How to Write a Business Plan: Step-by-Step Guide + Examples
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Noah Parsons
24 min. read
Updated July 29, 2024
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Writing a business plan doesn’t have to be complicated.
In this step-by-step guide, you’ll learn how to write a business plan that’s detailed enough to impress bankers and potential investors, while giving you the tools to start, run, and grow a successful business.
- The basics of business planning
If you’re reading this guide, then you already know why you need a business plan .
You understand that planning helps you:
- Raise money
- Grow strategically
- Keep your business on the right track
As you start to write your plan, it’s useful to zoom out and remember what a business plan is .
At its core, a business plan is an overview of the products and services you sell, and the customers that you sell to. It explains your business strategy: how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.
Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow.
A good business plan is much more than just a document that you write once and forget about. It’s also a guide that helps you outline and achieve your goals.
After completing your plan, you can use it as a management tool to track your progress toward your goals. Updating and adjusting your forecasts and budgets as you go is one of the most important steps you can take to run a healthier, smarter business.
We’ll dive into how to use your plan later in this article.
There are many different types of plans , but we’ll go over the most common type here, which includes everything you need for an investor-ready plan. However, if you’re just starting out and are looking for something simpler—I recommend starting with a one-page business plan . It’s faster and easier to create.
It’s also the perfect place to start if you’re just figuring out your idea, or need a simple strategic plan to use inside your business.
Dig deeper : How to write a one-page business plan
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- What to include in your business plan
Executive summary
The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally just one to two pages. Most people write it last because it’s a summary of the complete business plan.
Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan.
In fact, it’s common for investors to ask only for the executive summary when evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation , or more in-depth financial forecasts .
Your executive summary should include:
- A summary of the problem you are solving
- A description of your product or service
- An overview of your target market
- A brief description of your team
- A summary of your financials
- Your funding requirements (if you are raising money)
Dig Deeper: How to write an effective executive summary
Products and services description
This is where you describe exactly what you’re selling, and how it solves a problem for your target market. The best way to organize this part of your plan is to start by describing the problem that exists for your customers. After that, you can describe how you plan to solve that problem with your product or service.
This is usually called a problem and solution statement .
To truly showcase the value of your products and services, you need to craft a compelling narrative around your offerings. How will your product or service transform your customers’ lives or jobs? A strong narrative will draw in your readers.
This is also the part of the business plan to discuss any competitive advantages you may have, like specific intellectual property or patents that protect your product. If you have any initial sales, contracts, or other evidence that your product or service is likely to sell, include that information as well. It will show that your idea has traction , which can help convince readers that your plan has a high chance of success.
Market analysis
Your target market is a description of the type of people that you plan to sell to. You might even have multiple target markets, depending on your business.
A market analysis is the part of your plan where you bring together all of the information you know about your target market. Basically, it’s a thorough description of who your customers are and why they need what you’re selling. You’ll also include information about the growth of your market and your industry .
Try to be as specific as possible when you describe your market.
Include information such as age, income level, and location—these are what’s called “demographics.” If you can, also describe your market’s interests and habits as they relate to your business—these are “psychographics.”
Related: Target market examples
Essentially, you want to include any knowledge you have about your customers that is relevant to how your product or service is right for them. With a solid target market, it will be easier to create a sales and marketing plan that will reach your customers. That’s because you know who they are, what they like to do, and the best ways to reach them.
Next, provide any additional information you have about your market.
What is the size of your market ? Is the market growing or shrinking? Ideally, you’ll want to demonstrate that your market is growing over time, and also explain how your business is positioned to take advantage of any expected changes in your industry.
Dig Deeper: Learn how to write a market analysis
Competitive analysis
Part of defining your business opportunity is determining what your competitive advantage is. To do this effectively, you need to know as much about your competitors as your target customers.
Every business has some form of competition. If you don’t think you have competitors, then explore what alternatives there are in the market for your product or service.
For example: In the early years of cars, their main competition was horses. For social media, the early competition was reading books, watching TV, and talking on the phone.
A good competitive analysis fully lays out the competitive landscape and then explains how your business is different. Maybe your products are better made, or cheaper, or your customer service is superior. Maybe your competitive advantage is your location – a wide variety of factors can ultimately give you an advantage.
Dig Deeper: How to write a competitive analysis for your business plan
Marketing and sales plan
The marketing and sales plan covers how you will position your product or service in the market, the marketing channels and messaging you will use, and your sales tactics.
The best place to start with a marketing plan is with a positioning statement .
This explains how your business fits into the overall market, and how you will explain the advantages of your product or service to customers. You’ll use the information from your competitive analysis to help you with your positioning.
For example: You might position your company as the premium, most expensive but the highest quality option in the market. Or your positioning might focus on being locally owned and that shoppers support the local economy by buying your products.
Once you understand your positioning, you’ll bring this together with the information about your target market to create your marketing strategy .
This is how you plan to communicate your message to potential customers. Depending on who your customers are and how they purchase products like yours, you might use many different strategies, from social media advertising to creating a podcast. Your marketing plan is all about how your customers discover who you are and why they should consider your products and services.
While your marketing plan is about reaching your customers—your sales plan will describe the actual sales process once a customer has decided that they’re interested in what you have to offer.
If your business requires salespeople and a long sales process, describe that in this section. If your customers can “self-serve” and just make purchases quickly on your website, describe that process.
A good sales plan picks up where your marketing plan leaves off. The marketing plan brings customers in the door and the sales plan is how you close the deal.
Together, these specific plans paint a picture of how you will connect with your target audience, and how you will turn them into paying customers.
Dig deeper: What to include in your sales and marketing plan
Business operations
The operations section describes the necessary requirements for your business to run smoothly. It’s where you talk about how your business works and what day-to-day operations look like.
Depending on how your business is structured, your operations plan may include elements of the business like:
- Supply chain management
- Manufacturing processes
- Equipment and technology
- Distribution
Some businesses distribute their products and reach their customers through large retailers like Amazon.com, Walmart, Target, and grocery store chains.
These businesses should review how this part of their business works. The plan should discuss the logistics and costs of getting products onto store shelves and any potential hurdles the business may have to overcome.
If your business is much simpler than this, that’s OK. This section of your business plan can be either extremely short or more detailed, depending on the type of business you are building.
For businesses selling services, such as physical therapy or online software, you can use this section to describe the technology you’ll leverage, what goes into your service, and who you will partner with to deliver your services.
Dig Deeper: Learn how to write the operations chapter of your plan
Key milestones and metrics
Although it’s not required to complete your business plan, mapping out key business milestones and the metrics can be incredibly useful for measuring your success.
Good milestones clearly lay out the parameters of the task and set expectations for their execution. You’ll want to include:
- A description of each task
- The proposed due date
- Who is responsible for each task
If you have a budget, you can include projected costs to hit each milestone. You don’t need extensive project planning in this section—just list key milestones you want to hit and when you plan to hit them. This is your overall business roadmap.
Possible milestones might be:
- Website launch date
- Store or office opening date
- First significant sales
- Break even date
- Business licenses and approvals
You should also discuss the key numbers you will track to determine your success. Some common metrics worth tracking include:
- Conversion rates
- Customer acquisition costs
- Profit per customer
- Repeat purchases
It’s perfectly fine to start with just a few metrics and grow the number you are tracking over time. You also may find that some metrics simply aren’t relevant to your business and can narrow down what you’re tracking.
Dig Deeper: How to use milestones in your business plan
Organization and management team
Investors don’t just look for great ideas—they want to find great teams. Use this chapter to describe your current team and who you need to hire . You should also provide a quick overview of your location and history if you’re already up and running.
Briefly highlight the relevant experiences of each key team member in the company. It’s important to make the case for why yours is the right team to turn an idea into a reality.
Do they have the right industry experience and background? Have members of the team had entrepreneurial successes before?
If you still need to hire key team members, that’s OK. Just note those gaps in this section.
Your company overview should also include a summary of your company’s current business structure . The most common business structures include:
- Sole proprietor
- Partnership
Be sure to provide an overview of how the business is owned as well. Does each business partner own an equal portion of the business? How is ownership divided?
Potential lenders and investors will want to know the structure of the business before they will consider a loan or investment.
Dig Deeper: How to write about your company structure and team
Financial plan
Last, but certainly not least, is your financial plan chapter.
Entrepreneurs often find this section the most daunting. But, business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast.
A typical financial forecast in a business plan includes the following:
- Sales forecast : An estimate of the sales expected over a given period. You’ll break down your forecast into the key revenue streams that you expect to have.
- Expense budget : Your planned spending such as personnel costs , marketing expenses, and taxes.
- Profit & Loss : Brings together your sales and expenses and helps you calculate planned profits.
- Cash Flow : Shows how cash moves into and out of your business. It can predict how much cash you’ll have on hand at any given point in the future.
- Balance Sheet : A list of the assets, liabilities, and equity in your company. In short, it provides an overview of the financial health of your business.
A strong business plan will include a description of assumptions about the future, and potential risks that could impact the financial plan. Including those will be especially important if you’re writing a business plan to pursue a loan or other investment.
Dig Deeper: How to create financial forecasts and budgets
This is the place for additional data, charts, or other information that supports your plan.
Including an appendix can significantly enhance the credibility of your plan by showing readers that you’ve thoroughly considered the details of your business idea, and are backing your ideas up with solid data.
Just remember that the information in the appendix is meant to be supplementary. Your business plan should stand on its own, even if the reader skips this section.
Dig Deeper : What to include in your business plan appendix
Optional: Business plan cover page
Adding a business plan cover page can make your plan, and by extension your business, seem more professional in the eyes of potential investors, lenders, and partners. It serves as the introduction to your document and provides necessary contact information for stakeholders to reference.
Your cover page should be simple and include:
- Company logo
- Business name
- Value proposition (optional)
- Business plan title
- Completion and/or update date
- Address and contact information
- Confidentiality statement
Just remember, the cover page is optional. If you decide to include it, keep it very simple and only spend a short amount of time putting it together.
Dig Deeper: How to create a business plan cover page
How to use AI to help write your business plan
Generative AI tools such as ChatGPT can speed up the business plan writing process and help you think through concepts like market segmentation and competition. These tools are especially useful for taking ideas that you provide and converting them into polished text for your business plan.
The best way to use AI for your business plan is to leverage it as a collaborator , not a replacement for human creative thinking and ingenuity.
AI can come up with lots of ideas and act as a brainstorming partner. It’s up to you to filter through those ideas and figure out which ones are realistic enough to resonate with your customers.
There are pros and cons of using AI to help with your business plan . So, spend some time understanding how it can be most helpful before just outsourcing the job to AI.
Learn more: 10 AI prompts you need to write a business plan
- Writing tips and strategies
To help streamline the business plan writing process, here are a few tips and key questions to answer to make sure you get the most out of your plan and avoid common mistakes .
Determine why you are writing a business plan
Knowing why you are writing a business plan will determine your approach to your planning project.
For example: If you are writing a business plan for yourself, or just to use inside your own business , you can probably skip the section about your team and organizational structure.
If you’re raising money, you’ll want to spend more time explaining why you’re looking to raise the funds and exactly how you will use them.
Regardless of how you intend to use your business plan , think about why you are writing and what you’re trying to get out of the process before you begin.
Keep things concise
Probably the most important tip is to keep your business plan short and simple. There are no prizes for long business plans . The longer your plan is, the less likely people are to read it.
So focus on trimming things down to the essentials your readers need to know. Skip the extended, wordy descriptions and instead focus on creating a plan that is easy to read —using bullets and short sentences whenever possible.
Have someone review your business plan
Writing a business plan in a vacuum is never a good idea. Sometimes it’s helpful to zoom out and check if your plan makes sense to someone else. You also want to make sure that it’s easy to read and understand.
Don’t wait until your plan is “done” to get a second look. Start sharing your plan early, and find out from readers what questions your plan leaves unanswered. This early review cycle will help you spot shortcomings in your plan and address them quickly, rather than finding out about them right before you present your plan to a lender or investor.
If you need a more detailed review, you may want to explore hiring a professional plan writer to thoroughly examine it.
Use a free business plan template and business plan examples to get started
Knowing what information to include in a business plan is sometimes not quite enough. If you’re struggling to get started or need additional guidance, it may be worth using a business plan template.
There are plenty of great options available (we’ve rounded up our 8 favorites to streamline your search).
But, if you’re looking for a free downloadable business plan template , you can get one right now; download the template used by more than 1 million businesses.
Or, if you just want to see what a completed business plan looks like, check out our library of over 550 free business plan examples .
We even have a growing list of industry business planning guides with tips for what to focus on depending on your business type.
Common pitfalls and how to avoid them
It’s easy to make mistakes when you’re writing your business plan. Some entrepreneurs get sucked into the writing and research process, and don’t focus enough on actually getting their business started.
Here are a few common mistakes and how to avoid them:
Not talking to your customers : This is one of the most common mistakes. It’s easy to assume that your product or service is something that people want. Before you invest too much in your business and too much in the planning process, make sure you talk to your prospective customers and have a good understanding of their needs.
- Overly optimistic sales and profit forecasts: By nature, entrepreneurs are optimistic about the future. But it’s good to temper that optimism a little when you’re planning, and make sure your forecasts are grounded in reality.
- Spending too much time planning: Yes, planning is crucial. But you also need to get out and talk to customers, build prototypes of your product and figure out if there’s a market for your idea. Make sure to balance planning with building.
- Not revising the plan: Planning is useful, but nothing ever goes exactly as planned. As you learn more about what’s working and what’s not—revise your plan, your budgets, and your revenue forecast. Doing so will provide a more realistic picture of where your business is going, and what your financial needs will be moving forward.
- Not using the plan to manage your business: A good business plan is a management tool. Don’t just write it and put it on the shelf to collect dust – use it to track your progress and help you reach your goals.
- Presenting your business plan
The planning process forces you to think through every aspect of your business and answer questions that you may not have thought of. That’s the real benefit of writing a business plan – the knowledge you gain about your business that you may not have been able to discover otherwise.
With all of this knowledge, you’re well prepared to convert your business plan into a pitch presentation to present your ideas.
A pitch presentation is a summary of your plan, just hitting the highlights and key points. It’s the best way to present your business plan to investors and team members.
Dig Deeper: Learn what key slides should be included in your pitch deck
Use your business plan to manage your business
One of the biggest benefits of planning is that it gives you a tool to manage your business better. With a revenue forecast, expense budget, and projected cash flow, you know your targets and where you are headed.
And yet, nothing ever goes exactly as planned – it’s the nature of business.
That’s where using your plan as a management tool comes in. The key to leveraging it for your business is to review it periodically and compare your forecasts and projections to your actual results.
Start by setting up a regular time to review the plan – a monthly review is a good starting point. During this review, answer questions like:
- Did you meet your sales goals?
- Is spending following your budget?
- Has anything gone differently than what you expected?
Now that you see whether you’re meeting your goals or are off track, you can make adjustments and set new targets.
Maybe you’re exceeding your sales goals and should set new, more aggressive goals. In that case, maybe you should also explore more spending or hiring more employees.
Or maybe expenses are rising faster than you projected. If that’s the case, you would need to look at where you can cut costs.
A plan, and a method for comparing your plan to your actual results , is the tool you need to steer your business toward success.
Learn More: How to run a regular plan review
How to write a business plan FAQ
What is a business plan?
A document that describes your business , the products and services you sell, and the customers that you sell to. It explains your business strategy, how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.
What are the benefits of a business plan?
A business plan helps you understand where you want to go with your business and what it will take to get there. It reduces your overall risk, helps you uncover your business’s potential, attracts investors, and identifies areas for growth.
Having a business plan ultimately makes you more confident as a business owner and more likely to succeed for a longer period of time.
What are the 7 steps of a business plan?
The seven steps to writing a business plan include:
- Write a brief executive summary
- Describe your products and services.
- Conduct market research and compile data into a cohesive market analysis.
- Describe your marketing and sales strategy.
- Outline your organizational structure and management team.
- Develop financial projections for sales, revenue, and cash flow.
- Add any additional documents to your appendix.
What are the 5 most common business plan mistakes?
There are plenty of mistakes that can be made when writing a business plan. However, these are the 5 most common that you should do your best to avoid:
- 1. Not taking the planning process seriously.
- Having unrealistic financial projections or incomplete financial information.
- Inconsistent information or simple mistakes.
- Failing to establish a sound business model.
- Not having a defined purpose for your business plan.
What questions should be answered in a business plan?
Writing a business plan is all about asking yourself questions about your business and being able to answer them through the planning process. You’ll likely be asking dozens and dozens of questions for each section of your plan.
However, these are the key questions you should ask and answer with your business plan:
- How will your business make money?
- Is there a need for your product or service?
- Who are your customers?
- How are you different from the competition?
- How will you reach your customers?
- How will you measure success?
How long should a business plan be?
The length of your business plan fully depends on what you intend to do with it. From the SBA and traditional lender point of view, a business plan needs to be whatever length necessary to fully explain your business. This means that you prove the viability of your business, show that you understand the market, and have a detailed strategy in place.
If you intend to use your business plan for internal management purposes, you don’t necessarily need a full 25-50 page business plan. Instead, you can start with a one-page plan to get all of the necessary information in place.
What are the different types of business plans?
While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. Here are a few common business plan types worth considering.
Traditional business plan: The tried-and-true traditional business plan is a formal document meant to be used when applying for funding or pitching to investors. This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix.
Business model canvas: The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea.
One-page business plan: This format is a simplified version of the traditional plan that focuses on the core aspects of your business. You’ll typically stick with bullet points and single sentences. It’s most useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.
Lean Plan: The Lean Plan is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance. It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.
What’s the difference between a business plan and a strategic plan?
A business plan covers the “who” and “what” of your business. It explains what your business is doing right now and how it functions. The strategic plan explores long-term goals and explains “how” the business will get there. It encourages you to look more intently toward the future and how you will achieve your vision.
However, when approached correctly, your business plan can actually function as a strategic plan as well. If kept lean, you can define your business, outline strategic steps, and track ongoing operations all with a single plan.
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Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.
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Table of Contents
- Use AI to help write your plan
- Common planning mistakes
- Manage with your business plan
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How to create a business plan: examples & free template.
Whether you’re a seasoned entrepreneur or launching your very first startup, the guide will give you the insights, tools, and confidence you need to create a solid foundation for your business.
Table of Contents
How to Write a Business Plan
Executive summary.
It’s crucial to include a clear mission statement, a brief description of your primary products or services, an overview of your target market, and key financial projections or achievements.
Our target market includes environmentally conscious consumers and businesses seeking to reduce their carbon footprint. We project a 200% increase in revenue within the first three years of operation.
Overview and Business Objectives
Example: EcoTech’s primary objective is to become a market leader in sustainable technology products within the next five years. Our key objectives include:
Company Description
Example: EcoTech is committed to developing cutting-edge sustainable technology products that benefit both the environment and our customers. Our unique combination of innovative solutions and eco-friendly design sets us apart from the competition. We envision a future where technology and sustainability go hand in hand, leading to a greener planet.
Define Your Target Market
Market analysis.
The Market Analysis section requires thorough research and a keen understanding of the industry. It involves examining the current trends within your industry, understanding the needs and preferences of your customers, and analyzing the strengths and weaknesses of your competitors.
Our research indicates a gap in the market for high-quality, innovative eco-friendly technology products that cater to both individual and business clients.
SWOT Analysis
Including a SWOT analysis demonstrates to stakeholders that you have a balanced and realistic understanding of your business in its operational context.
Competitive Analysis
Organization and management team.
Provide an overview of your company’s organizational structure, including key roles and responsibilities. Introduce your management team, highlighting their expertise and experience to demonstrate that your team is capable of executing the business plan successfully.
Products and Services Offered
This section should emphasize the value you provide to customers, demonstrating that your business has a deep understanding of customer needs and is well-positioned to deliver innovative solutions that address those needs and set your company apart from competitors.
Marketing and Sales Strategy
Discuss how these marketing and sales efforts will work together to attract and retain customers, generate leads, and ultimately contribute to achieving your business’s revenue goals.
Logistics and Operations Plan
Inventory control is another crucial aspect, where you explain strategies for inventory management to ensure efficiency and reduce wastage. The section should also describe your production processes, emphasizing scalability and adaptability to meet changing market demands.
We also prioritize efficient distribution through various channels, including online platforms and retail partners, to deliver products to our customers in a timely manner.
Financial Projections Plan
This forward-looking financial plan is crucial for demonstrating that you have a firm grasp of the financial nuances of your business and are prepared to manage its financial health effectively.
Income Statement
Cash flow statement.
A cash flow statement is a crucial part of a financial business plan that shows the inflows and outflows of cash within your business. It helps you monitor your company’s liquidity, ensuring you have enough cash on hand to cover operating expenses, pay debts, and invest in growth opportunities.
Section | Description | Example |
---|---|---|
Executive Summary | Brief overview of the business plan | Overview of EcoTech and its mission |
Overview & Objectives | Outline of company's goals and strategies | Market leadership in sustainable technology |
Company Description | Detailed explanation of the company and its unique selling proposition | EcoTech's history, mission, and vision |
Target Market | Description of ideal customers and their needs | Environmentally conscious consumers and businesses |
Market Analysis | Examination of industry trends, customer needs, and competitors | Trends in eco-friendly technology market |
SWOT Analysis | Evaluation of Strengths, Weaknesses, Opportunities, and Threats | Strengths and weaknesses of EcoTech |
Competitive Analysis | In-depth analysis of competitors and their strategies | Analysis of GreenTech and EarthSolutions |
Organization & Management | Overview of the company's structure and management team | Key roles and team members at EcoTech |
Products & Services | Description of offerings and their unique features | Energy-efficient lighting solutions, solar chargers |
Marketing & Sales | Outline of marketing channels and sales strategies | Digital advertising, content marketing, influencer partnerships |
Logistics & Operations | Details about daily operations, supply chain, inventory, and quality control | Partnerships with manufacturers, quality control |
Financial Projections | Forecast of revenue, expenses, and profit for the next 3-5 years | Projected growth in revenue and net profit |
Income Statement | Summary of company's revenues and expenses over a specified period | Revenue, Cost of Goods Sold, Gross Profit, Net Income |
Cash Flow Statement | Overview of cash inflows and outflows within the business | Net Cash from Operating Activities, Investing Activities, Financing Activities |
Tips on Writing a Business Plan
4. Focus on your unique selling proposition (USP): Clearly articulate what sets your business apart from the competition. Emphasize your USP throughout your business plan to showcase your company’s value and potential for success.
FREE Business Plan Template
To help you get started on your business plan, we have created a template that includes all the essential components discussed in the “How to Write a Business Plan” section. This easy-to-use template will guide you through each step of the process, ensuring you don’t miss any critical details.
What is a Business Plan?
Why you should write a business plan.
Understanding the importance of a business plan in today’s competitive environment is crucial for entrepreneurs and business owners. Here are five compelling reasons to write a business plan:
What are the Different Types of Business Plans?
Type of Business Plan | Purpose | Key Components | Target Audience |
---|---|---|---|
Startup Business Plan | Outlines the company's mission, objectives, target market, competition, marketing strategies, and financial projections. | Mission Statement, Company Description, Market Analysis, Competitive Analysis, Organizational Structure, Marketing and Sales Strategy, Financial Projections. | Entrepreneurs, Investors |
Internal Business Plan | Serves as a management tool for guiding the company's growth, evaluating its progress, and ensuring that all departments are aligned with the overall vision. | Strategies, Milestones, Deadlines, Resource Allocation. | Internal Team Members |
Strategic Business Plan | Outlines long-term goals and the steps to achieve them. | SWOT Analysis, Market Research, Competitive Analysis, Long-Term Goals. | Executives, Managers, Investors |
Feasibility Business Plan | Assesses the viability of a business idea. | Market Demand, Competition, Financial Projections, Potential Obstacles. | Entrepreneurs, Investors |
Growth Business Plan | Focuses on strategies for scaling up an existing business. | Market Analysis, New Product/Service Offerings, Financial Projections. | Business Owners, Investors |
Operational Business Plan | Outlines the company's day-to-day operations. | Processes, Procedures, Organizational Structure. | Managers, Employees |
Lean Business Plan | A simplified, agile version of a traditional plan, focusing on key elements. | Value Proposition, Customer Segments, Revenue Streams, Cost Structure. | Entrepreneurs, Startups |
One-Page Business Plan | A concise summary of your company's key objectives, strategies, and milestones. | Key Objectives, Strategies, Milestones. | Entrepreneurs, Investors, Partners |
Nonprofit Business Plan | Outlines the mission, goals, target audience, fundraising strategies, and budget allocation for nonprofit organizations. | Mission Statement, Goals, Target Audience, Fundraising Strategies, Budget. | Nonprofit Leaders, Board Members, Donors |
Franchise Business Plan | Focuses on the franchisor's requirements, as well as the franchisee's goals, strategies, and financial projections. | Franchise Agreement, Brand Standards, Marketing Efforts, Operational Procedures, Financial Projections. | Franchisors, Franchisees, Investors |
Using Business Plan Software
Upmetrics provides a simple and intuitive platform for creating a well-structured business plan. It features customizable templates, financial forecasting tools, and collaboration capabilities, allowing you to work with team members and advisors. Upmetrics also offers a library of resources to guide you through the business planning process.
Software | Key Features | User Interface | Additional Features |
---|---|---|---|
LivePlan | Over 500 sample plans, financial forecasting tools, progress tracking against KPIs | User-friendly, visually appealing | Allows creation of professional-looking business plans |
Upmetrics | Customizable templates, financial forecasting tools, collaboration capabilities | Simple and intuitive | Provides a resource library for business planning |
Bizplan | Drag-and-drop builder, modular sections, financial forecasting tools, progress tracking | Simple, visually engaging | Designed to simplify the business planning process |
Enloop | Industry-specific templates, financial forecasting tools, automatic business plan generation, unique performance score | Robust, user-friendly | Offers a free version, making it accessible for businesses on a budget |
Tarkenton GoSmallBiz | Guided business plan builder, customizable templates, financial projection tools | User-friendly | Offers CRM tools, legal document templates, and additional resources for small businesses |
Business Plan FAQs
What is a good business plan.
A good business plan is a well-researched, clear, and concise document that outlines a company’s goals, strategies, target market, competitive advantages, and financial projections. It should be adaptable to change and provide a roadmap for achieving success.
What are the 3 main purposes of a business plan?
Can i write a business plan by myself, is it possible to create a one-page business plan.
Yes, a one-page business plan is a condensed version that highlights the most essential elements, including the company’s mission, target market, unique selling proposition, and financial goals.
How long should a business plan be?
What is a business plan outline, what are the 5 most common business plan mistakes, what questions should be asked in a business plan.
A business plan should address questions such as: What problem does the business solve? Who is the specific target market ? What is the unique selling proposition? What are the company’s objectives? How will it achieve those objectives?
What’s the difference between a business plan and a strategic plan?
How is business planning for a nonprofit different.
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How to Write a Business Plan in 9 Steps (+ Template and Examples)
Every successful business has one thing in common, a good and well-executed business plan. A business plan is more than a document, it is a complete guide that outlines the goals your business wants to achieve, including its financial goals . It helps you analyze results, make strategic decisions, show your business operations and growth.
If you want to start a business or already have one and need to pitch it to investors for funding, writing a good business plan improves your chances of attracting financiers. As a startup, if you want to secure loans from financial institutions, part of the requirements involve submitting your business plan.
Writing a business plan does not have to be a complicated or time-consuming process. In this article, you will learn the step-by-step process for writing a successful business plan.
You will also learn what you need a business plan for, tips and strategies for writing a convincing business plan, business plan examples and templates that will save you tons of time, and the alternatives to the traditional business plan.
Let’s get started.
What Do You Need A Business Plan For?
Businesses create business plans for different purposes such as to secure funds, monitor business growth, measure your marketing strategies, and measure your business success.
1. Secure Funds
One of the primary reasons for writing a business plan is to secure funds, either from financial institutions/agencies or investors.
For you to effectively acquire funds, your business plan must contain the key elements of your business plan . For example, your business plan should include your growth plans, goals you want to achieve, and milestones you have recorded.
A business plan can also attract new business partners that are willing to contribute financially and intellectually. If you are writing a business plan to a bank, your project must show your traction , that is, the proof that you can pay back any loan borrowed.
Also, if you are writing to an investor, your plan must contain evidence that you can effectively utilize the funds you want them to invest in your business. Here, you are using your business plan to persuade a group or an individual that your business is a source of a good investment.
2. Monitor Business Growth
A business plan can help you track cash flows in your business. It steers your business to greater heights. A business plan capable of tracking business growth should contain:
- The business goals
- Methods to achieve the goals
- Time-frame for attaining those goals
A good business plan should guide you through every step in achieving your goals. It can also track the allocation of assets to every aspect of the business. You can tell when you are spending more than you should on a project.
You can compare a business plan to a written GPS. It helps you manage your business and hints at the right time to expand your business.
3. Measure Business Success
A business plan can help you measure your business success rate. Some small-scale businesses are thriving better than more prominent companies because of their track record of success.
Right from the onset of your business operation, set goals and work towards them. Write a plan to guide you through your procedures. Use your plan to measure how much you have achieved and how much is left to attain.
You can also weigh your success by monitoring the position of your brand relative to competitors. On the other hand, a business plan can also show you why you have not achieved a goal. It can tell if you have elapsed the time frame you set to attain a goal.
4. Document Your Marketing Strategies
You can use a business plan to document your marketing plans. Every business should have an effective marketing plan.
Competition mandates every business owner to go the extraordinary mile to remain relevant in the market. Your business plan should contain your marketing strategies that work. You can measure the success rate of your marketing plans.
In your business plan, your marketing strategy must answer the questions:
- How do you want to reach your target audience?
- How do you plan to retain your customers?
- What is/are your pricing plans?
- What is your budget for marketing?
![creating a simple business plan Business Plan Infographic](https://www.founderjar.com/wp-content/uploads/2021/07/Business-Plan-Infographic.jpg)
How to Write a Business Plan Step-by-Step
1. create your executive summary.
The executive summary is a snapshot of your business or a high-level overview of your business purposes and plans . Although the executive summary is the first section in your business plan, most people write it last. The length of the executive summary is not more than two pages.
![creating a simple business plan Executive Summary of the business plan](https://www.founderjar.com/wp-content/uploads/2021/07/Executive-Summary-of-the-business-plan.jpg)
Generally, there are nine sections in a business plan, the executive summary should condense essential ideas from the other eight sections.
A good executive summary should do the following:
- A Snapshot of Growth Potential. Briefly inform the reader about your company and why it will be successful)
- Contain your Mission Statement which explains what the main objective or focus of your business is.
- Product Description and Differentiation. Brief description of your products or services and why it is different from other solutions in the market.
- The Team. Basic information about your company’s leadership team and employees
- Business Concept. A solid description of what your business does.
- Target Market. The customers you plan to sell to.
- Marketing Strategy. Your plans on reaching and selling to your customers
- Current Financial State. Brief information about what revenue your business currently generates.
- Projected Financial State. Brief information about what you foresee your business revenue to be in the future.
The executive summary is the make-or-break section of your business plan. If your summary cannot in less than two pages cannot clearly describe how your business will solve a particular problem of your target audience and make a profit, your business plan is set on a faulty foundation.
Avoid using the executive summary to hype your business, instead, focus on helping the reader understand the what and how of your plan.
View the executive summary as an opportunity to introduce your vision for your company. You know your executive summary is powerful when it can answer these key questions:
- Who is your target audience?
- What sector or industry are you in?
- What are your products and services?
- What is the future of your industry?
- Is your company scaleable?
- Who are the owners and leaders of your company? What are their backgrounds and experience levels?
- What is the motivation for starting your company?
- What are the next steps?
Writing the executive summary last although it is the most important section of your business plan is an excellent idea. The reason why is because it is a high-level overview of your business plan. It is the section that determines whether potential investors and lenders will read further or not.
The executive summary can be a stand-alone document that covers everything in your business plan. It is not uncommon for investors to request only the executive summary when evaluating your business. If the information in the executive summary impresses them, they will ask for the complete business plan.
If you are writing your business plan for your planning purposes, you do not need to write the executive summary.
2. Add Your Company Overview
The company overview or description is the next section in your business plan after the executive summary. It describes what your business does.
Adding your company overview can be tricky especially when your business is still in the planning stages. Existing businesses can easily summarize their current operations but may encounter difficulties trying to explain what they plan to become.
Your company overview should contain the following:
- What products and services you will provide
- Geographical markets and locations your company have a presence
- What you need to run your business
- Who your target audience or customers are
- Who will service your customers
- Your company’s purpose, mission, and vision
- Information about your company’s founders
- Who the founders are
- Notable achievements of your company so far
When creating a company overview, you have to focus on three basics: identifying your industry, identifying your customer, and explaining the problem you solve.
If you are stuck when creating your company overview, try to answer some of these questions that pertain to you.
- Who are you targeting? (The answer is not everyone)
- What pain point does your product or service solve for your customers that they will be willing to spend money on resolving?
- How does your product or service overcome that pain point?
- Where is the location of your business?
- What products, equipment, and services do you need to run your business?
- How is your company’s product or service different from your competition in the eyes of your customers?
- How many employees do you need and what skills do you require them to have?
After answering some or all of these questions, you will get more than enough information you need to write your company overview or description section. When writing this section, describe what your company does for your customers.
![creating a simple business plan It describes what your business does](https://www.founderjar.com/wp-content/uploads/2021/07/Company-Description-describes-what-your-business-does.jpg)
The company description or overview section contains three elements: mission statement, history, and objectives.
- Mission Statement
The mission statement refers to the reason why your business or company is existing. It goes beyond what you do or sell, it is about the ‘why’. A good mission statement should be emotional and inspirational.
Your mission statement should follow the KISS rule (Keep It Simple, Stupid). For example, Shopify’s mission statement is “Make commerce better for everyone.”
When describing your company’s history, make it simple and avoid the temptation of tying it to a defensive narrative. Write it in the manner you would a profile. Your company’s history should include the following information:
- Founding Date
- Major Milestones
- Location(s)
- Flagship Products or Services
- Number of Employees
- Executive Leadership Roles
When you fill in this information, you use it to write one or two paragraphs about your company’s history.
Business Objectives
Your business objective must be SMART (specific, measurable, achievable, realistic, and time-bound.) Failure to clearly identify your business objectives does not inspire confidence and makes it hard for your team members to work towards a common purpose.
3. Perform Market and Competitive Analyses to Proof a Big Enough Business Opportunity
The third step in writing a business plan is the market and competitive analysis section. Every business, no matter the size, needs to perform comprehensive market and competitive analyses before it enters into a market.
Performing market and competitive analyses are critical for the success of your business. It helps you avoid entering the right market with the wrong product, or vice versa. Anyone reading your business plans, especially financiers and financial institutions will want to see proof that there is a big enough business opportunity you are targeting.
This section is where you describe the market and industry you want to operate in and show the big opportunities in the market that your business can leverage to make a profit. If you noticed any unique trends when doing your research, show them in this section.
Market analysis alone is not enough, you have to add competitive analysis to strengthen this section. There are already businesses in the industry or market, how do you plan to take a share of the market from them?
You have to clearly illustrate the competitive landscape in your business plan. Are there areas your competitors are doing well? Are there areas where they are not doing so well? Show it.
Make it clear in this section why you are moving into the industry and what weaknesses are present there that you plan to explain. How are your competitors going to react to your market entry? How do you plan to get customers? Do you plan on taking your competitors' competitors, tap into other sources for customers, or both?
Illustrate the competitive landscape as well. What are your competitors doing well and not so well?
Answering these questions and thoughts will aid your market and competitive analysis of the opportunities in your space. Depending on how sophisticated your industry is, or the expectations of your financiers, you may need to carry out a more comprehensive market and competitive analysis to prove that big business opportunity.
Instead of looking at the market and competitive analyses as one entity, separating them will make the research even more comprehensive.
Market Analysis
Market analysis, boarding speaking, refers to research a business carried out on its industry, market, and competitors. It helps businesses gain a good understanding of their target market and the outlook of their industry. Before starting a company, it is vital to carry out market research to find out if the market is viable.
![creating a simple business plan Market Analysis for Online Business](https://www.founderjar.com/wp-content/uploads/2021/07/Market-Analysis-for-Online-Business.jpg)
The market analysis section is a key part of the business plan. It is the section where you identify who your best clients or customers are. You cannot omit this section, without it your business plan is incomplete.
A good market analysis will tell your readers how you fit into the existing market and what makes you stand out. This section requires in-depth research, it will probably be the most time-consuming part of the business plan to write.
- Market Research
To create a compelling market analysis that will win over investors and financial institutions, you have to carry out thorough market research . Your market research should be targeted at your primary target market for your products or services. Here is what you want to find out about your target market.
- Your target market’s needs or pain points
- The existing solutions for their pain points
- Geographic Location
- Demographics
The purpose of carrying out a marketing analysis is to get all the information you need to show that you have a solid and thorough understanding of your target audience.
Only after you have fully understood the people you plan to sell your products or services to, can you evaluate correctly if your target market will be interested in your products or services.
You can easily convince interested parties to invest in your business if you can show them you thoroughly understand the market and show them that there is a market for your products or services.
How to Quantify Your Target Market
One of the goals of your marketing research is to understand who your ideal customers are and their purchasing power. To quantify your target market, you have to determine the following:
- Your Potential Customers: They are the people you plan to target. For example, if you sell accounting software for small businesses , then anyone who runs an enterprise or large business is unlikely to be your customers. Also, individuals who do not have a business will most likely not be interested in your product.
- Total Households: If you are selling household products such as heating and air conditioning systems, determining the number of total households is more important than finding out the total population in the area you want to sell to. The logic is simple, people buy the product but it is the household that uses it.
- Median Income: You need to know the median income of your target market. If you target a market that cannot afford to buy your products and services, your business will not last long.
- Income by Demographics: If your potential customers belong to a certain age group or gender, determining income levels by demographics is necessary. For example, if you sell men's clothes, your target audience is men.
What Does a Good Market Analysis Entail?
Your business does not exist on its own, it can only flourish within an industry and alongside competitors. Market analysis takes into consideration your industry, target market, and competitors. Understanding these three entities will drastically improve your company’s chances of success.
![creating a simple business plan Market Analysis Steps](https://www.founderjar.com/wp-content/uploads/2021/07/Market-Analysis-Steps.jpg)
You can view your market analysis as an examination of the market you want to break into and an education on the emerging trends and themes in that market. Good market analyses include the following:
- Industry Description. You find out about the history of your industry, the current and future market size, and who the largest players/companies are in your industry.
- Overview of Target Market. You research your target market and its characteristics. Who are you targeting? Note, it cannot be everyone, it has to be a specific group. You also have to find out all information possible about your customers that can help you understand how and why they make buying decisions.
- Size of Target Market: You need to know the size of your target market, how frequently they buy, and the expected quantity they buy so you do not risk overproducing and having lots of bad inventory. Researching the size of your target market will help you determine if it is big enough for sustained business or not.
- Growth Potential: Before picking a target market, you want to be sure there are lots of potential for future growth. You want to avoid going for an industry that is declining slowly or rapidly with almost zero growth potential.
- Market Share Potential: Does your business stand a good chance of taking a good share of the market?
- Market Pricing and Promotional Strategies: Your market analysis should give you an idea of the price point you can expect to charge for your products and services. Researching your target market will also give you ideas of pricing strategies you can implement to break into the market or to enjoy maximum profits.
- Potential Barriers to Entry: One of the biggest benefits of conducting market analysis is that it shows you every potential barrier to entry your business will likely encounter. It is a good idea to discuss potential barriers to entry such as changing technology. It informs readers of your business plan that you understand the market.
- Research on Competitors: You need to know the strengths and weaknesses of your competitors and how you can exploit them for the benefit of your business. Find patterns and trends among your competitors that make them successful, discover what works and what doesn’t, and see what you can do better.
The market analysis section is not just for talking about your target market, industry, and competitors. You also have to explain how your company can fill the hole you have identified in the market.
Here are some questions you can answer that can help you position your product or service in a positive light to your readers.
- Is your product or service of superior quality?
- What additional features do you offer that your competitors do not offer?
- Are you targeting a ‘new’ market?
Basically, your market analysis should include an analysis of what already exists in the market and an explanation of how your company fits into the market.
Competitive Analysis
In the competitive analysis section, y ou have to understand who your direct and indirect competitions are, and how successful they are in the marketplace. It is the section where you assess the strengths and weaknesses of your competitors, the advantage(s) they possess in the market and show the unique features or qualities that make you different from your competitors.
![creating a simple business plan Four Steps to Create a Competitive Marketing Analysis](https://www.founderjar.com/wp-content/uploads/2021/07/Four-Steps-to-Create-a-Competitive-Marketing-Analysis.jpg)
Many businesses do market analysis and competitive analysis together. However, to fully understand what the competitive analysis entails, it is essential to separate it from the market analysis.
Competitive analysis for your business can also include analysis on how to overcome barriers to entry in your target market.
The primary goal of conducting a competitive analysis is to distinguish your business from your competitors. A strong competitive analysis is essential if you want to convince potential funding sources to invest in your business. You have to show potential investors and lenders that your business has what it takes to compete in the marketplace successfully.
Competitive analysis will s how you what the strengths of your competition are and what they are doing to maintain that advantage.
When doing your competitive research, you first have to identify your competitor and then get all the information you can about them. The idea of spending time to identify your competitor and learn everything about them may seem daunting but it is well worth it.
Find answers to the following questions after you have identified who your competitors are.
- What are your successful competitors doing?
- Why is what they are doing working?
- Can your business do it better?
- What are the weaknesses of your successful competitors?
- What are they not doing well?
- Can your business turn its weaknesses into strengths?
- How good is your competitors’ customer service?
- Where do your competitors invest in advertising?
- What sales and pricing strategies are they using?
- What marketing strategies are they using?
- What kind of press coverage do they get?
- What are their customers saying about your competitors (both the positive and negative)?
If your competitors have a website, it is a good idea to visit their websites for more competitors’ research. Check their “About Us” page for more information.
![creating a simple business plan How to Perform Competitive Analysis](https://www.founderjar.com/wp-content/uploads/2021/07/How-to-Perform-Competitive-Analysis.jpg)
If you are presenting your business plan to investors, you need to clearly distinguish yourself from your competitors. Investors can easily tell when you have not properly researched your competitors.
Take time to think about what unique qualities or features set you apart from your competitors. If you do not have any direct competition offering your product to the market, it does not mean you leave out the competitor analysis section blank. Instead research on other companies that are providing a similar product, or whose product is solving the problem your product solves.
The next step is to create a table listing the top competitors you want to include in your business plan. Ensure you list your business as the last and on the right. What you just created is known as the competitor analysis table.
Direct vs Indirect Competition
You cannot know if your product or service will be a fit for your target market if you have not understood your business and the competitive landscape.
There is no market you want to target where you will not encounter competition, even if your product is innovative. Including competitive analysis in your business plan is essential.
If you are entering an established market, you need to explain how you plan to differentiate your products from the available options in the market. Also, include a list of few companies that you view as your direct competitors The competition you face in an established market is your direct competition.
In situations where you are entering a market with no direct competition, it does not mean there is no competition there. Consider your indirect competition that offers substitutes for the products or services you offer.
For example, if you sell an innovative SaaS product, let us say a project management software , a company offering time management software is your indirect competition.
There is an easy way to find out who your indirect competitors are in the absence of no direct competitors. You simply have to research how your potential customers are solving the problems that your product or service seeks to solve. That is your direct competition.
Factors that Differentiate Your Business from the Competition
There are three main factors that any business can use to differentiate itself from its competition. They are cost leadership, product differentiation, and market segmentation.
1. Cost Leadership
A strategy you can impose to maximize your profits and gain an edge over your competitors. It involves offering lower prices than what the majority of your competitors are offering.
A common practice among businesses looking to enter into a market where there are dominant players is to use free trials or pricing to attract as many customers as possible to their offer.
2. Product Differentiation
Your product or service should have a unique selling proposition (USP) that your competitors do not have or do not stress in their marketing.
Part of the marketing strategy should involve making your products unique and different from your competitors. It does not have to be different from your competitors, it can be the addition to a feature or benefit that your competitors do not currently have.
3. Market Segmentation
As a new business seeking to break into an industry, you will gain more success from focusing on a specific niche or target market, and not the whole industry.
If your competitors are focused on a general need or target market, you can differentiate yourself from them by having a small and hyper-targeted audience. For example, if your competitors are selling men’s clothes in their online stores , you can sell hoodies for men.
4. Define Your Business and Management Structure
The next step in your business plan is your business and management structure. It is the section where you describe the legal structure of your business and the team running it.
Your business is only as good as the management team that runs it, while the management team can only strive when there is a proper business and management structure in place.
If your company is a sole proprietor or a limited liability company (LLC), a general or limited partnership, or a C or an S corporation, state it clearly in this section.
Use an organizational chart to show the management structure in your business. Clearly show who is in charge of what area in your company. It is where you show how each key manager or team leader’s unique experience can contribute immensely to the success of your company. You can also opt to add the resumes and CVs of the key players in your company.
The business and management structure section should show who the owner is, and other owners of the businesses (if the business has other owners). For businesses or companies with multiple owners, include the percent ownership of the various owners and clearly show the extent of each others’ involvement in the company.
Investors want to know who is behind the company and the team running it to determine if it has the right management to achieve its set goals.
Management Team
The management team section is where you show that you have the right team in place to successfully execute the business operations and ideas. Take time to create the management structure for your business. Think about all the important roles and responsibilities that you need managers for to grow your business.
Include brief bios of each key team member and ensure you highlight only the relevant information that is needed. If your team members have background industry experience or have held top positions for other companies and achieved success while filling that role, highlight it in this section.
![creating a simple business plan Create Management Team For Business Plan](https://www.founderjar.com/wp-content/uploads/2021/07/Create-Management-Team-For-Business-Plan.jpg)
A common mistake that many startups make is assigning C-level titles such as (CMO and CEO) to everyone on their team. It is unrealistic for a small business to have those titles. While it may look good on paper for the ego of your team members, it can prevent investors from investing in your business.
Instead of building an unrealistic management structure that does not fit your business reality, it is best to allow business titles to grow as the business grows. Starting everyone at the top leaves no room for future change or growth, which is bad for productivity.
Your management team does not have to be complete before you start writing your business plan. You can have a complete business plan even when there are managerial positions that are empty and need filling.
If you have management gaps in your team, simply show the gaps and indicate you are searching for the right candidates for the role(s). Investors do not expect you to have a full management team when you are just starting your business.
Key Questions to Answer When Structuring Your Management Team
- Who are the key leaders?
- What experiences, skills, and educational backgrounds do you expect your key leaders to have?
- Do your key leaders have industry experience?
- What positions will they fill and what duties will they perform in those positions?
- What level of authority do the key leaders have and what are their responsibilities?
- What is the salary for the various management positions that will attract the ideal candidates?
Additional Tips for Writing the Management Structure Section
1. Avoid Adding ‘Ghost’ Names to Your Management Team
There is always that temptation to include a ‘ghost’ name to your management team to attract and influence investors to invest in your business. Although the presence of these celebrity management team members may attract the attention of investors, it can cause your business to lose any credibility if you get found out.
Seasoned investors will investigate further the members of your management team before committing fully to your business If they find out that the celebrity name used does not play any actual role in your business, they will not invest and may write you off as dishonest.
2. Focus on Credentials But Pay Extra Attention to the Roles
Investors want to know the experience that your key team members have to determine if they can successfully reach the company’s growth and financial goals.
While it is an excellent boost for your key management team to have the right credentials, you also want to pay extra attention to the roles they will play in your company.
Organizational Chart
![creating a simple business plan Organizational chart Infographic](https://www.founderjar.com/wp-content/uploads/2021/07/An-organizational-chart-helps-to-identify-how-best-to-structure-your-management-team.jpg)
Adding an organizational chart in this section of your business plan is not necessary, you can do it in your business plan’s appendix.
If you are exploring funding options, it is not uncommon to get asked for your organizational chart. The function of an organizational chart goes beyond raising money, you can also use it as a useful planning tool for your business.
An organizational chart can help you identify how best to structure your management team for maximum productivity and point you towards key roles you need to fill in the future.
You can use the organizational chart to show your company’s internal management structure such as the roles and responsibilities of your management team, and relationships that exist between them.
5. Describe Your Product and Service Offering
In your business plan, you have to describe what you sell or the service you plan to offer. It is the next step after defining your business and management structure. The products and services section is where you sell the benefits of your business.
Here you have to explain how your product or service will benefit your customers and describe your product lifecycle. It is also the section where you write down your plans for intellectual property like patent filings and copyrighting.
The research and development that you are undertaking for your product or service need to be explained in detail in this section. However, do not get too technical, sell the general idea and its benefits.
If you have any diagrams or intricate designs of your product or service, do not include them in the products and services section. Instead, leave them for the addendum page. Also, if you are leaving out diagrams or designs for the addendum, ensure you add this phrase “For more detail, visit the addendum Page #.”
Your product and service section in your business plan should include the following:
- A detailed explanation that clearly shows how your product or service works.
- The pricing model for your product or service.
- Your business’ sales and distribution strategy.
- The ideal customers that want your product or service.
- The benefits of your products and services.
- Reason(s) why your product or service is a better alternative to what your competitors are currently offering in the market.
- Plans for filling the orders you receive
- If you have current or pending patents, copyrights, and trademarks for your product or service, you can also discuss them in this section.
What to Focus On When Describing the Benefits, Lifecycle, and Production Process of Your Products or Services
In the products and services section, you have to distill the benefits, lifecycle, and production process of your products and services.
When describing the benefits of your products or services, here are some key factors to focus on.
- Unique features
- Translating the unique features into benefits
- The emotional, psychological, and practical payoffs to attract customers
- Intellectual property rights or any patents
When describing the product life cycle of your products or services, here are some key factors to focus on.
- Upsells, cross-sells, and down-sells
- Time between purchases
- Plans for research and development.
When describing the production process for your products or services, you need to think about the following:
- The creation of new or existing products and services.
- The sources for the raw materials or components you need for production.
- Assembling the products
- Maintaining quality control
- Supply-chain logistics (receiving the raw materials and delivering the finished products)
- The day-to-day management of the production processes, bookkeeping, and inventory.
Tips for Writing the Products or Services Section of Your Business Plan
1. Avoid Technical Descriptions and Industry Buzzwords
The products and services section of your business plan should clearly describe the products and services that your company provides. However, it is not a section to include technical jargons that anyone outside your industry will not understand.
A good practice is to remove highly detailed or technical descriptions in favor of simple terms. Industry buzzwords are not necessary, if there are simpler terms you can use, then use them. If you plan to use your business plan to source funds, making the product or service section so technical will do you no favors.
2. Describe How Your Products or Services Differ from Your Competitors
When potential investors look at your business plan, they want to know how the products and services you are offering differ from that of your competition. Differentiating your products or services from your competition in a way that makes your solution more attractive is critical.
If you are going the innovative path and there is no market currently for your product or service, you need to describe in this section why the market needs your product or service.
For example, overnight delivery was a niche business that only a few companies were participating in. Federal Express (FedEx) had to show in its business plan that there was a large opportunity for that service and they justified why the market needed that service.
3. Long or Short Products or Services Section
Should your products or services section be short? Does the long products or services section attract more investors?
There are no straightforward answers to these questions. Whether your products or services section should be long or relatively short depends on the nature of your business.
If your business is product-focused, then automatically you need to use more space to describe the details of your products. However, if the product your business sells is a commodity item that relies on competitive pricing or other pricing strategies, you do not have to use up so much space to provide significant details about the product.
Likewise, if you are selling a commodity that is available in numerous outlets, then you do not have to spend time on writing a long products or services section.
The key to the success of your business is most likely the effectiveness of your marketing strategies compared to your competitors. Use more space to address that section.
If you are creating a new product or service that the market does not know about, your products or services section can be lengthy. The reason why is because you need to explain everything about the product or service such as the nature of the product, its use case, and values.
A short products or services section for an innovative product or service will not give the readers enough information to properly evaluate your business.
4. Describe Your Relationships with Vendors or Suppliers
Your business will rely on vendors or suppliers to supply raw materials or the components needed to make your products. In your products and services section, describe your relationships with your vendors and suppliers fully.
Avoid the mistake of relying on only one supplier or vendor. If that supplier or vendor fails to supply or goes out of business, you can easily face supply problems and struggle to meet your demands. Plan to set up multiple vendor or supplier relationships for better business stability.
5. Your Primary Goal Is to Convince Your Readers
The primary goal of your business plan is to convince your readers that your business is viable and to create a guide for your business to follow. It applies to the products and services section.
When drafting this section, think like the reader. See your reader as someone who has no idea about your products and services. You are using the products and services section to provide the needed information to help your reader understand your products and services. As a result, you have to be clear and to the point.
While you want to educate your readers about your products or services, you also do not want to bore them with lots of technical details. Show your products and services and not your fancy choice of words.
Your products and services section should provide the answer to the “what” question for your business. You and your management team may run the business, but it is your products and services that are the lifeblood of the business.
Key Questions to Answer When Writing your Products and Services Section
Answering these questions can help you write your products and services section quickly and in a way that will appeal to your readers.
- Are your products existing on the market or are they still in the development stage?
- What is your timeline for adding new products and services to the market?
- What are the positives that make your products and services different from your competitors?
- Do your products and services have any competitive advantage that your competitors’ products and services do not currently have?
- Do your products or services have any competitive disadvantages that you need to overcome to compete with your competitors? If your answer is yes, state how you plan to overcome them,
- How much does it cost to produce your products or services? How much do you plan to sell it for?
- What is the price for your products and services compared to your competitors? Is pricing an issue?
- What are your operating costs and will it be low enough for you to compete with your competitors and still take home a reasonable profit margin?
- What is your plan for acquiring your products? Are you involved in the production of your products or services?
- Are you the manufacturer and produce all the components you need to create your products? Do you assemble your products by using components supplied by other manufacturers? Do you purchase your products directly from suppliers or wholesalers?
- Do you have a steady supply of products that you need to start your business? (If your business is yet to kick-off)
- How do you plan to distribute your products or services to the market?
You can also hint at the marketing or promotion plans you have for your products or services such as how you plan to build awareness or retain customers. The next section is where you can go fully into details about your business’s marketing and sales plan.
6. Show and Explain Your Marketing and Sales Plan
Providing great products and services is wonderful, but it means nothing if you do not have a marketing and sales plan to inform your customers about them. Your marketing and sales plan is critical to the success of your business.
The sales and marketing section is where you show and offer a detailed explanation of your marketing and sales plan and how you plan to execute it. It covers your pricing plan, proposed advertising and promotion activities, activities and partnerships you need to make your business a success, and the benefits of your products and services.
There are several ways you can approach your marketing and sales strategy. Ideally, your marketing and sales strategy has to fit the unique needs of your business.
In this section, you describe how the plans your business has for attracting and retaining customers, and the exact process for making a sale happen. It is essential to thoroughly describe your complete marketing and sales plans because you are still going to reference this section when you are making financial projections for your business.
Outline Your Business’ Unique Selling Proposition (USP)
![creating a simple business plan Unique Selling Proposition (USP)](https://www.founderjar.com/wp-content/uploads/2021/07/Unique-Selling-Proposition-USP.jpg)
The sales and marketing section is where you outline your business’s unique selling proposition (USP). When you are developing your unique selling proposition, think about the strongest reasons why people should buy from you over your competition. That reason(s) is most likely a good fit to serve as your unique selling proposition (USP).
Target Market and Target Audience
Plans on how to get your products or services to your target market and how to get your target audience to buy them go into this section. You also highlight the strengths of your business here, particularly what sets them apart from your competition.
![creating a simple business plan Target Market Vs Target Audience](https://www.founderjar.com/wp-content/uploads/2021/07/Target-Market-Vs-Target-Audience.jpg)
Before you start writing your marketing and sales plan, you need to have properly defined your target audience and fleshed out your buyer persona. If you do not first understand the individual you are marketing to, your marketing and sales plan will lack any substance and easily fall.
Creating a Smart Marketing and Sales Plan
Marketing your products and services is an investment that requires you to spend money. Like any other investment, you have to generate a good return on investment (ROI) to justify using that marketing and sales plan. Good marketing and sales plans bring in high sales and profits to your company.
Avoid spending money on unproductive marketing channels. Do your research and find out the best marketing and sales plan that works best for your company.
Your marketing and sales plan can be broken into different parts: your positioning statement, pricing, promotion, packaging, advertising, public relations, content marketing, social media, and strategic alliances.
Your Positioning Statement
Your positioning statement is the first part of your marketing and sales plan. It refers to the way you present your company to your customers.
Are you the premium solution, the low-price solution, or are you the intermediary between the two extremes in the market? What do you offer that your competitors do not that can give you leverage in the market?
Before you start writing your positioning statement, you need to spend some time evaluating the current market conditions. Here are some questions that can help you to evaluate the market
- What are the unique features or benefits that you offer that your competitors lack?
- What are your customers’ primary needs and wants?
- Why should a customer choose you over your competition? How do you plan to differentiate yourself from the competition?
- How does your company’s solution compare with other solutions in the market?
After answering these questions, then you can start writing your positioning statement. Your positioning statement does not have to be in-depth or too long.
All you need to explain with your positioning statement are two focus areas. The first is the position of your company within the competitive landscape. The other focus area is the core value proposition that sets your company apart from other alternatives that your ideal customer might consider.
Here is a simple template you can use to develop a positioning statement.
For [description of target market] who [need of target market], [product or service] [how it meets the need]. Unlike [top competition], it [most essential distinguishing feature].
For example, let’s create the positioning statement for fictional accounting software and QuickBooks alternative , TBooks.
“For small business owners who need accounting services, TBooks is an accounting software that helps small businesses handle their small business bookkeeping basics quickly and easily. Unlike Wave, TBooks gives small businesses access to live sessions with top accountants.”
You can edit this positioning statement sample and fill it with your business details.
After writing your positioning statement, the next step is the pricing of your offerings. The overall positioning strategy you set in your positioning statement will often determine how you price your products or services.
Pricing is a powerful tool that sends a strong message to your customers. Failure to get your pricing strategy right can make or mar your business. If you are targeting a low-income audience, setting a premium price can result in low sales.
You can use pricing to communicate your positioning to your customers. For example, if you are offering a product at a premium price, you are sending a message to your customers that the product belongs to the premium category.
Basic Rules to Follow When Pricing Your Offering
Setting a price for your offering involves more than just putting a price tag on it. Deciding on the right pricing for your offering requires following some basic rules. They include covering your costs, primary and secondary profit center pricing, and matching the market rate.
- Covering Your Costs: The price you set for your products or service should be more than it costs you to produce and deliver them. Every business has the same goal, to make a profit. Depending on the strategy you want to use, there are exceptions to this rule. However, the vast majority of businesses follow this rule.
- Primary and Secondary Profit Center Pricing: When a company sets its price above the cost of production, it is making that product its primary profit center. A company can also decide not to make its initial price its primary profit center by selling below or at even with its production cost. It rather depends on the support product or even maintenance that is associated with the initial purchase to make its profit. The initial price thus became its secondary profit center.
- Matching the Market Rate: A good rule to follow when pricing your products or services is to match your pricing with consumer demand and expectations. If you price your products or services beyond the price your customer perceives as the ideal price range, you may end up with no customers. Pricing your products too low below what your customer perceives as the ideal price range may lead to them undervaluing your offering.
Pricing Strategy
Your pricing strategy influences the price of your offering. There are several pricing strategies available for you to choose from when examining the right pricing strategy for your business. They include cost-plus pricing, market-based pricing, value pricing, and more.
![creating a simple business plan Pricing strategy influences the price of offering](https://www.founderjar.com/wp-content/uploads/2021/07/Pricing-strategy-influences-the-price-of-offering.jpg)
- Cost-plus Pricing: This strategy is one of the simplest and oldest pricing strategies. Here you consider the cost of producing a unit of your product and then add a profit to it to arrive at your market price. It is an effective pricing strategy for manufacturers because it helps them cover their initial costs. Another name for the cost-plus pricing strategy is the markup pricing strategy.
- Market-based Pricing: This pricing strategy analyses the market including competitors’ pricing and then sets a price based on what the market is expecting. With this pricing strategy, you can either set your price at the low-end or high-end of the market.
- Value Pricing: This pricing strategy involves setting a price based on the value you are providing to your customer. When adopting a value-based pricing strategy, you have to set a price that your customers are willing to pay. Service-based businesses such as small business insurance providers , luxury goods sellers, and the fashion industry use this pricing strategy.
After carefully sorting out your positioning statement and pricing, the next item to look at is your promotional strategy. Your promotional strategy explains how you plan on communicating with your customers and prospects.
As a business, you must measure all your costs, including the cost of your promotions. You also want to measure how much sales your promotions bring for your business to determine its usefulness. Promotional strategies or programs that do not lead to profit need to be removed.
There are different types of promotional strategies you can adopt for your business, they include advertising, public relations, and content marketing.
Advertising
Your business plan should include your advertising plan which can be found in the marketing and sales plan section. You need to include an overview of your advertising plans such as the areas you plan to spend money on to advertise your business and offers.
Ensure that you make it clear in this section if your business will be advertising online or using the more traditional offline media, or the combination of both online and offline media. You can also include the advertising medium you want to use to raise awareness about your business and offers.
Some common online advertising mediums you can use include social media ads, landing pages, sales pages, SEO, Pay-Per-Click, emails, Google Ads, and others. Some common traditional and offline advertising mediums include word of mouth, radios, direct mail, televisions, flyers, billboards, posters, and others.
A key component of your advertising strategy is how you plan to measure the effectiveness and success of your advertising campaign. There is no point in sticking with an advertising plan or medium that does not produce results for your business in the long run.
Public Relations
A great way to reach your customers is to get the media to cover your business or product. Publicity, especially good ones, should be a part of your marketing and sales plan. In this section, show your plans for getting prominent reviews of your product from reputable publications and sources.
Your business needs that exposure to grow. If public relations is a crucial part of your promotional strategy, provide details about your public relations plan here.
Content Marketing
Content marketing is a popular promotional strategy used by businesses to inform and attract their customers. It is about teaching and educating your prospects on various topics of interest in your niche, it does not just involve informing them about the benefits and features of the products and services you have,
![creating a simple business plan The Benefits of Content Marketing](https://www.founderjar.com/wp-content/uploads/2021/07/The-Benefits-of-Content-Marketing.jpg)
Businesses publish content usually for free where they provide useful information, tips, and advice so that their target market can be made aware of the importance of their products and services. Content marketing strategies seek to nurture prospects into buyers over time by simply providing value.
Your company can create a blog where it will be publishing content for its target market. You will need to use the best website builder such as Wix and Squarespace and the best web hosting services such as Bluehost, Hostinger, and other Bluehost alternatives to create a functional blog or website.
If content marketing is a crucial part of your promotional strategy (as it should be), detail your plans under promotions.
Including high-quality images of the packaging of your product in your business plan is a lovely idea. You can add the images of the packaging of that product in the marketing and sales plan section. If you are not selling a product, then you do not need to include any worry about the physical packaging of your product.
When organizing the packaging section of your business plan, you can answer the following questions to make maximum use of this section.
- Is your choice of packaging consistent with your positioning strategy?
- What key value proposition does your packaging communicate? (It should reflect the key value proposition of your business)
- How does your packaging compare to that of your competitors?
Social Media
Your 21st-century business needs to have a good social media presence. Not having one is leaving out opportunities for growth and reaching out to your prospect.
You do not have to join the thousands of social media platforms out there. What you need to do is join the ones that your customers are active on and be active there.
![creating a simple business plan Most popular social media platforms](https://www.founderjar.com/wp-content/uploads/2021/07/Most-popular-social-media-platforms.jpg)
Businesses use social media to provide information about their products such as promotions, discounts, the benefits of their products, and content on their blogs.
Social media is also a platform for engaging with your customers and getting feedback about your products or services. Make no mistake, more and more of your prospects are using social media channels to find more information about companies.
You need to consider the social media channels you want to prioritize your business (prioritize the ones your customers are active in) and your branding plans in this section.
![creating a simple business plan Choosing the right social media platform](https://www.founderjar.com/wp-content/uploads/2021/07/Choosing-the-right-social-media-platform.jpg)
Strategic Alliances
If your company plans to work closely with other companies as part of your sales and marketing plan, include it in this section. Prove details about those partnerships in your business plan if you have already established them.
Strategic alliances can be beneficial for all parties involved including your company. Working closely with another company in the form of a partnership can provide access to a different target market segment for your company.
The company you are partnering with may also gain access to your target market or simply offer a new product or service (that of your company) to its customers.
Mutually beneficial partnerships can cover the weaknesses of one company with the strength of another. You should consider strategic alliances with companies that sell complimentary products to yours. For example, if you provide printers, you can partner with a company that produces ink since the customers that buy printers from you will also need inks for printing.
Steps Involved in Creating a Marketing and Sales Plan
1. Focus on Your Target Market
Identify who your customers are, the market you want to target. Then determine the best ways to get your products or services to your potential customers.
2. Evaluate Your Competition
One of the goals of having a marketing plan is to distinguish yourself from your competition. You cannot stand out from them without first knowing them in and out.
You can know your competitors by gathering information about their products, pricing, service, and advertising campaigns.
These questions can help you know your competition.
- What makes your competition successful?
- What are their weaknesses?
- What are customers saying about your competition?
3. Consider Your Brand
Customers' perception of your brand has a strong impact on your sales. Your marketing and sales plan should seek to bolster the image of your brand. Before you start marketing your business, think about the message you want to pass across about your business and your products and services.
4. Focus on Benefits
The majority of your customers do not view your product in terms of features, what they want to know is the benefits and solutions your product offers. Think about the problems your product solves and the benefits it delivers, and use it to create the right sales and marketing message.
Your marketing plan should focus on what you want your customer to get instead of what you provide. Identify those benefits in your marketing and sales plan.
5. Focus on Differentiation
Your marketing and sales plan should look for a unique angle they can take that differentiates your business from the competition, even if the products offered are similar. Some good areas of differentiation you can use are your benefits, pricing, and features.
Key Questions to Answer When Writing Your Marketing and Sales Plan
- What is your company’s budget for sales and marketing campaigns?
- What key metrics will you use to determine if your marketing plans are successful?
- What are your alternatives if your initial marketing efforts do not succeed?
- Who are the sales representatives you need to promote your products or services?
- What are the marketing and sales channels you plan to use? How do you plan to get your products in front of your ideal customers?
- Where will you sell your products?
You may want to include samples of marketing materials you plan to use such as print ads, website descriptions, and social media ads. While it is not compulsory to include these samples, it can help you better communicate your marketing and sales plan and objectives.
The purpose of the marketing and sales section is to answer this question “How will you reach your customers?” If you cannot convincingly provide an answer to this question, you need to rework your marketing and sales section.
7. Clearly Show Your Funding Request
If you are writing your business plan to ask for funding from investors or financial institutions, the funding request section is where you will outline your funding requirements. The funding request section should answer the question ‘How much money will your business need in the near future (3 to 5 years)?’
A good funding request section will clearly outline and explain the amount of funding your business needs over the next five years. You need to know the amount of money your business needs to make an accurate funding request.
Also, when writing your funding request, provide details of how the funds will be used over the period. Specify if you want to use the funds to buy raw materials or machinery, pay salaries, pay for advertisements, and cover specific bills such as rent and electricity.
In addition to explaining what you want to use the funds requested for, you need to clearly state the projected return on investment (ROI) . Investors and creditors want to know if your business can generate profit for them if they put funds into it.
Ensure you do not inflate the figures and stay as realistic as possible. Investors and financial institutions you are seeking funds from will do their research before investing money in your business.
If you are not sure of an exact number to request from, you can use some range of numbers as rough estimates. Add a best-case scenario and a work-case scenario to your funding request. Also, include a description of your strategic future financial plans such as selling your business or paying off debts.
Funding Request: Debt or Equity?
When making your funding request, specify the type of funding you want. Do you want debt or equity? Draw out the terms that will be applicable for the funding, and the length of time the funding request will cover.
Case for Equity
If your new business has not yet started generating profits, you are most likely preparing to sell equity in your business to raise capital at the early stage. Equity here refers to ownership. In this case, you are selling a portion of your company to raise capital.
Although this method of raising capital for your business does not put your business in debt, keep in mind that an equity owner may expect to play a key role in company decisions even if he does not hold a major stake in the company.
Most equity sales for startups are usually private transactions . If you are making a funding request by offering equity in exchange for funding, let the investor know that they will be paid a dividend (a share of the company’s profit). Also, let the investor know the process for selling their equity in your business.
Case for Debt
You may decide not to offer equity in exchange for funds, instead, you make a funding request with the promise to pay back the money borrowed at the agreed time frame.
When making a funding request with an agreement to pay back, note that you will have to repay your creditors both the principal amount borrowed and the interest on it. Financial institutions offer this type of funding for businesses.
Large companies combine both equity and debt in their capital structure. When drafting your business plan, decide if you want to offer both or one over the other.
Before you sell equity in exchange for funding in your business, consider if you are willing to accept not being in total control of your business. Also, before you seek loans in your funding request section, ensure that the terms of repayment are favorable.
You should set a clear timeline in your funding request so that potential investors and creditors can know what you are expecting. Some investors and creditors may agree to your funding request and then delay payment for longer than 30 days, meanwhile, your business needs an immediate cash injection to operate efficiently.
Additional Tips for Writing the Funding Request Section of your Business Plan
The funding request section is not necessary for every business, it is only needed by businesses who plan to use their business plan to secure funding.
If you are adding the funding request section to your business plan, provide an itemized summary of how you plan to use the funds requested. Hiring a lawyer, accountant, or other professionals may be necessary for the proper development of this section.
You should also gather and use financial statements that add credibility and support to your funding requests. Ensure that the financial statements you use should include your projected financial data such as projected cash flows, forecast statements, and expenditure budgets.
If you are an existing business, include all historical financial statements such as cash flow statements, balance sheets and income statements .
Provide monthly and quarterly financial statements for a year. If your business has records that date back beyond the one-year mark, add the yearly statements of those years. These documents are for the appendix section of your business plan.
8. Detail Your Financial Plan, Metrics, and Projections
If you used the funding request section in your business plan, supplement it with a financial plan, metrics, and projections. This section paints a picture of the past performance of your business and then goes ahead to make an informed projection about its future.
The goal of this section is to convince readers that your business is going to be a financial success. It outlines your business plan to generate enough profit to repay the loan (with interest if applicable) and to generate a decent return on investment for investors.
If you have an existing business already in operation, use this section to demonstrate stability through finance. This section should include your cash flow statements, balance sheets, and income statements covering the last three to five years. If your business has some acceptable collateral that you can use to acquire loans, list it in the financial plan, metrics, and projection section.
Apart from current financial statements, this section should also contain a prospective financial outlook that spans the next five years. Include forecasted income statements, cash flow statements, balance sheets, and capital expenditure budget.
If your business is new and is not yet generating profit, use clear and realistic projections to show the potentials of your business.
When drafting this section, research industry norms and the performance of comparable businesses. Your financial projections should cover at least five years. State the logic behind your financial projections. Remember you can always make adjustments to this section as the variables change.
The financial plan, metrics, and projection section create a baseline which your business can either exceed or fail to reach. If your business fails to reach your projections in this section, you need to understand why it failed.
Investors and loan managers spend a lot of time going through the financial plan, metrics, and projection section compared to other parts of the business plan. Ensure you spend time creating credible financial analyses for your business in this section.
Many entrepreneurs find this section daunting to write. You do not need a business degree to create a solid financial forecast for your business. Business finances, especially for startups, are not as complicated as they seem. There are several online tools and templates that make writing this section so much easier.
Use Graphs and Charts
The financial plan, metrics, and projection section is a great place to use graphs and charts to tell the financial story of your business. Charts and images make it easier to communicate your finances.
Accuracy in this section is key, ensure you carefully analyze your past financial statements properly before making financial projects.
Address the Risk Factors and Show Realistic Financial Projections
Keep your financial plan, metrics, and projection realistic. It is okay to be optimistic in your financial projection, however, you have to justify it.
You should also address the various risk factors associated with your business in this section. Investors want to know the potential risks involved, show them. You should also show your plans for mitigating those risks.
What You Should In The Financial Plan, Metrics, and Projection Section of Your Business Plan
The financial plan, metrics, and projection section of your business plan should have monthly sales and revenue forecasts for the first year. It should also include annual projections that cover 3 to 5 years.
A three-year projection is a basic requirement to have in your business plan. However, some investors may request a five-year forecast.
Your business plan should include the following financial statements: sales forecast, personnel plan, income statement, income statement, cash flow statement, balance sheet, and an exit strategy.
1. Sales Forecast
Sales forecast refers to your projections about the number of sales your business is going to record over the next few years. It is typically broken into several rows, with each row assigned to a core product or service that your business is offering.
One common mistake people make in their business plan is to break down the sales forecast section into long details. A sales forecast should forecast the high-level details.
For example, if you are forecasting sales for a payroll software provider, you could break down your forecast into target market segments or subscription categories.
![creating a simple business plan Benefits of Sales Forecasting](https://www.founderjar.com/wp-content/uploads/2021/07/Benefits-of-Sales-Forecasting.jpg)
Your sales forecast section should also have a corresponding row for each sales row to cover the direct cost or Cost of Goods Sold (COGS). The objective of these rows is to show the expenses that your business incurs in making and delivering your product or service.
Note that your Cost of Goods Sold (COGS) should only cover those direct costs incurred when making your products. Other indirect expenses such as insurance, salaries, payroll tax, and rent should not be included.
For example, the Cost of Goods Sold (COGS) for a restaurant is the cost of ingredients while for a consulting company it will be the cost of paper and other presentation materials.
![creating a simple business plan Factors that affect sales forecasting](https://www.founderjar.com/wp-content/uploads/2021/07/Factors-that-affect-sales-forecasting.jpg)
2. Personnel Plan
The personnel plan section is where you provide details about the payment plan for your employees. For a small business, you can easily list every position in your company and how much you plan to pay in the personnel plan.
However, for larger businesses, you have to break the personnel plan into functional groups such as sales and marketing.
The personnel plan will also include the cost of an employee beyond salary, commonly referred to as the employee burden. These costs include insurance, payroll taxes , and other essential costs incurred monthly as a result of having employees on your payroll.
![creating a simple business plan True HR Cost Infographic](https://www.founderjar.com/wp-content/uploads/2021/07/True-HR-Cost.jpg)
3. Income Statement
The income statement section shows if your business is making a profit or taking a loss. Another name for the income statement is the profit and loss (P&L). It takes data from your sales forecast and personnel plan and adds other ongoing expenses you incur while running your business.
![creating a simple business plan The income statement section](https://www.founderjar.com/wp-content/uploads/2021/07/The-income-statement-section.jpg)
Every business plan should have an income statement. It subtracts your business expenses from its earnings to show if your business is generating profit or incurring losses.
The income statement has the following items: sales, Cost of Goods Sold (COGS), gross margin, operating expenses, total operating expenses, operating income , total expenses, and net profit.
- Sales refer to the revenue your business generates from selling its products or services. Other names for sales are income or revenue.
- Cost of Goods Sold (COGS) refers to the total cost of selling your products. Other names for COGS are direct costs or cost of sales. Manufacturing businesses use the Costs of Goods Manufactured (COGM) .
- Gross Margin is the figure you get when you subtract your COGS from your sales. In your income statement, you can express it as a percentage of total sales (Gross margin / Sales = Gross Margin Percent).
- Operating Expenses refer to all the expenses you incur from running your business. It exempts the COGS because it stands alone as a core part of your income statement. You also have to exclude taxes, depreciation, and amortization. Your operating expenses include salaries, marketing expenses, research and development (R&D) expenses, and other expenses.
- Total Operating Expenses refers to the sum of all your operating expenses including those exemptions named above under operating expenses.
- Operating Income refers to earnings before interest, taxes, depreciation, and amortization. It is simply known as the acronym EBITDA (earnings before interest, taxes, depreciation, and amortization). Calculating your operating income is simple, all you need to do is to subtract your COGS and total operating expenses from your sales.
- Total Expenses refer to the sum of your operating expenses and your business’ interest, taxes, depreciation, and amortization.
- Net profit shows whether your business has made a profit or taken a loss during a given timeframe.
4. Cash Flow Statement
The cash flow statement tracks the money you have in the bank at any given point. It is often confused with the income statement or the profit and loss statement. They are both different types of financial statements. The income statement calculates your profits and losses while the cash flow statement shows you how much you have in the bank.
![creating a simple business plan Cash Flow Statement Example](https://www.founderjar.com/wp-content/uploads/2021/07/Cash-Flow-Statement-Example.jpg)
5. Balance Sheet
The balance sheet is a financial statement that provides an overview of the financial health of your business. It contains information about the assets and liabilities of your company, and owner’s or shareholders’ equity.
You can get the net worth of your company by subtracting your company’s liabilities from its assets.
![creating a simple business plan Balance sheet Formula](https://www.founderjar.com/wp-content/uploads/2021/07/Balance-sheet-Formula.jpg)
6. Exit Strategy
The exit strategy refers to a probable plan for selling your business either to the public in an IPO or to another company. It is the last thing you include in the financial plan, metrics, and projection section.
You can choose to omit the exit strategy from your business plan if you plan to maintain full ownership of your business and do not plan on seeking angel investment or virtual capitalist (VC) funding.
Investors may want to know what your exit plan is. They invest in your business to get a good return on investment.
Your exit strategy does not have to include long and boring details. Ensure you identify some interested parties who may be interested in buying the company if it becomes a success.
![creating a simple business plan Exit Strategy Section of Business Plan Infographic](https://www.founderjar.com/wp-content/uploads/2021/07/Exit-Strategy-Section-of-Business-Plan-Infographic.jpg)
Key Questions to Answer with Your Financial Plan, Metrics, and Projection
Your financial plan, metrics, and projection section helps investors, creditors, or your internal managers to understand what your expenses are, the amount of cash you need, and what it takes to make your company profitable. It also shows what you will be doing with any funding.
You do not need to show actual financial data if you do not have one. Adding forecasts and projections to your financial statements is added proof that your strategy is feasible and shows investors you have planned properly.
Here are some key questions to answer to help you develop this section.
- What is your sales forecast for the next year?
- When will your company achieve a positive cash flow?
- What are the core expenses you need to operate?
- How much money do you need upfront to operate or grow your company?
- How will you use the loans or investments?
9. Add an Appendix to Your Business Plan
Adding an appendix to your business plan is optional. It is a useful place to put any charts, tables, legal notes, definitions, permits, résumés, and other critical information that do not fit into other sections of your business plan.
The appendix section is where you would want to include details of a patent or patent-pending if you have one. You can always add illustrations or images of your products here. It is the last section of your business plan.
When writing your business plan, there are details you cut short or remove to prevent the entire section from becoming too lengthy. There are also details you want to include in the business plan but are not a good fit for any of the previous sections. You can add that additional information to the appendix section.
Businesses also use the appendix section to include supporting documents or other materials specially requested by investors or lenders.
You can include just about any information that supports the assumptions and statements you made in the business plan under the appendix. It is the one place in the business plan where unrelated data and information can coexist amicably.
If your appendix section is lengthy, try organizing it by adding a table of contents at the beginning of the appendix section. It is also advisable to group similar information to make it easier for the reader to access them.
A well-organized appendix section makes it easier to share your information clearly and concisely. Add footnotes throughout the rest of the business plan or make references in the plan to the documents in the appendix.
The appendix section is usually only necessary if you are seeking funding from investors or lenders, or hoping to attract partners.
People reading business plans do not want to spend time going through a heap of backup information, numbers, and charts. Keep these documents or information in the Appendix section in case the reader wants to dig deeper.
Common Items to Include in the Appendix Section of Your Business Plan
The appendix section includes documents that supplement or support the information or claims given in other sections of the business plans. Common items you can include in the appendix section include:
- Additional data about the process of manufacturing or creation
- Additional description of products or services such as product schematics
- Additional financial documents or projections
- Articles of incorporation and status
- Backup for market research or competitive analysis
- Bank statements
- Business registries
- Client testimonials (if your business is already running)
- Copies of insurances
- Credit histories (personal or/and business)
- Deeds and permits
- Equipment leases
- Examples of marketing and advertising collateral
- Industry associations and memberships
- Images of product
- Intellectual property
- Key customer contracts
- Legal documents and other contracts
- Letters of reference
- Links to references
- Market research data
- Organizational charts
- Photographs of potential facilities
- Professional licenses pertaining to your legal structure or type of business
- Purchase orders
- Resumes of the founder(s) and key managers
- State and federal identification numbers or codes
- Trademarks or patents’ registrations
Avoid using the appendix section as a place to dump any document or information you feel like adding. Only add documents or information that you support or increase the credibility of your business plan.
Tips and Strategies for Writing a Convincing Business Plan
To achieve a perfect business plan, you need to consider some key tips and strategies. These tips will raise the efficiency of your business plan above average.
1. Know Your Audience
When writing a business plan, you need to know your audience . Business owners write business plans for different reasons. Your business plan has to be specific. For example, you can write business plans to potential investors, banks, and even fellow board members of the company.
The audience you are writing to determines the structure of the business plan. As a business owner, you have to know your audience. Not everyone will be your audience. Knowing your audience will help you to narrow the scope of your business plan.
Consider what your audience wants to see in your projects, the likely questions they might ask, and what interests them.
- A business plan used to address a company's board members will center on its employment schemes, internal affairs, projects, stakeholders, etc.
- A business plan for financial institutions will talk about the size of your market and the chances for you to pay back any loans you demand.
- A business plan for investors will show proof that you can return the investment capital within a specific time. In addition, it discusses your financial projections, tractions, and market size.
2. Get Inspiration from People
Writing a business plan from scratch as an entrepreneur can be daunting. That is why you need the right inspiration to push you to write one. You can gain inspiration from the successful business plans of other businesses. Look at their business plans, the style they use, the structure of the project, etc.
To make your business plan easier to create, search companies related to your business to get an exact copy of what you need to create an effective business plan. You can also make references while citing examples in your business plans.
When drafting your business plan, get as much help from others as you possibly can. By getting inspiration from people, you can create something better than what they have.
3. Avoid Being Over Optimistic
Many business owners make use of strong adjectives to qualify their content. One of the big mistakes entrepreneurs make when preparing a business plan is promising too much.
The use of superlatives and over-optimistic claims can prepare the audience for more than you can offer. In the end, you disappoint the confidence they have in you.
In most cases, the best option is to be realistic with your claims and statistics. Most of the investors can sense a bit of incompetency from the overuse of superlatives. As a new entrepreneur, do not be tempted to over-promise to get the interests of investors.
The concept of entrepreneurship centers on risks, nothing is certain when you make future analyses. What separates the best is the ability to do careful research and work towards achieving that, not promising more than you can achieve.
To make an excellent first impression as an entrepreneur, replace superlatives with compelling data-driven content. In this way, you are more specific than someone promising a huge ROI from an investment.
4. Keep it Simple and Short
When writing business plans, ensure you keep them simple throughout. Irrespective of the purpose of the business plan, your goal is to convince the audience.
One way to achieve this goal is to make them understand your proposal. Therefore, it would be best if you avoid the use of complex grammar to express yourself. It would be a huge turn-off if the people you want to convince are not familiar with your use of words.
Another thing to note is the length of your business plan. It would be best if you made it as brief as possible.
You hardly see investors or agencies that read through an extremely long document. In that case, if your first few pages can’t convince them, then you have lost it. The more pages you write, the higher the chances of you derailing from the essential contents.
To ensure your business plan has a high conversion rate, you need to dispose of every unnecessary information. For example, if you have a strategy that you are not sure of, it would be best to leave it out of the plan.
5. Make an Outline and Follow Through
A perfect business plan must have touched every part needed to convince the audience. Business owners get easily tempted to concentrate more on their products than on other sections. Doing this can be detrimental to the efficiency of the business plan.
For example, imagine you talking about a product but omitting or providing very little information about the target audience. You will leave your clients confused.
To ensure that your business plan communicates your full business model to readers, you have to input all the necessary information in it. One of the best ways to achieve this is to design a structure and stick to it.
This structure is what guides you throughout the writing. To make your work easier, you can assign an estimated word count or page limit to every section to avoid making it too bulky for easy reading. As a guide, the necessary things your business plan must contain are:
- Table of contents
- Introduction
- Product or service description
- Target audience
- Market size
- Competition analysis
- Financial projections
Some specific businesses can include some other essential sections, but these are the key sections that must be in every business plan.
6. Ask a Professional to Proofread
When writing a business plan, you must tie all loose ends to get a perfect result. When you are done with writing, call a professional to go through the document for you. You are bound to make mistakes, and the way to correct them is to get external help.
You should get a professional in your field who can relate to every section of your business plan. It would be easier for the professional to notice the inner flaws in the document than an editor with no knowledge of your business.
In addition to getting a professional to proofread, get an editor to proofread and edit your document. The editor will help you identify grammatical errors, spelling mistakes, and inappropriate writing styles.
Writing a business plan can be daunting, but you can surmount that obstacle and get the best out of it with these tips.
Business Plan Examples and Templates That’ll Save You Tons of Time
1. hubspot's one-page business plan.
![creating a simple business plan HubSpot's One Page Business Plan](https://www.founderjar.com/wp-content/uploads/2021/07/HubSpots-One-Page-Business-Plan.jpg)
The one-page business plan template by HubSpot is the perfect guide for businesses of any size, irrespective of their business strategy. Although the template is condensed into a page, your final business plan should not be a page long! The template is designed to ask helpful questions that can help you develop your business plan.
Hubspot’s one-page business plan template is divided into nine fields:
- Business opportunity
- Company description
- Industry analysis
- Target market
- Implementation timeline
- Marketing plan
- Financial summary
- Funding required
2. Bplan’s Free Business Plan Template
![creating a simple business plan Bplan’s Free Business Plan Template](https://www.founderjar.com/wp-content/uploads/2021/07/Bplans-Free-Business-Plan-Template.jpg)
Bplans' free business plan template is investor-approved. It is a rich template used by prestigious educational institutions such as Babson College and Princeton University to teach entrepreneurs how to create a business plan.
The template has six sections: the executive summary, opportunity, execution, company, financial plan, and appendix. There is a step-by-step guide for writing every little detail in the business plan. Follow the instructions each step of the way and you will create a business plan that impresses investors or lenders easily.
3. HubSpot's Downloadable Business Plan Template
![creating a simple business plan HubSpot's Downloadable Business Plan Template](https://www.founderjar.com/wp-content/uploads/2021/07/HubSpots-Downloadable-Business-Plan-Template.jpg)
HubSpot’s downloadable business plan template is a more comprehensive option compared to the one-page business template by HubSpot. This free and downloadable business plan template is designed for entrepreneurs.
The template is a comprehensive guide and checklist for business owners just starting their businesses. It tells you everything you need to fill in each section of the business plan and how to do it.
There are nine sections in this business plan template: an executive summary, company and business description, product and services line, market analysis, marketing plan, sales plan, legal notes, financial considerations, and appendix.
4. Business Plan by My Own Business Institute
![creating a simple business plan The Business Profile](https://www.founderjar.com/wp-content/uploads/2021/07/The-Business-Profile.jpg)
My Own Business Institute (MOBI) which is a part of Santa Clara University's Center for Innovation and Entrepreneurship offers a free business plan template. You can either copy the free business template from the link provided above or download it as a Word document.
The comprehensive template consists of a whopping 15 sections.
- The Business Profile
- The Vision and the People
- Home-Based Business and Freelance Business Opportunities
- Organization
- Licenses and Permits
- Business Insurance
- Communication Tools
- Acquisitions
- Location and Leasing
- Accounting and Cash Flow
- Opening and Marketing
- Managing Employees
- Expanding and Handling Problems
There are lots of helpful tips on how to fill each section in the free business plan template by MOBI.
5. Score's Business Plan Template for Startups
![creating a simple business plan Score's Business Plan Template for Startups](https://www.founderjar.com/wp-content/uploads/2021/07/Scores-Business-Plan-Template-for-Startups.jpg)
Score is an American nonprofit organization that helps entrepreneurs build successful companies. This business plan template for startups by Score is available for free download. The business plan template asks a whooping 150 generic questions that help entrepreneurs from different fields to set up the perfect business plan.
The business plan template for startups contains clear instructions and worksheets, all you have to do is answer the questions and fill the worksheets.
There are nine sections in the business plan template: executive summary, company description, products and services, marketing plan, operational plan, management and organization, startup expenses and capitalization, financial plan, and appendices.
The ‘refining the plan’ resource contains instructions that help you modify your business plan to suit your specific needs, industry, and target audience. After you have completed Score’s business plan template, you can work with a SCORE mentor for expert advice in business planning.
6. Minimalist Architecture Business Plan Template by Venngage
![creating a simple business plan Minimalist Architecture Business Plan Template by Venngage](https://www.founderjar.com/wp-content/uploads/2021/07/Minimalist-Architecture-Business-Plan-Template-by-Venngage.jpg)
The minimalist architecture business plan template is a simple template by Venngage that you can customize to suit your business needs .
There are five sections in the template: an executive summary, statement of problem, approach and methodology, qualifications, and schedule and benchmark. The business plan template has instructions that guide users on what to fill in each section.
7. Small Business Administration Free Business Plan Template
![creating a simple business plan Small Business Administration Free Business Plan Template](https://www.founderjar.com/wp-content/uploads/2021/07/Small-Business-Administration-Free-Business-Plan-Template.jpg)
The Small Business Administration (SBA) offers two free business plan templates, filled with practical real-life examples that you can model to create your business plan. Both free business plan templates are written by fictional business owners: Rebecca who owns a consulting firm, and Andrew who owns a toy company.
There are five sections in the two SBA’s free business plan templates.
- Executive Summary
- Company Description
- Service Line
- Marketing and Sales
8. The $100 Startup's One-Page Business Plan
![creating a simple business plan The $100 Startup's One Page Business Plan](https://www.founderjar.com/wp-content/uploads/2021/07/The-100-Startups-One-Page-Business-Plan.jpg)
The one-page business plan by the $100 startup is a simple business plan template for entrepreneurs who do not want to create a long and complicated plan . You can include more details in the appendices for funders who want more information beyond what you can put in the one-page business plan.
There are five sections in the one-page business plan such as overview, ka-ching, hustling, success, and obstacles or challenges or open questions. You can answer all the questions using one or two sentences.
9. PandaDoc’s Free Business Plan Template
![creating a simple business plan PandaDoc’s Free Business Plan Template](https://www.founderjar.com/wp-content/uploads/2021/07/PandaDocs-Free-Business-Plan-Template.jpg)
The free business plan template by PandaDoc is a comprehensive 15-page document that describes the information you should include in every section.
There are 11 sections in PandaDoc’s free business plan template.
- Executive summary
- Business description
- Products and services
- Operations plan
- Management organization
- Financial plan
- Conclusion / Call to action
- Confidentiality statement
You have to sign up for its 14-day free trial to access the template. You will find different business plan templates on PandaDoc once you sign up (including templates for general businesses and specific businesses such as bakeries, startups, restaurants, salons, hotels, and coffee shops)
PandaDoc allows you to customize its business plan templates to fit the needs of your business. After editing the template, you can send it to interested parties and track opens and views through PandaDoc.
10. Invoiceberry Templates for Word, Open Office, Excel, or PPT
![creating a simple business plan Invoiceberry Templates Business Concept](https://www.founderjar.com/wp-content/uploads/2021/07/Invoiceberry-Templates-Business-Concept.jpg)
InvoiceBerry is a U.K based online invoicing and tracking platform that offers free business plan templates in .docx, .odt, .xlsx, and .pptx formats for freelancers and small businesses.
Before you can download the free business plan template, it will ask you to give it your email address. After you complete the little task, it will send the download link to your inbox for you to download. It also provides a business plan checklist in .xlsx file format that ensures you add the right information to the business plan.
Alternatives to the Traditional Business Plan
A business plan is very important in mapping out how one expects their business to grow over a set number of years, particularly when they need external investment in their business. However, many investors do not have the time to watch you present your business plan. It is a long and boring read.
Luckily, there are three alternatives to the traditional business plan (the Business Model Canvas, Lean Canvas, and Startup Pitch Deck). These alternatives are less laborious and easier and quicker to present to investors.
Business Model Canvas (BMC)
The business model canvas is a business tool used to present all the important components of setting up a business, such as customers, route to market, value proposition, and finance in a single sheet. It provides a very focused blueprint that defines your business initially which you can later expand on if needed.
![creating a simple business plan Business Model Canvas (BMC) Infographic](https://www.founderjar.com/wp-content/uploads/2021/07/Business-Model-Canvas-BMC.jpg)
The sheet is divided mainly into company, industry, and consumer models that are interconnected in how they find problems and proffer solutions.
Segments of the Business Model Canvas
The business model canvas was developed by founder Alexander Osterwalder to answer important business questions. It contains nine segments.
![creating a simple business plan Segments of the Business Model Canvas](https://www.founderjar.com/wp-content/uploads/2021/07/Segments-of-the-Business-Model-Canvas.jpg)
- Key Partners: Who will be occupying important executive positions in your business? What do they bring to the table? Will there be a third party involved with the company?
- Key Activities: What important activities will production entail? What activities will be carried out to ensure the smooth running of the company?
- The Product’s Value Propositions: What does your product do? How will it be different from other products?
- Customer Segments: What demography of consumers are you targeting? What are the habits of these consumers? Who are the MVPs of your target consumers?
- Customer Relationships: How will the team support and work with its customer base? How do you intend to build and maintain trust with the customer?
- Key Resources: What type of personnel and tools will be needed? What size of the budget will they need access to?
- Channels: How do you plan to create awareness of your products? How do you intend to transport your product to the customer?
- Cost Structure: What is the estimated cost of production? How much will distribution cost?
- Revenue Streams: For what value are customers willing to pay? How do they prefer to pay for the product? Are there any external revenues attached apart from the main source? How do the revenue streams contribute to the overall revenue?
Lean Canvas
The lean canvas is a problem-oriented alternative to the standard business model canvas. It was proposed by Ash Maurya, creator of Lean Stack as a development of the business model generation. It uses a more problem-focused approach and it majorly targets entrepreneurs and startup businesses.
![creating a simple business plan The lean canvas is a problem oriented alternative to the standard business model canvas](https://www.founderjar.com/wp-content/uploads/2021/07/The-lean-canvas-is-a-problem-oriented-alternative-to-the-standard-business-model-canvas.jpg)
Lean Canvas uses the same 9 blocks concept as the business model canvas, however, they have been modified slightly to suit the needs and purpose of a small startup. The key partners, key activities, customer relationships, and key resources are replaced by new segments which are:
- Problem: Simple and straightforward number of problems you have identified, ideally three.
- Solution: The solutions to each problem.
- Unfair Advantage: Something you possess that can't be easily bought or replicated.
- Key Metrics: Important numbers that will tell how your business is doing.
Startup Pitch Deck
While the business model canvas compresses into a factual sheet, startup pitch decks expand flamboyantly.
Pitch decks, through slides, convey your business plan, often through graphs and images used to emphasize estimations and observations in your presentation. Entrepreneurs often use pitch decks to fully convince their target audience of their plans before discussing funding arrangements.
![creating a simple business plan Startup Pitch Deck Presentation](https://www.founderjar.com/wp-content/uploads/2021/07/Startup-Pitch-Deck-Presentation.jpg)
Considering the likelihood of it being used in a small time frame, a good startup pitch deck should ideally contain 20 slides or less to have enough time to answer questions from the audience.
Unlike the standard and lean business model canvases, a pitch deck doesn't have a set template on how to present your business plan but there are still important components to it. These components often mirror those of the business model canvas except that they are in slide form and contain more details.
![creating a simple business plan Airbnb Pitch Deck](https://www.founderjar.com/wp-content/uploads/2021/07/Airbnb-Pitch-Deck.jpg)
Using Airbnb (one of the most successful start-ups in recent history) for reference, the important components of a good slide are listed below.
- Cover/Introduction Slide: Here, you should include your company's name and mission statement. Your mission statement should be a very catchy tagline. Also, include personal information and contact details to provide an easy link for potential investors.
- Problem Slide: This slide requires you to create a connection with the audience or the investor that you are pitching. For example in their pitch, Airbnb summarized the most important problems it would solve in three brief points – pricing of hotels, disconnection from city culture, and connection problems for local bookings.
- Solution Slide: This slide includes your core value proposition. List simple and direct solutions to the problems you have mentioned
- Customer Analysis: Here you will provide information on the customers you will be offering your service to. The identity of your customers plays an important part in fundraising as well as the long-run viability of the business.
- Market Validation: Use competitive analysis to show numbers that prove the presence of a market for your product, industry behavior in the present and the long run, as well as the percentage of the market you aim to attract. It shows that you understand your competitors and customers and convinces investors of the opportunities presented in the market.
- Business Model: Your business model is the hook of your presentation. It may vary in complexity but it should generally include a pricing system informed by your market analysis. The goal of the slide is to confirm your business model is easy to implement.
- Marketing Strategy: This slide should summarize a few customer acquisition methods that you plan to use to grow the business.
- Competitive Advantage: What this slide will do is provide information on what will set you apart and make you a more attractive option to customers. It could be the possession of technology that is not widely known in the market.
- Team Slide: Here you will give a brief description of your team. Include your key management personnel here and their specific roles in the company. Include their educational background, job history, and skillsets. Also, talk about their accomplishments in their careers so far to build investors' confidence in members of your team.
- Traction Slide: This validates the company’s business model by showing growth through early sales and support. The slide aims to reduce any lingering fears in potential investors by showing realistic periodic milestones and profit margins. It can include current sales, growth, valuable customers, pre-orders, or data from surveys outlining current consumer interest.
- Funding Slide: This slide is popularly referred to as ‘the ask'. Here you will include important details like how much is needed to get your business off the ground and how the funding will be spent to help the company reach its goals.
- Appendix Slides: Your pitch deck appendix should always be included alongside a standard pitch presentation. It consists of additional slides you could not show in the pitch deck but you need to complement your presentation.
It is important to support your calculations with pictorial renditions. Infographics, such as pie charts or bar graphs, will be more effective in presenting the information than just listing numbers. For example, a six-month graph that shows rising profit margins will easily look more impressive than merely writing it.
Lastly, since a pitch deck is primarily used to secure meetings and you may be sharing your pitch with several investors, it is advisable to keep a separate public version that doesn't include financials. Only disclose the one with projections once you have secured a link with an investor.
Advantages of the Business Model Canvas, Lean Canvas, and Startup Pitch Deck over the Traditional Business Plan
- Time-Saving: Writing a detailed traditional business plan could take weeks or months. On the other hand, all three alternatives can be done in a few days or even one night of brainstorming if you have a comprehensive understanding of your business.
- Easier to Understand: Since the information presented is almost entirely factual, it puts focus on what is most important in running the business. They cut away the excess pages of fillers in a traditional business plan and allow investors to see what is driving the business and what is getting in the way.
- Easy to Update: Businesses typically present their business plans to many potential investors before they secure funding. What this means is that you may regularly have to amend your presentation to update statistics or adjust to audience-specific needs. For a traditional business plan, this could mean rewriting a whole section of your plan. For the three alternatives, updating is much easier because they are not voluminous.
- Guide for a More In-depth Business Plan: All three alternatives have the added benefit of being able to double as a sketch of your business plan if the need to create one arises in the future.
Business Plan FAQ
Business plans are important for any entrepreneur who is looking for a framework to run their company over some time or seeking external support. Although they are essential for new businesses, every company should ideally have a business plan to track their growth from time to time. They can be used by startups seeking investments or loans to convey their business ideas or an employee to convince his boss of the feasibility of starting a new project. They can also be used by companies seeking to recruit high-profile employee targets into key positions or trying to secure partnerships with other firms.
Business plans often vary depending on your target audience, the scope, and the goals for the plan. Startup plans are the most common among the different types of business plans. A start-up plan is used by a new business to present all the necessary information to help get the business up and running. They are usually used by entrepreneurs who are seeking funding from investors or bank loans. The established company alternative to a start-up plan is a feasibility plan. A feasibility plan is often used by an established company looking for new business opportunities. They are used to show the upsides of creating a new product for a consumer base. Because the audience is usually company people, it requires less company analysis. The third type of business plan is the lean business plan. A lean business plan is a brief, straight-to-the-point breakdown of your ideas and analysis for your business. It does not contain details of your proposal and can be written on one page. Finally, you have the what-if plan. As it implies, a what-if plan is a preparation for the worst-case scenario. You must always be prepared for the possibility of your original plan being rejected. A good what-if plan will serve as a good plan B to the original.
A good business plan has 10 key components. They include an executive plan, product analysis, desired customer base, company analysis, industry analysis, marketing strategy, sales strategy, financial projection, funding, and appendix. Executive Plan Your business should begin with your executive plan. An executive plan will provide early insight into what you are planning to achieve with your business. It should include your mission statement and highlight some of the important points which you will explain later. Product Analysis The next component of your business plan is your product analysis. A key part of this section is explaining the type of item or service you are going to offer as well as the market problems your product will solve. Desired Consumer Base Your product analysis should be supplemented with a detailed breakdown of your desired consumer base. Investors are always interested in knowing the economic power of your market as well as potential MVP customers. Company Analysis The next component of your business plan is your company analysis. Here, you explain how you want to run your business. It will include your operational strategy, an insight into the workforce needed to keep the company running, and important executive positions. It will also provide a calculation of expected operational costs. Industry Analysis A good business plan should also contain well laid out industry analysis. It is important to convince potential investors you know the companies you will be competing with, as well as your plans to gain an edge on the competition. Marketing Strategy Your business plan should also include your marketing strategy. This is how you intend to spread awareness of your product. It should include a detailed explanation of the company brand as well as your advertising methods. Sales Strategy Your sales strategy comes after the market strategy. Here you give an overview of your company's pricing strategy and how you aim to maximize profits. You can also explain how your prices will adapt to market behaviors. Financial Projection The financial projection is the next component of your business plan. It explains your company's expected running cost and revenue earned during the tenure of the business plan. Financial projection gives a clear idea of how your company will develop in the future. Funding The next component of your business plan is funding. You have to detail how much external investment you need to get your business idea off the ground here. Appendix The last component of your plan is the appendix. This is where you put licenses, graphs, or key information that does not fit in any of the other components.
The business model canvas is a business management tool used to quickly define your business idea and model. It is often used when investors need you to pitch your business idea during a brief window.
A pitch deck is similar to a business model canvas except that it makes use of slides in its presentation. A pitch is not primarily used to secure funding, rather its main purpose is to entice potential investors by selling a very optimistic outlook on the business.
Business plan competitions help you evaluate the strength of your business plan. By participating in business plan competitions, you are improving your experience. The experience provides you with a degree of validation while practicing important skills. The main motivation for entering into the competitions is often to secure funding by finishing in podium positions. There is also the chance that you may catch the eye of a casual observer outside of the competition. These competitions also provide good networking opportunities. You could meet mentors who will take a keen interest in guiding you in your business journey. You also have the opportunity to meet other entrepreneurs whose ideas can complement yours.
Exlore Further
- 12 Key Elements of a Business Plan (Top Components Explained)
- 13 Sources of Business Finance For Companies & Sole Traders
- 5 Common Types of Business Structures (+ Pros & Cons)
- How to Buy a Business in 8 Steps (+ Due Diligence Checklist)
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Martin luenendonk.
Martin loves entrepreneurship and has helped dozens of entrepreneurs by validating the business idea, finding scalable customer acquisition channels, and building a data-driven organization. During his time working in investment banking, tech startups, and industry-leading companies he gained extensive knowledge in using different software tools to optimize business processes.
This insights and his love for researching SaaS products enables him to provide in-depth, fact-based software reviews to enable software buyers make better decisions.
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How to Write a Business Plan: Beginner’s Guide (& Templates)
![creating a simple business plan How to Write a Business Plan: Beginner’s Guide (& Templates)](https://visme.co/blog/wp-content/uploads/2021/09/business-plan-header.png)
Written by: Chloe West
![creating a simple business plan An illustration showing a woman standing in front of a folder containing her business plan.](https://visme.co/blog/wp-content/uploads/2021/09/business-plan-header.png)
Thinking about starting a business? One of the first steps you’ll need to take is to write a business plan. A business plan can help guide you through your financial planning, marketing strategy, unique selling point and more.
Making sure you start your new business off on the right foot is key, and we’re here to help. We’ve put together this guide to help you write your first business plan. Or, you can skip the guide and dive right into a business plan template .
Ready to get started?
Here’s a short selection of 8 easy-to-edit business plan templates you can edit, share and download with Visme. View more templates below:
![creating a simple business plan creating a simple business plan](https://visme.co/blog/wp-content/uploads/2021/09/real-estate-business-plan-template.jpg)
8-Step Process for Writing a Business Plan
What is a business plan, why is a business plan important, step #1: write your executive summary, step #2: put together your company description, step #3: conduct your market analysis, step #4: research your competition, step #5: outline your products or services, step #6: summarize your financial plan, step #7: determine your marketing strategy, step #8: showcase your organizational chart, 14 business plan templates to help you get started.
A business plan is a document that helps potential new business owners flesh out their business idea and put together a bird’s eye view of their business. Writing a business plan is an essential step in any startup’s ideation process.
Business plans help determine demographics, market analysis, competitive analysis, financial projections, new products or services, and so much more.
Each of these bits of information are important to have on hand when you’re trying to start a business or pitching investors for funds.
Here’s an example of a business plan that you can customize to incorporate your own business information.
![creating a simple business plan A business plan template available to customize with your own information in Visme.](https://visme.co/blog/wp-content/uploads/2021/09/business-plan-template.jpg)
We’re going to walk you through some of the most important parts of your business plan as well as how to write your own business plan in 8 easy steps.
If you’re in the beginning stages of starting a business , you might be wondering if it’s really worth your time to write out your business plan.
We’re here to tell you that it is.
A business plan is important for a number of reasons, but mostly because it helps to set you up for success right from the start.
Here are four reasons to prove to you why you need to start your business off on the right foot with a plan.
Reason #1: Set Realistic Goals and Milestones
Putting together a business plan helps you to set your objectives for growth and make realistic goals while you begin your business.
By laying out each of the steps you need to take in order to build a successful business, you’re able to be more reasonable about what your timeline is for achieving everything as well as what your financial projections are.
The best way to set goals is using the SMART goals guidelines, outlined below.
![creating a simple business plan An infographic on creating smart goals.](https://visme.co/blog/wp-content/uploads/2021/02/4-1.jpg)
Reason #2: Grow Your Business Faster
Having a business plan helps you be more organized and strategic, improving the overall performance of your business as you start out. In fact, one study found that businesses with a plan grow 30% faster than businesses that don’t.
Doesn’t that sound reason enough alone to start out your business venture with a solidified plan? We thought so too, but we’ve still got two more reasons.
Reason #3: Minimize Risk
Starting a new business is uncharted territory. However, when you start with a roadmap for your journey, it makes it easier to see success and minimize the risks that come with startups.
Minimize risk and maximize profitability by documenting the most important parts of your business planning.
Reason #4: Secure Funding
And finally, our last reason that business plans are so important is that if you plan to pitch investors for funding for your new venture, they’re almost always going to want to see a detailed business plan before deciding whether or not to invest.
You can easily create your business plan and investor pitch deck right here with Visme. Just sign up for a free account below to get started.
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![creating a simple business plan Hey executives! Looking to cut design costs?](https://visme.co/blog/wp-content/themes/blog/img/shortcodes/executive-1.png)
The executive summary is a brief overview of your entire business plan, giving anyone who reads through your document a quick understanding of what they’re going to learn about your business idea.
However, you need to remember that some of the people who are going to read your business plan don’t want to or have time to read the entire thing. So your executive summary needs to incorporate all of the most important aspects of your plan.
Here’s an example of an executive summary from a business plan template you can customize and turn into your own.
![creating a simple business plan An executive summary page from a business plan template.](https://visme.co/blog/wp-content/uploads/2021/09/executive-summary-1.jpg)
Your executive summary should include:
- Key objective(s)
- Market research
- Competitor information
- Products/services
- Value proposition
- Overview of your financial plan
- How you’re going to actually start your business
One thing to note is that you should actually write your executive summary after the rest of your business plan so that you can properly summarize everything you’ve already created.
So at this point, simply leave a page blank for your executive summary so you can come back to it at the end of your business plan.
![creating a simple business plan An executive summary section of a business plan.](https://visme.co/blog/wp-content/uploads/2021/09/executive-summary.jpg)
The next step is to write out a full description of your business and its core offerings. This section of your business plan should include your mission statement and objectives, along with your company history or overview.
In this section, you may also briefly describe your business formation details from a legal perspective.
Mission Statement
Don’t spend too much time trying to craft this. Your mission statement is a simple “why” you started this business. What are you trying to achieve? Or what does your business solve?
This can be anything from one single quote or a paragraph, but it doesn’t need to be much longer than that. In fact, this could be very similar to your value proposition.
![creating a simple business plan A mission statement page from a business plan template.](https://visme.co/blog/wp-content/uploads/2021/09/mission-statement.jpg)
What are your goals? What do you plan to achieve in the first 90 days or one year of your business? What kind of impact do you hope to make on the market?
These are all good points to include in your objectives section so anyone reading your business plan knows upfront what you hope to achieve.
History or Overview
If you’re not launching a brand new business or if you’ve previously worked on another iteration of this business, let potential investors know the history of your company.
If not, simply provide an overview of your business, sharing what it does or what it will do.
![creating a simple business plan A business overview page from a business plan template.](https://visme.co/blog/wp-content/uploads/2021/09/business-overview.jpg)
Your third step is to conduct a market analysis so you know how your business will fit into its target market. This page in your business plan is simply meant to summarize your findings. Most of your time should be spent actually doing the research.
Your market analysis needs to look at things like:
- Market size, and if it’s grown in recent years or shrinking
- The segment of the market you plan to target
- Demographics and behavior of your target audience
- The demand for your product or service
- Your competitive advantage or differentiation strategy
- The average price of your product or service
Put together a summary of your market analysis and industry research in a 1-2 page format, like we see below.
![creating a simple business plan A market analysis page in a business plan template.](https://visme.co/blog/wp-content/uploads/2021/09/market-analysis.jpg)
Your next step is to conduct a competitive analysis. While you likely touched on this briefly during your market analysis, now is the time to do a deep dive so that you have a good grasp on what your competitors are doing and how they are generating customers.
Start by creating a profile of all your existing competitors, or at the very least, your closest competitors – the ones who are offering very similar products or services to you, or are in a similar vicinity (if you’re opening a brick and mortar store).
Focus on their strengths and what they’re doing really well so that you can emulate their best qualities in your own way. Then, look at their weaknesses and what your business can do better.
Take note of their current marketing strategy, including the outlets you see a presence, whether it’s on social media, you hear a radio ad, you see a TV ad, etc. You won’t always find all of their marketing channels, but see what you can find online and on their website.
![creating a simple business plan A competitive analysis page in a business plan template.](https://visme.co/blog/wp-content/uploads/2021/09/competitive-analysis.jpg)
After this, take a minute to identify potential competitors based on markets you might try out in the future, products or services you plan to add to your offerings, and more.
Then put together a page or two in your business plan that highlights your competitive advantage and how you’ll be successful breaking into the market.
Step five is to dedicate a page to the products or services that your business plans to offer.
Put together a quick list and explanation of what each of the initial product or service offerings will be, but steer clear of industry jargon or buzzwords. This should be written in plain language so anyone reading has a full understanding of what your business will do.
![creating a simple business plan A products and services page in a business plan template.](https://visme.co/blog/wp-content/uploads/2021/09/products-and-services-page-scaled.jpg)
You can have a simple list like we see in the sample page above, or you can dive a little deeper. Depending on your type of business, it might be a good idea to provide additional information about what each product or service entails.
The next step is to work on the financial data of your new business. What will your overhead be? How will your business make money? What are your estimated expenses and profits over the first few months to a year? The expenses should cover all the spending whether they are recurring costs or just one-time LLC filing fees .
There is so much that goes into your financial plan for a new business, so this is going to take some time to compile. Especially because this section of your business plan helps potential cofounders or investors understand if the idea is even viable.
![creating a simple business plan A financial analysis page from a business plan template.](https://visme.co/blog/wp-content/uploads/2021/09/financial-analysis.jpg)
Your financial plan should include at least five major sections:
- Sales Forecast: The first thing you want to include is a forecast or financial projection of how much you think your business can sell over the next year or so. Break this down into the different products, services or facets of your business.
- Balance Sheet: This section is essentially a statement of your company’s financial position. It includes existing assets, liabilities and equity to demonstrate the company’s overall financial health.
- Income Statement: Also known as a profit and loss statement (P&L), this covers your projected expenses and revenue, showcasing whether your business will be profitable or not.
- Operating Budget: A detailed outline of your business’s income and expenses. This should showcase that your business is bringing in more than it’s spending.
- Cash Flow Statements: This tracks how much cash your business has at any given point, regardless of whether customers or clients have paid their bills or have 30-60+ days to do so.
While these are the most common financial statements, you may discover that there are other sections that you want to include or that lenders may want to see from you.
You can automate the process of looking through your documents with an OCR API , which will collect the data from all your financial statements and invoices.
The next step is coming up with a successful marketing plan so that you can actually get the word out about your business.
Throughout your business plan, you’ve already researched your competitors and your target market, both of which are major components of a good marketing strategy. You need to know who you’re marketing to, and you want to do it better than your competition.
![creating a simple business plan A marketing plan page from a business plan template.](https://visme.co/blog/wp-content/uploads/2021/09/marketing-plan.jpg)
On this page or throughout this section of your business plan, you need to focus on your chosen marketing channels and the types of marketing content you plan to create.
Start by taking a look at the channels that your competitors are on and make sure you have a good understanding of the demographics of each channel as well. You don’t want to waste time on a marketing channel that your target audience doesn’t use.
Then, create a list of each of your planned marketing avenues. It might look something like:
- Social media ( Facebook, Instagram, Pinterest)
- Email newsletter
- Digital ads
Depending on the type of business you’re starting, this list could change quite a bit — and that’s okay. There is no one-size-fits-all marketing strategy, and you need to find the one that brings in the highest number of potential customers.
Your last section will be all about your leadership and management team members. Showcasing that you have a solid team right from the start can make potential investors feel better about funding your venture.
You can easily put together an organizational chart like the one below, with the founder/CEO at the top and each of your team leaders underneath alongside the department they’re in charge of.
![creating a simple business plan An organizational chart template available in Visme.](https://visme.co/blog/wp-content/uploads/2021/09/organizational-chart.jpg)
Simply add an organizational chart like this as a page into your overall business plan and make sure it matches the rest of your design to create a cohesive document.
If you want to create a good business plan that sets your new business up for success and attracts new investors, it’s a good idea to start with a template.
We’ve got 14 options below from a variety of different industries for you to choose from. You can customize every aspect of each template to fit your business branding and design preferences.
If you're pressed for time, Visme's AI business plan generator can churn out compelling business plans in minutes. Just input a detailed prompt, choose the design, and watch the tool generate your plan in a few seconds.
Template #1: Photography Business Plan Template
![creating a simple business plan A photography business plan template available in Visme.](https://visme.co/blog/wp-content/uploads/2021/09/photography-business-plan-template.jpg)
This feminine and minimalistic business plan template is perfect for getting started with any kind of creative business. Utilize this template to help outline the step-by-step process of getting your new business idea up and running.
Template #2: Real Estate Business Plan Template
![creating a simple business plan A real estate business plan template available in Visme.](https://visme.co/blog/wp-content/uploads/2021/09/real-estate-business-plan-template.jpg)
Looking for a more modern business plan design? This template is perfect for plainly laying out each of your business plans in an easy-to-understand format. Adjust the red accents with your business’s colors to personalize this template.
Template #3: Nonprofit Business Plan Template
![creating a simple business plan A nonprofit business plan template available in Visme.](https://visme.co/blog/wp-content/uploads/2021/09/nonprofit-business-plan-template.jpg)
Creating a business and marketing plan for your nonprofit is still an essential step when you’re just starting out. You need to get the word out to increase donations and awareness for your cause.
Template #4: Restaurant Business Plan Template
![creating a simple business plan A restaurant business plan template available in Visme.](https://visme.co/blog/wp-content/uploads/2021/09/restaurant-business-plan-template.jpg)
If your business plan needs to rely heavily on showcasing photos of your products (like food), this template is perfect for you. Get potential investors salivating at the sight of your business plan, and they’re sure to provide the capital you need.
Template #5: Fashion Business Plan Template
![creating a simple business plan A fashion business plan template available to customize in Visme.](https://visme.co/blog/wp-content/uploads/2021/09/fashion-business-plan-template.jpg)
Serifs are in. Utilize this template with stunning serif as all the headers to create a contemporary and trendy business plan design that fits your business. Adjust the colors to match your brand and easily input your own content.
Template #6: Daycare Business Plan Template
![creating a simple business plan A daycare business plan template available in Visme.](https://visme.co/blog/wp-content/uploads/2021/09/daycare-business-plan.jpg)
Creating a more kid-friendly or playful business? This business plan template has bold colors and design elements that will perfectly represent your business and its mission.
Use the pages you need, and remove any that you don’t. You can also duplicate pages and move the elements around to add even more content to your business plan.
Template #7: Consulting Business Plan Template
![creating a simple business plan A consulting business plan template available in Visme.](https://visme.co/blog/wp-content/uploads/2021/09/consulting-business-plan-template.jpg)
This classic business plan template is perfect for a consulting business that wants to use a stunning visual design to talk about its services.
Template #8: Coffee Shop Business Plan Template
![creating a simple business plan A coffee shop business plan template available in Visme.](https://visme.co/blog/wp-content/uploads/2021/09/coffee-shop-business-plan-template.jpg)
Customize this coffee shop business plan template to match your own business idea. Adjust the colors to fit your brand or industry, replace photos with your own photography or stock photos that represent your business, and insert your own logo, fonts and colors throughout.
Template #9: SaaS Business Plan Template
![creating a simple business plan A SaaS business plan template available in Visme.](https://visme.co/blog/wp-content/uploads/2021/09/saas-business-plan-template.jpg)
A SaaS or service-based company also needs a solid business plan that lays out its financials, list of services, target market and more. This template is the perfect starting point.
Template #10: Small Business Plan Template
![creating a simple business plan A small business plan template available in Visme.](https://visme.co/blog/wp-content/uploads/2021/09/small-business-plan-template.jpg)
Every startup or small business needs to start out with a strong business plan in order to start off on the right foot and set yourself up for success. This template is an excellent starting point for any small business.
Template #11: Ecommerce Business Plan Template
![creating a simple business plan An ecommerce business plan template available in Visme.](https://visme.co/blog/wp-content/uploads/2021/09/ecommerce-business-plan-template.jpg)
An ecommerce business plan is ideal for planning out your pricing strategy of all of your online products, as well as the site you plan to use for setting up your store, whether WordPress, Shopify, Wix or something else.
Template #12: Startup Business Plan Template
![creating a simple business plan A startup business plan template available in Visme.](https://visme.co/blog/wp-content/uploads/2021/09/startup-business-plan-template.jpg)
Customize this template and make it your own! Edit and Download
This is another generic business plan template for any type of startup to customize. Switch out the content, fonts and colors to match your startup branding and increase brand equity.
Template #13: One-Page Business Plan Template
![creating a simple business plan A single page business plan template available in Visme.](https://visme.co/blog/wp-content/uploads/2021/09/one-page-business-plan-template.jpg)
Want just a quick business plan to get your idea going before you bite the bullet and map out your entire plan? This one-page template is perfect for those just starting to flesh out a new business idea.
Template #14: Salon Business Plan Template
![creating a simple business plan A salon business plan template available in Visme.](https://visme.co/blog/wp-content/uploads/2021/09/salon-business-plan-template.jpg)
This salon business plan template is easy on the design and utilizes a light color scheme to put more focus on the actual content. You can use the design as is or keep it as a basis for your own design elements.
Create Your Own Business Plan Today
Ready to write your business plan? Once you’ve created all of the most important sections, get started with a business plan template to really wow your investors and organize your startup plan.
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About the Author
Chloe West is the content marketing manager at Visme. Her experience in digital marketing includes everything from social media, blogging, email marketing to graphic design, strategy creation and implementation, and more. During her spare time, she enjoys exploring her home city of Charleston with her son.
How to make a business plan
![creating a simple business plan Strategic planning in Miro](https://images.ctfassets.net/w6r2i5d8q73s/5f0zMfClHfBoPCrTQDBCQT/ec9c9d2ab0401534afac5540d3e3e744/businessmodel.png)
Table of Contents
How to make a good business plan: step-by-step guide.
A business plan is a strategic roadmap used to navigate the challenging journey of entrepreneurship. It's the foundation upon which you build a successful business.
A well-crafted business plan can help you define your vision, clarify your goals, and identify potential problems before they arise.
But where do you start? How do you create a business plan that sets you up for success?
This article will explore the step-by-step process of creating a comprehensive business plan.
What is a business plan?
A business plan is a formal document that outlines a business's objectives, strategies, and operational procedures. It typically includes the following information about a company:
Products or services
Target market
Competitors
Marketing and sales strategies
Financial plan
Management team
A business plan serves as a roadmap for a company's success and provides a blueprint for its growth and development. It helps entrepreneurs and business owners organize their ideas, evaluate the feasibility, and identify potential challenges and opportunities.
As well as serving as a guide for business owners, a business plan can attract investors and secure funding. It demonstrates the company's understanding of the market, its ability to generate revenue and profits, and its strategy for managing risks and achieving success.
Business plan vs. business model canvas
A business plan may seem similar to a business model canvas, but each document serves a different purpose.
A business model canvas is a high-level overview that helps entrepreneurs and business owners quickly test and iterate their ideas. It is often a one-page document that briefly outlines the following:
Key partnerships
Key activities
Key propositions
Customer relationships
Customer segments
Key resources
Cost structure
Revenue streams
On the other hand, a Business Plan Template provides a more in-depth analysis of a company's strategy and operations. It is typically a lengthy document and requires significant time and effort to develop.
A business model shouldn’t replace a business plan, and vice versa. Business owners should lay the foundations and visually capture the most important information with a Business Model Canvas Template . Because this is a fast and efficient way to communicate a business idea, a business model canvas is a good starting point before developing a more comprehensive business plan.
A business plan can aim to secure funding from investors or lenders, while a business model canvas communicates a business idea to potential customers or partners.
Why is a business plan important?
A business plan is crucial for any entrepreneur or business owner wanting to increase their chances of success.
Here are some of the many benefits of having a thorough business plan.
Helps to define the business goals and objectives
A business plan encourages you to think critically about your goals and objectives. Doing so lets you clearly understand what you want to achieve and how you plan to get there.
A well-defined set of goals, objectives, and key results also provides a sense of direction and purpose, which helps keep business owners focused and motivated.
Guides decision-making
A business plan requires you to consider different scenarios and potential problems that may arise in your business. This awareness allows you to devise strategies to deal with these issues and avoid pitfalls.
With a clear plan, entrepreneurs can make informed decisions aligning with their overall business goals and objectives. This helps reduce the risk of making costly mistakes and ensures they make decisions with long-term success in mind.
Attracts investors and secures funding
Investors and lenders often require a business plan before considering investing in your business. A document that outlines the company's goals, objectives, and financial forecasts can help instill confidence in potential investors and lenders.
A well-written business plan demonstrates that you have thoroughly thought through your business idea and have a solid plan for success.
Identifies potential challenges and risks
A business plan requires entrepreneurs to consider potential challenges and risks that could impact their business. For example:
Is there enough demand for my product or service?
Will I have enough capital to start my business?
Is the market oversaturated with too many competitors?
What will happen if my marketing strategy is ineffective?
By identifying these potential challenges, entrepreneurs can develop strategies to mitigate risks and overcome challenges. This can reduce the likelihood of costly mistakes and ensure the business is well-positioned to take on any challenges.
Provides a basis for measuring success
A business plan serves as a framework for measuring success by providing clear goals and financial projections . Entrepreneurs can regularly refer to the original business plan as a benchmark to measure progress. By comparing the current business position to initial forecasts, business owners can answer questions such as:
Are we where we want to be at this point?
Did we achieve our goals?
If not, why not, and what do we need to do?
After assessing whether the business is meeting its objectives or falling short, business owners can adjust their strategies as needed.
How to make a business plan step by step
The steps below will guide you through the process of creating a business plan and what key components you need to include.
1. Create an executive summary
Start with a brief overview of your entire plan. The executive summary should cover your business plan's main points and key takeaways.
Keep your executive summary concise and clear with the Executive Summary Template . The simple design helps readers understand the crux of your business plan without reading the entire document.
2. Write your company description
Provide a detailed explanation of your company. Include information on what your company does, the mission statement, and your vision for the future.
Provide additional background information on the history of your company, the founders, and any notable achievements or milestones.
3. Conduct a market analysis
Conduct an in-depth analysis of your industry, competitors, and target market. This is best done with a SWOT analysis to identify your strengths, weaknesses, opportunities, and threats. Next, identify your target market's needs, demographics, and behaviors.
Use the Competitive Analysis Template to brainstorm answers to simple questions like:
What does the current market look like?
Who are your competitors?
What are they offering?
What will give you a competitive advantage?
Who is your target market?
What are they looking for and why?
How will your product or service satisfy a need?
These questions should give you valuable insights into the current market and where your business stands.
4. Describe your products and services
Provide detailed information about your products and services. This includes pricing information, product features, and any unique selling points.
Use the Product/Market Fit Template to explain how your products meet the needs of your target market. Describe what sets them apart from the competition.
5. Design a marketing and sales strategy
Outline how you plan to promote and sell your products. Your marketing strategy and sales strategy should include information about your:
Pricing strategy
Advertising and promotional tactics
Sales channels
The Go to Market Strategy Template is a great way to visually map how you plan to launch your product or service in a new or existing market.
6. Determine budget and financial projections
Document detailed information on your business’ finances. Describe the current financial position of the company and how you expect the finances to play out.
Some details to include in this section are:
Startup costs
Revenue projections
Profit and loss statement
Funding you have received or plan to receive
Strategy for raising funds
7. Set the organization and management structure
Define how your company is structured and who will be responsible for each aspect of the business. Use the Business Organizational Chart Template to visually map the company’s teams, roles, and hierarchy.
As well as the organization and management structure, discuss the legal structure of your business. Clarify whether your business is a corporation, partnership, sole proprietorship, or LLC.
8. Make an action plan
At this point in your business plan, you’ve described what you’re aiming for. But how are you going to get there? The Action Plan Template describes the following steps to move your business plan forward. Outline the next steps you plan to take to bring your business plan to fruition.
Types of business plans
Several types of business plans cater to different purposes and stages of a company's lifecycle. Here are some of the most common types of business plans.
Startup business plan
A startup business plan is typically an entrepreneur's first business plan. This document helps entrepreneurs articulate their business idea when starting a new business.
Not sure how to make a business plan for a startup? It’s pretty similar to a regular business plan, except the primary purpose of a startup business plan is to convince investors to provide funding for the business. A startup business plan also outlines the potential target market, product/service offering, marketing plan, and financial projections.
Strategic business plan
A strategic business plan is a long-term plan that outlines a company's overall strategy, objectives, and tactics. This type of strategic plan focuses on the big picture and helps business owners set goals and priorities and measure progress.
The primary purpose of a strategic business plan is to provide direction and guidance to the company's management team and stakeholders. The plan typically covers a period of three to five years.
Operational business plan
An operational business plan is a detailed document that outlines the day-to-day operations of a business. It focuses on the specific activities and processes required to run the business, such as:
Organizational structure
Staffing plan
Production plan
Quality control
Inventory management
Supply chain
The primary purpose of an operational business plan is to ensure that the business runs efficiently and effectively. It helps business owners manage their resources, track their performance, and identify areas for improvement.
Growth-business plan
A growth-business plan is a strategic plan that outlines how a company plans to expand its business. It helps business owners identify new market opportunities and increase revenue and profitability. The primary purpose of a growth-business plan is to provide a roadmap for the company's expansion and growth.
The 3 Horizons of Growth Template is a great tool to identify new areas of growth. This framework categorizes growth opportunities into three categories: Horizon 1 (core business), Horizon 2 (emerging business), and Horizon 3 (potential business).
One-page business plan
A one-page business plan is a condensed version of a full business plan that focuses on the most critical aspects of a business. It’s a great tool for entrepreneurs who want to quickly communicate their business idea to potential investors, partners, or employees.
A one-page business plan typically includes sections such as business concept, value proposition, revenue streams, and cost structure.
Best practices for how to make a good business plan
Here are some additional tips for creating a business plan:
Use a template
A template can help you organize your thoughts and effectively communicate your business ideas and strategies. Starting with a template can also save you time and effort when formatting your plan.
Miro’s extensive library of customizable templates includes all the necessary sections for a comprehensive business plan. With our templates, you can confidently present your business plans to stakeholders and investors.
Be practical
Avoid overestimating revenue projections or underestimating expenses. Your business plan should be grounded in practical realities like your budget, resources, and capabilities.
Be specific
Provide as much detail as possible in your business plan. A specific plan is easier to execute because it provides clear guidance on what needs to be done and how. Without specific details, your plan may be too broad or vague, making it difficult to know where to start or how to measure success.
Be thorough with your research
Conduct thorough research to fully understand the market, your competitors, and your target audience . By conducting thorough research, you can identify potential risks and challenges your business may face and develop strategies to mitigate them.
Get input from others
It can be easy to become overly focused on your vision and ideas, leading to tunnel vision and a lack of objectivity. By seeking input from others, you can identify potential opportunities you may have overlooked.
Review and revise regularly
A business plan is a living document. You should update it regularly to reflect market, industry, and business changes. Set aside time for regular reviews and revisions to ensure your plan remains relevant and effective.
Create a winning business plan to chart your path to success
Starting or growing a business can be challenging, but it doesn't have to be. Whether you're a seasoned entrepreneur or just starting, a well-written business plan can make or break your business’ success.
The purpose of a business plan is more than just to secure funding and attract investors. It also serves as a roadmap for achieving your business goals and realizing your vision. With the right mindset, tools, and strategies, you can develop a visually appealing, persuasive business plan.
Ready to make an effective business plan that works for you? Check out our library of ready-made strategy and planning templates and chart your path to success.
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How to Write a Detailed Business Plan Step-by-Step [Free Template]
Posted july 17, 2024 by noah parsons.
![creating a simple business plan Illustration of a stylized book connected to abstract lines and dots representing a network or circuitry on a green background. Representative of writing a detailed business plan.](https://web-cdn.liveplan.com/liveplan/content/uploads/2024/07/17151336/How-to-Write-a-Detailed-Business-Plan.png?format=auto)
Writing a business plan is one of the most valuable things you can do for your business.
Study after study proves that business planning significantly improves your chances of success by up to 30 percent 1 . That’s because the planning process helps you think about all aspects of your business and how it will operate and grow.
Ready to write your own detailed business plan? Here’s everything you need ( along with a free template ) to create your plan.
Before you write a detailed business plan, start with a one-page business plan
Despite the benefits of business planning , it’s easy to procrastinate writing a business plan.
Most people would prefer to work hands-on in their business rather than think about business strategy . That’s why, if you’re writing a business plan for the first time, we recommend you start with a simpler and shorter one-page business plan.
With a one-page plan, there’s no need to go into a lot of details or dive deep into financial projections—you just write down the fundamentals of your business and how it works.
A one-page plan should cover:
- Value proposition
- Market need
- Your solution
Competition
Target market.
- Sales and marketing
- Budget and sales goals
- Team summary
- Key partners
- Funding needs
A one-page business plan is a great jumping-off point in the planning process. It’ll give you an overview of your business and help you quickly refine your ideas.
Check out our guide to writing a simple one-page business plan for detailed instructions, examples, and a free downloadable template .
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When do you need a more detailed business plan?
While I will always recommend starting with the one-page plan format, there are times when a more detailed plan is necessary:
- Flesh out sections of your plan: You need to better understand how your marketing, operations, or other business functions will operate.
- Build a more detailed financial forecast: A one-page plan only includes a summary of your financial projections. A detailed plan includes a full financial forecast, including a profit and loss statement, balance sheet, and cash flow forecast to better measure performance.
- Prepare for lenders and investors: While they may not read the full plan, any investor will ask in-depth questions that you can only answer by spending time writing a detailed business plan.
- Sell your business: Use your business plan as part of your sales pitch, and show potential buyers all the details of how your business works.
How to write a detailed business plan
Let’s walk through writing a detailed business plan step-by-step and explore an example of what a finished business plan (for a local swim club Pools & Laps) built with LivePlan’s business plan builder looks like.
1. Executive summary
Yes, the executive summary comes first in your plan, but you should write it last—once you know all the details of your business plan.
It is just a summary of your full plan, so be careful not to be too repetitive—keep it between one or two pages and highlight:
- Your opportunity: This summarizes what your business does, what problem it solves, and who your customers are. This is where you want readers to get excited about your business
- Your team: For investors, your business’s team is often even more important than what the business is. Briefly highlight why your team is uniquely qualified to build the business and make it successful.
- Financials: What are the highlights of your financial forecast ? Summarize your sales goals, when you plan to be profitable, and how much money you need to get your business off the ground.
For existing businesses, write the executive summary for your audience—whether it’s investors, business partners, or employees. Think about what your audience will want to know, and just hit the highlights.
![creating a simple business plan](https://web-cdn.liveplan.com/liveplan/content/uploads/2024/07/17152700/Detailed_Business_Plan_Executive_Summary.png?format=auto)
2. Opportunity
The “opportunity” section of your business plan is all about the products and services that you are creating. The goal is to explain why your business is exciting and the problems that it solves for people. You’ll want to cover:
Problem & solution
Every successful business solves a problem for its customers. Their products and services make people’s lives easier or fill an unmet need in the marketplace.
In this section, you’ll want to explain the problem that you solve, whom you solve it for, and what your solution is. This is where you go in-depth to describe what you do and how you improve the lives of your customers.
![creating a simple business plan Problem Worth Solving section for Pools & Laps Club. It identifies issues such as limited capacity in local swim programs and lack of coaching expertise for higher-level competition. The club aims to address these problems for families and competitive swimmers.](https://web-cdn.liveplan.com/liveplan/content/uploads/2022/11/17153019/Detailed_Business_Plan_Problem_and_Solution.png?format=auto)
In the previous section, you summarized your target customer. Now you’ll want to describe them in much greater detail. You’ll want to cover things like your target market’s demographics (age, gender, location, etc.) and psychographics (hobbies and other behaviors).
Ideally, you can also estimate the size of your target market so you know how many potential customers you might have.
![creating a simple business plan](https://web-cdn.liveplan.com/liveplan/content/uploads/2022/11/17153010/Detailed_Business_Plan_Market_Research.png?format=auto)
Every business has competition , so don’t leave this section out. You’ll need to explain what other companies are doing to serve your customers or if your customers have other options for solving the problem you are solving.
Explain how your approach is different and better than your competitors, whether it’s better features, pricing, or location. Explain why a customer would come to you instead of going to another company.
![creating a simple business plan](https://web-cdn.liveplan.com/liveplan/content/uploads/2022/11/17152959/Detailed_Business_Plan_Competition.png?format=auto)
3. Execution
This section of your business plan dives into how you will accomplish your goals. While the Opportunity section discussed what you’re doing, you now need to explain the specifics of how you will do it.
Marketing & sales
What marketing tactics will you use to get the word out about your business? You’ll want to explain how you get customers to your door and what the sales process looks like. For businesses with a sales force, explain how the sales team gets leads and what the process is like for closing a sale.
![creating a simple business plan](https://web-cdn.liveplan.com/liveplan/content/uploads/2022/11/17153013/Detailed_Business_Plan_Marketing_Sales_Plan.png?format=auto)
Depending on the type of business that you are starting, the operations section needs to be customized to meet your needs. If you are building a mail-order business, you’ll want to cover how you source your products and how fulfillment will work.
If you’re building a manufacturing business, explain the manufacturing process and the necessary facilities. This is where you’ll talk about how your business “works,” meaning you should explain what day-to-day functions and processes are needed to make your business successful.
![creating a simple business plan](https://web-cdn.liveplan.com/liveplan/content/uploads/2022/11/17153017/Detailed_Business_Plan_Operations.png?format=auto)
Milestones & metrics
So far, your business plan has mostly discussed what you’re doing and how you will do it.
The milestones and metrics section is all about timing. Your plan should highlight key dates and goals that you intend to hit. You don’t need extensive project planning in this section, just key milestones that you want to hit and when you plan to hit them.
You should also discuss key metrics : the numbers you will track to determine your success.
![creating a simple business plan](https://web-cdn.liveplan.com/liveplan/content/uploads/2022/11/17153015/Detailed_Business_Plan_Milestones.png?format=auto)
The Company section of your business plan should explain your business’s overall structure and the team behind it.
Organizational structure
Describe your location, facilities, and anything else about your physical location relevant to your business. You’ll also want to explain the legal structure of your business—are you an S-corp, C-corp, or an LLC? What does company ownership look like?
![creating a simple business plan](https://web-cdn.liveplan.com/liveplan/content/uploads/2022/11/17152957/Detailed_Business_Plan_Company.png?format=auto)
Arguably one of the most important parts of your plan when seeking investment is the “Team” section. This should explain who you are and who else is helping you run the business. Focus on experience and qualifications for building the type of business that you want to build.
It’s OK if you don’t have a complete team yet. Just highlight the key roles that you need to fill and the type of person you hope to hire for each role.
![creating a simple business plan](https://web-cdn.liveplan.com/liveplan/content/uploads/2022/11/17153023/Detailed_Business_Plan_Team.png?format=auto)
5. Financial plan and forecasts
Your business plan now covers the “what,” the “how,” and the “when” for your business. Now it’s time to talk about money.
Financial forecasts
What revenue do you plan on bringing in, and when? What kind of expenses will you have? How much cash will you need?
These are the types of questions you’ll answer by creating detailed forecasts. Don’t worry about getting it perfect, these are just educated guesses. Your goal is to get numbers down that seem reasonable so you can review and revise financial expectations as you run your business.
You’ll want to cover sales , expenses , personnel costs , asset purchases, cash , etc, for at least the first 12 months of your business. If you can, also create educated guesses for the following two years in annual totals.
If you intend to pursue funding, it’s worth noting that some investors and lenders might want to see a five-year forecast. For most other cases, three years is usually enough.
![creating a simple business plan](https://web-cdn.liveplan.com/liveplan/content/uploads/2022/11/17153007/Detailed_Business_Plan_Forecast_Assumptions-756x1024.png?format=auto)
If you’re raising money for your business, the Financing section is where you describe how much you need. Whether you’re getting loans or investments, you should highlight what and when you need it.
Ideally, you’ll also want to summarize the specific ways you’ll use the funding once you have it.
For more specifics, check out our write-up explaining what to include in your business plan for a bank loan .
![creating a simple business plan](https://web-cdn.liveplan.com/liveplan/content/uploads/2022/11/17153026/Detailed_Business_Plan_Use_of_Funds.png?format=auto)
Historical Financial statements
If your business is up and running, you should also include your profit and loss statement , balance sheet , and cash flow statement . These are the historical record of your business performance and will be required by lenders, investors, and anyone considering buying your business.
If you don’t want lengthy financial statements overwhelming this section of your business plan, you can just include the most recent statements and include the rest within your appendix.
![creating a simple business plan Projected Profit and Loss table for FY2023 to FY2025 for Pools & Laps Club. It includes revenue, gross profit, gross margin, operating expenses, and operating income. Salaries, rent, insurance, travel, equipment, event expense, and other costs are detailed.](https://web-cdn.liveplan.com/liveplan/content/uploads/2022/11/17153003/Detailed_Business_Plan_Financial_Plan.png?format=auto)
6. Appendix
The final section of your business plan is the appendix . Include detailed financial forecasts here and any other key documentation for your business.
If you have product schematics, patent information, or any other details that aren’t appropriate for the main body of the plan but need to be included for reference.
Tips to write a detailed business plan
Keep it brief.
You may not be limited to one page, but that doesn’t mean you need to write a novel. Keep your business plan focused using clear, plain language and avoiding jargon. Make your plan easier to skim by using short sentences, bulleted lists, and visuals. Remember, you can always come back and add more details.
Related Reading: 7 tips to make a high-quality business plan
Start with what you know
Don’t worry about following a strict top-to-bottom approach. Instead, build momentum by starting with sections you know well. This will help you get information down and ultimately make you more likely to complete your business plan.
Set time limits
You don’t have to write your business plan in one sitting. It may be more valuable to set a time limit, see how much you get done, and return to it again in another session. This will keep you focused and productive and help you fit plan writing into your other responsibilities.
Reference business plan examples
Real-world business plan examples from your industry can provide valuable insights into how others have successfully presented their ideas, strategies, and financials. Exploring these examples can inspire your own approach and offer practical guidance on what to include and how to tailor it to your specific needs.
Just be sure not to copy and paste anything.
Prioritize sections that really matter
When writing a detailed business plan, focus on the parts most important to you and your business.
If you plan on distributing your plan to outsiders, you should complete every section. But, if your plan is just for internal use, focus on the areas that will help you right now.
Download a free business plan template
Are you ready to write your detailed business plan? Get started by downloading our free business plan template . With that, you will be well on your way to a better business strategy, with all of the necessary information expected in a more detailed plan.
If you want to improve your ability to build a healthy, growing business, consider LivePlan.
It’s a product that makes planning easy and features a guided business plan creator , drag-and-drop financial forecasting tools , and an AI-powered LivePlan Assistant to help you write, generate ideas, and analyze your business performance.
Use your detailed business plan to grow your business
Your business plan isn’t just a document to attract investors or close a bank loan. It’s a tool that helps you better manage and grow your business. And you’ll get the most value from your business plan if you use it as part of a growth planning process .
With growth planning, you’ll easily create and execute your plan, track performance, identify opportunities and issues, and consistently revise your strategy. It’s a flexible process that encourages you to build a plan that fits your needs.
So, whether you stick with a one-page plan or expand into a more detailed business plan—you’ll be ready to start growth planning.
Sources in this article
- Parsons, Noah. “Do You Need a Business Plan? This Study Says Yes” Bplans: Free Business Planning Resources and Templates , 10 May 2024, www.bplans.com/business-planning/basics/research .
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How to Create a Business Plan
By Scott McDowell
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A business plan is a helpful step to create a roadmap as you start or start to grow your business. This guide will explain the value of having a business plan and provide a detailed, step-by-step process to help you create one.
Think of a business plan as more than just a theoretical overview. It is a practical, actionable resource that informs your business as you grow.
What is a business plan?
At its most basic, a business plan is a formal document that outlines your objectives, strategy, and timeline to profitability. It includes basic information all in one place: your mission , organizational structure, product offerings, financial projections, and more.
A good business plan will:
Clarify your vision and strategy
Guide growth and help you stay on track
Provide a framework for making informed decisions regarding your business
At the end of the day, a business plan helps you stay focused on your goals and demonstrates that you have a viable strategy for growth.
Why create a business plan?
Even if you don’t need one right now, a business plan can help you clarify your goals and lay out the steps to grow your revenue and customer base, so you can keep doing work you enjoy. A solid business plan can keep you on track and provide a benchmark for measuring progress. Plus, you’ll likely need a comprehensive business plan if you plan to attract outside investors .
How to develop a business plan
Before you start putting together your business plan, there are a few key pieces of thinking and research that will inform the details.
1. Evaluate your business idea
Take some time to evaluate your new business. This step helps you hone in on your mission and vision for the business and what makes it unique.
Ask and answer the following questions:
What problem does my business solve?
Is there a demand for my product or service?
What are the potential pitfalls and risks?
2. Conduct market research
Market research involves gathering information about your industry, target audience, and competitors to understand your market and identify gaps and sales opportunities. This helps you look more closely at where you stand among similar businesses and how you can differentiate yourself.
Industry analysis: Look at industry trends, growth potential, and market size.
Target market: Identify who your customers are, their demographics, preferences, and buying behavior.
Competitor analysis : Analyze your competitors' strengths and weaknesses, their market positioning, and their strategies.
Read our guide to audience research
3. Understand your audience
Developing a clear understanding of your target audience will help you figure out how to speak to them effectively, how to market your brand to them, and their unique needs.
Once you know your target market, dive deeper into their needs. Ask yourself:
How do you solve a problem or fill a need for them?
What are their priorities?
How do you reach them online or in person?
What type of message or behavior is likely to gain their trust or loyalty?
Creating a customer or buyer persona —a fictional version of your ideal customer—can be a helpful way to summarize these details.
The elements of a business plan
A formal business plan includes several parts, including details about your business, how it’s structured, marketing plans, financials, and products. Which parts you need for your own business plan depends on its purpose. If you plan to present this to a potential partner or investor, you likely need most of the elements. If the business plan is to help you log your goals and plans, you can remove sections that don’t feel relevant to your needs.
Executive summary
The executive summary is the first section of your business plan, but you should probably write it last. It’s a one or two paragraph high-level summary of your entire plan. Remember, the executive summary is the first thing someone will see, so it needs to be concise and engaging.
What to include in your executive summary:
Business name: Your business' name and any relevant branding
Mission statement: A brief description of your business’s purpose and core values
Products/services: A summary of the products or services you offer
Market opportunity: An overview of the market need you are addressing
Financial highlights: Key financial projections, including expected revenue and profit
Example: For an eco-friendly clothing line, the executive summary might highlight the growing demand for sustainable fashion, the unique designs offered, and projected first-year revenues of $100,000.
"Our eco-friendly clothing line, GreenDress, is dedicated to providing stylish and sustainable fashion alternatives. With the mission to reduce fashion waste, our products are made from organic and recycled materials. Addressing the increasing consumer demand for eco-friendly options, we aim to capture a significant share of the sustainable fashion market, projecting first-year revenues of $100,000 with a profit margin of 20%."
Try the Squarespace Business Name Generator
Company description
Provide a comprehensive overview of your company, including its structure, history, and the problem it solves. This is similar to the About section you might write for your website bio .
What to include in your company description:
Business structure: Describe your legal business structure (for example, sole proprietorship, partnership, LLC ).
History: Provide a brief history of your business, if applicable.
Market needs: Reiterate the problem your business solves and why there’s a demand.
Example: “ GreenDress is an LLC founded in 2023 by Joan Campion, a fashion stylist and designer with over 10 years of experience in sustainable manufacturing. Our mission is to offer fashionable, eco-friendly women’s clothing options that minimize environmental impact. With growing awareness of fashion’s ecological footprint, there is an increasing demand for sustainable fashion.”
Market analysis
Conduct market analysis to help you understand your industry, market size, and competitors. This helps you and others understand where you sit among competitors, who your brand is for, and what makes you unique.
What to include in your market analysis:
Industry overview: Summarize the industry landscape and trends.
Target market: Define your target market, including demographics, location, and purchasing behavior.
Competitive analysis: Identify your main competitors and analyze their strengths and weaknesses.
Example: “The sustainable fashion industry is growing at an annual rate of 10%. Our target market consists of eco-conscious consumers aged 18-35 who value sustainability and unique design. Competitors include established brands like Patagonia, independent sustainable fashion brands, and direct-to-consumer startups like Everlane. GreenDress differentiates itself by offering more affordable and fashion-forward options.”
Organization and management
Highlight the experience and expertise of your team members. If you’re creating a business plan for your own planning purposes, you can likely skip this section unless it’s helpful to sketch out your team structure.
What to include in your organization and management section:
Organizational structure: Include an org chart and provide a one or two sentence overview of your business’s organizational structure.
Management team: Introduce team members, their roles, and relevant experience.
Advisors: Mention any advisors or board members.
Example: “ GreenDress is led by CEO Joan Campion, with over a decade of experience in sustainable fashion design. Our team includes COO Carlos Silver, who has a background in supply chain management, and CFO Emily Deschutes, an expert in financial planning for startups. We also have a board of advisors consisting of industry veterans and sustainability experts.”
Products or services
Describe your products and explain what makes them unique. Writing this out can help you clarify how you talk about your products and the process for creating and selling them.
What to include in the products or services section:
Description: Provide detailed descriptions of your products or services.
Benefits: Highlight the key benefits to your customers and the unique selling points of your products.
Lifecycle: Outline the lifecycle of your products or services, including development and future plans.
Example: “ Our product line includes organic cotton dresses, jeans, t-shirts, and jackets made of recycled and repurposed materials. Each item is designed with style and sustainability in mind. Our clothing is durable, stylish, and eco-friendly, appealing to consumers who want to reduce their environmental impact without sacrificing fashion.”
Marketing and sales strategy
How will you attract and retain customers? Include information about your preferred marketing channels, sales tactics, and customer retention plans.
What to include in the marketing and sales strategy section:
Marketing channels: Describe the channels you will use to reach your target market (for example: social media , email marketing , influencers).
Sales strategy: Explain your sales process and tactics.
Customer retention: State how you plan to retain customers and encourage repeat business.
Example: “ We will leverage social media platforms, fashionistas, and eco-influencers to promote our brand. Our sales strategy includes an ecommerce website and pop-up shops in vibrant neighborhoods. We will implement a customer loyalty program, offer discounts for repeat buyers, and regularly update our product line to retain customers and keep our brand fresh and appealing.”
Read our guide to creating a marketing strategy
Financial plan
Provide an overview of your business’ financial projections. You may need to talk to a financial expert or ask a friend who understands the financials of starting a business.
What to include in the financial plan section:
Revenue model: Explain how your business will make money.
Funding requirements: Detail any funding you need to start or grow your business.
Financial projections: Provide projected income statements, cash flow statements, and balance sheets for the next 3-5 years.
Example: “ Our revenue model is based on direct-to-consumer sales through our website and pop-up shops. We are seeking $50,000 in seed funding to cover initial production costs and marketing expenses. Projected first-year revenue is $100,000, with a net profit margin of 20%.”
Include any additional information that supports your business plan in an appendix. Consider what additional questions your audience might have. If this business plan is for your records, think about what business documentation would be useful to keep in your plan for easy reference.
The appendix can include things like:
Resumes: Detailed resumes or bios of the management team.
Product photos: High-quality images of your products .
Legal documentation: Any relevant legal documents, such as patents or trademarks.
Creating a simple starter business plan
Depending on your business stage and goals, you may only need a truncated, straightforward business plan outline. Focus on the essentials and don’t get bogged down in too much detail. Instead of including everything listed above, start with these sections:
Financial projections
A shorter business plan may be all you need to get your venture off the ground. It will provide enough of a framework to take the idea in your head and make it a real, viable business.
4 tips for writing a good business plan
A few best practices apply no matter how long your business plan is or who it’s for. A great business plan is clear, realistic, and based on research.
Use clear and straightforward language. Avoid jargon and overly technical terms, use short sentences and paragraphs, and be specific and direct.
Support your claims with data and research. Use credible sources for market data, provide references and cite your sources, and use charts or graphs to illustrate data and make it easy on the eyes.
Set feasible and achievable goals. Base your projections on realistic assumptions and don’t be overly optimistic, consider potential challenges and risks and how you plan to address them, and be able to explain for your projections.
Seek feedback from friends, mentors, and advisors. Share your plan with someone you trust, ideally with more experience than you and use the feedback to refine and improve your plan.
Crafting a well-structured business plan is an elemental step for starting a new business or side hustle. You can start with a simple bare-bones plan or develop a more robust one, depending on your needs. The process can seem daunting, but armed with a clear and detailed plan, you will be ready to guide your business to success.
Posted on 01 Aug 2024
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Step-by-Step Guide to Writing a Simple Business Plan
By Joe Weller | October 11, 2021
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A business plan is the cornerstone of any successful company, regardless of size or industry. This step-by-step guide provides information on writing a business plan for organizations at any stage, complete with free templates and expert advice.
Included on this page, you’ll find a step-by-step guide to writing a business plan and a chart to identify which type of business plan you should write . Plus, find information on how a business plan can help grow a business and expert tips on writing one .
What Is a Business Plan?
A business plan is a document that communicates a company’s goals and ambitions, along with the timeline, finances, and methods needed to achieve them. Additionally, it may include a mission statement and details about the specific products or services offered.
A business plan can highlight varying time periods, depending on the stage of your company and its goals. That said, a typical business plan will include the following benchmarks:
- Product goals and deadlines for each month
- Monthly financials for the first two years
- Profit and loss statements for the first three to five years
- Balance sheet projections for the first three to five years
Startups, entrepreneurs, and small businesses all create business plans to use as a guide as their new company progresses. Larger organizations may also create (and update) a business plan to keep high-level goals, financials, and timelines in check.
While you certainly need to have a formalized outline of your business’s goals and finances, creating a business plan can also help you determine a company’s viability, its profitability (including when it will first turn a profit), and how much money you will need from investors. In turn, a business plan has functional value as well: Not only does outlining goals help keep you accountable on a timeline, it can also attract investors in and of itself and, therefore, act as an effective strategy for growth.
For more information, visit our comprehensive guide to writing a strategic plan or download free strategic plan templates . This page focuses on for-profit business plans, but you can read our article with nonprofit business plan templates .
Business Plan Steps
The specific information in your business plan will vary, depending on the needs and goals of your venture, but a typical plan includes the following ordered elements:
- Executive summary
- Description of business
- Market analysis
- Competitive analysis
- Description of organizational management
- Description of product or services
- Marketing plan
- Sales strategy
- Funding details (or request for funding)
- Financial projections
If your plan is particularly long or complicated, consider adding a table of contents or an appendix for reference. For an in-depth description of each step listed above, read “ How to Write a Business Plan Step by Step ” below.
Broadly speaking, your audience includes anyone with a vested interest in your organization. They can include potential and existing investors, as well as customers, internal team members, suppliers, and vendors.
Do I Need a Simple or Detailed Plan?
Your business’s stage and intended audience dictates the level of detail your plan needs. Corporations require a thorough business plan — up to 100 pages. Small businesses or startups should have a concise plan focusing on financials and strategy.
How to Choose the Right Plan for Your Business
In order to identify which type of business plan you need to create, ask: “What do we want the plan to do?” Identify function first, and form will follow.
Use the chart below as a guide for what type of business plan to create:
Function | Audience | Type of Business Plan |
---|---|---|
Serve as a loose guide of objectives and timeline | Internal | Lean |
Serve as a detailed, brass-tacks blueprint of business goals and timeline | Internal | Traditional |
Serve as a strategic document with a narrative focus on organization-wide goals, priorities, and vision | Internal | Strategic |
Earn a company loan or grant | External | Traditional (with focus on financial documents) |
Attract investors or partners | External | Traditional/strategic (with focus on financials, as well as support departments, such as marketing, sales, product, etc.) |
To test a business or startup idea | Internal | Lean |
Is the Order of Your Business Plan Important?
There is no set order for a business plan, with the exception of the executive summary, which should always come first. Beyond that, simply ensure that you organize the plan in a way that makes sense and flows naturally.
The Difference Between Traditional and Lean Business Plans
A traditional business plan follows the standard structure — because these plans encourage detail, they tend to require more work upfront and can run dozens of pages. A Lean business plan is less common and focuses on summarizing critical points for each section. These plans take much less work and typically run one page in length.
In general, you should use a traditional model for a legacy company, a large company, or any business that does not adhere to Lean (or another Agile method ). Use Lean if you expect the company to pivot quickly or if you already employ a Lean strategy with other business operations. Additionally, a Lean business plan can suffice if the document is for internal use only. Stick to a traditional version for investors, as they may be more sensitive to sudden changes or a high degree of built-in flexibility in the plan.
How to Write a Business Plan Step by Step
Writing a strong business plan requires research and attention to detail for each section. Below, you’ll find a 10-step guide to researching and defining each element in the plan.
Step 1: Executive Summary
The executive summary will always be the first section of your business plan. The goal is to answer the following questions:
- What is the vision and mission of the company?
- What are the company’s short- and long-term goals?
See our roundup of executive summary examples and templates for samples. Read our executive summary guide to learn more about writing one.
Step 2: Description of Business
The goal of this section is to define the realm, scope, and intent of your venture. To do so, answer the following questions as clearly and concisely as possible:
- What business are we in?
- What does our business do?
Step 3: Market Analysis
In this section, provide evidence that you have surveyed and understand the current marketplace, and that your product or service satisfies a niche in the market. To do so, answer these questions:
- Who is our customer?
- What does that customer value?
Step 4: Competitive Analysis
In many cases, a business plan proposes not a brand-new (or even market-disrupting) venture, but a more competitive version — whether via features, pricing, integrations, etc. — than what is currently available. In this section, answer the following questions to show that your product or service stands to outpace competitors:
- Who is the competition?
- What do they do best?
- What is our unique value proposition?
Step 5: Description of Organizational Management
In this section, write an overview of the team members and other key personnel who are integral to success. List roles and responsibilities, and if possible, note the hierarchy or team structure.
Step 6: Description of Products or Services
In this section, clearly define your product or service, as well as all the effort and resources that go into producing it. The strength of your product largely defines the success of your business, so it’s imperative that you take time to test and refine the product before launching into marketing, sales, or funding details.
Questions to answer in this section are as follows:
- What is the product or service?
- How do we produce it, and what resources are necessary for production?
Step 7: Marketing Plan
In this section, define the marketing strategy for your product or service. This doesn’t need to be as fleshed out as a full marketing plan , but it should answer basic questions, such as the following:
- Who is the target market (if different from existing customer base)?
- What channels will you use to reach your target market?
- What resources does your marketing strategy require, and do you have access to them?
- If possible, do you have a rough estimate of timeline and budget?
- How will you measure success?
Step 8: Sales Plan
Write an overview of the sales strategy, including the priorities of each cycle, steps to achieve these goals, and metrics for success. For the purposes of a business plan, this section does not need to be a comprehensive, in-depth sales plan , but can simply outline the high-level objectives and strategies of your sales efforts.
Start by answering the following questions:
- What is the sales strategy?
- What are the tools and tactics you will use to achieve your goals?
- What are the potential obstacles, and how will you overcome them?
- What is the timeline for sales and turning a profit?
- What are the metrics of success?
Step 9: Funding Details (or Request for Funding)
This section is one of the most critical parts of your business plan, particularly if you are sharing it with investors. You do not need to provide a full financial plan, but you should be able to answer the following questions:
- How much capital do you currently have? How much capital do you need?
- How will you grow the team (onboarding, team structure, training and development)?
- What are your physical needs and constraints (space, equipment, etc.)?
Step 10: Financial Projections
Apart from the fundraising analysis, investors like to see thought-out financial projections for the future. As discussed earlier, depending on the scope and stage of your business, this could be anywhere from one to five years.
While these projections won’t be exact — and will need to be somewhat flexible — you should be able to gauge the following:
- How and when will the company first generate a profit?
- How will the company maintain profit thereafter?
Business Plan Template
![creating a simple business plan Business Plan Template](https://www.smartsheet.com/sites/default/files/2020-11/IC-Business-Plan-Template.png)
Download Business Plan Template
Microsoft Excel | Smartsheet
This basic business plan template has space for all the traditional elements: an executive summary, product or service details, target audience, marketing and sales strategies, etc. In the finances sections, input your baseline numbers, and the template will automatically calculate projections for sales forecasting, financial statements, and more.
For templates tailored to more specific needs, visit this business plan template roundup or download a fill-in-the-blank business plan template to make things easy.
If you are looking for a particular template by file type, visit our pages dedicated exclusively to Microsoft Excel , Microsoft Word , and Adobe PDF business plan templates.
How to Write a Simple Business Plan
A simple business plan is a streamlined, lightweight version of the large, traditional model. As opposed to a one-page business plan , which communicates high-level information for quick overviews (such as a stakeholder presentation), a simple business plan can exceed one page.
Below are the steps for creating a generic simple business plan, which are reflected in the template below .
- Write the Executive Summary This section is the same as in the traditional business plan — simply offer an overview of what’s in the business plan, the prospect or core offering, and the short- and long-term goals of the company.
- Add a Company Overview Document the larger company mission and vision.
- Provide the Problem and Solution In straightforward terms, define the problem you are attempting to solve with your product or service and how your company will attempt to do it. Think of this section as the gap in the market you are attempting to close.
- Identify the Target Market Who is your company (and its products or services) attempting to reach? If possible, briefly define your buyer personas .
- Write About the Competition In this section, demonstrate your knowledge of the market by listing the current competitors and outlining your competitive advantage.
- Describe Your Product or Service Offerings Get down to brass tacks and define your product or service. What exactly are you selling?
- Outline Your Marketing Tactics Without getting into too much detail, describe your planned marketing initiatives.
- Add a Timeline and the Metrics You Will Use to Measure Success Offer a rough timeline, including milestones and key performance indicators (KPIs) that you will use to measure your progress.
- Include Your Financial Forecasts Write an overview of your financial plan that demonstrates you have done your research and adequate modeling. You can also list key assumptions that go into this forecasting.
- Identify Your Financing Needs This section is where you will make your funding request. Based on everything in the business plan, list your proposed sources of funding, as well as how you will use it.
Simple Business Plan Template
![creating a simple business plan Simple Business Plan Template](https://www.smartsheet.com/sites/default/files/2020-04/IC-Simple-Business-Plan-Template_WORD.png)
Download Simple Business Plan Template
Microsoft Excel | Microsoft Word | Adobe PDF | Smartsheet
Use this simple business plan template to outline each aspect of your organization, including information about financing and opportunities to seek out further funding. This template is completely customizable to fit the needs of any business, whether it’s a startup or large company.
Read our article offering free simple business plan templates or free 30-60-90-day business plan templates to find more tailored options. You can also explore our collection of one page business templates .
How to Write a Business Plan for a Lean Startup
A Lean startup business plan is a more Agile approach to a traditional version. The plan focuses more on activities, processes, and relationships (and maintains flexibility in all aspects), rather than on concrete deliverables and timelines.
While there is some overlap between a traditional and a Lean business plan, you can write a Lean plan by following the steps below:
- Add Your Value Proposition Take a streamlined approach to describing your product or service. What is the unique value your startup aims to deliver to customers? Make sure the team is aligned on the core offering and that you can state it in clear, simple language.
- List Your Key Partners List any other businesses you will work with to realize your vision, including external vendors, suppliers, and partners. This section demonstrates that you have thoughtfully considered the resources you can provide internally, identified areas for external assistance, and conducted research to find alternatives.
- Note the Key Activities Describe the key activities of your business, including sourcing, production, marketing, distribution channels, and customer relationships.
- Include Your Key Resources List the critical resources — including personnel, equipment, space, and intellectual property — that will enable you to deliver your unique value.
- Identify Your Customer Relationships and Channels In this section, document how you will reach and build relationships with customers. Provide a high-level map of the customer experience from start to finish, including the spaces in which you will interact with the customer (online, retail, etc.).
- Detail Your Marketing Channels Describe the marketing methods and communication platforms you will use to identify and nurture your relationships with customers. These could be email, advertising, social media, etc.
- Explain the Cost Structure This section is especially necessary in the early stages of a business. Will you prioritize maximizing value or keeping costs low? List the foundational startup costs and how you will move toward profit over time.
- Share Your Revenue Streams Over time, how will the company make money? Include both the direct product or service purchase, as well as secondary sources of revenue, such as subscriptions, selling advertising space, fundraising, etc.
Lean Business Plan Template for Startups
![creating a simple business plan Lean Business Plan Templates for Startups](https://www.smartsheet.com/sites/default/files/2020-05/IC-Lean-Business-Plan-Template-for-Startups-Template_PDF.png)
Download Lean Business Plan Template for Startups
Microsoft Word | Adobe PDF
Startup leaders can use this Lean business plan template to relay the most critical information from a traditional plan. You’ll find all the sections listed above, including spaces for industry and product overviews, cost structure and sources of revenue, and key metrics, and a timeline. The template is completely customizable, so you can edit it to suit the objectives of your Lean startups.
See our wide variety of startup business plan templates for more options.
How to Write a Business Plan for a Loan
A business plan for a loan, often called a loan proposal , includes many of the same aspects of a traditional business plan, as well as additional financial documents, such as a credit history, a loan request, and a loan repayment plan.
In addition, you may be asked to include personal and business financial statements, a form of collateral, and equity investment information.
Download free financial templates to support your business plan.
Tips for Writing a Business Plan
Outside of including all the key details in your business plan, you have several options to elevate the document for the highest chance of winning funding and other resources. Follow these tips from experts:.
- Keep It Simple: Avner Brodsky , the Co-Founder and CEO of Lezgo Limited, an online marketing company, uses the acronym KISS (keep it short and simple) as a variation on this idea. “The business plan is not a college thesis,” he says. “Just focus on providing the essential information.”
- Do Adequate Research: Michael Dean, the Co-Founder of Pool Research , encourages business leaders to “invest time in research, both internal and external (market, finance, legal etc.). Avoid being overly ambitious or presumptive. Instead, keep everything objective, balanced, and accurate.” Your plan needs to stand on its own, and you must have the data to back up any claims or forecasting you make. As Brodsky explains, “Your business needs to be grounded on the realities of the market in your chosen location. Get the most recent data from authoritative sources so that the figures are vetted by experts and are reliable.”
- Set Clear Goals: Make sure your plan includes clear, time-based goals. “Short-term goals are key to momentum growth and are especially important to identify for new businesses,” advises Dean.
- Know (and Address) Your Weaknesses: “This awareness sets you up to overcome your weak points much quicker than waiting for them to arise,” shares Dean. Brodsky recommends performing a full SWOT analysis to identify your weaknesses, too. “Your business will fare better with self-knowledge, which will help you better define the mission of your business, as well as the strategies you will choose to achieve your objectives,” he adds.
- Seek Peer or Mentor Review: “Ask for feedback on your drafts and for areas to improve,” advises Brodsky. “When your mind is filled with dreams for your business, sometimes it is an outsider who can tell you what you’re missing and will save your business from being a product of whimsy.”
Outside of these more practical tips, the language you use is also important and may make or break your business plan.
Shaun Heng, VP of Operations at Coin Market Cap , gives the following advice on the writing, “Your business plan is your sales pitch to an investor. And as with any sales pitch, you need to strike the right tone and hit a few emotional chords. This is a little tricky in a business plan, because you also need to be formal and matter-of-fact. But you can still impress by weaving in descriptive language and saying things in a more elegant way.
“A great way to do this is by expanding your vocabulary, avoiding word repetition, and using business language. Instead of saying that something ‘will bring in as many customers as possible,’ try saying ‘will garner the largest possible market segment.’ Elevate your writing with precise descriptive words and you'll impress even the busiest investor.”
Additionally, Dean recommends that you “stay consistent and concise by keeping your tone and style steady throughout, and your language clear and precise. Include only what is 100 percent necessary.”
Resources for Writing a Business Plan
While a template provides a great outline of what to include in a business plan, a live document or more robust program can provide additional functionality, visibility, and real-time updates. The U.S. Small Business Association also curates resources for writing a business plan.
Additionally, you can use business plan software to house data, attach documentation, and share information with stakeholders. Popular options include LivePlan, Enloop, BizPlanner, PlanGuru, and iPlanner.
How a Business Plan Helps to Grow Your Business
A business plan — both the exercise of creating one and the document — can grow your business by helping you to refine your product, target audience, sales plan, identify opportunities, secure funding, and build new partnerships.
Outside of these immediate returns, writing a business plan is a useful exercise in that it forces you to research the market, which prompts you to forge your unique value proposition and identify ways to beat the competition. Doing so will also help you build (and keep you accountable to) attainable financial and product milestones. And down the line, it will serve as a welcome guide as hurdles inevitably arise.
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Business plans might seem like an old-school stiff-collared practice, but they deserve a place in the startup realm, too. It’s probably not going to be the frame-worthy document you hang in the office—yet, it may one day be deserving of the privilege.
Whether you’re looking to win the heart of an angel investor or convince a bank to lend you money, you’ll need a business plan. And not just any ol’ notes and scribble on the back of a pizza box or napkin—you’ll need a professional, standardized report.
Bah. Sounds like homework, right?
Yes. Yes, it does.
However, just like bookkeeping, loan applications, and 404 redirects, business plans are an essential step in cementing your business foundation.
Don’t worry. We’ll show you how to write a business plan without boring you to tears. We’ve jam-packed this article with all the business plan examples, templates, and tips you need to take your non-existent proposal from concept to completion.
Table of Contents
What Is a Business Plan?
![](http://charunivedita.online/777/templates/cheerup2/res/banner1.gif)
Tips to Make Your Small Business Plan Ironclad
How to Write a Business Plan in 6 Steps
Startup Business Plan Template
Business Plan Examples
Work on Making Your Business Plan
How to Write a Business Plan FAQs
What is a business plan why do you desperately need one.
A business plan is a roadmap that outlines:
- Who your business is, what it does, and who it serves
- Where your business is now
- Where you want it to go
- How you’re going to make it happen
- What might stop you from taking your business from Point A to Point B
- How you’ll overcome the predicted obstacles
While it’s not required when starting a business, having a business plan is helpful for a few reasons:
- Secure a Bank Loan: Before approving you for a business loan, banks will want to see that your business is legitimate and can repay the loan. They want to know how you’re going to use the loan and how you’ll make monthly payments on your debt. Lenders want to see a sound business strategy that doesn’t end in loan default.
- Win Over Investors: Like lenders, investors want to know they’re going to make a return on their investment. They need to see your business plan to have the confidence to hand you money.
- Stay Focused: It’s easy to get lost chasing the next big thing. Your business plan keeps you on track and focused on the big picture. Your business plan can prevent you from wasting time and resources on something that isn’t aligned with your business goals.
Beyond the reasoning, let’s look at what the data says:
- Simply writing a business plan can boost your average annual growth by 30%
- Entrepreneurs who create a formal business plan are 16% more likely to succeed than those who don’t
- A study looking at 65 fast-growth companies found that 71% had small business plans
- The process and output of creating a business plan have shown to improve business performance
Convinced yet? If those numbers and reasons don’t have you scrambling for pen and paper, who knows what will.
Don’t Skip: Business Startup Costs Checklist
Before we get into the nitty-gritty steps of how to write a business plan, let’s look at some high-level tips to get you started in the right direction:
Be Professional and Legit
You might be tempted to get cutesy or revolutionary with your business plan—resist the urge. While you should let your brand and creativity shine with everything you produce, business plans fall more into the realm of professional documents.
Think of your business plan the same way as your terms and conditions, employee contracts, or financial statements. You want your plan to be as uniform as possible so investors, lenders, partners, and prospective employees can find the information they need to make important decisions.
If you want to create a fun summary business plan for internal consumption, then, by all means, go right ahead. However, for the purpose of writing this external-facing document, keep it legit.
Know Your Audience
Your official business plan document is for lenders, investors, partners, and big-time prospective employees. Keep these names and faces in your mind as you draft your plan.
Think about what they might be interested in seeing, what questions they’ll ask, and what might convince (or scare) them. Cut the jargon and tailor your language so these individuals can understand.
Remember, these are busy people. They’re likely looking at hundreds of applicants and startup investments every month. Keep your business plan succinct and to the point. Include the most pertinent information and omit the sections that won’t impact their decision-making.
Invest Time Researching
You might not have answers to all the sections you should include in your business plan. Don’t skip over these!
Your audience will want:
- Detailed information about your customers
- Numbers and solid math to back up your financial claims and estimates
- Deep insights about your competitors and potential threats
- Data to support market opportunities and strategy
Your answers can’t be hypothetical or opinionated. You need research to back up your claims. If you don’t have that data yet, then invest time and money in collecting it. That information isn’t just critical for your business plan—it’s essential for owning, operating, and growing your company.
Stay Realistic
Your business may be ambitious, but reign in the enthusiasm just a teeny-tiny bit. The last thing you want to do is have an angel investor call BS and say “I’m out” before even giving you a chance.
The folks looking at your business and evaluating your plan have been around the block—they know a thing or two about fact and fiction. Your plan should be a blueprint for success. It should be the step-by-step roadmap for how you’re going from Point A to Point B.
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How to Write a Business Plan—6 Essential Elements
Not every business plan looks the same, but most share a few common elements. Here’s what they typically include:
- Executive Summary
- Business Overview
- Products and Services
- Market Analysis
- Competitive Analysis
- Financial Strategy
Below, we’ll break down each of these sections in more detail.
1. Executive Summary
While your executive summary is the first page of your business plan, it’s the section you’ll write last. That’s because it summarizes your entire business plan into a succinct one-pager.
Begin with an executive summary that introduces the reader to your business and gives them an overview of what’s inside the business plan.
Your executive summary highlights key points of your plan. Consider this your elevator pitch. You want to put all your juiciest strengths and opportunities strategically in this section.
2. Business Overview
In this section, you can dive deeper into the elements of your business, including answering:
- What’s your business structure? Sole proprietorship, LLC, corporation, etc.
- Where is it located?
- Who owns the business? Does it have employees?
- What problem does it solve, and how?
- What’s your mission statement? Your mission statement briefly describes why you are in business. To write a proper mission statement, brainstorm your business’s core values and who you serve.
Don’t overlook your mission statement. This powerful sentence or paragraph could be the inspiration that drives an investor to take an interest in your business. Here are a few examples of powerful mission statements that just might give you the goosebumps:
- Patagonia: Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.
- Tesla: To accelerate the world’s transition to sustainable energy.
- InvisionApp : Question Assumptions. Think Deeply. Iterate as a Lifestyle. Details, Details. Design is Everywhere. Integrity.
- TED : Spread ideas.
- Warby Parker : To offer designer eyewear at a revolutionary price while leading the way for socially conscious businesses.
3. Products and Services
As the owner, you know your business and the industry inside and out. However, whoever’s reading your document might not. You’re going to need to break down your products and services in minute detail.
For example, if you own a SaaS business, you’re going to need to explain how this business model works and what you’re selling.
You’ll need to include:
- What services you sell: Describe the services you provide and how these will help your target audience.
- What products you sell: Describe your products (and types if applicable) and how they will solve a need for your target and provide value.
- How much you charge: If you’re selling services, will you charge hourly, per project, retainer, or a mixture of all of these? If you’re selling products, what are the price ranges?
4. Market Analysis
Your market analysis essentially explains how your products and services address customer concerns and pain points. This section will include research and data on the state and direction of your industry and target market.
This research should reveal lucrative opportunities and how your business is uniquely positioned to seize the advantage. You’ll also want to touch on your marketing strategy and how it will (or does) work for your audience.
Include a detailed analysis of your target customers. This describes the people you serve and sell your product to. Be careful not to go too broad here—you don’t want to fall into the common entrepreneurial trap of trying to sell to everyone and thereby not differentiating yourself enough to survive the competition.
The market analysis section will include your unique value proposition. Your unique value proposition (UVP) is the thing that makes you stand out from your competitors. This is your key to success.
If you don’t have a UVP, you don’t have a way to take on competitors who are already in this space. Here’s an example of an ecommerce internet business plan outlining their competitive edge:
FireStarters’ competitive advantage is offering product lines that make a statement but won’t leave you broke. The major brands are expensive and not distinctive enough to satisfy the changing taste of our target customers. FireStarters offers products that are just ahead of the curve and so affordable that our customers will return to the website often to check out what’s new.
5. Competitive Analysis
Your competitive analysis examines the strengths and weaknesses of competing businesses in your market or industry. This will include direct and indirect competitors. It can also include threats and opportunities, like economic concerns or legal restraints.
The best way to sum up this section is with a classic SWOT analysis. This will explain your company’s position in relation to your competitors.
6. Financial Strategy
Your financial strategy will sum up your revenue, expenses, profit (or loss), and financial plan for the future. It’ll explain how you make money, where your cash flow goes, and how you’ll become profitable or stay profitable.
This is one of the most important sections for lenders and investors. Have you ever watched Shark Tank? They always ask about the company’s financial situation. How has it performed in the past? What’s the ongoing outlook moving forward? How does the business plan to make it happen?
Answer all of these questions in your financial strategy so that your audience doesn’t have to ask. Go ahead and include forecasts and graphs in your plan, too:
- Balance sheet: This includes your assets, liabilities, and equity.
- Profit & Loss (P&L) statement: This details your income and expenses over a given period.
- Cash flow statement: Similar to the P&L, this one will show all cash flowing into and out of the business each month.
It takes cash to change the world—lenders and investors get it. If you’re short on funding, explain how much money you’ll need and how you’ll use the capital. Where are you looking for financing? Are you looking to take out a business loan, or would you rather trade equity for capital instead?
Read More: 16 Financial Concepts Every Entrepreneur Needs to Know
Startup Business Plan Template (Copy/Paste Outline)
Ready to write your own business plan? Copy/paste the startup business plan template below and fill in the blanks.
Executive Summary Remember, do this last. Summarize who you are and your business plan in one page.
Business Overview Describe your business. What’s it do? Who owns it? How’s it structured? What’s the mission statement?
Products and Services Detail the products and services you offer. How do they work? What do you charge?
Market Analysis Write about the state of the market and opportunities. Use date. Describe your customers. Include your UVP.
Competitive Analysis Outline the competitors in your market and industry. Include threats and opportunities. Add a SWOT analysis of your business.
Financial Strategy Sum up your revenue, expenses, profit (or loss), and financial plan for the future. If you’re applying for a loan, include how you’ll use the funding to progress the business.
![creating a simple business plan What’s the Best Business Plan to Succeed as a Consultant?](https://foundr.com/wp-content/plugins/wp-youtube-lyte/lyteCache.php?origThumbUrl=https%3A%2F%2Fi.ytimg.com%2Fvi%2FDdsCkpqxA5A%2F0.jpg)
5 Frame-Worthy Business Plan Examples
Want to explore other templates and examples? We got you covered. Check out these 5 business plan examples you can use as inspiration when writing your plan:
- SBA Wooden Grain Toy Company
- SBA We Can Do It Consulting
- OrcaSmart Business Plan Sample
- Plum Business Plan Template
- PandaDoc Free Business Plan Templates
Get to Work on Making Your Business Plan
If you find you’re getting stuck on perfecting your document, opt for a simple one-page business plan —and then get to work. You can always polish up your official plan later as you learn more about your business and the industry.
Remember, business plans are not a requirement for starting a business—they’re only truly essential if a bank or investor is asking for it.
Ask others to review your business plan. Get feedback from other startups and successful business owners. They’ll likely be able to see holes in your planning or undetected opportunities—just make sure these individuals aren’t your competitors (or potential competitors).
Your business plan isn’t a one-and-done report—it’s a living, breathing document. You’ll make changes to it as you grow and evolve. When the market or your customers change, your plan will need to change to adapt.
That means when you’re finished with this exercise, it’s not time to print your plan out and stuff it in a file cabinet somewhere. No, it should sit on your desk as a day-to-day reference. Use it (and update it) as you make decisions about your product, customers, and financial plan.
Review your business plan frequently, update it routinely, and follow the path you’ve developed to the future you’re building.
Keep Learning: New Product Development Process in 8 Easy Steps
What financial information should be included in a business plan?
Be as detailed as you can without assuming too much. For example, include your expected revenue, expenses, profit, and growth for the future.
What are some common mistakes to avoid when writing a business plan?
The most common mistake is turning your business plan into a textbook. A business plan is an internal guide and an external pitching tool. Cut the fat and only include the most relevant information to start and run your business.
Who should review my business plan before I submit it?
Co-founders, investors, or a board of advisors. Otherwise, reach out to a trusted mentor, your local chamber of commerce, or someone you know that runs a business.
Ready to Write Your Business Plan?
Don’t let creating a business plan hold you back from starting your business. Writing documents might not be your thing—that doesn’t mean your business is a bad idea.
Let us help you get started.
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About Jesse Sumrak
Jesse Sumrak is a writing zealot focused on creating killer content. He’s spent almost a decade writing about startup, marketing, and entrepreneurship topics, having built and sold his own post-apocalyptic fitness bootstrapped business. A writer by day and a peak bagger by night (and early early morning), you can usually find Jesse preparing for the apocalypse on a precipitous peak somewhere in the Rocky Mountains of Colorado.
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How To Write a Business Plan
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Starting a business is a wild ride, and a solid business plan can be the key to keeping you on track. A business plan is essentially a roadmap for your business — outlining your goals, strategies, market analysis and financial projections. Not only will it guide your decision-making, a business plan can help you secure funding with a loan or from investors .
Writing a business plan can seem like a huge task, but taking it one step at a time can break the plan down into manageable milestones. Here is our step-by-step guide on how to write a business plan.
Table of contents
- Write your executive summary
- Do your market research homework
- Set your business goals and objectives
- Plan your business strategy
- Describe your product or service
- Crunch the numbers
- Finalize your business plan
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Step 1: Write your executive summary
Though this will be the first page of your business plan , we recommend you actually write the executive summary last. That’s because an executive summary highlights what’s to come in the business plan but in a more condensed fashion.
An executive summary gives stakeholders who are reading your business plan the key points quickly without having to comb through pages and pages. Be sure to cover each successive point in a concise manner, and include as much data as necessary to support your claims.
You’ll cover other things too, but answer these basic questions in your executive summary:
- Idea: What’s your business concept? What problem does your business solve? What are your business goals?
- Product: What’s your product/service and how is it different?
- Market: Who’s your audience? How will you reach customers?
- Finance: How much will your idea cost? And if you’re seeking funding, how much money do you need? How much do you expect to earn? If you’ve already started, where is your revenue at now?
![creating a simple business plan](https://www.business.org/app/uploads/2022/10/credit-cards-icon.png)
Step 2: Do your market research homework
The next step in writing a business plan is to conduct market research . This involves gathering information about your target market (or customer persona), your competition, and the industry as a whole. You can use a variety of research methods such as surveys, focus groups, and online research to gather this information. Your method may be formal or more casual, just make sure that you’re getting good data back.
This research will help you to understand the needs of your target market and the potential demand for your product or service—essential aspects of starting and growing a successful business.
Step 3: Set your business goals and objectives
Once you’ve completed your market research, you can begin to define your business goals and objectives. What is the problem you want to solve? What’s your vision for the future? Where do you want to be in a year from now?
Use this step to decide what you want to achieve with your business, both in the short and long term. Try to set SMART goals—specific, measurable, achievable, relevant, and time-bound benchmarks—that will help you to stay focused and motivated as you build your business.
Step 4: Plan your business strategy
Your business strategy is how you plan to reach your goals and objectives. This includes details on positioning your product or service, marketing and sales strategies, operational plans, and the organizational structure of your small business.
Make sure to include key roles and responsibilities for each team member if you’re in a business entity with multiple people.
Step 5: Describe your product or service
In this section, get into the nitty-gritty of your product or service. Go into depth regarding the features, benefits, target market, and any patents or proprietary tech you have. Make sure to paint a clear picture of what sets your product apart from the competition—and don’t forget to highlight any customer benefits.
Step 6: Crunch the numbers
Financial analysis is an essential part of your business plan. If you’re already in business that includes your profit and loss statement , cash flow statement and balance sheet .
These financial projections will give investors and lenders an understanding of the financial health of your business and the potential return on investment.
You may want to work with a financial professional to ensure your financial projections are realistic and accurate.
Step 7: Finalize your business plan
Once you’ve completed everything, it's time to finalize your business plan. This involves reviewing and editing your plan to ensure that it is clear, concise, and easy to understand.
You should also have someone else review your plan to get a fresh perspective and identify any areas that may need improvement. You could even work with a free SCORE mentor on your business plan or use a SCORE business plan template for more detailed guidance.
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The takeaway
Writing a business plan is an essential process for any forward-thinking entrepreneur or business owner. A business plan requires a lot of up-front research, planning, and attention to detail, but it’s worthwhile. Creating a comprehensive business plan can help you achieve your business goals and secure the funding you need.
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- What Is a Cash Flow Statement?
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How to Write a Business Plan, Step by Step
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What is a business plan?
1. write an executive summary, 2. describe your company, 3. state your business goals, 4. describe your products and services, 5. do your market research, 6. outline your marketing and sales plan, 7. perform a business financial analysis, 8. make financial projections, 9. summarize how your company operates, 10. add any additional information to an appendix, business plan tips and resources.
A business plan outlines your business’s financial goals and explains how you’ll achieve them over the next three to five years. Here’s a step-by-step guide to writing a business plan that will offer a strong, detailed road map for your business.
![creating a simple business plan ZenBusiness](https://www.nerdwallet.com/cdn-cgi/image/quality=85/cdn/software/logos/ZenB.png)
LLC Formation
A business plan is a document that explains what your business does, how it makes money and who its customers are. Internally, writing a business plan should help you clarify your vision and organize your operations. Externally, you can share it with potential lenders and investors to show them you’re on the right track.
Business plans are living documents; it’s OK for them to change over time. Startups may update their business plans often as they figure out who their customers are and what products and services fit them best. Mature companies might only revisit their business plan every few years. Regardless of your business’s age, brush up this document before you apply for a business loan .
» Need help writing? Learn about the best business plan software .
This is your elevator pitch. It should include a mission statement, a brief description of the products or services your business offers and a broad summary of your financial growth plans.
Though the executive summary is the first thing your investors will read, it can be easier to write it last. That way, you can highlight information you’ve identified while writing other sections that go into more detail.
» MORE: How to write an executive summary in 6 steps
Next up is your company description. This should contain basic information like:
Your business’s registered name.
Address of your business location .
Names of key people in the business. Make sure to highlight unique skills or technical expertise among members of your team.
Your company description should also define your business structure — such as a sole proprietorship, partnership or corporation — and include the percent ownership that each owner has and the extent of each owner’s involvement in the company.
Lastly, write a little about the history of your company and the nature of your business now. This prepares the reader to learn about your goals in the next section.
» MORE: How to write a company overview for a business plan
![creating a simple business plan](https://www.nerdwallet.com/assets/blog/wp-content/uploads/2023/07/floating-phone-480x769.png)
The third part of a business plan is an objective statement. This section spells out what you’d like to accomplish, both in the near term and over the coming years.
If you’re looking for a business loan or outside investment, you can use this section to explain how the financing will help your business grow and how you plan to achieve those growth targets. The key is to provide a clear explanation of the opportunity your business presents to the lender.
For example, if your business is launching a second product line, you might explain how the loan will help your company launch that new product and how much you think sales will increase over the next three years as a result.
» MORE: How to write a successful business plan for a loan
In this section, go into detail about the products or services you offer or plan to offer.
You should include the following:
An explanation of how your product or service works.
The pricing model for your product or service.
The typical customers you serve.
Your supply chain and order fulfillment strategy.
You can also discuss current or pending trademarks and patents associated with your product or service.
Lenders and investors will want to know what sets your product apart from your competition. In your market analysis section , explain who your competitors are. Discuss what they do well, and point out what you can do better. If you’re serving a different or underserved market, explain that.
Here, you can address how you plan to persuade customers to buy your products or services, or how you will develop customer loyalty that will lead to repeat business.
Include details about your sales and distribution strategies, including the costs involved in selling each product .
» MORE: R e a d our complete guide to small business marketing
If you’re a startup, you may not have much information on your business financials yet. However, if you’re an existing business, you’ll want to include income or profit-and-loss statements, a balance sheet that lists your assets and debts, and a cash flow statement that shows how cash comes into and goes out of the company.
Accounting software may be able to generate these reports for you. It may also help you calculate metrics such as:
Net profit margin: the percentage of revenue you keep as net income.
Current ratio: the measurement of your liquidity and ability to repay debts.
Accounts receivable turnover ratio: a measurement of how frequently you collect on receivables per year.
This is a great place to include charts and graphs that make it easy for those reading your plan to understand the financial health of your business.
This is a critical part of your business plan if you’re seeking financing or investors. It outlines how your business will generate enough profit to repay the loan or how you will earn a decent return for investors.
Here, you’ll provide your business’s monthly or quarterly sales, expenses and profit estimates over at least a three-year period — with the future numbers assuming you’ve obtained a new loan.
Accuracy is key, so carefully analyze your past financial statements before giving projections. Your goals may be aggressive, but they should also be realistic.
NerdWallet’s picks for setting up your business finances:
The best business checking accounts .
The best business credit cards .
The best accounting software .
Before the end of your business plan, summarize how your business is structured and outline each team’s responsibilities. This will help your readers understand who performs each of the functions you’ve described above — making and selling your products or services — and how much each of those functions cost.
If any of your employees have exceptional skills, you may want to include their resumes to help explain the competitive advantage they give you.
Finally, attach any supporting information or additional materials that you couldn’t fit in elsewhere. That might include:
Licenses and permits.
Equipment leases.
Bank statements.
Details of your personal and business credit history, if you’re seeking financing.
If the appendix is long, you may want to consider adding a table of contents at the beginning of this section.
How much do you need?
with Fundera by NerdWallet
We’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.
Here are some tips to write a detailed, convincing business plan:
Avoid over-optimism: If you’re applying for a business bank loan or professional investment, someone will be reading your business plan closely. Providing unreasonable sales estimates can hurt your chances of approval.
Proofread: Spelling, punctuation and grammatical errors can jump off the page and turn off lenders and prospective investors. If writing and editing aren't your strong suit, you may want to hire a professional business plan writer, copy editor or proofreader.
Use free resources: SCORE is a nonprofit association that offers a large network of volunteer business mentors and experts who can help you write or edit your business plan. The U.S. Small Business Administration’s Small Business Development Centers , which provide free business consulting and help with business plan development, can also be a resource.
On a similar note...
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How to Write a Business Plan (Plus Examples & Templates)
![creating a simple business plan creating a simple business plan](https://www.upflip.com/wp-content/uploads/2024/06/1554309957717-150x150.jpeg)
Have you ever wondered how to write a business plan step by step? Mike Andes, told us:
This guide will help you write a business plan to impress investors.
Throughout this process, we’ll get information from Mike Andes, who started Augusta Lawn Care Services when he was 12 and turned it into a franchise with over 90 locations. He has gone on to help others learn how to write business plans and start businesses. He knows a thing or two about writing business plans!
We’ll start by discussing the definition of a business plan. Then we’ll discuss how to come up with the idea, how to do the market research, and then the important elements in the business plan format. Keep reading to start your journey!
What Is a Business Plan?
A business plan is simply a road map of what you are trying to achieve with your business and how you will go about achieving it. It should cover all elements of your business including:
- Finding customers
- Plans for developing a team
- Competition
- Legal structures
- Key milestones you are pursuing
If you aren’t quite ready to create a business plan, consider starting by reading our business startup guide .
Get a Business Idea
Before you can write a business plan, you have to have a business idea. You may see a problem that needs to be solved and have an idea how to solve it, or you might start by evaluating your interests and skills.
Mike told us, “The three things I suggest asking yourself when thinking about starting a business are:
- What am I good at?
- What would I enjoy doing?
- What can I get paid for?”
![How to Write a Business Plan (Plus Examples & Templates) 1 Three adjoining circles about business opportunity](https://www.upflip.com/wp-content/uploads/2021/05/business-opportunity-for-business-plan-writing.jpg)
If all three of these questions don’t lead to at least one common answer, it will probably be a much harder road to success. Either there is not much market for it, you won’t be good at it, or you won’t enjoy doing it.
As Mike told us, “There’s enough stress starting and running a business that if you don’t like it or aren’t good at it, it’s hard to succeed.”
If you’d like to hear more about Mike’s approach to starting a business, check out our YouTube video
Conduct Market Analysis
Market analysis is focused on establishing if there is a target market for your products and services, how large the target market is, and identifying the demographics of people or businesses that would be interested in the product or service. The goal here is to establish how much money your business concept can make.
Product and Service Demand
![How to Write a Business Plan (Plus Examples & Templates) 2 An image showing product service and demand](https://www.upflip.com/wp-content/uploads/2021/05/product-service-and-demand.jpg)
A search engine is your best friend when trying to figure out if there is demand for your products and services. Personally, I love using presearch.org because it lets you directly search on a ton of different platforms including Google, Youtube, Twitter, and more. Check out the screenshot for the full list of search options.
With quick web searches, you can find out how many competitors you have, look through their reviews, and see if there are common complaints about the competitors. Bad reviews are a great place to find opportunities to offer better products or services.
If there are no similar products or services, you may have stumbled upon something new, or there may just be no demand for it. To find out, go talk to your most honest friend about the idea and see what they think. If they tell you it’s dumb or stare at you vacantly, there’s probably no market for it.
You can also conduct a survey through social media to get public opinion on your idea. Using Facebook Business Manager , you could get a feel for who would be interested in your product or service.
I ran a quick test of how many people between 18-65 you could reach in the U.S. during a week. It returned an estimated 700-2,000 for the total number of leads, which is enough to do a fairly accurate statistical analysis.
Identify Demographics of Target Market
Depending on what type of business you want to run, your target market will be different. The narrower the demographic, the fewer potential customers you’ll have. If you did a survey, you’ll be able to use that data to help define your target audience. Some considerations you’ll want to consider are:
- Other Interests
- Marital Status
- Do they have kids?
Once you have this information, it can help you narrow down your options for location and help define your marketing further. One resource that Mike recommended using is the Census Bureau’s Quick Facts Map . He told us,
“It helps you quickly evaluate what the best areas are for your business to be located.”
How to Write a Business Plan
![How to Write a Business Plan (Plus Examples & Templates) 3 Business plan development](https://www.upflip.com/wp-content/uploads/2021/04/business-plan-development.jpg)
Now that you’ve developed your idea a little and established there is a market for it, you can begin writing a business plan. Getting started is easier with the business plan template we created for you to download. I strongly recommend using it as it is updated to make it easier to create an action plan.
Each of the following should be a section of your business plan:
- Business Plan Cover Page
- Table of Contents
- Executive Summary
- Company Description
- Description of Products and Services
SWOT Analysis
- Competitor Data
- Competitive Analysis
- Marketing Expenses Strategy
Pricing Strategy
- Distribution Channel Assessment
- Operational Plan
- Management and Organizational Strategy
- Financial Statements and/or Financial Projections
We’ll look into each of these. Don’t forget to download our free business plan template (mentioned just above) so you can follow along as we go.
How to Write a Business Plan Step 1. Create a Cover Page
The first thing investors will see is the cover page for your business plan. Make sure it looks professional. A great cover page shows that you think about first impressions.
A good business plan should have the following elements on a cover page:
- Professionally designed logo
- Company name
- Mission or Vision Statement
- Contact Info
Basically, think of a cover page for your business plan like a giant business card. It is meant to capture people’s attention but be quickly processed.
How to Write a Business Plan Step 2. Create a Table of Contents
Most people are busy enough that they don’t have a lot of time. Providing a table of contents makes it easy for them to find the pages of your plan that are meaningful to them.
A table of contents will be immediately after the cover page, but you can include it after the executive summary. Including the table of contents immediately after the executive summary will help investors know what section of your business plan they want to review more thoroughly.
Check out Canva’s article about creating a table of contents . It has a ton of great information about creating easy access to each section of your business plan. Just remember that you’ll want to use different strategies for digital and hard copy business plans.
How to Write a Business Plan Step 3. Write an Executive Summary
![How to Write a Business Plan (Plus Examples & Templates) 4 A notepad with a written executive summary for business plan writing](https://www.upflip.com/wp-content/uploads/2021/05/executive-summary-for-business-plan-writing.jpg)
An executive summary is where your business plan should catch the readers interest. It doesn’t need to be long, but should be quick and easy to read.
Mike told us,
How long should an executive summary bein an informal business plan?
For casual use, an executive summary should be similar to an elevator pitch, no more than 150-160 words, just enough to get them interested and wanting more. Indeed has a great article on elevator pitches . This can also be used for the content of emails to get readers’ attention.
It consists of three basic parts:
- An introduction to you and your business.
- What your business is about.
- A call to action
Example of an informal executive summary
One of the best elevator pitches I’ve used is:
So far that pitch has achieved a 100% success rate in getting partnerships for the business.
What should I include in an executive summary for investors?
Investors are going to need a more detailed executive summary if you want to secure financing or sell equity. The executive summary should be a brief overview of your entire business plan and include:
- Introduction of yourself and company.
- An origin story (Recognition of a problem and how you came to solution)
- An introduction to your products or services.
- Your unique value proposition. Make sure to include intellectual property.
- Where you are in the business life cycle
- Request and why you need it.
Successful business plan examples
The owner of Urbanity told us he spent 2 months writing a 75-page business plan and received a $250,000 loan from the bank when he was 23. Make your business plan as detailed as possible when looking for financing. We’ve provided a template to help you prepare the portions of a business plan that banks expect.
Here’s the interview with the owner of Urbanity:
When to write an executive summary?
Even though the summary is near the beginning of a business plan, you should write it after you complete the rest of a business plan. You can’t talk about revenue, profits, and expected expenditures if you haven’t done the market research and created a financial plan.
What mistakes do people make when writing an executive summary?
Business owners commonly go into too much detail about the following items in an executive summary:
- Marketing and sales processes
- Financial statements
- Organizational structure
- Market analysis
These are things that people will want to know later, but they don’t hook the reader. They won’t spark interest in your small business, but they’ll close the deal.
How to Write a Business Plan Step 4. Company Description
Every business plan should include a company description. A great business plan will include the following elements while describing the company:
- Mission statement
- Philosophy and vision
- Company goals
Target market
- Legal structure
Let’s take a look at what each section includes in a good business plan.
Mission Statement
A mission statement is a brief explanation of why you started the company and what the company’s main focus is. It should be no more than one or two sentences. Check out HubSpot’s article 27 Inspiring Mission Statement for a great read on informative and inspiring mission and vision statements.
Company Philosophy and Vision
![How to Write a Business Plan (Plus Examples & Templates) 5 Writing the company philosophy and vision](https://www.upflip.com/wp-content/uploads/2021/05/company-vision-for-business-plan-writing.jpg)
The company philosophy is what drives your company. You’ll normally hear them called core values. These are the building blocks that make your company different. You want to communicate your values to customers, business owners, and investors as often as possible to build a company culture, but make sure to back them up.
What makes your company different?
Each company is different. Your new business should rise above the standard company lines of honesty, integrity, fun, innovation, and community when communicating your business values. The standard answers are corporate jargon and lack authenticity.
Examples of core values
One of my clients decided to add a core values page to their website. As a tech company they emphasized the values:
- Prioritize communication.
- Never stop learning.
- Be transparent.
- Start small and grow incrementally.
These values communicate how the owner and the rest of the company operate. They also show a value proposition and competitive advantage because they specifically focus on delivering business value from the start. These values also genuinely show what the company is about and customers recognize the sincerity. Indeed has a great blog about how to identify your core values .
What is a vision statement?
A vision statement communicate the long lasting change a business pursues. The vision helps investors and customers understand what your company is trying to accomplish. The vision statement goes beyond a mission statement to provide something meaningful to the community, customer’s lives, or even the world.
Example vision statements
The Alzheimer’s Association is a great example of a vision statement:
A world without Alzheimer’s Disease and other dementia.
It clearly tells how they want to change the world. A world without Alzheimers might be unachievable, but that means they always have room for improvement.
Business Goals
You have to measure success against goals for a business plan to be meaningful. A business plan helps guide a company similar to how your GPS provides a road map to your favorite travel destination. A goal to make as much money as possible is not inspirational and sounds greedy.
Sure, business owners want to increase their profits and improve customer service, but they need to present an overview of what they consider success. The goals should help everyone prioritize their work.
How far in advance should a business plan?
Business planning should be done at least one year in advance, but many banks and investors prefer three to five year business plans. Longer plans show investors that the management team understands the market and knows the business is operating in a constantly shifting market. In addition, a plan helps businesses to adjust to changes because they have already considered how to handle them.
Example of great business goals
My all time-favorite long-term company goals are included in Tesla’s Master Plan, Part Deux . These goals were written in 2016 and drive the company’s decisions through 2026. They are the reason that investors are so forgiving when Elon Musk continually fails to meet his quarterly and annual goals.
If the progress aligns with the business plan investors are likely to continue to believe in the company. Just make sure the goals are reasonable or you’ll be discredited (unless you’re Elon Musk).
![How to Write a Business Plan (Plus Examples & Templates) 6 A man holding an iPad with a cup of coffee on his desk](https://www.upflip.com/wp-content/uploads/2021/04/target-market-for-charter-boat-business.jpg)
You did target market research before creating a business plan. Now it’s time to add it to the plan so others understand what your ideal customer looks like. As a new business owner, you may not be considered an expert in your field yet, so document everything. Make sure the references you use are from respectable sources.
Use information from the specific lender when you are applying for lending. Most lenders provide industry research reports and using their data can strengthen the position of your business plan.
A small business plan should include a section on the external environment. Understanding the industry is crucial because we don’t plan a business in a vacuum. Make sure to research the industry trends, competitors, and forecasts. I personally prefer IBIS World for my business research. Make sure to answer questions like:
- What is the industry outlook long-term and short-term?
- How will your business take advantage of projected industry changes and trends?
- What might happen to your competitors and how will your business successfully compete?
Industry resources
Some helpful resources to help you establish more about your industry are:
- Trade Associations
- Federal Reserve
- Bureau of Labor Statistics
Legal Structure
There are five basic types of legal structures that most people will utilize:
- Sole proprietorships
- Limited Liability Companies (LLC)
Partnerships
Corporations.
- Franchises.
Each business structure has their pros and cons. An LLC is the most common legal structure due to its protection of personal assets and ease of setting up. Make sure to specify how ownership is divided and what roles each owner plays when you have more than one business owner.
You’ll have to decide which structure is best for you, but we’ve gathered information on each to make it easier.
Sole Proprietorship
A sole proprietorship is the easiest legal structure to set up but doesn’t protect the owner’s personal assets from legal issues. That means if something goes wrong, you could lose both your company and your home.
To start a sole proprietorship, fill out a special tax form called a Schedule C . Sole proprietors can also join the American Independent Business Alliance .
Limited Liability Company (LLC)
An LLC is the most common business structure used in the United States because an LLC protects the owner’s personal assets. It’s similar to partnerships and corporations, but can be a single-member LLC in most states. An LLC requires a document called an operating agreement.
Each state has different requirements. Here’s a link to find your state’s requirements . Delaware and Nevada are common states to file an LLC because they are really business-friendly. Here’s a blog on the top 10 states to get an LLC.
Partnerships are typically for legal firms. If you choose to use a partnership choose a Limited Liability Partnership. Alternatively, you can just use an LLC.
Corporations are typically for massive organizations. Corporations have taxes on both corporate and income tax so unless you plan on selling stock, you are better off considering an LLC with S-Corp status . Investopedia has good information corporations here .
![How to Write a Business Plan (Plus Examples & Templates) 7 An iPad with colored pens on a desk](https://www.upflip.com/wp-content/uploads/2020/12/franchise-for-car-rental-business.jpg)
There are several opportunities to purchase successful franchises. TopFranchise.com has a list of companies in a variety of industries that offer franchise opportunities. This makes it where an entrepreneur can benefit from the reputation of an established business that has already worked out many of the kinks of starting from scratch.
How to Write a Business Plan Step 5. Products and Services
This section of the business plan should focus on what you sell, how you source it, and how you sell it. You should include:
- Unique features that differentiate your business products from competitors
- Intellectual property
- Your supply chain
- Cost and pricing structure
Questions to answer about your products and services
Mike gave us a list of the most important questions to answer about your product and services:
- How will you be selling the product? (in person, ecommerce, wholesale, direct to consumer)?
- How do you let them know they need a product?
- How do you communicate the message?
- How will you do transactions?
- How much will you be selling it for?
- How many do you think you’ll sell and why?
Make sure to use the worksheet on our business plan template .
How to Write a Business Plan Step 6. Sales and Marketing Plan
The marketing and sales plan is focused on the strategy to bring awareness to your company and guides how you will get the product to the consumer. It should contain the following sections:
SWOT Analysis stands for strengths, weaknesses, opportunities, and threats. Not only do you want to identify them, but you also want to document how the business plans to deal with them.
Business owners need to do a thorough job documenting how their service or product stacks up against the competition.
If proper research isn’t done, investors will be able to tell that the owner hasn’t researched the competition and is less likely to believe that the team can protect its service from threats by the more well-established competition. This is one of the most common parts of a presentation that trips up business owners presenting on Shark Tank .
SWOT Examples
![How to Write a Business Plan (Plus Examples & Templates) 8 Business plan SWOT analysis](https://www.upflip.com/wp-content/uploads/2021/05/SWOT-analysis-for-writing-a-business-plan-1.jpg)
Examples of strengths and weaknesses could be things like the lack of cash flow, intellectual property ownership, high costs of suppliers, and customers’ expectations on shipping times.
Opportunities could be ways to capitalize on your strengths or improve your weaknesses, but may also be gaps in the industry. This includes:
- Adding offerings that fit with your current small business
- Increase sales to current customers
- Reducing costs through bulk ordering
- Finding ways to reduce inventory
- And other areas you can improve
Threats will normally come from outside of the company but could also be things like losing a key member of the team. Threats normally come from competition, regulations, taxes, and unforeseen events.
The management team should use the SWOT analysis to guide other areas of business planning, but it absolutely has to be done before a business owner starts marketing.
Include Competitor Data in Your Business Plan
When you plan a business, taking into consideration the strengths and weaknesses of the competition is key to navigating the field. Providing an overview of your competition and where they are headed shows that you are invested in understanding the industry.
For smaller businesses, you’ll want to search both the company and the owners names to see what they are working on. For publicly held corporations, you can find their quarterly and annual reports on the SEC website .
What another business plans to do can impact your business. Make sure to include things that might make it attractive for bigger companies to outsource to a small business.
Marketing Strategy
The marketing and sales part of business plans should be focused on how you are going to make potential customers aware of your business and then sell to them.
If you haven’t already included it, Mike recommends:
“They’ll want to know about Demographics, ages, and wealth of your target market.”
Make sure to include the Total addressable market . The term refers to the value if you captured 100% of the market.
Advertising Strategy
You’ll explain what formats of advertising you’ll be using. Some possibilities are:
- Online: Facebook and Google are the big names to work with here.
- Print : Print can be used to reach broad groups or targeted markets. Check out this for tips .
- Radio : iHeartMedia is one of the best ways to advertise on the radio
- Cable television : High priced, hard to measure ROI, but here’s an explanation of the process
- Billboards: Attracting customers with billboards can be beneficial in high traffic areas.
You’ll want to define how you’ll be using each including frequency, duration, and cost. If you have the materials already created, including pictures or links to the marketing to show creative assets.
Mike told us “Most businesses are marketing digitally now due to Covid, but that’s not always the right answer.”
Make sure the marketing strategy will help team members or external marketing agencies stay within the brand guidelines .
![How to Write a Business Plan (Plus Examples & Templates) 9 An iPad with graph about pricing strategy](https://www.upflip.com/wp-content/uploads/2021/05/pricing-strategy-for-business-plan-writing-1.jpg)
This section of a business plan should be focused on pricing. There are a ton of pricing strategies that may work for different business plans. Which one will work for you depends on what kind of a business you run.
Some common pricing strategies are:
- Value-based pricing – Commonly used with home buying and selling or other products that are status symbols.
- Skimming pricing – Commonly seen in video game consoles, price starts off high to recoup expenses quickly, then reduces over time.
- Competition-based pricing – Pricing based on competitors’ pricing is commonly seen at gas stations.
- Freemium services – Commonly used for software, where there is a free plan, then purchase options for more functionality.
HubSpot has a great calculator and blog on pricing strategies.
Beyond explaining what strategy your business plans to use, you should include references for how you came to this pricing strategy and how it will impact your cash flow.
Distribution Plan
This part of a business plan is focused on how the product or service is going to go through the supply chain. These may include multiple divisions or multiple companies. Make sure to include any parts of the workflow that are automated so investors can see where cost savings are expected and when.
Supply Chain Examples
For instance, lawn care companies would need to cover aspects such as:
- Suppliers for lawn care equipment and tools
- Any chemicals or treatments needed
- Repair parts for sprinkler systems
- Vehicles to transport equipment and employees
- Insurance to protect the company vehicles and people.
Examples of Supply Chains
These are fairly flat supply chains compared to something like a clothing designer where the clothes would go through multiple vendors. A clothing company might have the following supply chain:
- Raw materials
- Shipping of raw materials
- Converting of raw materials to thread
- Shipping thread to produce garments
- Garment producer
- Shipping to company
- Company storage
- Shipping to retail stores
There have been advances such as print on demand that eliminate many of these steps. If you are designing completely custom clothing, all of this would need to be planned to keep from having business disruptions.
The main thing to include in the business plan is the list of suppliers, the path the supply chain follows, the time from order to the customer’s home, and the costs associated with each step of the process.
According to BizPlanReview , a business plan without this information is likely to get rejected because they have failed to research the key elements necessary to make sales to the customer.
How to Write a Business Plan Step 7. Company Organization and Operational Plan
This part of the business plan is focused on how the business model will function while serving customers. The business plan should provide an overview of how the team will manage the following aspects:
Quality Control
- Legal environment
Let’s look at each for some insight.
Production has already been discussed in previous sections so I won’t go into it much. When writing a business plan for investors, try to avoid repetition as it creates a more simple business plan.
If the organizational plan will be used by the team as an overview of how to perform the best services for the customer, then redundancy makes more sense as it communicates what is important to the business.
![How to Write a Business Plan (Plus Examples & Templates) 10 A wooden stamp with the words "quality control"](https://www.upflip.com/wp-content/uploads/2021/05/quality-control-for-business-plan-writing-1.jpg)
Quality control policies help to keep the team focused on how to verify that the company adheres to the business plan and meets or exceeds customer expectations.
Quality control can be anything from a standard that says “all labels on shirts can be no more than 1/16″ off center” to a defined checklist of steps that should be performed and filled out for every customer.
There are a variety of organizations that help define quality control including:
- International Organization for Standardization – Quality standards for energy, technology, food, production environments, and cybersecurity
- AICPA – Standard defined for accounting.
- The Joint Commission – Healthcare
- ASHRAE – HVAC best practices
You can find lists of the organizations that contribute most to the government regulation of industries on Open Secrets . Research what the leaders in your field are doing. Follow their example and implement it in your quality control plan.
For location, you should use information from the market research to establish where the location will be. Make sure to include the following in the location documentation.
- The size of your location
- The type of building (retail, industrial, commercial, etc.)
- Zoning restrictions – Urban Wire has a good map on how zoning works in each state
- Accessibility – Does it meet ADA requirements?
- Costs including rent, maintenance, utilities, insurance and any buildout or remodeling costs
- Utilities – b.e.f. has a good energy calculator .
Legal Environment
The legal requirement section is focused on defining how to meet the legal requirements for your industry. A good business plan should include all of the following:
- Any licenses and/or permits that are needed and whether you’ve obtained them
- Any trademarks, copyrights, or patents that you have or are in the process of applying for
- The insurance coverage your business requires and how much it costs
- Any environmental, health, or workplace regulations affecting your business
- Any special regulations affecting your industry
- Bonding requirements, if applicable
Your local SBA office can help you establish requirements in your area. I strongly recommend using them. They are a great resource.
Your business plan should include a plan for company organization and hiring. While you may be the only person with the company right now, down the road you’ll need more people. Make sure to consider and document the answers to the following questions:
- What is the current leadership structure and what will it look like in the future?
- What types of employees will you have? Are there any licensing or educational requirements?
- How many employees will you need?
- Will you ever hire freelancers or independent contractors?
- What is each position’s job description?
- What is the pay structure (hourly, salaried, base plus commission, etc.)?
- How do you plan to find qualified employees and contractors?
One of the most crucial parts of a business plan is the organizational chart. This simply shows the positions the company will need, who is in charge of them and the relationship of each of them. It will look similar to this:
![How to Write a Business Plan (Plus Examples & Templates) 11 Organization chart](https://www.upflip.com/wp-content/uploads/2021/05/the-organization-chart.jpg)
Our small business plan template has a much more in-depth organizational chart you can edit to include when you include the organizational chart in your business plan.
How to Write a Business Plan Step 8. Financial Statements
No business plan is complete without financial statements or financial projections. The business plan format will be different based on whether you are writing a business plan to expand a business or a startup business plan. Let’s dig deeper into each.
Provide All Financial Income from an Existing Business
An existing business should use their past financial documents including the income statement, balance sheet, and cash flow statement to find trends to estimate the next 3-5 years.
You can create easy trendlines in excel to predict future revenue, profit and loss, cash flow, and other changes in year-over-year performance. This will show your expected performance assuming business continues as normal.
If you are seeking an investment, then the business is probably not going to continue as normal. Depending on the financial plan and the purpose of getting financing, adjustments may be needed to the following:
- Higher Revenue if expanding business
- Lower Cost of Goods Sold if purchasing inventory with bulk discounts
- Adding interest if utilizing financing (not equity deal)
- Changes in expenses
- Addition of financing information to the cash flow statement
- Changes in Earnings per Share on the balance sheet
Financial modeling is a challenging subject, but there are plenty of low-cost courses on the subject. If you need help planning your business financial documentation take some time to watch some of them.
Make it a point to document how you calculated all the changes to the income statement, balance sheet, and cash flow statement in your business plan so that key team members or investors can verify your research.
Financial Projections For A Startup Business Plan
Unlike an existing business, a startup doesn’t have previous success to model its future performance. In this scenario, you need to focus on how to make a business plan realistic through the use of industry research and averages.
Mike gave the following advice in his interview:
Financial Forecasting Mistakes
One of the things a lot of inexperienced people use is the argument, “If I get one percent of the market, it is worth $100 million.” If you use this, investors are likely to file the document under bad business plan examples.
Let’s use custom t-shirts as an example.
Credence Research estimated in 2018 there were 11,334,800,000 custom t-shirts sold for a total of $206.12 Billion, with a 6% compound annual growth rate.
With that data, you can calculate that the industry will grow to $270 Billion in 2023 and that the average shirt sold creates $18.18 in revenue.
Combine that with an IBIS World estimate of 11,094 custom screen printers and that means even if you become an average seller, you’ll get .009% of the market.
Here’s a table for easier viewing of that information.
![How to Write a Business Plan (Plus Examples & Templates) 12 A table showing yearly revenue of a business](https://www.upflip.com/wp-content/uploads/2021/05/projection-of-revenue-for-business-plan-writing.jpg)
The point here is to make sure your business proposal examples make sense.
You’ll need to know industry averages such as cost of customer acquisition, revenue per customer, the average cost of goods sold, and admin costs to be able to create accurate estimates.
Our simple business plan templates walk you through most of these processes. If you follow them you’ll have a good idea of how to write a business proposal.
How to Write a Business Plan Step 9. Business Plan Example of Funding Requests
What is a business plan without a plan on how to obtain funding?
The Small Business Administration has an example for a pizza restaurant that theoretically needed nearly $20k to make it through their first month.
In our video, How to Start a $500K/Year T-Shirt Business (Pt. 1 ), Sanford Booth told us he needed about $200,000 to start his franchise and broke even after 4 months.
Freshbooks estimates it takes on average 2-3 years for a business to be profitable, which means the fictitious pizza company from the SBA could need up to $330k to make it through that time and still pay their bills for their home and pizza shop.
Not every business needs that much to start, but realistically it’s a good idea to assume that you need a fairly large cushion.
Ways to get funding for a small business
There are a variety of ways to cover this. the most common are:
- Bootstrapping – Using your savings without external funding.
- Taking out debt – loans, credit cards
- Equity, Seed Funding – Ownership of a percentage of the company in exchange for current funds
- Crowdsourcing – Promising a good for funding to create the product
Keep reading for more tips on how to write a business plan.
How funding will be used
When asking for business financing make sure to include:
- How much to get started?
- What is the minimum viable product and how soon can you make money?
- How will the money be spent?
Mike emphasized two aspects that should be included in every plan,
How to Write a Business Plan Resources
Here are some links to a business plan sample and business plan outline.
- Sample plan
It’s also helpful to follow some of the leading influencers in the business plan writing community. Here’s a list:
- Wise Plans – Shares a lot of information on starting businesses and is a business plan writing company.
- Optimus Business Plans – Another business plan writing company.
- Venture Capital – A venture capital thread that can help give you ideas.
How to Write a Business Plan: What’s Next?
We hope this guide about how to write a simple business plan step by step has been helpful. We’ve covered:
- The definition of a business plan
- Coming up with a business idea
- Performing market research
- The critical components of a business plan
- An example business plan
In addition, we provided you with a simple business plan template to assist you in the process of writing your startup business plan. The startup business plan template also includes a business model template that will be the key to your success.
Don’t forget to check out the rest of our business hub .
Have you written a business plan before? How did it impact your ability to achieve your goals?
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Brandon Boushy
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nice work https://binarychemist.com/
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How to write a business plan in 7 easy to follow steps
- Amanda Bellucco Chatham
![creating a simple business plan Free business plan template for your new business](https://static.wixstatic.com/media/1f6616_4f9ca8ede74442ee8cbb6796460290b8~mv2.png/v1/fill/w_46,h_30,al_c,q_85,usm_0.66_1.00_0.01,blur_2,enc_auto/1f6616_4f9ca8ede74442ee8cbb6796460290b8~mv2.png)
Creating a successful business is about more than launching a business website or hanging a shingle on your front door. It requires a well-crafted plan that keeps you on track, anticipates obstacles and acts as a concrete roadmap for launching or improving your small business.
Business planning allows you to clarify your vision while providing information to both intrigue and reassure potential investors. The process may seem daunting, but creating a business plan isn’t difficult—and templates like the one below can help simplify the process even further.
Ready to launch your business? Create a website today.
What is a business plan?
A business plan is used by small business owners and entrepreneurs when starting a new business venture. It’s a strategic document that outlines the goals, objectives and strategies of your new or expanding business, including the company's vision, target market, financial projections and operational plans.
A business plan can attract potential partners, convince investors and banks to help you raise capital, and serve as a resource for future growth. Most importantly, you’ll be able to use your business plan as a roadmap for how to structure, operate and manage your new venture, whether it’s a sole proprietorship, a partnership or something larger.
Who needs a business plan?
Every business owner needs a business plan. They’re an essential tool for any person or entity interested in starting a business . There are many benefits, including:
Defining your business idea
Clarifying the market and competitive landscape
Outlining your marketing strategy
Stating your value proposition
Identifying/anticipating potential risks
Seeking investments from banks and other sources
Setting benchmarks, goals and key performance indicators (KPIs)
A business plan also gives you a way to assess the viability of a business before investing too much time or money into it. While all business involves risk, taking the time to create a plan can help mitigate fallout and avoid potentially costly mistakes.
When creating a business plan, it's important to establish your business goals up front and be prepared to spend time researching the market, performing a competitor analysis and understanding your target market .
How to write a business plan in 7 steps
In terms of types of business plans , there are two main formats to choose from: traditional and lean. Here we'll rundown the most traditional plan first, while touching on how to write a more lean business plan for a startup.
A traditional business plan includes every detail and component that defines a business and contributes to its success. It's typically a sizable document of about 30 to 50 pages. Here are the steps to creating one.
Executive summary
Company description, market analysis, organization and management, service or product line, marketing and sales strategies, financial projections and funding requests, 01. executive summary.
Your executive summary should contain a high-level overview of everything included in the plan. It generally provides a short explanation of your business and its goals (e.g., your elevator pitch ). Many authors like to write this section last after fleshing out the sections below.
02. Company description
A company description should include essential details like your business name, the names of your founders, your locations and your company’s mission statement .
Briefly describe your core services (or products if you’re writing an eCommerce business plan ), but don't go into too much detail since you’ll elaborate on this in the service/product section.
Wix offers some helpful mission statement examples if you get stuck. It’s also a good idea to create a vision statement . While your mission statement clarifies your company’s purpose, a vision statement outlines what you want your company to achieve over time.
03. Market analysis
One of the most extensive sections of the business plan, this section requires that you conduct market research and write your conclusions. Include findings for the following: industry background, a SWOT analysis , barriers/obstacles, target market and your business differentiators.
04. Organization and management
This is where you outline how your business is structured and who's in charge, including founders, executive team members, board members, employees and key stakeholders. To this end, it can be helpful to create a visual layout (e.g., org chart) to illustrate your company structure.
05. Service or product line
Create a detailed list of your current and future products and services. If you’re still working on your idea, create a concept statement to describe your idea or product. You should also include a proof of concept (POC), which demonstrates the feasibility of your idea. Wherever applicable, include diagrams, product images and other visual components to illustrate the product life cycle.
06. Marketing and sales strategies
Detail how your business idea translates into selling and delivering your offerings to potential customers. You can start by outlining your brand identity, which includes the colors and fonts you plan to use, your marketing and advertising strategy, and details about planned consumer touchpoints (like your website, mobile app or physical storefront).
07. Financial projections and funding requests
Include financial statements, such as a balance sheet, profit-and-loss statement (P&L), cash flow statement and break-even analysis. It's not uncommon for a business plan to include multiple pages of financial projections and information. You’ll also want to mention how much funding you seek and what you plan to do with it. If you’ve already secured funding, provide details about your investments.
![creating a simple business plan essential parts of a business plan](https://static.wixstatic.com/media/1f6616_7fb418f888974a9a8d8a43218c04ae79~mv2.png/v1/fill/w_46,h_27,al_c,q_85,usm_0.66_1.00_0.01,blur_2,enc_auto/1f6616_7fb418f888974a9a8d8a43218c04ae79~mv2.png)
Lean startup business plan format
A lean startup business plan—also referred to as a “lean canvas”—is presented as a problem/solution framework that provides a high-level description of your business idea. A lean plan is a single-page document that provides a basic overview of the most essential aspects of your business. It’s a good way to dip a toe into business planning since it doesn't require the same level of detail as a traditional plan. This includes:
Problem: What problem does your product or service solve, or what need does it fulfill?
Solution: How do you intend to solve it?
Unique value proposition (UVP): Why should people use your product or service versus someone else’s?
Unfair advantage: What do you have that other companies don’t?
Customers: Who are your ideal customers?
Channels: How will those customers find you?
Key metrics: How do you define success? How will you track and measure it?
Revenue streams: How will your business make money?
Cost structure: What will you spend money on (fixed and variable costs)?
Sample business plan for a small business
Want to see what a business plan should look like? We've put together this sample plan, for a beauty business to show you.
Our beauty studio, aims to establish a luxury beauty salon in a prime location, offering a range of premium beauty services and products to cater to upscale clientele. With a focus on exceptional customer service, professional expertise and a relaxing atmosphere, ABC Beauty Studio seeks to become a top destination for people seeking high-quality treatments and personalized care.
Our beauty studio will be a full-service salon offering a variety of beauty services, including skincare treatments, hair styling, makeup services and nail care. Our team of experienced beauty professionals will provide customized solutions to meet each client's unique needs and preferences. The salon will feature a modern and elegant design to create a luxurious and tranquil environment for clients to relax and rejuvenate.
The beauty industry is a thriving market with a growing demand for quality beauty services and products. The target market for our beauty studio includes affluent individuals who value premium beauty experiences and are willing to invest in high-end treatments. The salon's strategic location in a busy shopping district with high foot traffic and visibility will help attract a steady flow of clientele.
ABC Beauty Studio will be led by a team of seasoned beauty professionals with expertise in various areas of the industry, including skincare, haircare, makeup, and business management. The management team will focus on delivering exceptional service, fostering a positive work culture, and implementing effective operational strategies to ensure the salon's success.
Our service line will include facial treatments, haircuts and styling, bridal makeup, manicures and pedicures, waxing services and retail products from top beauty brands. We will also offer personalized beauty consultations to help clients create customized beauty routines and achieve their desired look.
Our beauty studio will implement a multi-faceted marketing approach, including social media campaigns, influencer partnerships, local advertising and promotional events to build brand awareness and attract new clients. We'll also focus on building customer loyalty through loyalty programs, referral incentives, and exclusive promotions.
Initial funding of $200,000 is sought to cover start-up costs, including leasehold improvements, equipment purchases, inventory, marketing expenses, and working capital. Financial projections indicate a steady revenue growth over the first three years, with a focus on achieving profitability by the end of year 2. Sales are forecasted to increase through the expansion of services, repeat business, and targeted marketing initiatives. Continued funding may be required for future growth and expansion plans, including additional locations and service offerings.
Download Wix’s free business plan template
Creating a successful business plan is no easy feat. That’s why we’ve put together a simple, customizable, and free-to-download business plan template that takes the guesswork out of getting started. Use it to create a new business plan or to refresh an existing one.
![creating a simple business plan Download your free Wix business plan template](https://static.wixstatic.com/media/6542d9_ad35fe6bfcf9456aa2ee1e93db4ea719~mv2.jpg/v1/fill/w_139,h_11,al_c,q_80,usm_0.66_1.00_0.01,blur_2,enc_auto/6542d9_ad35fe6bfcf9456aa2ee1e93db4ea719~mv2.jpg)
What are the main benefits of writing a business plan?
Writing a business plan offers a range of benefits that can significantly impact the success and sustainability of a business. Here are the main advantages of creating a well-thought-out one:
Clarity and focus: A business plan helps clarify your company's mission, vision, goals, and strategies, providing a clear roadmap for your business's direction and focus. This can be what takes your business idea from just an idea, to an actual business so it's important.
Strategic planning : It enables the identification of strengths, weaknesses, opportunities and threats (SWOT analysis), allowing for informed decision-making, effective resource allocation and proactive risk management. When running a business, the more prepared you are for any eventuality, the more successful you're likely to be long term — a business plan helps you plot the potential risks or downturns.
Goal setting: Writing a business plan helps set measurable objectives, timelines, and key performance indicators (KPIs) to track progress and evaluate the business's performance against targets.
Communication and alignment: A business plan serves as a communication tool to share the company's vision, objectives, and strategies with stakeholders, employees, investors and partners, ensuring alignment and shared understanding.
Attracting funding and investment : Investors, lenders and potential partners often require a detailed business plan to assess the viability, potential return on investment, and growth prospects of the business.
Continuous improvement: Regularly reviewing and updating the business plan facilitates ongoing evaluation, adjustment and improvement of strategies, operations, and goals to adapt to changing market conditions and drive long-term success.
Tips for filling out your business plan
The hardest part of a journey is always the first step, or so the saying goes. Filling out your business plan can be daunting, using a template helps and we would always recommend doing that.
Remember also, these are best practices—they’re not rules. Do what works for you. The main thing to remember is that these tips can help you move more easily through the planning process, so that you can advance onto the next (exciting) step, which is launching your business.
Consider your goals
What's the purpose of your business? Are you looking to expand, launch a new product line or fund a specific project? Identifying your goals helps you prioritize important information in your business plan.
Fill out what you can
You may already have a vague—or specific—idea of what you want your business to achieve. Go through each section of the template and fill out what you can. We suggest leaving the executive summary blank for now, since it'll be the last thing you write. At the same time be realistic, even though this document is meant to serve as a marketing tool for potential investors, don't exaggerate any numbers or make any false promises.
Dig into the research
Nothing's more motivating than getting some intel about your competitors and your market. If you're truly stuck, a little research can help motivate you and provide valuable insight about what direction to take your business. For example, if you plan to start a landscaping business, learn about the specific pricing offered in your area so that you can differentiate your services and potentially offer better options.
Get help from others
Bouncing your ideas off a friend, mentor or advisor is a great way to get feedback and discover approaches or products to incorporate into your plan. Your network can also give you valuable insight about the industry or even about potential customers. Plus, it's nice to be able to talk through the challenges with someone who understands you and your vision.
Revise and review your business plan
Once complete, step back from your plan and let it "cook." In a day or two, review your plan and make sure that everything is current. Have other people review it too, since having another set of eyes can help identify areas that may be lacking detail or need further explanation.
Once you’ve completed your business plan template, it can become a meaningful resource for developing your mission statement, writing business proposals and planning how to move forward with the marketing, distribution and growth of your products and services.
After launch, you can also analyze your value chain to identify key factors that create value for your customers and maximum profitability for you. This can help you develop a more effective business plan that considers the entire value chain, from research and development to sales and customer support.
Business plan template FAQ
What is the easiest way to write a business plan.
The easiest way to write a business plan is to utilize a template. Templates provide a structured format and guide you through each section, simplifying the process of creating a comprehensive plan.
Is there a template for how to write a business plan?
What are the 7 essential parts of a business plan, related posts.
How to create a plumbing business plan (with templates)
How to create a virtual assistant business plan
How to create a defensible eCommerce business plan
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7 Business Plan Examples to Inspire Your Own (2024)
Need support creating your business plan? Check out these business plan examples for inspiration.
![creating a simple business plan business plan examples](https://cdn.shopify.com/s/files/1/0070/7032/files/business_20plan_20examples.jpg?v=1685397795)
Any aspiring entrepreneur researching how to start a business will likely be advised to write a business plan. But few resources provide business plan examples to really guide you through writing one of your own.
Here are some real-world and illustrative business plan examples to help you craft your business plan .
7 business plan examples: section by section
The business plan examples in this article follow this template:
- Executive summary. An introductory overview of your business.
- Company description. A more in-depth and detailed description of your business and why it exists.
- Market analysis. Research-based information about the industry and your target market.
- Products and services. What you plan to offer in exchange for money.
- Marketing plan. The promotional strategy to introduce your business to the world and drive sales.
- Logistics and operations plan. Everything that happens in the background to make your business function properly.
- Financial plan. A breakdown of your numbers to show what you need to get started as well as to prove viability of profitability.
- Executive summary
Your executive summary is a page that gives a high-level overview of the rest of your business plan. It’s easiest to save this section for last.
In this free business plan template , the executive summary is four paragraphs and takes a little over half a page:
![creating a simple business plan A four-paragraph long executive summary for a business.](https://cdn.shopify.com/s/files/1/0070/7032/files/executive_summary_2b780640-bba6-4fa9-979f-f4b7a7baec6d.png?v=1685052930)
- Company description
You might repurpose your company description elsewhere, like on your About page, social media profile pages, or other properties that require a boilerplate description of your small business.
Soap brand ORRIS has a blurb on its About page that could easily be repurposed for the company description section of its business plan.
![creating a simple business plan A company description from the website of soap brand Orris](https://cdn.shopify.com/s/files/1/0070/7032/files/orris.png?v=1685053110)
You can also go more in-depth with your company overview and include the following sections, like in the example for Paw Print Post:
- Business structure. This section outlines how you registered your business —as an LLC , sole proprietorship, corporation, or other business type . “Paw Print Post will operate as a sole proprietorship run by the owner, Jane Matthews.”
- Nature of the business. “Paw Print Post sells unique, one-of-a-kind digitally printed cards that are customized with a pet’s unique paw prints.”
- Industry. “Paw Print Post operates primarily in the pet industry and sells goods that could also be categorized as part of the greeting card industry.”
- Background information. “Jane Matthews, the founder of Paw Print Post, has a long history in the pet industry and working with animals, and was recently trained as a graphic designer. She’s combining those two loves to capture a niche in the market: unique greeting cards customized with a pet’s paw prints, without needing to resort to the traditional (and messy) options of casting your pet’s prints in plaster or using pet-safe ink to have them stamp their ‘signature.’”
- Business objectives. “Jane will have Paw Print Post ready to launch at the Big Important Pet Expo in Toronto to get the word out among industry players and consumers alike. After two years in business, Jane aims to drive $150,000 in annual revenue from the sale of Paw Print Post’s signature greeting cards and have expanded into two new product categories.”
- Team. “Jane Matthews is the sole full-time employee of Paw Print Post but hires contractors as needed to support her workflow and fill gaps in her skill set. Notably, Paw Print Post has a standing contract for five hours a week of virtual assistant support with Virtual Assistants Pro.”
Your mission statement may also make an appearance here. Passionfruit shares its mission statement on its company website, and it would also work well in its example business plan.
![creating a simple business plan A mission statement example on the website of apparel brand Passionfruit, alongside a picture of woman](https://cdn.shopify.com/s/files/1/0070/7032/files/mission_statement.png?v=1685053205)
- Market analysis
The market analysis consists of research about supply and demand, your target demographics, industry trends, and the competitive landscape. You might run a SWOT analysis and include that in your business plan.
Here’s an example SWOT analysis for an online tailored-shirt business:
![creating a simple business plan A SWOT analysis table showing strengths, weaknesses, opportunities and threats](https://cdn.shopify.com/s/files/1/0070/7032/files/swot-example.png?v=1685053230)
You’ll also want to do a competitive analysis as part of the market research component of your business plan. This will tell you who you’re up against and give you ideas on how to differentiate your brand. A broad competitive analysis might include:
- Target customers
- Unique value add or what sets their products apart
- Sales pitch
- Price points for products
- Shipping policy
- Products and services
This section of your business plan describes your offerings—which products and services do you sell to your customers? Here’s an example for Paw Print Post:
![creating a simple business plan An example products and services section from a business plan](https://cdn.shopify.com/s/files/1/0070/7032/files/products_0d941ab8-5039-424b-8f0e-abd0716b9918.png?v=1685053278)
- Marketing plan
It’s always a good idea to develop a marketing plan before you launch your business. Your marketing plan shows how you’ll get the word out about your business, and it’s an essential component of your business plan as well.
The Paw Print Post focuses on four Ps: price, product, promotion, and place. However, you can take a different approach with your marketing plan. Maybe you can pull from your existing marketing strategy , or maybe you break it down by the different marketing channels. Whatever approach you take, your marketing plan should describe how you intend to promote your business and offerings to potential customers.
- Logistics and operations plan
The Paw Print Post example considered suppliers, production, facilities, equipment, shipping and fulfillment, and inventory.
Financial plan
The financial plan provides a breakdown of sales, revenue, profit, expenses, and other relevant financial metrics related to funding and profiting from your business.
Ecommerce brand Nature’s Candy’s financial plan breaks down predicted revenue, expenses, and net profit in graphs.
![creating a simple business plan A sample bar chart showing business expenses by month](https://cdn.shopify.com/s/files/1/0070/7032/files/financial-metrics_example.png?v=1685053351)
It then dives deeper into the financials to include:
- Funding needs
- Projected profit-and-loss statement
- Projected balance sheet
- Projected cash-flow statement
You can use this financial plan spreadsheet to build your own financial statements, including income statement, balance sheet, and cash-flow statement.
![creating a simple business plan A sample financial plan spreadsheet](https://cdn.shopify.com/s/files/1/0070/7032/files/financial-plan-spreadsheet.png?v=1685053380)
Types of business plans, and what to include for each
A one-page business plan is meant to be high level and easy to understand at a glance. You’ll want to include all of the sections, but make sure they’re truncated and summarized:
- Executive summary: truncated
- Market analysis: summarized
- Products and services: summarized
- Marketing plan: summarized
- Logistics and operations plan: summarized
- Financials: summarized
A startup business plan is for a new business. Typically, these plans are developed and shared to secure outside funding . As such, there’s a bigger focus on the financials, as well as on other sections that determine viability of your business idea—market research, for example.
- Market analysis: in-depth
- Financials: in-depth
Your internal business plan is meant to keep your team on the same page and aligned toward the same goal.
A strategic, or growth, business plan is a bigger picture, more-long-term look at your business. As such, the forecasts tend to look further into the future, and growth and revenue goals may be higher. Essentially, you want to use all the sections you would in a normal business plan and build upon each.
- Market analysis: comprehensive outlook
- Products and services: for launch and expansion
- Marketing plan: comprehensive outlook
- Logistics and operations plan: comprehensive outlook
- Financials: comprehensive outlook
Feasibility
Your feasibility business plan is sort of a pre-business plan—many refer to it as simply a feasibility study. This plan essentially lays the groundwork and validates that it’s worth the effort to make a full business plan for your idea. As such, it’s mostly centered around research.
Set yourself up for success as a business owner
Building a good business plan serves as a roadmap you can use for your ecommerce business at launch and as you reach each of your business goals. Business plans create accountability for entrepreneurs and synergy among teams, regardless of your business model .
Kickstart your ecommerce business and set yourself up for success with an intentional business planning process—and with the sample business plans above to guide your own path.
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Business plan examples FAQ
How do i write a simple business plan, what is the best format to write a business plan, what are the 4 key elements of a business plan.
- Executive summary: A concise overview of the company's mission, goals, target audience, and financial objectives.
- Business description: A description of the company's purpose, operations, products and services, target markets, and competitive landscape.
- Market analysis: An analysis of the industry, market trends, potential customers, and competitors.
- Financial plan: A detailed description of the company's financial forecasts and strategies.
What are the 3 main points of a business plan?
- Concept: Your concept should explain the purpose of your business and provide an overall summary of what you intend to accomplish.
- Contents: Your content should include details about the products and services you provide, your target market, and your competition.
- Cashflow: Your cash flow section should include information about your expected cash inflows and outflows, such as capital investments, operating costs, and revenue projections.
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How to write a business plan in seven simple steps
When written effectively, a business plan can help raise capital, inform decisions, and draw new talent.
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Companies of all sizes have one thing in common: They all began as small businesses. Starting small is the corner for those just getting off the ground. Learn about how to make that first hire, deal with all things administrative, and set yourself up for success.
Writing a business plan is often the first step in transforming your business from an idea into something tangible . As you write, your thoughts begin to solidify into strategy, and a path forward starts to emerge. But a business plan is not only the realm of startups; established companies can also benefit from revisiting and rewriting theirs. In any case, the formal documentation can provide the clarity needed to motivate staff , woo investors, or inform future decisions.
No matter your industry or the size of your team, the task of writing a business plan—a document filled with so much detail and documentation—can feel daunting. Don’t let that stop you, however; there are easy steps to getting started.
What is a business plan and why does it matter?
A business plan is a formal document outlining the goals, direction, finances, team, and future planning of your business. It can be geared toward investors, in a bid to raise capital, or used as an internal document to align teams and provide direction. It typically includes extensive market research, competitor analysis, financial documentation, and an overview of your business and marketing strategy. When written effectively, a business plan can help prescribe action and keep business owners on track to meeting business goals.
Who needs a business plan?
A business plan can be particularly helpful during a company’s initial growth and serve as a guiding force amid the uncertainty, distractions, and at-times rapid developments involved in starting a business . For enterprise companies, a business plan should be a living, breathing document that guides decision-making and facilitates intentional growth.
“You should have a game plan for every major commitment you’ll have, from early-stage founder agreements to onboarding legal professionals,” says Colin Keogh, CEO of the Rapid Foundation—a company that brings technology and training to communities in need—and a WeWork Labs mentor in the UK . “You can’t go out on funding rounds or take part in accelerators without any planning.”
How to make a business plan and seven components every plan needs
While there is no set format for writing a business plan, there are several elements that are typically included. Here’s what’s important to consider when writing your business plan.
1. Executive summary
No longer than half a page, the executive summary should briefly introduce your business and describe the purpose of the business plan. Are you writing the plan to attract capital? If so, specify how much money you hope to raise, and how you’re going to repay the loan. If you’re writing the plan to align your team and provide direction, explain at a high level what you hope to achieve with this alignment, as well as the size and state of your existing team.
The executive summary should explain what your business does, and provide an introductory overview of your financial health and major achievements to date.
2. Company description
To properly introduce your company, it’s important to also describe the wider industry. What is the financial worth of your market? Are there market trends that will affect the success of your company? What is the state of the industry and its future potential? Use data to support your claims and be sure to include the full gamut of information—both positive and negative—to provide investors and your employees a complete and accurate portrayal of your company’s milieu.
Go on to describe your company and what it provides your customers. Are you a sole proprietor , LLC, partnership, or corporation? Are you an established company or a budding startup? What does your leadership team look like and how many employees do you have? This section should provide both historical and future context around your business, including its founding story, mission statement , and vision for the future.
It’s essential to showcase your point of difference in your company description, as well as any advantages you may have in terms of expert talent or leading technology. This is typically one of the first pieces of the plan to be written.
3. Market analysis and opportunity
Research is key in completing a business plan and, ideally, more time should be spent on research and analysis than writing the plan itself. Understanding the size, growth, history, future potential, and current risks inherent to the wider market is essential for the success of your business, and these considerations should be described here.
In addition to this, it’s important to include research into the target demographic of your product or service. This might be in the form of fictional customer personas, or a broader overview of the income, location, age, gender, and buying habits of your existing and potential customers.
Though the research should be objective, the analysis in this section is a good place to reiterate your point of difference and the ways you plan to capture the market and surpass your competition.
4. Competitive analysis
Beyond explaining the elements that differentiate you from your competition, it’s important to provide an in-depth analysis of your competitors themselves.
This research should delve into the operations, financials, history, leadership, and distribution channels of your direct and indirect competitors. It should explore the value propositions of these competitors, and explain the ways you can compete with, or exploit, their strengths and weaknesses.
5. Execution plan: operations, development, management
This segment provides details around how you’re going to do the work necessary to fulfill this plan. It should include information about your organizational structure and the everyday operations of your team, contractors, and physical and digital assets.
Consider including your company’s organizational chart, as well as more in-depth information on the leadership team: Who are they? What are their backgrounds? What do they bring to the table? Potentially include the résumés of key people on your team.
For startups, your execution plan should include how long it will take to begin operations, and then how much longer to reach profitability. For established companies, it’s a good idea to outline how long it will take to execute your plan, and the ways in which you will change existing operations.
If applicable, it’s also beneficial to include your strategy for hiring new team members and scaling into different markets.
6. Marketing plan
It’s essential to have a comprehensive marketing plan in place as you scale operations or kick off a new strategy—and this should be shared with your stakeholders and employees. This segment of your business plan should show how you’re going to promote your business, attract customers, and retain existing clients.
Include brand messaging, marketing assets, and the timeline and budget for engaging consumers across different channels. Potentially include a marketing SWOT analysis into your strengths, weaknesses, opportunities, and threats. Evaluate the way your competitors market themselves, and how your target audience responds—or doesn’t respond—to these messages.
![creating a simple business plan WeWork 222 Exhibition Street in Melbourne, Australia.](https://www.wework.com/ideas/wp-content/uploads/sites/4/2019/12/Web_72DPI-20190724-WeWork-222-Exhibition-Street-28_v1-800x571.jpg)
7. Financial history and projections
It’s essential to disclose all finances involved in running your company within your business plan. This is so your shareholders properly understand how you’re projected to perform going forward, and the progress you’ve made so far.
You should include your income statement, which outlines annual net profits or losses; a cash flow statement, which shows how much money you need to launch or scale operations; and a balance sheet that shows financial liabilities and assets.
“An income statement is the measure of your financial results for a certain period and the most accurate report of business activities during that time, [whereas a balance sheet] presents your assets, liabilities, and equity,” Amit Perry, a corporate finance expert, explained at a WeWork Labs educational session in Israel.
It’s crucial to understand the terms correctly so you know how to present your finances when you’re speaking to investors. Amit Perry, CEO and founder of Perryllion Ltd.
In addition, if you’re asking for funding, you will need to outline exactly how much money you need as well as where this money will go and how you plan to pay it back.
12 quick tips for writing a business plan
Now that you know what components are traditionally included in a business plan, it’s time to consider how you’ll actually construct the document.
Here are 12 key factors to keep in mind when writing a business plan. These overarching principles will help you write a business plan that serves its purpose (whatever that may be) and becomes an easy reference in the years ahead.
1. Don’t be long-winded
Use clear, concise language and avoid jargon. When business plans are too long-winded, they’re less likely to be used as intended and more likely to be forgotten or glazed over by stakeholders.
2. Show why you care
Let your passion for your business shine through; show employees and investors why you care (and why they should too).
3. Provide supporting documents
Don’t be afraid to have an extensive list of appendices, including the CVs of team members, built-out customer personas, product demonstrations, and examples of internal or external messaging.
4. Reference data
All information regarding the market, your competitors, and your customers should reference authoritative and relevant data points.
5. Research, research, research
The research that goes into your business plan should take you longer than the writing itself. Consider tracking your research as supporting documentation.
6. Clearly demonstrate your points of difference
At every opportunity, it’s important to drive home the way your product or service differentiates you from your competition and helps solve a problem for your target audience. Don’t shy away from reiterating these differentiating factors throughout the plan.
7. Be objective in your research
As important as it is to showcase your company and the benefits you provide your customers, it’s also important to be objective in the data and research you reference. Showcase the good and the bad when it comes to market research and your financials; you want your shareholders to know you’ve thought through every possible contingency.
8. Know the purpose of your plan
It’s important you understand the purpose of your plan before you begin researching and writing. Be clear about whether you’re writing this plan to attract investment, align teams, or provide direction.
9. Identify your audience
The same way your business plan must have a clearly defined purpose, you must have a clearly defined audience. To whom are you writing? New investors? Current employees? Potential collaborators? Existing shareholders?
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10. Avoid jargon
Avoid using industry-specific jargon, unless completely unavoidable, and try making your business plan as easy to understand as possible—for all potential stakeholders.
11. Don’t be afraid to change it
Your business plan should evolve with your company’s growth, which means your business plan document should evolve as well. Revisit and rework your business plan as needed, and remember the most important factor: having a plan in place, even if it changes.
A business plan shouldn’t just be a line on your to-do list; it should be referenced and used as intended going forward. Keep your business plan close, and use it to inform decisions and guide your team in the years ahead.
Creating a business plan is an important step in growing your company
Whether you’re just starting out or running an existing operation, writing an effective business plan can be a key predictor of future success. It can be a foundational document from which you grow and thrive . It can serve as a constant reminder to employees and clients about what you stand for, and the direction in which you’re moving. Or, it can prove to investors that your business, team, and vision are worth their investment.
No matter the size or stage of your business, WeWork can help you fulfill the objectives outlined in your business plan—and WeWork’s coworking spaces can be a hotbed for finding talent and investors, too. The benefits of coworking spaces include intentionally designed lounges, conference rooms, and private offices that foster connection and bolster creativity, while a global network of professionals allows you to expand your reach and meet new collaborators.
Using these steps to write a business plan will put you in good stead to not only create a document that fulfills a purpose but one that also helps to more clearly understand your market, competition, point of difference, and plan for the future.
For more tips on growing teams and building a business, check out all our articles on Ideas by WeWork.
Caitlin Bishop is a writer for WeWork’s Ideas by WeWork , based in New York City. Previously, she was a journalist and editor at Mamamia in Sydney, Australia, and a contributing reporter at Gotham Gazette .
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If you’ve been asking questions like, how will I know when I find a product market fit? How long should I explore before launching? Or what should I initially price my product? These are all questions that founders have asked, and below are the answers from the founders who’ve figured it out.
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Tom Hewitson, Chief AI Officer at leading AI training company General Purpose , offers tips for small businesses
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What Is a Business Plan?
Understanding business plans, how to write a business plan, common elements of a business plan, the bottom line, business plan: what it is, what's included, and how to write one.
Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.
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A business plan is a document that outlines a company's goals and the strategies to achieve them. It's valuable for both startups and established companies. For startups, a well-crafted business plan is crucial for attracting potential lenders and investors. Established businesses use business plans to stay on track and aligned with their growth objectives. This article will explain the key components of an effective business plan and guidance on how to write one.
Key Takeaways
- A business plan is a document detailing a company's business activities and strategies for achieving its goals.
- Startup companies use business plans to launch their venture and to attract outside investors.
- For established companies, a business plan helps keep the executive team focused on short- and long-term objectives.
- There's no single required format for a business plan, but certain key elements are essential for most companies.
Investopedia / Ryan Oakley
Any new business should have a business plan in place before beginning operations. Banks and venture capital firms often want to see a business plan before considering making a loan or providing capital to new businesses.
Even if a company doesn't need additional funding, having a business plan helps it stay focused on its goals. Research from the University of Oregon shows that businesses with a plan are significantly more likely to secure funding than those without one. Moreover, companies with a business plan grow 30% faster than those that don't plan. According to a Harvard Business Review article, entrepreneurs who write formal plans are 16% more likely to achieve viability than those who don't.
A business plan should ideally be reviewed and updated periodically to reflect achieved goals or changes in direction. An established business moving in a new direction might even create an entirely new plan.
There are numerous benefits to creating (and sticking to) a well-conceived business plan. It allows for careful consideration of ideas before significant investment, highlights potential obstacles to success, and provides a tool for seeking objective feedback from trusted outsiders. A business plan may also help ensure that a company’s executive team remains aligned on strategic action items and priorities.
While business plans vary widely, even among competitors in the same industry, they often share basic elements detailed below.
A well-crafted business plan is essential for attracting investors and guiding a company's strategic growth. It should address market needs and investor requirements and provide clear financial projections.
While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.
Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.
The length of a business plan can vary greatly from business to business. Regardless, gathering the basic information into a 15- to 25-page document is best. Any additional crucial elements, such as patent applications, can be referenced in the main document and included as appendices.
Common elements in many business plans include:
- Executive summary : This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
- Products and services : Describe the products and services the company offers or plans to introduce. Include details on pricing, product lifespan, and unique consumer benefits. Mention production and manufacturing processes, relevant patents , proprietary technology , and research and development (R&D) information.
- Market analysis : Explain the current state of the industry and the competition. Detail where the company fits in, the types of customers it plans to target, and how it plans to capture market share from competitors.
- Marketing strategy : Outline the company's plans to attract and retain customers, including anticipated advertising and marketing campaigns. Describe the distribution channels that will be used to deliver products or services to consumers.
- Financial plans and projections : Established businesses should include financial statements, balance sheets, and other relevant financial information. New businesses should provide financial targets and estimates for the first few years. This section may also include any funding requests.
Investors want to see a clear exit strategy, expected returns, and a timeline for cashing out. It's likely a good idea to provide five-year profitability forecasts and realistic financial estimates.
2 Types of Business Plans
Business plans can vary in format, often categorized into traditional and lean startup plans. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.
- Traditional business plans : These are detailed and lengthy, requiring more effort to create but offering comprehensive information that can be persuasive to potential investors.
- Lean startup business plans : These are concise, sometimes just one page, and focus on key elements. While they save time, companies should be ready to provide additional details if requested by investors or lenders.
Why Do Business Plans Fail?
A business plan isn't a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections. Markets and the economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All this calls for building flexibility into your plan, so you can pivot to a new course if needed.
How Often Should a Business Plan Be Updated?
How frequently a business plan needs to be revised will depend on its nature. Updating your business plan is crucial due to changes in external factors (market trends, competition, and regulations) and internal developments (like employee growth and new products). While a well-established business might want to review its plan once a year and make changes if necessary, a new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.
What Does a Lean Startup Business Plan Include?
The lean startup business plan is ideal for quickly explaining a business, especially for new companies that don't have much information yet. Key sections may include a value proposition , major activities and advantages, resources (staff, intellectual property, and capital), partnerships, customer segments, and revenue sources.
A well-crafted business plan is crucial for any company, whether it's a startup looking for investment or an established business wanting to stay on course. It outlines goals and strategies, boosting a company's chances of securing funding and achieving growth.
As your business and the market change, update your business plan regularly. This keeps it relevant and aligned with your current goals and conditions. Think of your business plan as a living document that evolves with your company, not something carved in stone.
University of Oregon Department of Economics. " Evaluation of the Effectiveness of Business Planning Using Palo Alto's Business Plan Pro ." Eason Ding & Tim Hursey.
Bplans. " Do You Need a Business Plan? Scientific Research Says Yes ."
Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."
Harvard Business Review. " How to Write a Winning Business Plan ."
U.S. Small Business Administration. " Write Your Business Plan ."
SCORE. " When and Why Should You Review Your Business Plan? "
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How to Write a Business Plan: A Step-by-Step Template
Writing a business plan doesn't have to be an intimidating task, but it does require foresight, honesty, and plenty of research. here is an outline and some smart tips to help get you started..
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Creating a business plan is the first and most crucial step to building a successful company .
"A business plan is important because it communicates to everyone involved in the organization what the goals are, and how management plans to get there," says Drew Starbird, a professor of operations management and information systems at Santa Clara University's Leavey School of Business.
Growing up, Starbird helped to manage Hall & Rambo, his family's commercial insurance firm that launched roughly 110 years ago. The San Jose, California-based company began by serving fruit processing plants in the Silicon Valley before pivoting in the late 1960s to work with tech ventures.
At Leavey School of Business, the My Own Business Institute (MOBI) program provides online education tools for entrepreneurs around the world. Its website generates roughly 70,000 page views each month. Business owners can register for a web course and earn a certificate for free. MOBI also offers a downloadable business plan template , which is designed to help startups in any sector--from bakeries to IT services.
The parts that make up a business plan are straightforward. According to guidelines from the U.S. Small Business Administration , you need to include the following:
- an executive summary
- a company description
- a market analysis
- an organization and management breakdown
- a description of the service or product line
- an overview of your marketing strategy, a request for funding (if applicable)
- some financial projections to back up your ask
- an Appendix (optional) that includes relevant resumes, permits, or leases.
Here's a step-by-step breakdown to get you started with your business plan, along with a few expert tips on how to attract investors.
1. Describe your startup.
The first step is to simply describe the business you want to build. During the process, it's important to be honest about the obstacles you're likely to face.
Starbird suggests including a breakdown of the target market and customers. You should also be clear about the factors offering a competitive edge.
Be careful not to have any blinders on when it comes to your product or service. "People spend a lot of time focusing on the features that make them unique without taking the time to translate that into a value proposition," says Starbird.
Do diligent research on what your market is, and how to communicate with customers accordingly. "The most successful investors are looking for an idea that is going to have a clear and understandable market potential," he adds.
2. Have a thorough plan: Document all aspects of your company.
"As the founder, you need to be concerned about all parts of the plan," says Starbird. That means including any licensing agreements, or your location strategy, for example.
It's especially important to know and understand your numbers. "The number one reason firms go under is inadequate cash flow. If you don't know what's going on in that area, you're going to be in big trouble," Starbird warns.
3. Make sure the plan is modifiable for different audiences.
Different sections of your business plan will be more important depending on your audience. Investors, for instance, will want to see your financial projections, whereas employees might be more concerned with the organizational structure of your company.
The SBA recommends that you project that status of your company for between three and five years into the future, though it's a good idea to outline your annual goals, too. Keep in mind that the further ahead you look, the less accurate your conclusions are going to be.
"A five-year horizon is fine, but a thorough business plan looks beyond that [up to 10 years], with the recognition that some of the forecasts would be of decreasing accuracy," says Starbird.
He recommends updating your business plan every year as the company grows.
4. Include details to put you over the edge.
When writing the market analysis, it's a good idea to include any information about external growth trends, and why one company might have the market share. Pricing power -- meaning how consumer demand would be affected if your company shifted its prices -- is one detail that often gets excluded from business plans, but which can help put you over the edge.
It's also important to keep your expectations realistic and honest: The biggest mistake entrepreneurs can make when writing a business plan, says Starbird, is to be overly optimistic with sales and future cost estimates.
5. Remember why you care.
At Hall & Rambo, Starbird says his primary role was to be the "gopher guy." It allowed him to learn the ropes of running a business, and to prioritize goals beyond the bottom line.
"It was very clear working with my father and grandfather and uncle that it wasn't just about making money," he said. Other priorities included raising the payroll for employees, offering competitive benefits, and making an impact on the local Central California community.
Your business plan should reflect not only your financial goals, but also your values, and those of the community you're working to build.
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How To Start A Business In 11 Steps (2024 Guide)
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Updated: Jul 29, 2024, 8:15pm
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Table of Contents
Before you begin: get in the right mindset, 1. determine your business concept, 2. research your competitors and market, 3. create your business plan, 4. choose your business structure, 5. register your business and get licenses, 6. get your finances in order, 7. fund your business, 8. apply for business insurance, 9. get the right business tools, 10. market your business, 11. scale your business, what are the best states to start a business, bottom line, frequently asked questions (faqs).
Starting a business is one of the most exciting and rewarding experiences you can have. But where do you begin? There are several ways to approach creating a business, along with many important considerations. To help take the guesswork out of the process and improve your chances of success, follow our comprehensive guide on how to start a business. We’ll walk you through each step of the process, from defining your business idea to registering, launching and growing your business .
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The public often hears about overnight successes because they make for a great headline. However, it’s rarely that simple—they don’t see the years of dreaming, building and positioning before a big public launch. For this reason, remember to focus on your business journey and don’t measure your success against someone else’s.
Consistency Is Key
New business owners tend to feed off their motivation initially but get frustrated when that motivation wanes. This is why it’s essential to create habits and follow routines that power you through when motivation goes away.
Take the Next Step
Some business owners dive in headfirst without looking and make things up as they go along. Then, there are business owners who stay stuck in analysis paralysis and never start. Perhaps you’re a mixture of the two—and that’s right where you need to be. The best way to accomplish any business or personal goal is to write out every possible step it takes to achieve the goal. Then, order those steps by what needs to happen first. Some steps may take minutes while others take a long time. The point is to always take the next step.
Most business advice tells you to monetize what you love, but it misses two other very important elements: it needs to be profitable and something you’re good at. For example, you may love music, but how viable is your business idea if you’re not a great singer or songwriter? Maybe you love making soap and want to open a soap shop in your small town that already has three close by—it won’t be easy to corner the market when you’re creating the same product as other nearby stores.
If you don’t have a firm idea of what your business will entail, ask yourself the following questions:
- What do you love to do?
- What do you hate to do?
- Can you think of something that would make those things easier?
- What are you good at?
- What do others come to you for advice about?
- If you were given ten minutes to give a five-minute speech on any topic, what would it be?
- What’s something you’ve always wanted to do, but lacked resources for?
These questions can lead you to an idea for your business. If you already have an idea, they might help you expand it. Once you have your idea, measure it against whether you’re good at it and if it’s profitable.
Your business idea also doesn’t have to be the next Scrub Daddy or Squatty Potty. Instead, you can take an existing product and improve upon it. You can also sell a digital product so there’s little overhead.
What Kind of Business Should You Start?
Before you choose the type of business to start, there are some key things to consider:
- What type of funding do you have?
- How much time do you have to invest in your business?
- Do you prefer to work from home or at an office or workshop?
- What interests and passions do you have?
- Can you sell information (such as a course), rather than a product?
- What skills or expertise do you have?
- How fast do you need to scale your business?
- What kind of support do you have to start your business?
- Are you partnering with someone else?
- Does the franchise model make more sense to you?
Consider Popular Business Ideas
Not sure what business to start? Consider one of these popular business ideas:
- Start a Franchise
- Start a Blog
- Start an Online Store
- Start a Dropshipping Business
- Start a Cleaning Business
- Start a Bookkeeping Business
- Start a Clothing Business
- Start a Landscaping Business
- Start a Consulting Business
- Start a Photography Business
- Start a Vending Machine Business
Most entrepreneurs spend more time on their products than they do getting to know the competition. If you ever apply for outside funding, the potential lender or partner wants to know: what sets you (or your business idea) apart? If market analysis indicates your product or service is saturated in your area, see if you can think of a different approach. Take housekeeping, for example—rather than general cleaning services, you might specialize in homes with pets or focus on garage cleanups.
Primary Research
The first stage of any competition study is primary research, which entails obtaining data directly from potential customers rather than basing your conclusions on past data. You can use questionnaires, surveys and interviews to learn what consumers want. Surveying friends and family isn’t recommended unless they’re your target market. People who say they’d buy something and people who do are very different. The last thing you want is to take so much stock in what they say, create the product and flop when you try to sell it because all of the people who said they’d buy it don’t because the product isn’t something they’d buy.
Secondary Research
Utilize existing sources of information, such as census data, to gather information when you do secondary research. The current data may be studied, compiled and analyzed in various ways that are appropriate for your needs but it may not be as detailed as primary research.
Conduct a SWOT Analysis
SWOT stands for strengths, weaknesses, opportunities and threats. Conducting a SWOT analysis allows you to look at the facts about how your product or idea might perform if taken to market, and it can also help you make decisions about the direction of your idea. Your business idea might have some weaknesses that you hadn’t considered or there may be some opportunities to improve on a competitor’s product.
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Asking pertinent questions during a SWOT analysis can help you identify and address weaknesses before they tank your new business.
A business plan is a dynamic document that serves as a roadmap for establishing a new business. This document makes it simple for potential investors, financial institutions and company management to understand and absorb. Even if you intend to self-finance, a business plan can help you flesh out your idea and spot potential problems. When writing a well-rounded business plan, include the following sections:
- Executive summary: The executive summary should be the first item in the business plan, but it should be written last. It describes the proposed new business and highlights the goals of the company and the methods to achieve them.
- Company description: The company description covers what problems your product or service solves and why your business or idea is best. For example, maybe your background is in molecular engineering, and you’ve used that background to create a new type of athletic wear—you have the proper credentials to make the best material.
- Market analysis: This section of the business plan analyzes how well a company is positioned against its competitors. The market analysis should include target market, segmentation analysis, market size, growth rate, trends and a competitive environment assessment.
- Organization and structure: Write about the type of business organization you expect, what risk management strategies you propose and who will staff the management team. What are their qualifications? Will your business be a single-member limited liability company (LLC) or a corporation ?
- Mission and goals: This section should contain a brief mission statement and detail what the business wishes to accomplish and the steps to get there. These goals should be SMART (specific, measurable, action-orientated, realistic and time-bound).
- Products or services: This section describes how your business will operate. It includes what products you’ll offer to consumers at the beginning of the business, how they compare to existing competitors, how much your products cost, who will be responsible for creating the products, how you’ll source materials and how much they cost to make.
- Background summary: This portion of the business plan is the most time-consuming to write. Compile and summarize any data, articles and research studies on trends that could positively and negatively affect your business or industry.
- Marketing plan: The marketing plan identifies the characteristics of your product or service, summarizes the SWOT analysis and analyzes competitors. It also discusses how you’ll promote your business, how much money will be spent on marketing and how long the campaign is expected to last.
- Financial plan: The financial plan is perhaps the core of the business plan because, without money, the business will not move forward. Include a proposed budget in your financial plan along with projected financial statements, such as an income statement, a balance sheet and a statement of cash flows. Usually, five years of projected financial statements are acceptable. This section is also where you should include your funding request if you’re looking for outside funding.
Learn more: Download our free simple business plan template .
Come Up With an Exit Strategy
An exit strategy is important for any business that is seeking funding because it outlines how you’ll sell the company or transfer ownership if you decide to retire or move on to other projects. An exit strategy also allows you to get the most value out of your business when it’s time to sell. There are a few different options for exiting a business, and the best option for you depends on your goals and circumstances.
The most common exit strategies are:
- Selling the business to another party
- Passing the business down to family members
- Liquidating the business assets
- Closing the doors and walking away
Develop a Scalable Business Model
As your small business grows, it’s important to have a scalable business model so that you can accommodate additional customers without incurring additional costs. A scalable business model is one that can be replicated easily to serve more customers without a significant increase in expenses.
Some common scalable business models are:
- Subscription-based businesses
- Businesses that sell digital products
- Franchise businesses
- Network marketing businesses
Start Planning for Taxes
One of the most important things to do when starting a small business is to start planning for taxes. Taxes can be complex, and there are several different types of taxes you may be liable for, including income tax, self-employment tax, sales tax and property tax. Depending on the type of business you’re operating, you may also be required to pay other taxes, such as payroll tax or unemployment tax.
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When structuring your business, it’s essential to consider how each structure impacts the amount of taxes you owe, daily operations and whether your personal assets are at risk.
An LLC limits your personal liability for business debts. LLCs can be owned by one or more people or companies and must include a registered agent . These owners are referred to as members.
- LLCs offer liability protection for the owners
- They’re one of the easiest business entities to set up
- You can have a single-member LLC
- You may be required to file additional paperwork with your state on a regular basis
- LLCs can’t issue stock
- You’ll need to pay annual filing fees to your state
Limited Liability Partnership (LLP)
An LLP is similar to an LLC but is typically used for licensed business professionals such as an attorney or accountant. These arrangements require a partnership agreement.
- Partners have limited liability for the debts and actions of the LLP
- LLPs are easy to form and don’t require much paperwork
- There’s no limit to the number of partners in an LLP
- Partners are required to actively take part in the business
- LLPs can’t issue stock
- All partners are personally liable for any malpractice claims against the business
Sole Proprietorship
If you start a solo business, you might consider a sole proprietorship . The company and the owner, for legal and tax purposes, are considered the same. The business owner assumes liability for the business. So, if the business fails, the owner is personally and financially responsible for all business debts.
- Sole proprietorships are easy to form
- There’s no need to file additional paperwork with your state
- You’re in complete control of the business
- You’re personally liable for all business debts
- It can be difficult to raise money for a sole proprietorship
- The business may have a limited lifespan
Corporation
A corporation limits your personal liability for business debts just as an LLC does. A corporation can be taxed as a C corporation (C-corp) or an S corporation (S-corp). S-corp status offers pass-through taxation to small corporations that meet certain IRS requirements. Larger companies and startups hoping to attract venture capital are usually taxed as C-corps.
- Corporations offer liability protection for the owners
- The life span of a corporation is not limited
- A corporation can have an unlimited number of shareholders
- Corporations are subject to double taxation
- They’re more expensive and complicated to set up than other business structures
- The shareholders may have limited liability
Before you decide on a business structure, discuss your situation with a small business accountant and possibly an attorney, as each business type has different tax treatments that could affect your bottom line.
Helpful Resources
- How To Set Up an LLC in 7 Steps
- How To Start a Sole Proprietorship
- How To Start a Corporation
- How To Start a Nonprofit
- How To Start a 501(c)(3)
There are several legal issues to address when starting a business after choosing the business structure. The following is a good checklist of items to consider when establishing your business:
Choose Your Business Name
Make it memorable but not too difficult. Choose the same domain name, if available, to establish your internet presence. A business name cannot be the same as another registered company in your state, nor can it infringe on another trademark or service mark that is already registered with the United States Patent and Trademark Office (USPTO).
Business Name vs. DBA
There are business names, and then there are fictitious business names known as “Doing Business As” or DBA. You may need to file a DBA if you’re operating under a name that’s different from the legal name of your business. For example, “Mike’s Bike Shop” is doing business as “Mike’s Bikes.” The legal name of the business is “Mike’s Bike Shop,” and “Mike’s Bikes” is the DBA.
You may need to file a DBA with your state, county or city government offices. The benefits of a DBA include:
- It can help you open a business bank account under your business name
- A DBA can be used as a “trade name” to brand your products or services
- A DBA can be used to get a business license
Register Your Business and Obtain an EIN
You’ll officially create a corporation, LLC or other business entity by filing forms with your state’s business agency―usually the Secretary of State. As part of this process, you’ll need to choose a registered agent to accept legal documents on behalf of your business. You’ll also pay a filing fee. The state will send you a certificate that you can use to apply for licenses, a tax identification number (TIN) and business bank accounts.
Next, apply for an employer identification number (EIN) . All businesses, other than sole proprietorships with no employees, must have a federal employer identification number. Submit your application to the IRS and you’ll typically receive your number in minutes.
Get Appropriate Licenses and Permits
Legal requirements are determined by your industry and jurisdiction. Most businesses need a mixture of local, state and federal licenses to operate. Check with your local government office (and even an attorney) for licensing information tailored to your area.
- Best LLC Services
- How To Register a Business Name
- How To Register a DBA
- How To Get an EIN for an LLC
- How To Get a Business License
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Open a Business Bank Account
Keep your business and personal finances separate. Here’s how to choose a business checking account —and why separate business accounts are essential. When you open a business bank account, you’ll need to provide your business name and your business tax identification number (EIN). This business bank account can be used for your business transactions, such as paying suppliers or invoicing customers. Most times, a bank will require a separate business bank account to issue a business loan or line of credit.
Hire a Bookkeeper or Get Accounting Software
If you sell a product, you need an inventory function in your accounting software to manage and track inventory. The software should have ledger and journal entries and the ability to generate financial statements.
Some software programs double as bookkeeping tools. These often include features such as check writing and managing receivables and payables. You can also use this software to track your income and expenses, generate invoices, run reports and calculate taxes.
There are many bookkeeping services available that can do all of this for you, and more. These services can be accessed online from any computer or mobile device and often include features such as bank reconciliation and invoicing. Check out the best accounting software for small business, or see if you want to handle the bookkeeping yourself.
Determine Your Break-Even Point
Before you fund your business, you must get an idea of your startup costs. To determine these, make a list of all the physical supplies you need, estimate the cost of any professional services you will require, determine the price of any licenses or permits required to operate and calculate the cost of office space or other real estate. Add in the costs of payroll and benefits, if applicable.
Businesses can take years to turn a profit, so it’s better to overestimate the startup costs and have too much money than too little. Many experts recommend having enough cash on hand to cover six months of operating expenses.
When you know how much you need to get started with your business, you need to know the point at which your business makes money. This figure is your break-even point.
In contrast, the contribution margin = total sales revenue – cost to make product
For example, let’s say you’re starting a small business that sells miniature birdhouses for fairy gardens. You have determined that it will cost you $500 in startup costs. Your variable costs are 40 cents per birdhouse produced, and you sell them for $1.50 each.
Let’s write these out so it’s easy to follow:
$500 for the first month | ||
40 cents per birdhouse | ||
$1.50 | ||
$500/($1.50 - 40 cents) | ||
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1. Create Your Executive Summary. The executive summary is a snapshot of your business or a high-level overview of your business purposes and plans. Although the executive summary is the first section in your business plan, most people write it last. The length of the executive summary is not more than two pages.
Step #3: Conduct Your Market Analysis. Step #4: Research Your Competition. Step #5: Outline Your Products or Services. Step #6: Summarize Your Financial Plan. Step #7: Determine Your Marketing Strategy. Step #8: Showcase Your Organizational Chart. 14 Business Plan Templates to Help You Get Started.
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Finally, price anchoring involves showing a higher original price alongside the current selling price, making the current offer appear as a better deal. This technique works well for both customer types. Price-sensitive customers see the discounted price as a significant bargain. Value-oriented customers view the anchored price as a confirmation that they're getting a high-quality product at ...