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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.

ZenBusiness

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

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.

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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:

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

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

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

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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How to make a business plan

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 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?

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.

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.

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.

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.

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.

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.

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.

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

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)

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.

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.

• 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,

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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

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

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

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

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

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

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

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

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

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.

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.

• 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.

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.

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.

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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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?

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.

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.

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?

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Let us help you get started.

Join our free training to learn how to start an online side hustle in 30 days or less. We’ll provide you with a proven roadmap for how to find, validate, and pursue a profitable business idea (even if you have zero entrepreneurial experience).

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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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15 Ways to Use and Get Incredible Value From a Business Plan

14 min. read

Updated October 27, 2023

What is a business plan used for? That fully depends on your business stage and specific business needs. 

If you’re just starting, you’ll use a business plan to deal with uncertainty and navigate early doubts and questions. If you’re seeking funding then you’ll be using your business plan to explain your value to potential investors and lenders. 

When  created correctly , a detailed plan can help you successfully start, manage, and grow your business. Of course, this is just a simple introduction to the purpose of a business plan. Let’s explore and explain the uses of a business plan for each business stage.

• How to use a business plan when starting your business

When starting a new business, your business plan is meant to help you explore, define, and connect. You’re evaluating the type of business you’ll be running, who your target market will be, and defining how sections of your business will operate. Here are the key methods for using a business plan to successfully start your business.

1. Evaluate and develop your business idea

Is  your business idea  valid? Should you even pursue it? Will it sell enough to cover costs and expenses? Who else is doing something like this?  

Your business plan will help you answer these critical questions. It guides you through the process of making the right educated guesses for every area of your business. This includes initial financial planning and outlining expected sales, costs of goods sold, expenses, and cash flow. You’ll also set up your strategy, tactics, major milestones, and success metrics.

Evaluating your idea by developing a plan ensures that you’re prepared and minimizing risk. You don’t need to have everything perfectly developed. However, you should know enough to determine if your idea is valuable and sustainable. Shouldn’t you be able to write these down for yourself before you take the risk? 

You want to keep things short and simple. Start with a lean business plan, which is a collection of bullet-point lists and projections. Use it for yourself and your team members only, not to show to outsiders. 

At the end of the day, your goal is to be able to deal with the big questions. Is this really a good idea? Will it work? Can you feasibly do it?  

2. Inform your branding and mission

Writing a business plan  doesn’t just help evaluate your business idea. It also ensures that you’re outlining core business operations that allow people to recognize, like, and trust your company. This is encompassed by your branding, value proposition, and company mission.

Branding is all about how your business looks and feels. Your mission statement then helps define what your brand stands for. Then your value proposition officially defines how your products and services effectively serve your potential customers.

Trying to please everybody is usually a shortcut to failure. Creating these upfront streamlines your focus toward the right people. Through effective market research, you create an informed brand position that is designed to reach and resonate with a specific audience. 

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3. Identify professional gaps

Just like you can’t serve everyone, you also can’t be an expert on everything involved in running a successful business. Maybe you have industry expertise, solid management skills, or a specialized skillset. However, there may be other areas such as accounting, customer service, or marketing that you are completely unprepared to take on.

Creating a business plan allows you to explore operational areas that you are unfamiliar with and assess what skill gaps you need to fill. Even without experience, you’ll attempt to outline the functions of your marketing plan, financial forecasts, sales channels, etc. As part of this exercise, you can also mention specific roles or areas of operation that you need to outsource or fill.

This will directly tie the onboarding of professionals to your milestones and startup strategy. This will help you determine the right time to bring on more people. It will also prove to investors that you are thinking ahead and already understand your weaknesses. 

4. Connect with mentors

Your business plan can be a great introduction to working with mentors, counselors, and business development organizations. The best example is in the U.S. Where more than 1,000 Small Business Development Centers offer workshops, counseling, and mentorship for small business owners and entrepreneurs. They really appreciate business owners having a business plan as part of the relationship.

Aside from these formal relationships with mentors, there are informal relationships that can evolve into mentorship over time. It may be another business owner, someone you’re pitching to, an employee, or someone you randomly connect with at a networking event. 

This is where your business plan can be a great tool for explaining a business to somebody who might be able to help with it. Just keep a  lean and streamlined version of your plan , or even just your executive summary, ready to share.  

5. Connect and partner with suppliers

Business owners use forecasts and financial statements to manage their sourcing, suppliers, contractors, and inventory. You’ll anticipate sales and expenses ahead of time, review actual results, and revise accordingly. 

Regularly scrutinizing your projected sales and costs can better inform your purchasing decisions and optimize inventory. Too much inventory can be a drain on cash. Too little can hurt production and sales. 

Understanding the state of your financials will also make it much easier to approach suppliers and vendors. You’ll be prepared to discuss growth plans, negotiate product or service pricing, and changes to inventory. Your business plan can even be a key part of proposing a strategic alliance with a supplier.

The importance of a business plan in this instance is making sure you’re fully prepared to have these conversations. You’re not scrambling when you suddenly start bleeding cash or take on an excess of inventory. Instead, you’re using your plan to look ahead and prepare. 

• How to use a business plan to pursue funding

An inevitable step for most existing businesses is the  pursuit of funding . It can occur early in the lifespan of a business to help get it off the ground. It may also take years until it becomes necessary for a business to achieve an escalated level of growth. Here are the specific ways that you can use your business plan to successfully gain funding and present it to potential investors.  

6. Solidify your funding needs

In years of angel investment, I’ve seen many attempts to raise investment run aground over entrepreneurs and owners not knowing how much money they need. Investors always want to know how much money you need and what it will be spent on. Bankers expect you to apply for loans for some specific amount. 

Before you seek out a loan or make a pitch, you’ll need to understand how much funding you require. You can use your business plan to estimate that total. It will also demonstrate why you need that money, what you’ll do with it, and how it will help the business. 

That process starts with your educated guesses about sales, costs, expenses, and cash flow. If your projections indicate that you can get by without other people’s money, then heave a sigh of relief because you don’t need investment or loans. If the projects show a deficit, then that deficit is likely how much money you need in funding. 

7. Support for loan applications 

Your business plan is your best-supporting documentation when submitting a loan application. Most commercial bank loans and especially Small Business Administration-backed loan applications require a business plan as part of the process. Your business plan should include your essential financials including sales, costs, expenses, and cash flow statements. Again, it should also show why you need funding, how you’ll spend it, and how you’ll pay it back. 

These days it doesn’t always take a long formal business plan document. Often a lean business plan is enough to support a loan. That will include those essential numbers, plus short summaries of strategy, tactics, major milestones, and metrics. 

8. Guide your pitch to investors

I’ve seen founders fail a pitch because they couldn’t answer common questions that come up. Questions such as:

• What are you projecting for marketing expenses? 
• How much is your gross margin?
• What’s the headcount assumption?

This can be a death sentence for your chance at funding. Investors can immediately tell if you don’t have a plan to back up your pitch. 

Another important myth to dispel is that investors don’t read business plans. The truth is that investors will often reject a proposal based on just a summary, without having read the whole plan. But when they like the proposal, the summary, and the  pitch , they need the full business plan to guide due diligence. 

In 12 years with an angel investment group, I’ve never seen an investment made without investors reading a business plan in detail. In short, you need to have your business plan prepared. It will enhance your pitch and make it far easier to move on to the next step to gain funding.

9. Manage funding once received

Having a business plan doesn’t just help you gain funding, it also helps you  effectively manage it . You’ll have this outlined in an initial use of funds report and actively engage with investors through the ongoing business planning process. This doesn’t mean that you’ll be forced to stick to the strategy you set out with, and are instead able to optimize how to leverage your funding. 

Track results including essential numbers and execution. Review those results regularly and revise as necessary. Use that process to provide updates as needed for your bankers or investors. That way you aren’t scrambling to pull together your financial statements and strategy when asked for them.

• How to use a business plan to manage and grow your business

The best and most common ongoing use of your business plan is to steer, manage, and grow your business. The business plan is for you to use to better run your business. Think of business planning for your business as a system that mimics navigation in your car. 

The long-term goals are the destination. The strategy, tactics, execution, and essential budgets are the route. Tracking and reviewing real-time information are the choices you make when driving. They help you determine if you should adjust you’re route or stay on course. 

Recognizing this primary use of the business plan also helps you focus on what you need and don’t need for your business plan. You can opt to work with a one-page business plan  instead of a big formal business planning document. Here are the key ways you can use your business plan for effective business management and growth.

10. Establish a strategy and the tactics needed to execute it

Use your business plan  to clarify your strategy , determine the tactics necessary to support it, and track your execution. No need to write elaborate text explanations. You can deal with just bullet points that summarize and remind you of the main aspects of your plan. 

Think of this as a tool for maintaining focus. Most business owners and entrepreneurs want to do everything they can to please every customer. I certainly always did with my business. 

But what we learn in the real world is that there is the principle of displacement in small businesses. What we do rules out what we can’t do. 

11. Monitor and measure business performance

This ties directly into establishing your strategy and tactics but deserves its own focus. Your business plan is not only useful for defining milestones, key performance indicators, and success metrics. It’s also an invaluable tool for tracking and measuring this data on an ongoing basis. 

Having these metrics sit directly within your plan ensures that you’re always linking tactile performance back to your broader strategy. It makes  performance reviews and revisions  much easier to complete. And should you need funding at a later stage, it makes it much easier to prepare your plan for a professional pitch.

12. Explore potential scenarios

A what-if analysis, more often called a scenario analysis, allows you to explore what might happen to your business in different scenarios. 

What if we open another location? What if we change pricing? What if we add another employee? What happens if we don’t reach our sales goals?

You can use your business plan as a tool for scenario analysis. Save your current plan as the most likely scenario. Then leverage your forecasts to develop at least a worst-case and best-case financial scenario. From here, you can outline specific strategies within your plan to take advantage of opportunities and prepare for crisis events. 

13. Plan revisions in response to a crisis

Speaking of a crisis, you can easily use your plan to develop an emergency response strategy. For example, when COVID changed everything almost overnight, business owners with well-established business plans were able to adapt far more quickly. Using their plan like a performance dashboard puts strategy, tactics, metrics, milestones, and essential projections all in one place. 

This enabled these owners to look quickly at educated guesses on revenue decline and then adjust spending to compensate. They had a view of milestones due, and performance against metrics, and were able to adjust timing, scheduling, and priorities to deal with the crisis. 

14. Determine the right time for growth initiatives

Similar to crisis planning, you can also use your business plan to better  prepare your business to take on growth initiatives . Rather than blindly guessing if you’re needing to invest further to achieve growth, you can instead coordinate around swings in revenue, costs, expenses, and priorities. 

For example, there may be an optimal time to launch a new website, a second location, or even an additional product. Any of these initiatives bring with them an opportunity for substantial gains, as well as an incredible risk if not executed properly. In any of these circumstances, you can use your plan to better understand how introducing a website, location, product, or anything else will affect your business.

What timeframe do you need to gain traction? What’s the necessary ROI that makes it a success? Do you have enough cash to invest in it right now?

You can answer all of these questions, and take full advantage of growth opportunities with your business plan.

15. Update your plan based on actual results

Using your business plan to track your strategy, tactics, and execution is the first step. The next step is to engage in regular plan reviews to maintain an accurate view of your actual results. 

The point of reviewing your plan and tracking results is so that you can steer your business with course corrections as required.  Plan vs. actual business plan analysis  is perfect for this. 

When a business plan review turns up results different than expected, you will always have the dilemma of whether to change the plan or the execution. When results are better than expected, then you have to decide whether you change the plan to take advantage of what’s working. And when you have bad news, you have to decide whether the disappointment means changing the plan or just improving execution.  

In any case, using your plan in this way means you spend more time reviewing and less time pulling together data. 

• Additional ways to use your business plan

Outside of this list, there are some special and less common use cases for your business plan. If you’re planning to sell your business, a business plan can help inform buyers beforehand. A business plan can also inform parties involved in a divorce or estate execution. It can also be useful for developing a continuity plan when a business is being passed on to a relative or employee. 

Lastly, a business plan is key for determining the valuation of a business for purposes including sale, legal settlements, and taxation. All of these use cases tend to deal with helping streamline legal aspects of selling, transitioning, or valuing a business. Similar to how having a business plan prepped helps you prepare to pursue funding, it can also eliminate the need to do any additional work in these scenarios.

How do you ensure that you actually use your plan? Leverage growth planning 

Business planning is the best way to get what you want from your business. It coordinates strategy, tactics, business activities, and teamwork, and pushes results to the forefront. More than likely, you’ll find  even more specific use cases  for your own business beyond the fifteen listed here.

There are many types of business plans out there, and you don’t always need a formal business plan document. If your full intention is to leverage your plan as an internal management tool, then you should start with a one-page plan.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.

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• How do you ensure that you actually use your plan? Leverage growth planning 

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Starting a Business | How To

How to Write a Business Plan in 7 Steps

Published February 2, 2024

Published Feb 2, 2024

WRITTEN BY: Mary King

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This article is part of a larger series on Starting a Business .

Starting A Business?

Step 1: Gather Your Information

Step 2: outline your business plan, step 3: write each section, step 4: organize your appendix, step 5: add final details, step 6: add a table of contents, step 7: get feedback, bottom line.

A solid business plan helps you forecast your future business and is a critical tool for raising money or attracting key employees or business partners. A business plan is also an opportunity to show why and how your business will become a success. Learning how to write a business plan successfully requires planning ahead and conducting financial and market research.

How to write a business plan step-by-step:

• Gather your information
• Outline your business plan
• Write each section
• Organize your appendix
• Add final details
• Add a table of contents
• Get feedback.

Your first step is to get organized by gathering all your relevant business information. This will save you time completing the various sections of your business plan. At a minimum, you’ll want to have the following handy:

• Business name, contact information, and address
• Owner(s) names, contact information, and addresses
• Names, contact information, and addresses of any business partners (if you will be working with partners)
• Resume and relevant work history for yourself and any key partners or employees
• Any significant sales, commerce, traffic, and financial data and forecasts
• Customer data (if applicable)
• Any significant data about your nearest competitors’ commerce, traffic, or finances

Now it’s time to outline your business plan, making note of the sections you need to include and what data you want to include in each section. You can create an outline on your own or use a business plan template to help. Whichever route you choose, it is common to include these sections in your business plan outline:

• Introduction
• Executive summary
• Company overview
• Products and services
• Market and industry analysis
• Marketing strategy
• Sales strategy
• Management and organization
• Financial data, analysis, and forecasts

Connect the data you gathered in step one to specific sections of your outline. Make a note if you need to convert some information into charts or images to make them more compelling for potential investors. For example, you’ll want to include relevant work history in your management section and convert your sales forecasts into charts for your financial data section.

Now it’s time to write your business plan. Attack this one section at a time, adding the relevant data as you go.

Executive Summary

The executive summary is an overview of the business plan and should ideally be one, but no more than two, pages in length. Some investors actually only request the executive summary. So make it an informative, persuasive, and concise version of your business plan.

It can be easier to write the executive summary last, after the other sections. Then you can more clearly understand which sections of your business plan are the most important to highlight in the executive summary.

When learning how to write an executive summary for a business plan, remember to include the following:

• Business objectives : Your business objectives are specific and attainable goals for your business. Create at least four business objectives organized by bullet point. If you’re not sure how to phrase your objectives, read our SMART goals examples to understand how to do so.
• Mission statement: The mission statement discusses the aim, purpose, and values of your business. It’s typically a short statement from one sentence to several sentences in length. You may find that your mission statement evolves as your business grows. Learn more on how to write your mission statement in our guide.

Consider also including the following in your executive summary:

• Business description : Similar to a 30-second pitch, describing your business and what makes it unique
• Products and services : The type of products and services you’re providing and their costs
• Competitors : Your biggest competitors and why your business will succeed despite them
• Management and organization : The owners’ backgrounds and how they will help the business succeed; management structure within the business
• Business location (or facility) : Location benefits and the surrounding area
• Target market and ideal customer : Who your ideal customers are and why they’re going to purchase your products or services
• Financial data and projections : Provide brief financial data and projections relevant to your business, such as startup costs, at what month the business will be profitable, and forecasted sales data
• Financing needed : Explanation of the startup funding sources and the amount of financing being requested

The bullets above can be combined into several paragraphs. You can add or remove sections based on your business’ needs. For example, if you don’t have a physical location, you might remove that piece of information. Or, if a web presence is crucial to your success, include two to three sentences about your online strategy .

Company Overview

The company overview (sometimes also called a “business overview”) section highlights your company successes (if you’re already in business) or why it will be successful (if you’re a startup). In the opening paragraph or paragraphs, provide information like location, owners, hours of operation, products, and services.

How you structure this section depends on whether you’re a startup or an established business. A startup will discuss the general expenses and steps needed to open the business, such as permits, build-outs, rent, and marketing. An established business will briefly discuss the company’s financial performance over the past three years.

If you’re trying to raise capital from an investor or bank, include a chart listing the items your business will acquire with the capital. For example, if you’re purchasing equipment with the additional funding, list each piece of equipment and the associated cost. At the bottom of the chart, show the total of all expenses, which should be the requested amount of funding.

This startup cost table for a pizza restaurant separates startup expenses from startup assets.

Your company overview should cover the following:

• Location & Facilities : If you have a brick-and-mortar location or a facility, like a warehouse, describe it here. Detail the benefits of your location and the surrounding areas. Write about square footage, leases or ownership, the surrounding area, and a brief description of the population.
• Ownership : Briefly mention the company ownership team and their backgrounds. Show why these owners are likely to be successful in operating this business by providing certain details, such as each owner’s industry experience, previous employers, education, and awards. This will be discussed more in-depth in the management and organization section below.
• Competitive advantage : Ideally, your competitive advantage is what your business can do that your competitors cannot. It’s the one big differentiator that will make your company successful. Many investors are looking for specific competitive advantages, such as patents, proprietary tech, data, and industry relationships. If you don’t have these, describe the top aspect in which your business will do better than competitors, such as quality of products, quality of services, relationships with vendors, or marketing strategy.

Products & Services

The products and services section is the most flexible section because its structure depends on what your business sells. Regardless of what you’re selling, include a description of your business model to explain how your business makes money. Also include future products or services your business could provide one, two, or five years down the road.

List and describe all physical and digital products you plan to sell, as well as any services the business provides. Services don’t necessarily have to be sold for a cost—your business might offer entertainment, like live music or bar games as a free service.

Whether you’re selling products, services, or both, it’s important to discuss fulfillment, or how each will be delivered. If you make or sell physical products, describe how products will be sold, assembled, packed, and shipped. If your business is service-based, describe how a service, such as a window installation, will be ordered and completed. Where will the glass be purchased from and acquired, how will customers place orders, and how will the window be installed?

Market & Industry Analysis

The market and industry analysis section is where you analyze potential customers and the forces that influence your industry. This section is where you make the case as to why your business should succeed, ideally backed by data. You’ll want to do a deep dive into your competitors and discuss their challenges and successes. Learn more about sales targeting to improve how you approach your sales strategy.

Market Segmentation

Market segmentation, or your target market, consists of the customers who are most likely to purchase your products or services. Describe these groups of customers based on demographics, including attributes like age, income, location, and buying habits. Additionally, if you’ll be operating with a business-to-business (B2B) model, use characteristics to describe the ideal businesses to which you’ll sell.

Once your target market is segmented into groups, use market research data to show that those customers are physically located near your business (or are likely to do business with you if you’re online). If you’re opening a daycare, for example, you’ll want to show the data on how many families are in a certain mile radius around your business. You can obtain this kind of data from a free resource, like the U.S. Census and ReferenceUSA .

Once you have at least three segments, briefly outline the strategy you’ll use to reach them. Most likely it will be a combination of marketing, pricing, networking, and sales.

Learn the best approach to product pricing in our guide.

Industry Analysis

Take a look at your business’s industry and explain why it’s a great idea to start a business in that niche. If you’re in a growing industry, a bank is more likely to lend your business capital because it’s predicted to be in demand and have additional customers. Learn about how to find a niche market .

Find industry statistics from a free tool, like the Bureau of Labor Statistics , or a paid tool like the Hoovers Industry Research , which provides professionally curated reports for over 1,000 industries.

Competitor Research

Wrap up the market and industry analysis section by analyzing at least five competitors within a five-mile radius (expand the radius, if needed). Create a table with the five competitors and mention their distance from your business (if applicable), along with their challenges, and successes.

During your analysis, you’ll want to frame their challenges as something you can improve upon. Persuade your reader that your business will provide superior products and services than the competitors.

Marketing Strategy & Implementation Summary

In the opening paragraphs of your marketing strategy and implementation summary, give an overview of the subsections below.

Include any industry trends you may take advantage of. If applicable, include the advertising strategy and budget, stating specific channels. Mention who in the business will be responsible for overseeing the marketing.

Include any platforms and tools the business will use, like your website, social media, email marketing, and video. If you’re hiring a company to do any online work, like creating a website or managing social media, briefly describe them and the overall cost (you can elaborate more on costs in the financial data section ).

Don’t forget to include a subsection for your traditional marketing plan. Traditional marketing encompasses anything not online, such as business cards, flyers, local media, direct mail, magazine advertising, and signage.

Sales Strategy

If sales is an important component of your business, include a section about your sales strategy. Describe the role of the salesperson (or persons), strategies they’ll use to close the deal with clients, lead follow-up procedures, and networking they’ll attend. Also, list any training your sales staff will attend.

Sales Forecast Table

A sales forecast table gives a high-level summary of where you expect your sales and expenses to occur for each of the next three years in business. In the paragraph before the table, state where you expect growth to come from and include a growth percentage rate. The annual sales forecast chart will be broken down further in the financial projections section below.

The annual sales forecast for this restaurant summarizes sales, cost, and profit for the first three years in business.

Pricing Strategy

In the pricing strategy section, discuss product/service pricing, competitor pricing, sales promotions , and discounts—basically anything related to the pricing of what you sell. You should discuss pricing in relation to product and service quality as well. Consider including an overview of pricing for specific products, e.g., pizza price discounts when ordering a specific number of pizzas for catering.

Milestones in a business plan are typically displayed in a table. They outline important tasks to do before the business opens (or expands, if already in business). For each milestone, include the name, estimated start and completion date, cost, person responsible, and department responsible (or outside company responsible). List at least seven milestones.

Milestones for this commercial photography business include hiring staff and completing marketing campaigns.

Management & Organization Summary

The management and organization summary is an in-depth look at the ownership background and key personnel. This is an important section because many investors say they don’t invest in companies, they invest in people. In this section, make the case why you and your team have the experience and knowledge to make this business a success.

Ownership Background

Discuss the owners’ backgrounds and place an emphasis on why that background will ensure the business succeeds. If you don’t have experience managing a retail business, consider finding a co-owner who does. Typically, banks won’t lend to someone who doesn’t have experience in the type of business they’re trying to open.

Management Team Gaps

If there are any experience or knowledge gaps within the management team, state them. List the consultants or employees you will hire to cover the gaps. Investors who know your industry well may recognize gaps within your business plan, and it’s important to state the gaps without waiting for the investor to bring it up. This makes it appear that you know the industry well.

Personnel Plan

The personnel plan outlines every position within your business for at least the next three years. In the opening paragraph, discuss the roles within the company and who will report to whom. Include a table with at least three years of salary projections for each employee in your business. Include a total salary figure at the bottom. This table may be broken down further into salaries for each month in the financial projections or appendix.

This commercial photography business has the CEO at the same salary every year, with their employees’ salaries increasing year over year.

Financial Data & Analysis

The financial data and analysis section is the most difficult part of a business plan. This section requires you to forecast income and expenses for the next three years. You’ll need a working knowledge of common financial statements, like the profit and loss statement, balance sheet, and cash flow statement.

In the opening paragraphs of the financial data and analysis section, give an overview of the sections below. Discuss the break-even point and the projected profit at the first, second, and third year in business. State the assets and liabilities from the projected balance sheet as well.

If you’re getting a loan from a bank, say how long and from what source the loan will be repaid. One of the main pieces of information bankers want to ascertain from financial forecasting is if they will be paid back and how likely that is to happen.

You might also include the following financial reports:

• Break-even analysis : Break-even is when your business starts to make money. Break-even analysis is where you illustrate the point at which your revenue exceeds expenses and a profit occurs. In this section’s opening paragraph, state your monthly fixed costs and average percent variable costs (cost that changes with output, like labor or cost of goods). In the example below, variable costs increase 8% for every additional dollar made.

The break-even point for this document shredding business is $31,500 in a month.

• Projected profit & loss: The profit and loss table is a month-by-month breakdown of income and expenses (including startup expenses). Typically, you should expect your business to show a profit within the first year of operating and increase in years two and three. Be sure to show income and expenses month-by-month for the first two years in operation. Create a separate chart that shows income and expenses year-by-year for the first three years.
• Projected cash flow : The cash flow section shows your business’s monthly incoming and outgoing cash. It should cover the first two years in business. Mention what you plan to do with excess cash. See how to run a statement cash flow in QuickBooks Online .
• Projected balance sheet: The balance sheet shows the net worth of the business and the financial position of the company on a specific date. It focuses on the assets and liabilities of the business. Ideally, the balance sheet should show that the net worth of your business increases. Prepare a projected year-by-year balance sheet for the first three years.
• Business ratios: Also called financial ratios, these are a way to evaluate business performance. It’s helpful to compare your projected business ratios to the industry standard. Project your business ratios by year for the first three years.

The appendix is where you put information about the business that doesn’t fit in the above categories. What you put here largely depends on the type of business you’re creating. It’s a good idea to put any visual components in the appendix. A restaurant might add an image of the menu and an artist rendering of the interior and exterior, for example.

Consider including the following items in your business plan appendix:

• Artist mock-up of interior
• Building permits
• Equipment documentation
• Incorporation documents
• Leases and agreements
• Letters of recommendation
• Licenses and permits
• Marketing materials
• Media coverage
• Supplier agreements

An appendix isn’t required in a business plan, but it’s highly recommended for additional persuasion. Documents like media coverage, agreements, and equipment documentation show the investor and banker you’re serious about the business. If your appendix is more than 10 pages, consider creating a second table of contents just for the appendix.

Detailed Financial Projections

Put the more detailed projections in the appendix. The financial projections in the previous section is typically a year-by-year breakdown for three years in the future. But many bankers and investors want to see the first two years broken down month-by-month for at least the profit and loss statement, balance sheet, cash flow, and personnel plan.

Typically, you can print out the spreadsheet in smaller font and include it in the appendix. You don’t need to create additional charts for the appendix.

With all of your information organized, now it’s time to add the final details, like cover pages and a nondisclosure agreement (NDA).

• Cover Page: The cover page provides contact information about the business and its owner. The cover page should have the business name and who prepared it, including your name, address, phone number, and email address. Additionally, if the registered company name with the state is different from the business name, you may want to add that as a “company name.”
• Nondisclosure Agreement: An NDA ((also called a confidentiality agreement) is a legal document that safeguards business information. You’d want someone to sign it before reading your business plan if you believe they could use the information to their advantage and your disadvantage, such as to steal your business idea or marketing strategy.

Fit Small Business provides a free non-disclosure agreement.

Once your final details are added, proofread all the sections of your business plan, ensuring that the information is accurate and that all spelling and grammar are correct. If there are any illustrations, projections, or additional information you forgot to include, now is the time to add it.

The final step is adding a table of contents so that bankers and potential investors can easily navigate your business plan. A table of contents lists the sections and subsections of your business plan. All of the headers above (Executive Summary, Business Objectives, Company Overview, Products and Services, and so on) are considered sections of a business plan. You can number the sections for additional organization. For example, 1.0 is the executive summary, 1.1 is the business objectives, and 1.2 is the mission statement.

Editing and formatting can change the pagination of your business plan. So you’ll save yourself work if you finalize the business plan content first, then arrange the table of contents at the end.

Congratulations! You’ve captured your business idea and plan for profitability on paper. Before you send this business plan to loan officers and potential investors, ask friends, family, and other supportive business owners to read it and provide feedback. They may notice typos or other errors that you missed. They may also identify details you can add to make your business plan more persuasive.

Frequently Asked Questions (FAQs) About How to Write a Business Plan

These are the most common questions I hear about writing a business plan.

What needs to be in a business plan?

What you should put in a business plan depends on its purpose and your industry. If you’re seeking funding from a bank or investor, you’re going to need most of the sections above, with a strong focus on your financial projections. If you are using your business plan to attract key employees (like a chef for your restaurant), mock-ups and vendor agreements will be more useful. Think about the information that will help your target reader make a decision about whether to get involved with your business—whether that is a location, a business model, or product idea—and be sure your business plan includes that information.

How do you write a business plan for a startup?

The business plan for a startup is similar to a business plan for an established business. The startup business plan will include startup costs, which will be listed by item and factored into the financial projections. Additionally, since your business hasn’t proven it can be successful yet, you may need additional information about the ownership, business model, market, and industry to convince the reader your business will succeed.

How long does it take to write a business plan?

A simple business plan may only take a couple of hours. However, for the business plan provided with this template, which includes financial projections, it may take over 60 hours to research the income and costs associated with running your business. You also have to format those costs into a chart, because it’s best to showcase the data with easy-to-understand charts.

Is writing a business plan hard?

Creating a business plan for funding from a bank or investor is a detailed process. Unless you have a background in financial statements, the financial projections may be difficult for the average business owner. But you can ask for help; it is common to hire a bookkeeper or accountant to assist you with financial projects to ensure your math is correct. Outside of the projections, most other business plan sections are simple, though you’ll want to give yourself time to make each section persuasive.

Every type of business, whether it’s a side hustle or a multimillion-dollar business, should have a business plan. The industry analysis and market segmentation sections validate your business idea. Researching and forecasting financial projections helps you logically think through income and expenses, which lessens the risk of business failure. Remember to get feedback on your business plan from business employees and associates. If necessary, have them sign an NDA before they review the plan.

About the Author

Find Mary On LinkedIn Twitter

Mary King is an expert restaurant and small business contributor at Fit Small Business. With more than a decade of small business experience, Mary has worked with some of the best restaurants in the world, and some of the most forward-thinking hospitality programs in the country. Mary’s firsthand operational experience ranges from independent food trucks to the grand scale of Michelin-starred restaurants, from small trades-based businesses to cutting-edge co-working spaces.

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October 31, 2023

Block Advisors

How to Write a Business Plan Step-By-Step

October 31, 2023 • Block Advisors

QUICK ANSWER:

• A business plan outlines your business’s goals, services, financing, and more.
• Business plans vary in length and complexity but should always include an explanation of what your business will do and how it will do it.
• Business plans serve as a guide for business owners and employees and are key to boosting investor confidence.

Whether you’re a serial entrepreneur or just getting your first small business idea off the ground, creating a business plan is an important step. Good business planning will help you clarify your goals and objectives, identify strategies, and note any potential issues or roadblocks you might face.

Not every business owner chooses to write a business plan, but many find it to be a valuable step to take when starting a business. Creating a business plan can seem daunting and confusing at first. But taking the time to plan and research can be very beneficial, especially for first-time small business owners.

If you want to learn how to create a business plan or if you feel you just need a little business plan help, read on!

What is a Business Plan?

A business plan serves as a comprehensive document that outlines your business’s goals, services, financing, leadership, and more details essential to its success. Think of the plan as the who, what, and why of your new business:

Who are the major players in your business?

What goods or services do you offer and why are they important?

Why are you in business and why should customers choose you?

Business plans can range in complexity and length, but, at their core, all plans explain what the business will do and how it will do it. A business plan serves as a guide for business owners and employees and should boost investor confidence. Some important advantages of business plans include:

• Shows investors you have an in-demand product or service, a solid team to achieve business goals, and the potential for growth and scalability.
• Increases the likelihood of securing a business loan, locking in investments, or raising capital. >>Read: A Guide to Raising Capital as a Small Business Founder
• Helps recognize partnership opportunities with other companies.
• Identifies and defines competitors within your given industry.

Looking for an examples of a successful business plan? Check out the SBA’s business plan page for walkthroughs of different business plan outlines.

How to Write a Business Plan: 10 Simple Steps

Starting with a blank page is undoubtedly intimidating. So, begin with a structured business plan template including the key elements for each section. Once your outline is complete, it’ll be time to fill in the details. Don’t worry, you’ll know how to write a business plan in no time. We’ve broken each section down to help you write a business plan in a few simple steps.

1. Brainstorm and Draft an Executive Summary for Your Business Plan

This will be the first page of your business plan. Think of it as your business’ written elevator pitch. In this high level summary, include a mission statement, a short description of the products or services you will be providing, and a summary of your financial and growth projections.

This section will be the first part people read, but you may find it easier to write it last. Writing it after building out the rest of your plan may help you condense the most important information into a concise statement. You’ll need to streamline your thoughts from the other sections into a one page or less summary.

2. Create a Business Description

In this next section, describe your business. Add more specific details than the executive summary. You should include your business’s registered name, the address of your business’s location, basic information about your business structure , and the names of key people involved in the business.

The company description should also answer these two questions:

• Who are you?
• What do you plan to do?

Explain why you’re in business. Show how you are different from competitors. Tell investors why they should finance your company. This section is often more inspirational and emotional. Make sure you grab the reader’s attention. The goal is to get them to believe in your vision as much as you do.

What business structure is right for my company?

Answer these six questions to help you find your fit

3. Outline Your Business Goals

This section should serve as an objective statement. Explain what you want to accomplish and your timeline. Business goals and objectives give you a clear focus. They drive your business to success, so dream big. Include objectives that will help you reach each goal. Don’t forget to make your goals and objectives SMART – that is, they should be:

S pecific | M easurable | A ttainable | R elevant | T ime-bound

4. Conduct and Summarize Market Research

Next, outline your ideal customer with some research. Do the math to estimate the potential size of your target market. Make sure you are choosing the right market for your product, one with plenty of customers who want and need your product. Define your customer’s pain points. Explain your expertise in relation to the market. Show how your product or service fills an important gap and brings value to your customers. Use your findings to build out a value proposition statement.

5. Conduct a Competitive Analysis

In a similar way, you’ll also want to conduct and include a competitive analysis. The purpose of this analysis is to determine the strengths and weaknesses of competitors in your market, strategies that will give you a competitive advantage, and how your company is different. Some people choose to conduct a competitive analysis using the SWOT method .

6. Outline Your Marketing and Sales Strategies

Your marketing sales strategy can make or break your business. Your marketing plan should outline your current sales decisions as well as future marketing strategies. In this section, you should reiterate your value proposition, target markets, and customer segments. Then, include details such as:

• A launch plan
• Growth tactics and strategies
• A customer retention plan
• Advertising and promotion channels (i.e. social media, print, search engines, etc.)

7. Describe Your Product or Service

By this point, your products or services have probably been mentioned in several areas of the business plan. But it’s still important to include a separate section that outlines their key details. Describe what you’re offering and how it fits in the current market. Also include details about the benefits, production process, and life cycle of your products. If you have any trademarks or patents, include them here. This is also a good time to ask yourself, “Should my plan include visual aids?”

[ Read More Must-Have Tips to Start Your Small Business ]

8. Compile Financial Plans

Financial health is crucial to the success of any business. If you’re just starting your business, you likely won’t have financial data yet. However, you still need to prepare a budget and financial plan. If you have them, include income statements , balance sheets , and cash flow statements . You can also include reporting metrics such as net income and your ratio of liquidity to debt repayment ability.

If you haven’t launched your business yet, include realistic projections of the same information. Set clear financial goals and include projected milestones. Share information about the budget. What are the business operations costs? Ensure you are comprehensive when considering what costs you may need to prepare for.

9. Build a Management and Operations Plan

Identify your team members. Highlight their expertise and qualifications. Outline roles that still need to be filled now to establish your company and later as the business grows. Read More: 8 tax steps to take when hiring employees >>

Include a section detailing your logistics and operations plan. Consider all parts of your operation. Create a plan that provides details on suppliers, production, equipment, shipment and fulfillment, and inventory. This shows how your business will get done.

10. Create an Appendix – A Place for Additional Information and Documents

Lastly, assemble an organized appendix. This section can contain any other relevant information a reader might need to enhance their understanding of other sections. If you feel like the appendix is getting long, consider adding a table of contents at the beginning of this section. Appendices often include documents such as:

• Licenses and permits
• Bank statements
• Resumes of key employees
• Equipment leases

How to Create a Business Plan: The Bottom Line

A business plan helps you identify clear goals and provides your business direction. Many small business plans are 10-20 pages in length. But as long as the essentials are covered, feel empowered to build a plan that works for you and your company’s needs. Creating a business plan will help you identify your market and target customers, define business aims, and foster long-term financial health.

We’re ready to help you get your business started on the right foot today, and help you find long-term satisfaction as you pursue your business dream. Writing a business plan can be exciting. But if the steps to starting your business are feeling overwhelming, Block Advisors is here to help. Make an appointment today – our experts can assist you with tax prep , bookkeeping , payroll , business formation , and more .

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How a Business Plan Sets Your Business Up For Success

• August 12, 2021

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Table of Contents

A business plan is your secret tool to grow your business and take it where you want it to go. Even research backs this up.

• A vast majority of successful medium-sized and large businesses have a business plan in place.
• The University of Oregon compared businesses with plans with businesses without plans and found that the former were consistently better at determining strategy-handling challenges, getting things done, and moving their businesses forward.
• Entrepreneurs that write formal business plans receive more financial support than if they had no plan.
• A study found an association between the completion of a company’s strategic plans and its profitability.
• Another study found that having a formal business plan was associated with higher gross revenues and growth in sales.
• Companies who finish their business plans are twice as likely to succeed in growing their business than those who don’t have a business plan. Case in point: Companies with a business plan grow 30% faster than companies without the plan.

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What Is a Business Plan?

• The kind of business you intend to build
• The products you plan to sell
• The people you want to sell to
• The structure of how you want to capitalize on the market
• The competitors you have in the market
• The exit strategies you’ve considered
• Which route will you take to go to Las Vegas from Los Angeles?
• What kind of car do you plan to use to make this journey?
• How much gas will making the journey cost?
• Do you have enough money to cover all expenses for the trip?
• What sites do you want to see along the way?

How Should You Present Your Business Plan?

How can making a business plan help your business.

Business Plans for Startups

Business plans for existing businesses, why making a business plan is so important, business idea evaluation and legitimization, securing finance and loans, strategizing and better decision-making, identifying potential weaknesses and uncovering new opportunities, procuring business license, the different types of business plans, the lean business plan, the standard business plan or external business plan, decoding the crucial sections of a business plan, 1. executive summary.

• Business Concept. What does your business do?
• Mission Statement. What does your business want to do? What are its core values and purpose?
• Product Description and Differentiation. What product or service do you sell, and why is it different?
• Target Market. Who do you want to sell to?
• Marketing Strategy. How do you plan to reach out to your customers?
• Current and Projected Financial State. What's your current revenue, and how much do you foresee earning in the future? Do you have any existing funding sources or investors?
• The Ask. How much capital do you want to raise?
• Company Information. What is the company‘s name? Where is its headquarters? Who are the founders or owners and the management team?

2. Company Summary

• Your business structure, i.e, are you a general partnership, limited partnership, or a corporation?
• Your business model and operating industry
• Your business’s vision and mission statement, as well as a value proposition
• Information on your business or history
• Your long-term and short-term business objectives
• Your team, including the key personnel and their salaries

• Consider all the people your company is accountable to, including owners, employees, suppliers, investors, and of course, customers. How would you like to conduct business with each one of them?
• Your short-term objectives should cover goals you plan on achieving within the next year, whereas your long-term goals should focus on a longer period, say, five years. What would yours be?
• A good mission statement should explain why your business exists and how it can help — all presented convincingly in a one-sentence format. Do you have one?

3. Products and Services

• Pricing – Your approach for your pricing strategy, i.e whether it’s cost-plus, market-based, or value-based.
• Promotion – Your promotion plan should cover your plan for communicating with your prospects and customers, along with how you’ll measure the overall cost and success
• Packaging – Mention whether your packaging matches your positioning strategy, and how it communicates your key value proposition and compares to your competition.
• Advertising – An overview of the kinds of advertising you plan to spend money on — traditional, off-line, or social media.
• Content Marketing – Your approach to educating your prospects on topics they are interested in and leverage your product or service as the perfect solution for their pain points.
• Public Relations and Social Media – While you don’t need to be on every social media channel or invest in public relations, both tactics can be useful to give the exposure you need to grow your business.

4. Market Analysis Summary

• What features or benefits do you offer to your target customers that your competitors don’t?
• How would you describe your customer's primary needs and wants?
• How are your competitors positioning themselves?
• Do you have any strategy for differentiating your company from your rivals? Why should a customer choose your product or service instead of your competition?
• Where do you see your company in the market of other solutions?
• What risks are you taking with this business?

5. Web Plan Summary

6. management summary.

7. Financial Plan Summary

• Sales Forecast – Your projections of how much you think you’re going to sell over the next few years.
• Personnel Plan – An estimate of how much you plan on paying your employees, along with something known as “employee burden,“ which refers to the cost of an employee beyond the salary. This usually includes insurance, payroll taxes, benefits, and so on.
• Income Statement – Also known as the profit and loss statement, the income statement indicates whether you’re making a profit or loss based on your sales forecast, personal plan, and a list of other ongoing expenses (cost of goods sold, operating expenses, interest, taxes, depreciation, etc.).
• Cash Flow Statement – This statement helps you keep track of how much cash you have at any given point in time, and no, it isn’t the same as the profit and loss statement.
• Balance Sheet – This document gives you an overview of the overall financial health of your business. It’ll list your assets, liabilities, and equity in detail.
• Use of Funds – A brief explanation of how you plan on using your investor’s cash.
• Exit Strategy – Your plan for eventually selling your business either to the public in an IPO or to another company.

8. Appendix

Get Started With Your Business Plan ASAP!

The good news is, irrespective of whether you’re overwhelmed or contemplative, As a business coach , I can help you make a strong business plan that does everything you want it to do using my 20-year experience and expertise.

Get in touch with a business coach today to create your roadmap for growing your business and ensure success.

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Outsourced CFO Services Driving M&A Success from Due Diligence to Integration

Maximizing Profits: Financial Breakdown of a 1M Home Service Business

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What is a Business Plan? And How Does it Benefit My Business?

May 26, 2023

Before you start up a business , or even before you make any major changes to your existing business, it's essential to have a solid plan in place. Your business plan will guide you through the critical early stages and help minimise mistakes - and if you're looking for investors, it could be the deciding factor that gets them on board with your idea.

While understanding the components and benefits of a business plan is crucial, creating one can be a daunting task, especially for new entrepreneurs. If you're unsure where to start or how to structure your plan effectively, consider seeking professional assistance from a business plan writing service . These services can provide expert guidance and support, ensuring that your business plan is not only comprehensive but also tailored to your specific business goals and needs.

But what exactly is a business plan? How do you write one? And how does it benefit your startup? In this article, we'll tackle all of those questions and more!

Key Takeaways on the Benefit of a B ‍ usiness Plans:

• Definition : A business plan is a written document that outlines your business's goals and the strategy to achieve them.
• Benefits : It serves as a roadmap, aids in securing funding, and assists in decision-making.
• Components : It typically includes sections like the executive summary, company description, market analysis, organisation and management, product line or services, marketing and sales strategy, and financial projections.
• Flexibility : Your business plan should be a flexible document that evolves with your business.
• Investor Attractio n: A well-structured plan can attract investors and other stakeholders.
• Strategic Planning : It helps to define your business strategy and establish a clear path for growth.
• Performance Monitoring : Regularly reviewing and updating your business plan allows for effective performance monitoring.

What is a business plan?

A business plan is a document that outlines your company's goals and objectives. It's a roadmap to help you achieve those goals, as well as a tool for making better decisions. A good business plan can help you attract investors, customers and other resources (like employees) by showing them what makes your company unique, and how it will grow in the future.

A well-written business plan should be clear enough for anyone from outside of your industry to understand, but detailed enough that it gives readers confidence in their investment or purchase decision.

Why do I need a business plan?

Your business plan is the roadmap that helps you achieve your goals. It's also a great tool for keeping track of your progress and clarifying where you need to focus your efforts in order to get results. As an entrepreneur, it's important to know what type of information should be included in your plan so you can create one that meets all of its needs.

Here are some benefits of having a well-written business plan:

• Helps secure funding (including loans)
• Provides direction for future growth and development
• Serves as an internal guide for employees who may not have been involved in developing the original document

How do I write a good business plan?

Writing a good business plan is not easy, but it's not impossible either. With several AI business plan generators available, you may create the first draft of your plan in no time. The most important thing is to make sure that your business plan is written in a clear and concise way.

The next step is to make sure that you address all the relevant information in your plan. As mentioned earlier, this includes:

• Your company's mission statement (your why)
• Your vision for the future of your company (what)
• A detailed description of how you will achieve this goal (how)

What does my business plan need to include?

Your business plan should include:

• Company description . This section should include the company's history, mission statement, and goals for the future. It should also include your background and experience in the industry.
• Market analysis . This section will analyse your target market and competitors, including any research you have done on them that's relevant to your business plan (such as demographic information). It will also include details about how much money it will take to get started with this venture, including startup costs such as equipment purchases or lease payments; operating expenses like utilities or payroll; expenses associated with marketing/promotion (printing flyers, paying for Google ads); etcetera...
• Product description & financial projections/requirements (or "Financials"). If applicable, and particularly if you're planning on launching a new product line, this part of your plan needs plenty of detail about what makes up each component of production costs so that investors can evaluate whether or not they'd like their money invested here vs elsewhere before committing funds up front!

A solid business plan will help you define and execute your startup's vision.

A solid business plan will help you define and execute your startup's vision. It's a roadmap to help you set goals, measure progress, and focus on what's most important to the success of your company.

A good plan also helps investors understand what they're investing in by providing a detailed description of how their money will be used to achieve certain results, and why those results are important for the company (and for them).

FAQs on Business Plans

Are you planning to start a business, or do you want to bring clarity to your existing operations? A business plan can be an indispensable tool to guide your path. This article outlines what a business plan is and the various ways it can benefit your business. For more specific queries, you can browse through our FAQ section.

How can a business plan benefit my business?

A business plan is a roadmap for your company. It helps you define your business goals, identify the resources you need to achieve those goals, and build a plan for achieving them. A well-written business plan will also help you make better decisions by providing a framework for evaluating opportunities and risks.

A good plan should include a mission statement - What's the purpose or mission of your company? Why does it exist? What does it do that makes it unique from other companies in its industry space (if applicable)? This section should be written in clear language that anyone could understand; think back to when we talked about defining what makes up a good elevator pitch earlier in this series!

What are the key components of a business plan?

A business plan is a detailed, written document that outlines the goals of your company and how you plan to achieve them. It's essentially a road map for your business, outlining what you want to accomplish in the short term (3-5 years) and long term (10+ years).

A good business plan will include all of these key components:

• Business summary - This section summarises who your company is, what industry you're in, what value proposition sets you apart from competitors, where customers come from and go through your sales funnel (e.g., website visitors turn into leads who become customers), etc. It should also include any existing marketing materials like brochures or infographics that explain how great it is working with clients using your services/products.
• Company overview - This section details everything about who owns/operates each department within the organisation, what their role is within those departments; whether they have any special skills needed for this particular job function; any certifications or licences necessary for performing these tasks at an efficient level without breaking laws along the way...etcetera ad nauseum! It may seem boring but trust me when I say this information helps potential investors understand exactly how much work needs done before they invest money into something (or someone).
• Market analysis - In order not only survive but thrive as an entrepreneur one must first understand what makes up "the competition" so one can better develop strategies around beating them head-on! This part explains why yours would be better than theirs by highlighting key differences between products offered by both sides; explaining why consumers choose one product over another based on price point alone.

How often should I update my business plan?

You should update your business plan at least annually, but more frequently if you are changing your business model or expanding it. It can also be beneficial to do so if you are adding or removing team members from the team (for example, if someone leaves). When updating a plan, consider which parts of it need adjusting based on changes in your industry and market conditions.

How can a business plan attract investors?

A business plan is a document that helps you determine your goals, market and customers. It's also a document that investors look at when deciding whether or not to invest in your company.

The best way to attract investors is by presenting them with an attractive and well thought out business plan.

How does a business plan help in strategic planning?

A business plan helps you to plan for the future of your business, which is essential when you are trying to attract investors or secure funding. A business plan is a written document that outlines the goals of your business, how you will achieve them and how you will measure your success.

A well-written and well-structured plan will help in strategic planning by providing:

• A clear vision and mission statement for your company
• An overview of the industry in which it operates along with its competitors' strengths and weaknesses
• An assessment of its strengths relative to those competitors' weaknesses

A business plan is an important tool for any entrepreneur, and it can help you to make better decisions. If you're just starting out with your own startup, then we recommend that you create a plan as soon as possible so that you know where your company is going in the future.

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How to Start a Business: A Comprehensive Guide and Essential Steps

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Conducting Market Research

Crafting a business plan, reviewing funding options, understanding legal requirements, implementing marketing strategies, how much does it cost to start a business, what should i do before starting a business, what types of funding are available to start a business, do you need to write a business plan, the bottom line.

Building an effective business launch plan

Starting a business in the United States involves a number of different steps, spanning legal considerations, market research, creating a business plan, securing funding, and developing a marketing strategy. It also entails decisions around a business’s location, structure, name, taxation, and registration.

This article covers the key steps involved in starting a business, as well as important aspects of the process for entrepreneurs to consider.

Key Takeaways

• Entrepreneurs seeking to develop their own business should start by conducting market research to understand their industry space and competition, and to target customers.
• The next step is to write a comprehensive business plan, outlining the company’s structure, vision, and strategy. Potential funders and partners may want to review the business plan in advance of signing any agreements.
• Securing funding is crucial in launching a business. Funding can come in the form of grants, loans, venture capital, or crowdfunded money; entrepreneurs may also opt to self-fund instead of or in combination with any of these avenues.
• Choosing a location and business structure can have many implications for legal aspects of business ownership, such as taxation, registration, and permitting, so it’s important to fully understand the regulations and requirements for the jurisdiction in which the business will operate. 
• Another key aspect of launching a new business is having a strategic marketing plan that addresses the specifics of the business, industry, and target market.

Before starting a business, entrepreneurs should conduct market research to determine their target audience, competition, and market trends. 

The U.S. Small Business Administration (SBA) recommends researching demographic data around potential customers to understand a given consumer base and reduce business risk. It also breaks down common market considerations as follows:

• Demand : Do people want or need this product or service?
• Market size : How many people might be interested?
• Economic indicators : These include income, employment rate, and spending habits of potential customers.
• Location : Where are the target market and the business located?
• Market saturation : How competitive is the business space, and how many similar offerings exist?
• Pricing : What might a customer be willing to pay?

Market research should also include an analysis of the competition (including their strengths and weaknesses compared to those of the proposed business), market opportunities and barriers to entry, industry trends, and competitors’ market share .

There are various methods for conducting market research, and the usefulness of different sources and methodologies will depend on the nature of the industry and potential business. Data can come from a variety of sources: statistical agencies, economic and financial institutions, and industry sources, as well as direct consumer research through focus groups, interviews, surveys, or questionnaires.

A comprehensive business plan is like a blueprint for a business. It will help lay the foundation for business development and can assist in decision making, day-to-day operations, and growth. 

Potential investors or business partners may want to review and assess a business plan in advance of agreeing to work together. Financial institutions often request business plans as part of an application for a loan or other forms of capital. 

Business plans will differ according to the needs and nature of the company and only need to include what makes sense for the business in question. As such, they can vary in length and structure depending on their intended purpose. 

Business plans can generally be divided into two formats: traditional business plans and lean startup business plans. The latter is typically more useful for businesses that will need to adjust their planning quickly and frequently, as they are shorter and provide a higher-level overview of the company.

The process of funding a business can be as unique as the business itself—that is, it will depend on the needs and vision of the business and the current financial situation of the business owner. 

The first step in seeking funding is to calculate how much it will cost to start the business. Estimate startup costs by identifying a list of expenses and putting a number to each of them through research and requesting quotes. The SBA has a startup costs calculator for small businesses that includes common types of business expenses. 

From there, an entrepreneur will need to determine how to secure the required funding. Common funding methods include:

• Self-funding , also known as bootstrapping  
• Seeking funding from investors, also known as venture capital  
• Raising money by crowdfunding
• Securing a business loan
• Winning a business grant

Each method will hold advantages and disadvantages depending on the situation of the business. It’s important to consider the obligations associated with any avenue of funding. For example, investors generally provide funding in exchange for a degree of ownership or control in the company, whereas self-funding may allow business owners to maintain complete control (albeit while taking on all of the risk). 

The availability of funding sources is another potential consideration. Unlike loans, grants do not have to be paid back—however, as a result, they are a highly competitive form of business funding. The federal government also does not provide grants for the purposes of starting or growing a business, although private organizations may. On the other hand, the SBA guarantees several categories of loans to support small business owners in accessing capital that may not be available through traditional lenders.

Whichever funding method (or methods) an entrepreneur decides to pursue, it’s essential to evaluate in detail how the funding will be used and lay out a future financial plan for the business, including sales projections and loan repayments , as applicable.  

Legally, businesses operating in the U.S. are subject to regulations and requirements under many jurisdictions, across local, county, state, and federal levels. Legal business requirements are often tied to the location and structure of the business, which then determine obligations around taxation, business IDs, registration, and permits.

Choosing a Business Location

The location—that is, the neighborhood, city, and state—in which a business operates will have an impact on many different aspects of running the business, such as the applicable taxes, zoning laws (for brick-and-mortar, or physical locations), and regulations.

A business needs to be registered in a certain location; this location then determines the taxes, licenses, and permits required. Other factors to consider when choosing a location might include:

• Human factors : Such as the target audience for your business, and preferences of business owners and partners around convenience, knowledge of the area, and commuting distance
• Regulations and restrictions : Concerning applicable jurisdictions or government agencies, including zoning laws
• Regionally specific expenses : Such as average salaries (including required minimum wages), property or rental prices, insurance rates, utilities, and government fees and licensing
• The tax and financial environment : Including income tax, sales tax, corporate tax, and property tax, or the availability of tax credits, incentives, or loan programs

Picking a Business Structure

The structure of a business should reflect the desired number of owners, liability characteristics, and tax status. Because these have legal and tax compliance implications , it’s important to fully understand and choose a business structure carefully and, if necessary, consult a business counselor, lawyer, and/or accountant.

Common business structures include:

• Sole proprietorship : An unincorporated business that has just one owner, who pays personal income tax on profits
• Partnership : Options include a limited partnership (LP) or a limited liability partnership (LLP)
• Limited liability company (LLC) : A business structure that protects its owners from personal responsibility for its debts or liabilities
• Corporation : Options include a C corp , S corp , B corp , closed corporation , or nonprofit

Getting a Tax ID Number

A tax ID number is like a Social Security number for a business. Whether or not a state and/or federal tax ID number is required for any given business will depend on the nature of the business, as well as the location in which the business is registered.

If a business is required to pay state taxes (such as income taxes and employment taxes), then a state tax ID will be necessary. The process and requirements around state tax IDs vary by state and can be found on individual states’ official websites. In some situations, state tax IDs can also be used for other purposes, such as protecting sole proprietors against identity theft.

A federal tax ID, also known as an employer identification number (EIN) , is required if a business:

• Operates as a corporation or partnership
• Pays federal taxes
• Wants to open a business bank account
• Applies for federal business licenses and permits
• Files employment, excise, alcohol, tobacco, or firearms tax returns

There are further situations in which a business might need a federal tax ID number, specific to income taxation, certain types of pension plans, and working with certain types of organizations. Business owners can check with the Internal Revenue Service (IRS) about whether they need an EIN.

Registering a Business

Registration of a business will depend on its location and business structure, and can look quite different depending on the nature and size of the business. 

For example, small businesses may not require any steps beyond registering their business name with local and state governments, and business owners whose business name is their own legal name might not need to register at all. However, registration can include personal liability protection as well as legal and tax benefits, so it can be beneficial even if it’s not strictly required. 

Most LLCs, corporations, partnerships, and nonprofits are required to register at the state level and will require a registered agent to file on their behalf. Determining which state to register with can depend on factors such as:

• Whether the business has a physical presence in the state
• If the business often conducts in-person client meetings in the state
• If a large portion of business revenue comes from the state
• Whether the business has employees working in the state

If a business operates in more than one state, it may need to file for foreign qualification in other states in which it conducts business. In this case, the business would register in the state in which it was formed (this would be considered the domestic state), and file for foreign qualification in any additional states.

Some businesses may decide to register with the federal government if they are seeking tax-exempt status or trademark protection, but federal registration is not required for many businesses.

Overall registration requirements, costs, and documentation will vary depending on the governing jurisdictions and business structure.

Obtaining Permits

Filing for the applicable government licenses and permits will depend on the industry and nature of the business, and might include submitting an application to a federal agency, state, county, and/or city. The SBA lists federally regulated business activities alongside the corresponding license-issuing agency, while state, county, and city regulations can be found on the official government websites for each region.

Every business should have a marketing plan that outlines an overall strategy and the day-to-day tactics used to execute it. A successful marketing plan will lay out tactics for how to connect with customers and convince them to buy what the company is selling. 

Marketing plans will vary according to the specifics of the industry , target market, and business, but they should aim to include descriptions of and strategies around the following:

• A target customer : Including market size, demographics, traits, and relevant trends
• Unique value propositions or business differentiators : Essentially, an overview of the company’s competitive advantage with regard to employees, certifications, or offerings
• A sales and marketing plan : Including methods, channels, and a customer’s journey through interacting with the business
• Goals : Should cover different aspects of the marketing and sales strategy, such as social media follower growth, public relations opportunities, or sales targets
• An execution plan : Should detail tactics and break down higher-level goals into specific actions
• A budget : Detailing how much different marketing projects and activities will cost

The startup costs for any given business will vary greatly depending on the industry, business activity, and product or service offering. Home-based online businesses will usually cost less than those that require an office setting to meet with customers. The estimated cost can be calculated by first identifying a list of expenses and then researching and requesting quotes for each one. Use the SBA’s startup costs calculator for common types of expenses associated with starting a small business.

Entrepreneurs seeking to start their own business should fully research and understand all the legal and funding considerations involved, conduct market research, and create marketing and business plans. They will also need to secure any necessary permits, licenses, funding, and business bank accounts.

Startup capital can come in the form of loans, grants, crowdfunding, venture capital, or self-funding. Note that the federal government does not provide grant funding for the purposes of starting a business, although private sources do.

Business plans are comprehensive documents that lay out the most important information about a business. They are important references for the growth, development, and decision-making processes of a business, and financial institutions as well as potential investors and partners generally request to review them in advance of agreeing to provide funding or work together.

Starting a business is no easy feat, but research and preparation can help smooth the way. Having a firm understanding of the target market, competition, industry, business goals, business structure, funding requirements, tax and operating regulations, and marketing strategy, and conducting research and consulting experts where necessary, are all things that entrepreneurs can do to set themselves up for success.

U.S. Small Business Administration. “ Market Research and Competitive Analysis .”

U.S. Small Business Administration. “ Write Your Business Plan .”

U.S. Small Business Administration. “ Loans .”

U.S. Small Business Administration. “ Fund Your Business .”

U.S. Small Business Administration. “ Pick Your Business Location .”

U.S. Small Business Administration. “ Choose a Business Structure .”

U.S. Small Business Administration. “ Get Federal and State Tax ID Numbers .”

Internal Revenue Service. “ Do You Need an EIN? ”

U.S. Small Business Administration. “ Register Your Business .”

U.S. Small Business Administration. “ Apply for Licenses and Permits .”

U.S. Small Business Administration. “ Marketing and Sales .”

U.S. Small Business Administration. “ Grants .”

• How to Start a Business: A Comprehensive Guide and Essential Steps 1 of 25
• How to Do Market Research, Types, and Example 2 of 25
• Marketing Strategy: What It Is, How It Works, and How to Create One 3 of 25
• Marketing in Business: Strategies and Types Explained 4 of 25
• What Is a Marketing Plan? Types and How to Write One 5 of 25
• Business Development: Definition, Strategies, Steps & Skills 6 of 25
• Business Plan: What It Is, What's Included, and How to Write One 7 of 25
• Small Business Development Center (SBDC): Meaning, Types, Impact 8 of 25
• How to Write a Business Plan for a Loan 9 of 25
• Business Startup Costs: It’s in the Details 10 of 25
• Startup Capital Definition, Types, and Risks 11 of 25
• Bootstrapping Definition, Strategies, and Pros/Cons 12 of 25
• Crowdfunding: What It Is, How It Works, and Popular Websites 13 of 25
• Starting a Business with No Money: How to Begin 14 of 25
• A Comprehensive Guide to Establishing Business Credit 15 of 25
• Equity Financing: What It Is, How It Works, Pros and Cons 16 of 25
• Best Startup Business Loans 17 of 25
• Sole Proprietorship: What It Is, Pros and Cons, and Differences From an LLC 18 of 25
• Partnership: Definition, How It Works, Taxation, and Types 19 of 25
• What Is an LLC? Limited Liability Company Structure and Benefits Defined 20 of 25
• Corporation: What It Is and How to Form One 21 of 25
• Starting a Small Business: Your Complete How-to Guide 22 of 25
• Starting an Online Business: A Step-by-Step Guide 23 of 25
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How To Set Business Goals (+ Examples for Inspiration)

Updated: March 11, 2024

Published: October 24, 2023

You’re a business owner — the captain of your own ship. But how do you ensure you’re steering your company in the right direction? 

Without clear-cut goals and a plan to reach them, you risk setting your sails on the course of dangerous icebergs. 

The best way to steer clear of wreckage is to map out exactly where you want your business to go. This is what makes setting business goals so important. If you’re not already using them to guide your ship, then now’s a great time to start.

Table of contents:

• What are business goals?

Why business goals are important

How to set business goals, tips to achieve business goals, business goals examples, what are business goals .

Business goals are the desired outcomes that an organization aims to achieve within a specific time frame. These goals help define the purpose and direction of the company, guiding decision-making and resource allocation. They can be short-term or long-term objectives , aligned with the company’s mission and vision.

Operating a business using your gut and feelings will only get you so far. If you’re looking to build a sustainable company, then you need to set goals in advance and follow through with them. 

Here’s what goal setting can do to make your business a success:

• Give your business direction. Business goals align everyone toward a common purpose and ensure all efforts and resources are directed toward achieving specific outcomes.
• Keep everyone motivated to keep pushing forward. Goals provide employees with a sense of purpose and motivation. According to research from BiWorldwide, goal setting makes employees 14.2x more inspired at work and 3.6x more likely to be committed to the organization.
• Create benchmarks to work toward (and above). Goals provide a basis for measuring and evaluating the performance of the organization. They serve as benchmarks to assess progress, identify areas of improvement, and make informed decisions about resource allocation and strategy adjustments .
• Prioritize activities and allocate resources effectively. Goals help you identify the most important initiatives, ensuring that time, money, and effort are invested in activities that align with the overall objectives.
• Make continuous organizational improvements. Goals drive continuous improvement by setting targets for growth and progress. They encourage businesses to constantly evaluate their performance, identify areas for refinement, and implement strategies to enhance efficiency and effectiveness.

Nothing creates solidarity among teams and departments like shared goals. So be sure to get everyone involved to boost camaraderie. 

Setting business goals requires careful consideration and planning. By defining specific and measurable targets, you can track progress and make necessary adjustments along the way.

Here are the steps to effectively set business goals.

Step 1: Identify key areas to improve in your business

Start by assessing the current state of your organization. Identify areas that require improvement or growth. This could include increasing revenue, expanding your customer base, improving employee satisfaction, or enhancing product offerings.

Step 2: Choose specific and measurable goals 

Setting clear and specific goals is essential. Use the SMART goal framework to ensure your goals are Specific, Measurable, Achievable, Relevant, and Time-bound. For example, instead of setting a vague goal like “increase revenue,” set a specific goal like “increase revenue by 15% in the next quarter.”

Step 3: Prioritize which goals to tackle first

Not all goals are equally important or urgent. Evaluate the impact and feasibility of each goal and prioritize them accordingly. By ranking your goals, you can focus your efforts and resources on the most critical objectives.

Step 4: Break down your goals into smaller milestones

Breaking down each goal into smaller, manageable tasks makes them more attainable. Assign responsibilities and set deadlines for each step. This approach helps track progress and ensures accountability.

Step 5: Decide what your Key Performance Indicators (KPIs) will be

Key Performance Indicators (KPIs) are metrics used to measure progress toward your goals. Set realistic and relevant KPIs that align with your objectives. For example, if your goal is to increase customer acquisition, a relevant KPI could be the number of new customers acquired per month.

Now that you have set your business goals, it’s time to take action and work toward achieving them. Here are some tips to help you stay on track:

1. Write down your action plan 

Develop a detailed plan of action for each goal. Identify the necessary resources, strategies, and milestones to achieve them. A well-defined action plan provides a road map for success.

2. Foster a culture that’s goal-oriented

Encourage your employees to embrace and contribute to your goals. Foster a culture that values goal setting and achievement. Recognize and reward individuals or teams that make significant progress toward the goals.

3. Regularly track and evaluate progress

Monitor the progress toward each goal and make adjustments as needed. Use project management tools or software to track and visualize progress. Regularly review and evaluate your performance to ensure you’re on the right track.

4. Seek feedback and adapt

Gather feedback from employees, customers, and stakeholders. Their insights can provide valuable perspectives and help you refine your goals and strategies. Adapt your approach based on feedback to increase your chances of success.

5. Stay focused and motivated (even when you fail)

Staying motivated to achieve goals is difficult, especially when you come up short or fail. But don’t let this set you back. Continue pushing forward with your goals or readjust the direction as needed. Then do whatever you can to avoid distractions so you stay committed to your action plan.

Also, remember to celebrate small wins and milestones along the way to keep your team motivated and engaged.

To provide inspiration, here are some examples of common business goals:

1. Revenue growth

Revenue growth is a business goal that focuses on increasing the overall income generated by the company. Setting a specific target percentage increase in revenue can create a measurable goal to work toward.

Strategies for achieving revenue growth may include:

• Expanding the customer base through targeted marketing campaigns
• Improving customer retention and loyalty
• Upselling or cross-selling to existing customers
• Increasing the average order value by offering premium products or services

Example: A retail company sets a goal to increase its revenue by 10% in the next fiscal year. To achieve this, it implements several strategies, including launching a digital marketing campaign to attract new customers, offering personalized discounts and promotions to encourage repeat purchases, and introducing a premium product line to increase the average order value.

2. Customer acquisition

Customer acquisition focuses on expanding the customer base by attracting new customers to the business. Setting a specific goal for the number of new customers helps businesses track their progress and measure the effectiveness of their marketing efforts.

Strategies for customer acquisition may include:

• Running targeted advertising campaigns
• Implementing referral programs to incentivize existing customers to refer new ones
• Forming strategic partnerships with complementary businesses to reach a wider audience

Example: A software-as-a-service (SaaS) company aims to acquire 1k new customers in the next quarter. To achieve this, it launches a social media marketing campaign targeting its ideal customer profile, offers a referral program where existing customers receive a discount for referring new customers, and forms partnerships with industry influencers to promote its product.

3. Employee development

Employee development goals focus on enhancing the skills and knowledge of employees to improve their performance and contribute to the organization’s growth. By setting goals for employee training and skill development, businesses can create a culture of continuous learning and provide opportunities for career advancement.

Strategies for employee development may include:

• Offering training programs
• Providing mentorship opportunities
• Sponsoring professional certifications
• Creating a career development plan for each employee

Example: A technology company aims to have 80% of its employees complete at least one professional certification within the next year. To achieve this, it offers financial support and study materials for employees interested in obtaining certifications, provides dedicated study time during working hours, and celebrates employees’ achievements upon certification completion.

4. Product development

Product development goals focus on creating and improving products or services to meet customer needs and stay competitive in the market. Setting goals for product development can prioritize your efforts and so you can allocate resources effectively.

Strategies for product development may include:

• Conducting market research to identify customer preferences and trends
• Gathering customer feedback through surveys or focus groups
• Investing in research and development to create new products or enhance existing ones
• Collaborating with customers or industry experts to co-create innovative solutions

Example: An electronics company sets a goal to launch three new product lines within the next year. To achieve this, it conducts market research to identify emerging trends and customer demands, gathers feedback from its target audience through surveys and usability testing, allocates resources to research and development teams for product innovation, and collaborates with external design agencies to create visually appealing and user-friendly products.

5. Social responsibility

Social responsibility goals focus on making a positive impact on society or the environment. These goals go beyond financial success and emphasize the importance of ethical and sustainable business practices. Setting goals for social responsibility allows businesses to align their values with their actions and contribute to causes that resonate with their stakeholders.

Strategies for social responsibility may include: 

• Implementing sustainable practices to reduce environmental impact
• Donating a percentage of profits to charitable organizations
• Supporting local communities through volunteer programs
• Promoting diversity and inclusion within the organization

Example: A clothing retailer aims to reduce its carbon footprint by 20% in the next two years. To achieve this, it implements sustainable practices, such as using eco-friendly materials, optimizing packaging to minimize waste, and partnering with ethical manufacturers. It also donates a percentage of its profits to an environmental conservation organization.

Setting and achieving goals is what it takes to be successful in business. By following the steps outlined in this article and incorporating the tips provided, you can effectively set and work toward your goals. Remember to regularly evaluate progress, adapt as necessary, and celebrate milestones along the way.

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What to know about the SAVE plan, the income-driven plan to repay student loans

FILE - Wheaton College students stop to chat on the Norton, Mass. campus, Feb. 13, 2024 as snow falls. More than 75 million student loan borrowers have enrolled in the U.S. government’s newest repayment plan since it launched in August. (Mark Stockwell/The Sun Chronicle via AP, File)

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NEW YORK (AP) — More than 7.5 million student loan borrowers have enrolled in the U.S. government’s newest repayment plan since it launched in August.

President Joe Biden recently announced that he was canceling federal student loans for nearly 153,000 borrowers enrolled in the plan, known as the SAVE plan . Forgiveness was granted to borrowers who had made payments for at least 10 years and originally borrowed $12,000 or less.

The SAVE plan was created last year to replace other existing income-based repayment plans offered by the federal government. More borrowers are now eligible to have their monthly payments reduced to $0, and many will qualify for lower payments compared to other repayment plans.

For Lauran Michael and her husband, the SAVE plan has reduced student loan payments by half.

Since getting married, they’ve both been paying off her husband’s student loans, which would have amounted to about $1,000 a month when payments resumed after a pause during the pandemic. Under the SAVE plan, their payments are now $530 a month.

“We don’t want our loans dictating our life choices, and us not being able to do other things because we’re paying so much money. The SAVE plan is definitely a game changer for us,” said Michael, a 34-year-old interior designer in Raleigh, North Carolina.

Michael’s family is paying for daycare for their two children using the money they saved from not making payments during the pandemic and the reduced payments under the SAVE plan.

If you are interested in applying for the SAVE plan, here’s what you need to know:

WHAT IS AN INCOME-DRIVEN REPAYMENT PLAN?

The U.S. Education Department offers several plans for repaying federal student loans. Under the standard plan, borrowers are charged a fixed monthly amount that ensures all their debt will be repaid after 10 years. But if borrowers have difficulty paying that amount, they can enroll in one of several plans that offer lower monthly payments based on income and family size. Those are known as income-driven repayment plans.

Income-driven options have been offered for years and generally cap monthly payments at 10% of a borrower’s discretionary income. If a borrower’s earnings are low enough, their bill is reduced to $0. And after 20 or 25 years, any remaining debt gets erased.

HOW IS THE SAVE PLAN DIFFERENT?

More borrowers in the SAVE plan are eligible for $0 payments. This plan won’t require borrowers to make payments if they earn less than 225% of the federal poverty line — $32,800 a year for a single person. The cutoff for other plans, by contrast, is 150% of the poverty line, or $22,000 a year for a single person.

Also, the SAVE plan prevents interest from piling up. As long as borrowers make their monthly payments, their overall balance won’t increase. Once they cover their adjusted monthly payment — even if it’s $0 — any remaining interest is waived.

Other major changes will take effect in July 2024. Payments on undergraduate loans will be capped at 5% of discretionary income, down from 10% now. Those with graduate and undergraduate loans will pay between 5% and 10%, depending on their original loan balance.

The maximum repayment period is capped at 20 years for those with only undergraduate loans and 25 years for those with any graduate school loans.

WHO QUALIFIES FOR THE SAVE PLAN?

The SAVE plan is available to all student loan borrowers in the Direct Loan Program who are in good standing on their loans.

Read more about the SAVE plan here .

HOW DO I APPLY FOR THE SAVE PLAN?

Borrowers can apply to the SAVE plan using the Income-Driven Repayment Plan request through the Education Department’s website.

HOW WILL I KNOW THAT MY DEBT HAS BEEN CANCELED?

If you are one of the borrowers who is benefitting from forgiveness under the SAVE plan, you will receive an email from the Education Department.

WHAT ARE OTHER PROGRAMS THAT CAN HELP WITH STUDENT LOAN DEBT?

If you’ve worked for a government agency or a nonprofit , the Public Service Loan Forgiveness program offers cancellation after 10 years of regular payments, and some income-driven repayment plans cancel the remainder of a borrower’s debt after 20 to 25 years.

Borrowers should make sure they’re signed up for the best possible income-driven repayment plan to qualify for these programs.

Borrowers who have been defrauded by for-profit colleges may also apply for relief through a program known as Borrower Defense.

If you’d like to repay your federal student loans under an income-driven plan, the first step is to fill out an application through the Federal Student Aid website .

WILL THERE BE FUTURE FORGIVENESS?

Several categories of borrowers would be eligible for relief under Biden’s second try at widespread cancellation after the Supreme Court rejected his first plan last year.

The proposed plan includes relief for borrowers who have been paying their loans for at least 20 or 25 years, automatic forgiveness for borrowers who are eligible for income-driven repayment plans but are not enrolled, and loan cancellation for borrowers who attended a for-profit college that left them unable to pay their student loans, among others.

Whether any of the relief will materialize is a looming question as conservatives vow to challenge any attempt at mass student loan cancellation. The new proposal is narrower, focusing on several categories of borrowers who could get some or all of their loans canceled, but legal challenge is almost certain.

Currently, borrowers who are eligible for forgiveness under the SAVE program will get their loans discharged on a rolling basis, according to the Education Department.

This story was first published on March 10, 2024. It was updated on March 18, 2024, to correct the number of borrowers who have enrolled in the government’s newest repayment plan.

The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.

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IR-2024-71, March 14, 2024

WASHINGTON ― With the April 15 filing deadline approaching, the Internal Revenue Service encourages taxpayers who may find it difficult to gather the necessary documents they need to file or pay the taxes they owe to consider several options offered on IRS.gov to avoid late filing and interest penalties.

This is the last in a four-part series called the Tax Time Guide , a resource to help taxpayers file an accurate tax return. As taxpayers approach the April 15 deadline, those who owe taxes can benefit from knowing their options.

Eligible individuals and families who earned $79,000 or less in 2023 can use IRS Free File on IRS.gov, to electronically file their taxes. But all taxpayers, regardless of income, who need more time to file a return can use IRS Free File as an easy and quick way to electronically file for a six-month extension before April 15, 2024. An extension will help to avoid penalties and interest for failing to file on time , and gives taxpayers until Oct. 15, 2024, to file. However, they still must pay what they owe by the April 15 deadline.

Except for eligible victims of recent natural disasters who have until Oct. 15 to make tax payments, taxpayers who can’t pay the full amount of taxes they owe by April 15 should file and pay what they can to reduce total penalties and interest.

There are multiple ways to make electronic payments and there are options for a payment plan or an agreement with the IRS.

IRS Online Account

An IRS Online Account provides taxpayers access to important information when preparing to file a tax return, pay a balance or follow up on notices. Taxpayers can view their information online including:

• Adjusted Gross Income.
• Payment history and any scheduled or pending payments.
• Payment plan details.
• Digital copies of select notices from the IRS.

Taxpayers can also use their Online Account to securely make a same-day payment for an outstanding 2023 tax balance, pay quarterly estimated taxes for the 2024 tax season or request an extension to file a 2023 return.

Interest and a late payment penalty will apply to any payments made after April 15. Making a payment, even a partial payment, will help limit penalty and interest charges.

Other electronic options

Direct Pay, available at IRS.gov, is the fastest, easiest way to make a one-time payment without signing into an IRS Online Account.

• Direct Pay : Direct Pay is free and allows taxpayers to securely pay their taxes directly from their checking or savings account without any fees or registration. Taxpayers can schedule payments up to 365 days in advance. After submitting a payment through Direct Pay, taxpayers will receive immediate confirmation.  
• IRS2Go mobile app : IRS2Go is the official mobile app of the IRS. Taxpayers can check their refund status, make a payment, find free tax preparation assistance, sign up for helpful tax tips and more. IRS2Go is available in both English and Spanish.  
• Electronic Funds Withdrawal (EFW) : This option allows taxpayers to file and pay electronically from their bank account when using tax preparation software or a tax professional. This option is free and only available when electronically filing a tax return.  
• Electronic Federal Tax Payment System : This free service gives taxpayers a safe, convenient way to pay individual and business taxes by phone or online. To enroll and for more information, taxpayers can call 800-555-4477 or visit eftps.gov .  
• Debit or credit card and digital wallet : Individuals can pay online, by phone or with a mobile device through any of the authorized payment processors. Processors do charge a fee to use these services. The IRS doesn’t receive any fees for these payments. Authorized card processors and phone numbers are available at IRS.gov/payments .

Other payment options

• Cash: For taxpayers who prefer to pay in cash, the IRS offers a way to pay taxes at one of its many retail partners. The IRS urges taxpayers choosing this option to start early because it involves a four-step process. Details, including answers to frequently asked questions, are at IRS.gov/paywithcash .
• “2023 Form 1040”.
• Daytime phone number.
• Social Security number.

Help for taxpayers who cannot pay in full

The IRS encourages taxpayers who cannot pay in full to pay what they can and consider a variety of payment options available for the remaining balance including getting a loan to pay the amount due. In many cases, loan costs may be lower than the combination of interest and penalties that the IRS must charge under federal law. Taxpayers should act as quickly as possible and are urged not to wait to respond to a notice: Tax bills accumulate more interest and fees the longer they remain unpaid. For all payment options, visit IRS.gov/payments .

Online self-service payment plans

Most individual taxpayers qualify for a payment plan and can use Online Payment Agreement to set up a payment plan (including an installment agreement) to pay off an outstanding balance over time.

Once the online application is complete, the taxpayer receives immediate notification of whether their payment plan has been approved. Taxpayers can setup a plan using the Online Payment Agreement in a matter of minutes. There’s no paperwork and no need to call, write or visit the IRS. Setup fees may apply for some types of plans.

Online payment plan options for individual taxpayers include:

• Short-term payment plan – The total balance owed is less than $100,000 in combined tax, penalties and interest. Additional time of up to 180 days to pay the balance in full.
• Long-term payment plan (installment agreement) – The total balance owed is less than $50,000 in combined tax, penalties and interest. Pay in monthly payments for up to 72 months. Payments may be set up using direct debit (automatic bank withdraw) which eliminates the need to send in a payment each month, saving postage costs and reducing the chance of default. For balances between $25,000 and $50,000, direct debit is required.

Qualified taxpayers with existing payment plans may be able to use the Online Payment Agreement to make changes including revising payment dates, payment amounts or bank information for payments made by direct debit. Go to Online Payment Agreement for more information.

Though interest and late-payment penalties continue to accrue on any unpaid taxes after April 15, the failure to pay tax penalty rate is cut in half while an installment agreement is in effect. Find more information about the costs of payment plans on the IRS’ Additional Information on Payment Plans webpage.

Taxpayers struggling to meet their tax obligation may also consider these additional payment options:

• Offer in Compromise – Certain taxpayers qualify to settle their tax liabilities for less than the total amount they owe by submitting an Offer in Compromise. To help determine their eligibility, they can use the Offer in Compromise Pre-Qualifier tool .
• Temporary delay of collection – Taxpayers can contact the IRS to request a temporary delay of the collection process. If the IRS determines a taxpayer is unable to pay, it may delay collection until the taxpayer’s financial condition improves. Penalties and interest continue to accrue until the full amount is paid.
• Other payment plan options – Taxpayers who do not qualify for online self-service should contact the IRS using the phone number or address on their most recent notice for other payment plan options. For individuals and out-of-business sole proprietors who are already working with IRS Campus Collection and who owe $250,000 or less, one available option is to propose a monthly payment that will pay the balance over the length of the Collection Statute (usually 10 years). These payment plans don’t require a financial statement, but they do require a determination for the filing of a Notice of Federal Tax Lien.

For more information about payments, see Topic No. 202, Tax Payment Options , on IRS.gov.

Taxpayer rights

The IRS reminds taxpayers that they have rights and protections throughout the collection process. For details, see Taxpayer Bill of Rights and Publication 1, Your Rights as a Taxpayer PDF .

Taxpayers should know before they owe. The IRS encourages all taxpayers to check their withholdings with the IRS Tax Withholding Estimator .

This information is part of a series called the Tax Time Guide , a resource to help taxpayers file an accurate tax return. Additional help is available in Publication 17, Your Federal Income Tax .

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The Department of Homeland Security Is Embracing A.I.

The agency will be the first in the federal government to roll out a comprehensive plan to integrate the technology into a variety of uses, from fighting crime to helping disaster survivors.

The Department of Homeland Security is moving quickly to adopt artificial intelligence, said Alejandro N. Mayorkas, the homeland security secretary. Credit... Valerie Plesch for The New York Times

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By Cecilia Kang

Reporting from Washington on A.I. policy

• March 18, 2024

The Department of Homeland Security has seen the opportunities and risks of artificial intelligence firsthand. It found a trafficking victim years later using an A.I. tool that conjured an image of the child a decade older. But it has also been tricked into investigations by deep fake images created by A.I.

Now, the department is becoming the first federal agency to embrace the technology with a plan to incorporate generative A.I. models across a wide range of divisions. In partnerships with OpenAI, Anthropic and Meta, it will launch pilot programs using chatbots and other tools to help combat drug and human trafficking crimes, train immigration officials and prepare emergency management across the nation.

The rush to roll out the still unproven technology is part of a larger scramble to keep up with the changes brought about by generative A.I., which can create hyper realistic images and videos and imitate human speech.

“One cannot ignore it,” Alejandro Mayorkas, secretary of the Department of Homeland Security, said in an interview. “And if one isn’t forward-leaning in recognizing and being prepared to address its potential for good and its potential for harm, it will be too late and that’s why we’re moving quickly.”

The plan to incorporate generative A.I. throughout the agency is the latest demonstration of how new technology like OpenAI’s ChatGPT is forcing even the most staid industries to re-evaluate the way they conduct their work. Still, government agencies like the D.H.S. are likely to face some of the toughest scrutiny over the way they use the technology, which has set off rancorous debate because it has proved at times to be unreliable and discriminatory.

Those within the federal government have rushed to form plans following President Biden’s executive order issued late last year that mandates the creation of safety standards for A.I. and its adoption across the federal government.

The D.H.S., which employs 260,000 people, was created after the Sept. 11 terror attacks and is charged with protecting Americans within the country’s borders, including policing of human and drug trafficking, the protection of critical infrastructure, disaster response and border patrol.

As part of its plan, the agency plans to hire 50 A.I. experts to work on solutions to keep the nation’s critical infrastructure safe from A.I.-generated attacks and to combat the use of the technology to generate child sexual abuse material and create biological weapons.

In the pilot programs, on which it will spend $5 million, the agency will use A.I. models like ChatGPT to help investigations of child abuse materials, human and drug trafficking. It will also work with companies to comb through its troves of text-based data to find patterns to help investigators. For example, a detective who is looking for a suspect driving a blue pickup truck will be able to search for the first time across homeland security investigations for the same type of vehicle.

D.H.S. will use chatbots to train immigration officials who have worked with other employees and contractors posing as refugees and asylum seekers. The A.I. tools will enable officials to get more training with mock interviews. The chatbots will also comb information about communities across the country to help them create disaster relief plans.

The agency will report results of its pilot programs by the end of the year, said Eric Hysen, the department’s chief information officer and head of A.I.

The agency picked OpenAI, Anthropic and Meta to experiment with a variety of tools and will use cloud providers Microsoft, Google and Amazon in its pilot programs. “We cannot do this alone,” he said. “We need to work with the private sector on helping define what is responsible use of a generative A.I.”

Cecilia Kang reports on technology and regulatory policy and is based in Washington D.C. She has written about technology for over two decades. More about Cecilia Kang

Explore Our Coverage of Artificial Intelligence

News  and Analysis

Gov. Bill Lee of Tennessee signed a bill  to prevent the use of A.I. to copy a performer’s voice. It is the first such measure in the United States.

French regulators said Google failed to notify news publishers  that it was using their articles to train its A.I. algorithms, part of a wider ruling against the company for its negotiating practices with media outlets.

Apple is in discussions with Google  about using Google’s generative A.I. model called Gemini for its next iPhone.

The Age of A.I.

By interacting with data about genes and cells, A.I. models have made some surprising discoveries and are learning what it means to be alive. What could they teach us someday ?

Covariant, a robotics start-up, is using the technology behind chatbots  to build robots that learn skills much like ChatGPT does.

When Google released Gemini, a new chatbot, the company quickly faced a backlash. The episode unleashed a fierce debate  about whether A.I. should be guided by social values.

A.I.’s booming growth is radically reshaping an already red-hot data center market, raising questions about whether these sites can be operated sustainably .

Few companies better illustrate how A.I. is changing Silicon Valley deal-making than Anthropic, one of the world’s hottest A.I. start-ups .

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How to Start a Lawn Care Business: A Step-by-Step Guide for Budding Entrepreneurs

Self-starters who want to learn how to start a lawn care business can follow these 11 steps to help create a lawn care business sure to grow..

By Amber Guetebier | Updated Mar 19, 2024 5:30 PM

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When it comes to types of businesses an entrepreneur can start, opting for a lawn care business can be full of benefits. Overall, lawn care business start-up costs are relatively low and the industry has the potential for high revenue; some lawn care businesses can bring in six figures annually. Add to that the perks of independence and spending time outdoors, and starting a lawn care business becomes even more appealing. To offer customers individualized, reliable lawn care, the best lawn care services start with a comprehensive, executable lawn care business plan. Those interested in starting a lawn care business will find the steps listed can help them on their path to a flourishing lawn care business.

Before You Begin…

When entrepreneurs are researching how to start a lawn care business, there are a number of key factors to take into consideration. Before launching a new venture, aspiring business owners will want to consider any existing lawn care businesses in their marketplace, what those businesses have done to be a success, and how a new lawn care business can compete.

In many locations, lawn care isn’t a year-round business, so taking the weather and climate into consideration will help an entrepreneur formulate the right plan. Many lawn care businesses offer winter snow or ice removal in areas with heavy snowfall. Those with milder winters may be able to work nearly year-round if they plan to offer lawn care preparation and seasonal cleanup as part of their services.

Tips for Starting a Lawn Care Business

• Create a well-researched business plan and set a budget.
• Decide on a business structure, such as sole proprietorship or limited liability company (LLC).
• Research required licenses and permits, such as those required for pesticide application.
• Invest in necessary equipment and software.
• Create a targeted marketing plan to create brand awareness and reach a wider client base.
• Recruit and hire employees to help the lawn care business scale.

STEP 1: Write a comprehensive lawn care business plan.

Writing a business plan is a logical first step for any entrepreneur, and it’s no different for a lawn care business. In order to create a robust, actionable business plan for lawn care companies, the owner needs to start off with market research and make decisions about the scope of the lawn care business they want to run. Many lawn care companies begin as a small lawn care business but may scale into a larger operation, so thinking about company structure is important. For example, will this be an LLC or a sole proprietorship? Is the goal to be a solo operation or to eventually become a franchise? A strong lawn care business plan includes a list of the equipment and tools the owner will need from the start, the start-up and operational budget for the business, and a marketing plan that includes outreach to let new customers know that the business is up and running.

STEP 2: Choose a business structure and register your business name.

There are several different structures an entrepreneur can choose for their business, including a sole proprietorship, a partnership, a corporation, an S corporation, or a limited liability company (LLC). For each of these structures, there are different requirements to register with the state or local government. Business structure affects taxes, paperwork requirements, personal liability, and where potential funding comes from. Aspiring entrepreneurs will want to consider their lawn care business structure carefully, as choosing to restructure in the future may come with restrictions and complications. The U.S. Small Business Administration (SBA) website offers business owners information to help them determine which structure is best for their company. Entrepreneurs can also choose to work with a professional to register their business; for example, they may choose to work with one of the best LLC services , such as LegalZoom or Northwest Registered Agent , to register their business as an LLC.

STEP 3: Get the necessary business licenses and permits as required by your state or local government.

Business owners typically need to register their lawn care business name with state and local governments. They’ll also want to consider the adjacent states where the company may conduct business and research whether the business needs to be registered there as well. Generally, if the company is an LLC, corporation, or partnership, the business owner may be required to register in any state where the company will regularly conduct business. Business names do not need to be registered on a federal level, but paying taxes to both state and federal tax agencies is a requirement.

In addition, the business owner will likely need to get a business license , though the specifics will depend on their location. There are a number of different types of business licenses , and new lawn care business owners will want to research what licenses are required in their area. For example, some states may only require a general business license for lawn care companies to operate legally. Others, however, may require lawn care businesses to obtain special pesticide application certification or permits.

STEP 4: Obtain business insurance coverage.

Lawn care companies frequently work with equipment such as riding lawn mowers or rototillers on clients’ property. They may work on drainage and irrigation as well as lawn care and maintenance. Because of this, purchasing the best insurance for lawn care businesses (such as a policy from NEXT Insurance or Thimble ) is a critical investment for any lawn care business. In many cases, a certain amount of insurance coverage is required by law in order for a business to acquire a license and operate legally in the state in which it’s located.

The good news is, the cost of lawn care business insurance is relatively affordable, with the national average at about $45 a month. Having lawn care business insurance can help protect the company in the event of an accident, damage to a client’s property, injuries to a client, and in some cases, stolen or damaged equipment.

STEP 5: Get financing and open a business bank account.

The national average lawn care business start-up cost is $6,900, which includes a business license, taxes, insurance, equipment, and operating supplies. This amount can fluctuate depending on location, existing equipment, and other factors such as number of employees and vehicles. Commercial lawn care companies may need to invest in larger and more powerful equipment, such as one or more of the best riding lawn mowers , rather than basic push mowers, and this can be a larger investment up front. Creating and finalizing a budget, possibly with the help of an accountant, will help a business owner see the profit they need to succeed and help secure the right amount of financing. It’s also essential to have a business bank account to help manage income and outgoing expenses.

STEP 6: Invest in software to help run and organize the business.

With so many moving parts involved in starting a lawn care business, investing in accounting or other business management software can provide a new business owner with the support they need to manage the daily operations of a lawn care business, including scheduling, invoicing, and budget tracking. The best lawn care scheduling software programs (such as Jobber ) can help address the specific needs associated with operating a lawn care business.

STEP 7: Purchase quality lawn care tools and equipment. 

Starting a lawn care business requires a business owner to invest in certain types of equipment, not the least of which is a lawn mower. Purchasing the best lawn mowers will help any new lawn care business operate successfully. If the lawn care company will operate as a commercial business, with clients that could include golf courses, sports stadiums, or parks, the owner may want to consider larger mowing equipment such as a zero-turn or tractor-style riding lawn mower . Riding lawn mowers are a greater initial investment, but they enable the lawn care business to serve more clients in less time. Entrepreneurs will want to keep in mind that some equipment, such as rototillers or skid-steer loaders, can be rented on an as-needed basis until the business grows.

“Investing in quality equipment and tools will allow you to apply [lawn care products] faster and more efficiently while putting less wear and tear on your body,” says Mark Marino, owner of Lawn Phix , a lawn care company based in Bellingham, Massachusetts. “I now primarily use a ride-on spreader/sprayer with a walk-behind fertilizer spreader and two battery backpack sprayers (one for herbicides and one for liquid nutrition). This setup has instantly doubled the number of properties I complete daily…compared to [using] the push spreader and battery backpack sprayer alone. Plus, I’m less tired at the end of the day, and it’s a lot of fun to ride around, too.”

STEP 8: Invest in top-quality lawn care products.

In addition to having quality tools, a new lawn care business will need to have a selection of quality lawn care products, such as fertilizer, weed control, and pest control products. Lawn care businesses can keep these types of products on hand to make it easier to maintain and beautify clients’ yards.

There are several factors for aspiring lawn care business owners to keep in mind while researching the best lawn care products for their company. First, they’ll want to consider safety. There is a lot of value in choosing a company that offers environmentally friendly products, and doing so could give a lawn care company an edge against the competition if other companies in the area aren’t using eco-friendly products. Second, they’ll want to think about the reputation of the company providing the lawn care products they’re considering. Entrepreneurs can research the different brands available, asking local companies what products they recommend and reading reviews on the effectiveness of each type of product.

Lawn care products are a critical component of any lawn care business, so it’s vital that an entrepreneur include them in their budget and shop around to find the best products for their money.

STEP 9: Choose and price the services your lawn care business will offer.

It’s common for many lawn care companies to offer up-front pricing on their website and on flyers or advertisements. By researching the lawn care cost in the area in which the lawn care business will operate, new lawn care companies can remain competitive in their local market. The national average cost for lawn care services is $124, with a range between $48 and $206. Pricing can be dependent on many factors including geographic location, frequency of service, lawn size, and any additional services the lawn care business will offer, such as pesticide application, additional landscaping services, or seasonal cleanups. In areas with heavy snowfall, many lawn care businesses pivot to offer snow removal and holiday lights installation.

STEP 10: Create a marketing plan to build a solid client base.

A marketing plan is an integral part of cultivating and maintaining a client base. Marketing includes everything from lawn care business cards to a dynamic website. It also includes targeted advertising, such as flyers and door hangers, in neighborhoods businesses wish to serve. The use of social media outreach is also important to build brand identity and interact with customers.

Another way for a lawn care business owner to get more clients is to tap into their existing customer base. “Something that’s worked really well for us is simple word-of-mouth advertising,” says Jeremy Yamaguchi, founder of Lawn Love . “We’ve gathered tons of new customers simply through being recommended by satisfied customers. We make it a habit to always ask our satisfied customers to recommend us after completing a job for them, and we also run lots of promotions where we will offer discounts to people who recommend and get others to do business with us. Lawn care is one of those services that is inherently personable and connection-focused, which is why this has always been an effective approach for us.”

Additionally, entrepreneurs will want to consider purchasing vehicle wraps or magnets with their business name, logo, and contact information and place them on their business vehicles. This helps the business become more visible in the community, which can attract more customers. Finally, business owners can ask their current customers if they can place a yard sign with their business info on the customer’s property—this way, passersby can see the business’s contact information while also admiring their handiwork.

STEP 11: Hire employees to help you run your lawn care business.

While a small lawn care business may start out with a single owner and operator, the workload will grow alongside the client base. In order to effectively scale a business, many lawn care companies will reach a point at which they will need to hire employees. Investigating the average wage and benefits will be a big step in the process for the business owner. Offering employees a fair wage and good benefits will help with employee retention, and it can help ensure trust and loyalty between employer and employee.

“I have seen wages increase steadily over the past 10 years. For instance, an inexperienced crew member started at about $11 per hour in 2014 compared to $18 per hour today,” says Jennifer Nichols, president of GreenWeaver Landscapes in Lenni, Pennsylvania. “Along with wage increases, benefits have grown over the years, and we now offer health and dental insurance, a retirement plan, and liberal vacation and education benefits for all new hires…Landscaping is a skilled profession and our employees deserve a living wage, just like all the other trades. I believe the public is beginning to understand and accept this. This simply means that wages will most likely continue to increase in the near future, and they should.”

When learning the ins and outs of how to start a lawn care business, from writing an initial business plan and securing funding to marketing and hiring employees, entrepreneurs can create a thriving business that helps beautify the neighborhood while earning a living wage. By dedicating the time up front to create a well-researched business plan, the grass really will grow greener.

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Overview of Travel Insurance Coverage

What does travel insurance cover, what does credit card travel insurance cover, what travel insurance coverage do you need to pay more for, choosing the right travel insurance, what does travel insurance cover frequently asked questions, understanding what travel insurance covers.

Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate insurance products to write unbiased product reviews.

The information for the following product(s) has been collected independently by Business Insider: Chase Freedom Flex℠. The details for these products have not been reviewed or provided by the issuer.

• Travel insurance is intended to cover risks and financial losses associated with traveling.
• Coverage can include trip cancellation, baggage protection, medical care, and emergency evacuation.
• When filing a claim, be specific and comprehensive in your documentation to ease the process.

Whether it's a trip across the world or a trip across the state, having travel insurance provides major relief if things go awry. Flight delays, lost baggage, illness, injuries, and other unforeseen events can disrupt even the best-laid plans. With a major disruption comes the potential for unanticipated expenses.

Travel insurance and the coverage it offers can help keep you protected and save you money in the long run.

Travel insurance policies protect travelers from financial losses should something go wrong during their trip. You can customize which coverages you want to include, and there are several to choose from.

"Common types of coverage include trip cancellation, trip interruption, baggage protection, coverage for medical care if you get sick or hurt during your trip, and emergency medical evacuation," says Angela Borden, a travel insurance expert and product strategist for travel insurance company Seven Corners.

Travel insurance plans offer nonrefundable payments and other trip-related expenses. While monetary compensation is a primary benefit, there is another valuable perk of travel insurance. It can provide peace of mind.

Your specific travel insurance plan (and its terms and conditions) will determine the minutia and specifics of what is covered. As with most other forms of insurance, a general rule of thumb is the more you spend, the better your coverage.

"Travel insurance can be confusing, so it's best to research a reputable company that specializes in travel insurance and has a long history of successfully helping travelers all over the world," says Borden.

Trip cancellation and interruptions

A travel insurance policy can reimburse you for a prepaid, nonrefundable trip if it is canceled for a covered event, such as a natural disaster or a global pandemic.

Trip interruption insurance covers you if you're already on your trip and you get sick, there's a natural disaster, or something else happens. Make sure to check with your travel insurance providers to discuss any inclusions, coverage, and more.

Travel delays and missed connections

Travel delay insurance coverage provides reimbursement for any expenses you incur when you experience a delay in transit over a minimum time. Reimbursements can include hotels, airfare, food, and other related expenses.

Medical emergencies and evacuations

Typically, US healthcare plans are not accepted in other countries. So travel insurance with medical coverage can be particularly beneficial when you are abroad. Medical coverage can also help with locating doctors and healthcare facilities.

Medical transportation coverage will also pay for emergency evacuation expenses such as airlifts and medically-equipped flights back to the US. Out of pocket, these expenses can easily amount to tens of thousands of dollars. Certain plans may even transport you to a hospital of choice for care.

Travel insurance generally does not include coverage for pre-existing conditions. That said, you can obtain a pre-existing condition waiver, which we will talk about later.  

Baggage and personal belongings

Most airlines will reimburse travelers for lost or destroyed baggage, but be prepared for limitations. Travel insurance plans will typically cover stolen items, such as those stolen out of a hotel room. This may not include expensive jewelry, antiques, or heirloom items. Typically, airlines have a few days to recover your bag.

In the meantime, you can make a claim to pay for items like certain toiletries and other items you need to pick up. If your bag is truly lost or you don't get it for an extended period, you can file a true lost baggage claim.

A major perk on several travel credit cards is embedded credit card travel insurance . Typically, you will need to use the specific card for the transaction (at least with partial payment) for travel coverage to kick in.

Each card has specific rules on what exactly is covered. But one of the industry leaders is the $550-per-year Chase Sapphire Reserve credit card. Here's a snapshot of what is covered with this specific card:

• Baggage delay: up to $100 reimbursed per day for up to five days if a passenger carrier delays your baggage by more than six hours.
• Lost and damaged baggage: up to $3,000 per passenger per trip, but only up to $500 per passenger for jewelry and watches and up to $500 per passenger for cameras and other electronic equipment.
• Trip delay reimbursement: up to $500 per ticket if you're delayed more than six hours or require an overnight stay.
• Trip cancellation and interruption protection: up to $10,000 per person and $20,000 per trip for prepaid, nonrefundable travel expenses.
• Medical evacuation benefit: up to $100,000 for necessary emergency evacuation and transportation when on a trip of five to 60 days and traveling more than 100 miles from home.
• Travel accident insurance: accidental death or dismemberment coverage of up to $100,000 (up to $1,000,000 for common carrier travel).
• Emergency medical and dental benefits: up to $2,500 for medical expenses (subject to a $50 deductible) when on a trip arranged by a travel agency and traveling more than 100 miles from home.
• Rental car coverage: primary coverage for damages caused by theft or collision up to $75,000 on rentals of 31 days or fewer

More protections are included with cards with an annual fee, but there are exceptions. The no-annual-fee Chase Freedom Flex, for instance, includes up to $1,500 per person (and up to $6,000 per trip) in trip cancellation and trip interruption coverage.

However, there are some differences between credit card travel coverage and obtaining coverage from a third party.

"Credit card coverage does not typically provide travel medical benefits," Borden says. "For protection if you get sick or hurt while traveling, you'll want a travel insurance plan with medical coverage."

Whether you get your travel insurance in a standalone policy or through a credit card, it's important to review your plan details carefully. In either case, there may be exclusions and other requirements such as deadlines when filing a claim, Borden notes.

Knowing what travel insurance doesn't cover is as important as knowing what it does cover.

"Travelers should understand that travel insurance benefits come into play only if a covered reason occurs," Borden says. Most standard travel insurance plans won't reimburse you for the following:

Cancel for any reason (CFAR)

Cancel-for-any-reason travel insurance covers a trip cancellation for any reason, not just a covered event. your standard benefits won't kick in unless it's a covered event. For instance, you'll be reimbursed simply for changing your mind about taking a trip.

That said, CFAR travel insurance is not without its downsides. For one, it's more expensive than traditional insurance, and most CFAR policies will only reimburse you for a percentage of your travel expenses. Additionally, CFAR policies aren't available for annual travel insurance . 

You can find our guide on the best CFAR travel insurance here.

Foreseen weather events

Sudden storms or unforeseen weather events are typically covered by standard travel insurance plans. There are exceptions to be aware of. For example, an anticipated and named hurricane will not be covered.

Medical tourism

If you're going to travel internationally for a medical procedure or doctor's visit, your travel insurance plan will not cover the procedure itself. Most medical travel plans also won't cover you if something goes wrong with your procedure.

Pre-existing conditions and pregnancy

Those with specific pre-existing conditions, such as someone with diabetes and needing more insulin, will not be covered by most plans. In addition, pregnancy-related expenses will likely not be covered under most plans.

That said, you can obtain a pre-existing condition waiver for stable conditions. In order to obtain a wavier, you will need to purchase travel insurance within a certain time frame from when you booked your trip, usually two to three weeks, depending on your policy.

Extreme sports and activities

Accidents occurring while participating in extreme sports like skydiving and paragliding will typically not be covered under most plans. However, many plans offer the ability to upgrade to a higher-priced version with extended coverage.

Navigating claims and assistance

When a trip goes awry, the first thing you should do is document everything and be as specific as possible with documentation. This will make the claims process easier, as you can substantiate and quantify your financial losses due to the delay.

For example, your flight home has been delayed long enough to be covered under your policy, you'll want to keep any receipts from purchases made while waiting. For instances where your luggage is lost, you will need to file a report with local authorities and document all the items you packed.

Cancellation protection also requires meticulous attention to detail. If you're too sick to fly, you may need to see a doctor to prove your eligibility. If an airline cancels a flight, you'll also need to document any refunds you received as travel insurance isn't going to reimburse you for money you've already gotten back. 

Part of the benefit of CFAR insurance is the reduced paperwork necessary to file a claim. You'll still need to document your nonrefundable losses, but you won't have to substantiate why you're canceling a trip.

Each plan should be personalized to meet the insured party's needs. Some travelers prefer to stick to the bare minimum (flight cancellation benefits through the airline). Others want a comprehensive plan with every coverage possible. Before you buy anything, set your destination. Are there any travel restrictions or changes pending? Does your destination country require emergency or other medical coverage?

If the destination airport is known for lost or delayed luggage, travelers should keep important items in carry-ons. Lost or delayed luggage coverage protects insured parties in the event of a significant delay or total loss.

Second, check current credit card travel benefits to avoid redundancies. Savvy travelers don't need to pay for the same coverage twice.

Finally, consider your individual needs. Do you have a chronic medical condition, or do you feel safe with emergency-only medical coverage? Keep in mind, this does not include coverage for cosmetic surgery or other medical tourism. Do you have a budget limit for travel insurance? Asking and answering these important questions will help every traveler find the right product.

Most travel insurance plans are simple, and Business Insider's guide to the best travel insurance companies outlines our top picks. Remember, read your policy and its specifics closely to ensure it includes the items you need coverage for.

No one likes to dwell on how a trip might not go as planned before even leaving. However, at its core, travel insurance provides peace of mind as you go about your trip. While the upfront cost may seem significant, when you compare it to the potential expenses of a canceled flight, emergency evacuation, or a hefty medical bill, it's a small price to pay in the grand scheme of things.

Coverage for pandemics vary from policy to policy. Some travel insurance companies have specific provisions for pandemic-related cancellations, while others may exclude them entirely.

Sports injuries are often covered under travel insurance, but high-risk or adventure sports might require additional coverage or a special policy.

Travel advisories have different effects on your travel insurance depending on your policy. Traveling to a country already under travel advisory may invalidate your coverage, but if you're already traveling when a travel advisory is announced, you may be covered.

Travel insurance usually covers the cost of emergency medical evacuations to the nearest suitable medical facility, and sometimes back to your home country, if necessary.

Many travel insurance policies provide coverage for the cost of replacing lost or stolen passports during a trip.

Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards .

Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.

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