bite-sized sections and use ChatGPT to help you write one section at a time. This approach generates far more detail and the combined results are much more impressive. To divide your business plan into sections, or chapters, you need a business plan outline.

Not sure what sections you need? Ask ChatGPT to create a business plan outline.

Overall, the plan outline ChatGPT provides is decent. It includes most of the sections you should include in a business plan. However, it isn’t organized very well and places topics like “legal structure” and “ownership and management” in positions that are too prominent.

If you’re trying to raise money, or just exploring your business strategy—your plan should highlight your idea and the market opportunity instead.

To see better results from your ChatGPT business plan, try using this business plan outline instead:

• •Executive Summary
• •Products & Services
• •Target Market
• •Competition
• •Marketing & Sales
• •Operations
• •Milestones & Metrics
• •Company Overview & Team
• •Financial Plan
• •Appendix

Need even more detail? Check out the complete, expanded business plan outline.

Using this outline will help you focus on defining what your business opportunity is and why your idea deserves funding. 

I’ll use this structure for the remainder of this guide to help influence my prompts in ChatGPT and better organize my plan.

A quick note: You should write your executive summary last, so I’m skipping that section for now and will tackle it at the end.

2. Write about your product or service

In this section of your plan, you describe your product or service and the problems that it solves for your customers. You’ll also describe any initial traction, intellectual property, and future products or services that you plan to offer. 

To use ChatGPT effectively, start your prompt by describing what your business does. The more detail you can provide, the better. Then ask it to help write the products & services section of your business plan. 

You can see my prompt and part of the initial response here:

The initial output is honestly impressive, but also a bit generic. 

In this example, that’s caused by my generic prompt. I didn’t describe my business in much detail or explain what makes the business unique. 

If I had added those details to my prompt, I may have received a more specific output. Regardless, the text from ChatGPT will almost never be a straight cut-and-paste for your business plan. You’ll have to review it carefully and customize it for your business and your product offering. 

To get better results, I would add information to the product description in my prompt that includes the types of waterproofing technology my business is using and what makes my products stylish. I would also include some information about initial customer feedback that I’ve received on my prototypes.

As with all ChatGPT prompts, describing the output that you want is also important. I asked ChatGPT only to cover the problem that my business solves and future product offerings. I could have also asked it to describe our initial traction and intellectual property, assuming I’d provided that information in the product description.

Here are the prompts I recommend using now to achieve better results.

Core products and services ChatGPT prompt:

I am starting a [business description]. Help me craft a strong “Opportunity” section for my business plan. Clearly articulate the problem I’m solving, my unique solution, and any traction achieved. I need to demonstrate why now is the right time for my business, [business name]. Describe the significant pain point or unmet need experienced by my target customers, [target customer description]. Explain how my product/service directly solves the problem, detailing its key features and benefits. How is it innovative or different from competitors?

Additional prompts:

• •Describe my initial traction that I have with my customers, which includes [description of any early successes including sales figures, user growth, partnerships, positive testimonials, or awards.]
• •Explain what makes this the ideal time to launch my business. Are there favorable market shifts, technological advancements, or gaps my solution is poised to fill?

Weakness: ChatGPT might not fully understand unique, niche, or complex products/services, leading to incomplete or inaccurate descriptions. As long as you’re aware of this, the text it generates is a good starting point.

3. Develop a market analysis

A market analysis provides an overview of your target market, total market size and segments, market trends, and an industry analysis.

To make the most of ChatGPT, provide a brief overview of your target market and any additional information you may have. If you’re unsure who your target market is, you can also ask ChatGPT for ideas. 

When I initially used ChatGPT for this task, it provided a great starting point but lacked a lot of detail. It didn’t provide any real market size numbers or specifics on the growth of the ski industry. 

If you are starting this business, you’d want to know what your potential market size is to make some educated guesses about the potential revenue you might generate. Investors will also want to know these details and a generic plan without facts and numbers is not all that useful. 

Since I originally wrote this article, ChatGPT has improved. Using the following prompts it will provide some information on the size of my industry and market segments.

Core ChatGPT market analysis prompt:

Help me write a comprehensive market analysis for my business plan. My business is [business name], and we offer [products/services] within the [industry] sector. Cover the following key areas:

• •Market Size & Growth: Quantify the current market size in terms of value or volume. Identify and discuss trends influencing market growth (or decline).
• •Target Customers: Create detailed customer profiles of my ideal segments (demographics, psychographics, needs, buying behaviors).

Additional prompts:

• •Market Segmentation: “Break down the market into smaller segments – are there lucrative niches to target?”
• •Data Sources: “Suggest reliable sources for industry reports, market statistics, and competitor insights.”

That said, you need to fact-check this data – you can’t just trust that it’s correct. ChatGPT also has trouble telling you where it found its data and doesn’t always cite sources correctly.

The only way around this issue that I’ve found is to do some old-fashioned Google searches and include data from trusted industry data sources in my business plan.

For now, ChatGPT is good for generating some decent writing and structure for the market analysis section of the plan. You’ll still have to do a bit of work on your own and go find some facts to plug into the paragraphs that ChatGPT has written. 

Weakness: ChatGPT’s knowledge is limited and it has trouble citing specific sources.  You’ll need to fill in the details with your own research.

4. Provide an overview of your competition

A good competitive analysis reviews the current alternatives on the market and describes your advantages. You should also review any barriers that your company can create to prevent competitors from seizing your opportunity.

If you know who your competition is, provide ChatGPT with that information as well as a summary of why your business is superior. If you don’t know who your competitors are, you can ask ChatGPT for ideas. 

But be careful to double-check the output that ChatGPT provides. It sometimes will invent information and confidently present that information as fact. Be sure to double-check everything and don’t assume that it’s true.

ChatGPT does an admirable job of comparing our product to the competition as well as summarizing the competitive advantages. Of course, it’s a bit generic and should be edited to add more specifics, but it’s a solid place to start. 

For even better results, here is the revised prompt I recommend using.

Core competitive analysis ChatGPT prompt:

Help me craft a strong “Competition” section for my business plan. My business is [business name], offering [product/service] in the [industry] sector. Cover the following key areas:

• •Competitor Analysis: Identify my top 3-5 direct competitors and analyze their strengths, weaknesses, pricing, marketing strategies, and target customer overlap.
• •Indirect Competition: List companies offering alternative solutions or partially addressing the same customer need.
• •Competitive Advantage: Clearly articulate how my product/service is unique, better, or fills unmet needs compared to the competition.
• •Barriers to Entry: Outline challenges new competitors would face (high startup costs, patents, customer loyalty to existing brands, etc.).
• •Opportunities & Threats:
• •Identify potential weaknesses in competitor offerings that I can capitalize on.
• •Predict any competitive shifts that could threaten my business (emerging technologies, consolidation, etc.).

Additional prompts:

• •SWOT Focus: “Summarize my competitive analysis in a SWOT framework specifically tailored to my business compared to the competition.”
• •Future Outlook: “Analyze how the competitive landscape might evolve and how my business is positioned to adapt.”
• •Customer Perspective: “Assess the competition through the eyes of my target customer – What influences their purchasing decisions?”

Just be careful to double-check the output that ChatGPT provides. It sometimes will invent information and confidently present that information as facts. Be sure to double-check everything and don’t assume that it’s true.

Weakness: ChatGPT isn’t a full-blown competitive research tool at this point. You’ll need to do some of your own research to understand who your competitors are and what their value proposition is in the market.

5. Develop a marketing and sales plan

A good marketing and sales plan will explain your market positioning, and unique value proposition, as well as outline your marketing, sales, and pricing strategies.

Again, providing ChatGPT with as much detail as possible yields the best results. The more you can describe the business you’re building and the type of marketing and sales strategy you plan on using, the better writing it will do for you.

Core marketing and sales plan ChatGPT prompt:

Help me develop a detailed “Marketing and Sales” plan for my business, [business name].  My target customers are [describe ideal customer profile] within the [industry]. Outline the following aspects:

• •Market Positioning: Define how I will position my brand and offerings within the marketplace. I want to be perceived as [luxury, budget, etc.]
• •Marketing Channels: Where does my target audience spend their time? List potential online and offline channels to reach them (website, social media, content marketing, trade shows, etc.).
• •Sales Process: Outline the steps from lead generation to closing a sale. I will use a [direct sales team, online store, distributors, or a combination]. Describe the customer’s sales journey.
• •Pricing Strategy: Explain my pricing model [premium, competitive, etc.] and the rationale behind it. Consider costs, market comparisons, and perceived value.

Additional Prompt Elements:

• •Budget: “My preliminary marketing budget is [$]. Suggest marketing channels and marketing tactics that align with this budget”
• •Metrics: “Identify key metrics to track the effectiveness of my marketing and sales efforts.”

If you’re short of marketing ideas, you can ask ChatGPT to list marketing and sales ideas tailored to your business. 

Provide your target market, product/service offering, and desired marketing channels, then ask the AI for suggestions. If you like the ideas, you can incorporate them into your prompt when you ask the AI to help write the marketing and sales strategy section of your business plan.

As a useful follow-up, you can ask the AI to generate some advertising copy, social media posts, or promotional materials based on the marketing plan that it generated.

Weakness: The AI-generated strategies may lack creativity or industry-specific insights, potentially limiting their effectiveness.

6. Operations

The operations section of your business plan describes how your business functions. If you have physical stores,manufacturing facilities, or your products are manufactured in a different country you’ll describe that here. 

Once again, to get the most out of ChatGPT, describe as much as you know about your operational plan and then ask the AI to flesh it out. 

Core operations ChatGPT prompt:

Help me write an “Operations” section for my business plan. My business is [business name], offering [products/services] in the [industry] sector. Cover the following key areas:

• •Location & Facilities: Describe my business location (physical/virtual/hybrid). Detail any specialized facility needs (manufacturing space, storefront, etc.).
• •Technology & Equipment: Outline essential software, hardware, tools, and specialized equipment required. Specify any technology unique to my industry.
• •Production/Workflow: Map out the process for creating my product or delivering my service. Identify potential bottlenecks for optimization.
• •Suppliers & Inventory: If applicable, describe my sourcing strategy and relationships with key suppliers. Explain any inventory management systems in place.
• •Regulatory/Legal: List any critical permits, licenses, or regulations that impact my operations.

If you’re not sure about what your operations should look like, you can ask ChatGPT for ideas. Ask it, “How should I operate my [ski clothing] business?” and it will give you ideas based on your specific business. It might have suggestions around supply chain, customer service, sales, and more.

That said, every business is unique. Your location will be unique and how you choose to do your manufacturing and customer service will likely be different from your competitors. Use ChatGPT for ideas, but then fill in the details that you know specifically.

Weakness: You’ll get out what you put into this section. There’s not a lot of creativity that ChatGPT can add, so you’re really just using it as a writing assistant. Make sure to include as much detail in your prompts as possible.

7. Milestones & metrics

Milestones are important dates for your business—essentially a roadmap for how you plan to build your business. 

AI can be helpful and give you some ideas for key milestones, but you’ll need to customize this section to match your business, your schedule, and your own timeline.

Milestones are all about goals and accountability.

It doesn’t matter how great your idea is if you can’t execute and make it happen. Milestones are all about coming up with a plan to turn your idea into reality, so spend a little time here thinking about a realistic timeline and plan.

Core milestones and metrics ChatGPT prompt

Help me craft a strong “Milestones and Metrics” section for my business plan. My business is [business name], offering [product/service] in the [industry]. Break it down as follows:

Key Milestones: Outline 5-8 of my most significant goals over the next 1-3 years. These should be: 

• •Specific: Avoid vague goals; state precisely what needs to happen.
• •Time-Bound: Include a target date for completion. 
• •Relevant: Goals should directly support business growth and vision. 

Examples: Secure funding, launch product, reach a revenue target, open a new location, etc.

Key Performance Indicators (KPIs): List 5-8 metrics that will best measure the progress towards those milestones and my overall business health. Consider the following categories: 

• •Financial: Sales revenue, gross profit margin, customer acquisition cost (CAC), etc. 
• •Customer-Related: Net promoter score (NPS), customer retention, website traffic, etc. 
• •Operational: Production efficiency, order fulfillment time, etc. Explain why each KPI is important and how I plan to track them.

Weakness: This prompt will generate ideas for milestones and metrics, but you’ll need to customize them for your business to get the best results.

8. Company overview & team

This section offers a detailed description of your company, including its history and ownership. 

To use ChatGPT for this section, summarize your company’s background and ask the AI to expand on it, focusing on aspects such as the business structure and core values.

Core company overview chatGPT prompt:

Help me write a “Company Overview” for my business plan. My company, [company name], operates within the [industry] sector. Cover the following essential details:

• •Legal Structure: My company is a [Sole Proprietorship, Partnership, LLC, Corporation, etc.]. Briefly explain the reason behind this choice.
• •Ownership: [List the owners/founders, their titles, and percentage of ownership]

Additional prompts:

• •Company History: Summarize my company history based on the following information: [Founding date and location, major milestones achieved to date (if existing business), etc.]

You’ll also want to define your company’s organizational structure and management team. To use ChatGPT, briefly describe your management team’s roles and responsibilities, and ask the AI to create an organizational chart and expand on each role’s duties. 

You can even ask it to list out any role gaps that you should be aware of.

Core management team ChatGPT prompt:

Help me write a “Management Team” section for my business plan. My company is [company name] operating in the [industry]. Include the following:

Acknowledge any current gaps in expertise within the team and your plans to fill them (future hires, consultants, etc.).

• •Key Leadership:
• •Team Strengths:
• •Advisors:
• •Addressing Gaps:

Weakness: ChatGPT may generate generic content or fail to portray your company’s unique characteristics accurately. The AI may also not grasp the specific intricacies of your company’s hierarchy or be able to recommend the ideal structure for your business. Again, you know your company better than ChatGPT does, so make sure your prompt is detailed and you follow up with additional editing.

9. Financial plan

Using ChatGPT for this section was the real test. Investors and lenders need to understand your company’s potential for growth and profitability, so a detailed financial plan is important. 

Even if you’re not raising money, working on the financial projections is crucial. You need to understand how your business works from a financial perspective and what it’s going to take to be successful. 

Core financial plan ChatGPT prompt:

Help me generate a comprehensive list of potential revenue streams, cost of goods, and expenses to include in my financial forecast for my business, [business name].  My business operates in the [industry] sector and offers [products/services].

While ChatGPT did a fairly good job at writing the strategy sections of the business plan, producing a viable financial model turned out to be a challenge. 

To test it out, I provided a brief overview of what I thought my revenue forecast might look like and asked the AI to generate financial statement projections for the next five years.

It turns out that ChatGPT just isn’t capable of helping very much with this section of the business plan, and it says as much in its response. 

I was hoping for a detailed financial forecast, with at least 12 months of detailed statements, followed by 4 years of annual detail. I was also hoping for a detailed expense budget and calculations on profit and cash flow over time, all formatted as standard financial statements.

Unfortunately, ChatGPT just is not ready to do that quite yet. In part, this is because the tool is a generative text tool and is not designed to create financial models in Excel or any other spreadsheet format.

That’s likely to change in the future as AI gets integrated into Excel, Google Sheets, and other spreadsheets. But, for now, it’s just not ready. 

That said, ChatGPT can help you come up with ideas to help you flesh out your financial plan. I asked it to suggest some ideas for revenue streams and it provided ideas I hadn’t thought of. I would do the same—ask for suggestions—for the expense forecast to make sure I didn’t miss anything when building my financial model.

Your business plan needs a full financial plan. It helps you determine how much money you need to start the business and keep the business afloat as you grow. You’ll also want to be able to easily change the numbers and see how that impacts your profitability and cash flow.

A good Excel spreadsheet or a business planning tool like LivePlan is likely a better option than ChatGPT for your financial plan. However, ChatGPT can help you think about how you’ll make money and what your key expenses will be.

Check out this article for a more detailed step-by-step guide for using ChatGPT to create useful financial forecasts.

Weakness: ChatGPT does not have the expertise to produce accurate financial projections or offer nuanced financial advice. The AI can also not currently produce a financial model that can be easily adjusted to help determine the key information you need to start and run your business successfully.

10. Simplify your plan into an executive summary

Wait until you’ve completed your business plan to have ChatGPT help you with your executive summary. You’ll get a much better result by asking the AI to summarize your plan.

Once you’ve completed your plan, you can cut & paste it into ChatGPT and ask it to create the summary. Or, if you’ve been working on your plan in a single chat session, just ask ChatGPT to summarize what you’ve created so far. 

Tips when summarizing your business plan with ChatGPT

• •You can even ask it to limit the summary to a certain number of words.
• •Tell ChatGPT to write in a certain style. 

For example, if your business plan is for a complex medical device, you might want your executive summary to be simple and jargon-free. In that case, you can ask ChatGPT to write in a simple, non-scientific style.

• •If the plan is for investors, ask ChatGPT to heavily focus on market size, competitive advantage, team credentials, and financial outlook.

Core executive summary prompt:

Help me write a powerful Executive Summary for my business plan. My company is [company name], offering [products/services] in the [industry]. The executive summary should cover the following points:

• •The Problem & Solution: Concisely describe the pain point my business addresses and my unique solution.
• •Market Opportunity: Summarize the target market size, growth potential, and key customer segments.
• •Business Model: Explain how we will generate revenue (pricing strategy, sales channels).
• •Competitive Advantage: Highlight what sets us apart and how you’ll win in the market.
• •Team: Briefly mention the key experience and skills of our management team.
• •Financial Highlights: Provide a snapshot of our projections ( revenue, profit margins).

I’ve already completed the following sections of my business plan, which you can utilize for details: [complete plan content]”

Additional executive summary prompts:

The Ask: “Include our fundraising ask. We are seeking an investment of [$] which will be used to [describe your use of funds].”

Target Audience: “Our business plan will be presented to [describe your audience] so the tone should be [business like, casual, etc.]”

Be aware of ChatGPT’s weaknesses

ChatGPT can be a valuable tool for drafting a business plan but it’s essential to be aware of its limitations and weaknesses before you delegate your business planning task to AI.

• •True financial forecasting is not possible
• •It can lack creativity
• •Industry-specific insights may be hard to get
• •You’ll need to do your own market research
• •Only you have an understanding of your business’s unique position in the market.
• •It may produce inaccurate information about people, places, or facts.

But, these weaknesses don’t mean that it’s not a useful tool. 

ChatGPT is a great writing assistant and can help you brainstorm ideas. And, if you need a business name, it can do that too:

Should you use ChatGPT to help you with your business plan?

A business plan helps entrepreneurs in three core areas: 

• •Figure out your strategy
• •Understand the numbers behind your business
• •Run a better business

ChatGPT can really only help with your strategy. 

It can take your ideas and expand on them, even providing new ideas that you might want to incorporate into your strategy. 

However, it cannot develop a full financial plan or assist you with ongoing analysis. A dedicated business plan builder, like LivePlan, is really the better choice for these tasks.

Understanding the numbers that drive your business is crucial

A business can only be a business if it eventually makes money. The planning process helps you figure out the sales that you’ll need to make to cover expenses and what kind of cash you’ll need to get your business off the ground and keep it running. 

Without this knowledge, failure is a real possibility. ChatGPT can’t develop a full financial plan, but it can help you think through your revenue streams and key expenses. It can’t really do the numbers for you, but it can certainly help you get started.

Planning helps you run a better business

As you get up and running, tracking your results compared to your financial plan is an important part of running a responsible business. Using your accounting data, you can compare your actual spending to your budget and see where you’re on track and where you need to make adjustments. You’ll also see which sales channels are working well and which you’ll need to grow further. 

The process of using your plan to track your progress and refine your strategy is called growth planning. Turning your plan from a static document into a tool to run your business is one of the most important things you can do to improve your chances of success. In fact, businesses that track their growth against their plan grow 30% faster than those that don’t.

Unfortunately, ChatGPT isn’t really set up to help with this kind of detailed, ongoing analysis. A dedicated business planning tool, like LivePlan, (which includes a highly refined AI business plan generator) is really the better choice here.

The bottom line, ChatGPT can be a valuable helper in the business planning process. It’s like having a smart assistant at your side that can take your ideas and flesh out the details. But, it does have limitations, especially with the financial plan, and can’t help with the entire planning and business management processes just yet.

So, it’s not quite an AI business plan generator. But, when used correctly and with the right prompting it can help you break past writer’s block, think through each section, and ultimately write a solid plan.

Noah Parsons

Before joining Palo Alto Software, Noah Parsons was an early Internet marketing and product expert in the Silicon Valley. He joined Yahoo! in 1996 as one of its first 101 employees and become Producer of the Yahoo! Employment property as part of the Yahoo! Classifieds team before leaving to serve as Director of Production at Epinions.com. He is a graduate of Princeton University. Noah devotes most of his free time to his three young sons. In the winter you'll find him giving them lessons on the ski slopes, and in summer they're usually involved in a variety of outdoor pursuits. Noah is currently the COO at Palo Alto Software, makers of the online business plan app LivePlan.