Can AI Write a Business Plan? We Tested It
A business plan is one of those documents that everyone says you need, nobody loves writing, and most people procrastinate on for months.
So we decided to test whether AI can actually write one — not just produce a generic outline, but deliver something substantive that a real founder could actually use.
We used both ChatGPT-4o and Claude 3.5 Sonnet. Here’s what happened.
The Test Setup
We gave both models the same scenario:
“I’m starting a mobile dog grooming business in Austin, Texas. I plan to operate out of a converted van, serve residential neighborhoods, and price at a slight premium to traditional grooming salons. I’ll be the sole operator to start, with plans to hire within 18 months. Help me write a complete business plan.”
We didn’t give additional details upfront — we wanted to see what the models would ask for versus assume.
What a Real Business Plan Needs
Before we dive into results, here’s what a solid business plan typically includes:
- Executive Summary
- Company Description
- Market Analysis
- Organization & Management
- Products/Services
- Marketing & Sales Strategy
- Financial Projections
- Funding Requirements (if applicable)
That’s the standard SBA structure. We judged the AI output against it.
What ChatGPT-4o Produced
ChatGPT asked two clarifying questions before starting: my approximate startup budget and whether I was seeking outside funding. Good sign — it wasn’t just assuming.
The output was organized and comprehensive. It hit every section, used professional language, and was clearly structured. The marketing section suggested local SEO, Google Business Profile setup, Instagram before-and-after content, and neighborhood Nextdoor groups — all genuinely relevant to this type of business.
Where it fell short: the financial projections were vague. It produced a table with placeholder numbers (“estimated monthly revenue: $8,000–$12,000”) without explaining the assumptions behind them. A real business plan needs to show how you get to those numbers — pricing per appointment, appointments per day, operating days per month, and so on.
When we pushed back (“show me the math”), ChatGPT rebuilt the projections from unit economics. That worked. But it required follow-up.
Word count: ~1,800 words across all sections.
What Claude 3.5 Sonnet Produced
Claude produced a slightly longer initial plan (~2,200 words) and immediately included more nuanced market language — noting that Austin’s density and income demographics made mobile pet services a reasonable premium play, and that competition from existing groomers would center on convenience rather than price.
The financial section was better on first pass. It broke down revenue by assuming 6 appointments/day at $85 average → $510/day → ~$10,200/month at 20 working days. The math was visible and reviewable.
The weakness: the operations section was thin. It mentioned equipment and van maintenance briefly but didn’t address real operational specifics like scheduling software, water sourcing for the van, licensing requirements in Texas, or waste disposal — all of which matter for this type of business.
When we added those topics in a follow-up prompt, Claude filled them in well.
The Real Pattern: AI Plans Are Drafts, Not Final Documents
Both models produced business plans that were:
✅ Well-structured
✅ Professionally written
✅ Reasonably accurate on market dynamics
✅ Useful as a starting framework
Both fell short on:
❌ Specific local data — market size numbers were estimates, not cited sources
❌ Financial rigor — projections needed follow-up prompting to show real assumptions
❌ Regulatory specifics — neither mentioned Texas-specific licensing for mobile pet groomers without being asked
❌ Competitive analysis depth — named zero specific local competitors
The key insight: AI writes the skeleton. You fill in the flesh.
The Right Way to Use AI for a Business Plan
Don’t ask for a business plan in one shot. Work through it section by section with real data you provide.
Better prompting approach:
Start with:
“I’m writing a business plan for a mobile dog grooming service in Austin, TX. Let’s build it section by section. Start with the Executive Summary. I’ll give you details, you structure them.”
Then feed it your actual numbers:
“My startup costs are: van conversion $15,000, grooming equipment $3,000, licensing $500, insurance $1,200/year, first 3 months operating costs $6,000. Monthly fixed costs after launch: insurance $100, fuel $400, supplies $300, phone/software $80.”
Now ask for financial projections:
“Based on these costs, build a 12-month P&L projection assuming I start at 4 appointments/day in month 1, scale to 6 by month 3, and add a second van/operator in month 12. Pricing: $85 average per dog, 20 working days/month.”
The output you get from that approach is usable. The generic one-shot version is a template with your name on it.
Who This Is Actually For
AI-written business plans work well for:
- First-time entrepreneurs who need structure and don’t know where to start
- Internal planning documents that don’t need investor-level rigor
- Quickly testing the viability of an idea before investing more time
- SBA loan applications where a complete, professional-looking document matters
They’re not sufficient for:
- Serious investor pitches (VCs and angels will see through generic projections immediately)
- Complex businesses with multiple revenue streams
- Regulated industries where compliance specifics matter
The Verdict
Yes, AI can write a business plan. A pretty good one, faster than you’d do it yourself.
But “written by AI” isn’t the same as “ready to use.” You still need to:
- Verify the market data it cites
- Replace placeholder numbers with your real projections
- Add specifics about your local competitive landscape
- Check regulatory requirements for your industry and location
- Have someone who knows business review the final draft
Used right, AI compresses the time to first draft from days to hours. That’s real value. Just don’t confuse a solid first draft with a finished business plan.
The blank page problem is solved. The rest is still on you.