business plan template for sole proprietorship

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How to Write a Business Plan for a Sole Proprietorship

Starting your own business as a sole proprietor is an exciting journey, offering unparalleled flexibility and control over your professional destiny. Yet, navigating this path successfully hinges on having a clear, well-structured business plan. This essential document serves as your roadmap, outlining your vision, strategy, and the practical steps needed to bring your business to life. Here’s how to craft a business plan that lays the groundwork for your sole proprietorship's success.

Key Components of a Sole Proprietorship Business Plan

A robust business plan for a sole proprietorship encompasses several critical sections:

Executive Summary: Your executive summary should succinctly encapsulate your business concept, target market, and competitive advantages. This section is crucial as it sets the stage for the detailed plan.

Company Description: Offer an in-depth overview of your business, including its structure, the products or services you provide, and your overarching goals. This section lays out the essence of your business and its purpose.

Market Analysis: Conduct a comprehensive analysis of your target audience and competitors. This research is essential for carving out your niche in the market and developing strategies to serve your customers effectively.

Organization and Management: Describe your business's organizational structure and any external support, such as freelancers or consultants, you plan to utilize. This section outlines how your business will operate and scale.

Marketing and Sales Strategy: Detail your approach for attracting and retaining customers. This includes your marketing channels, promotional tactics, and sales processes.

Service or Product Line: Clearly explain what you're offering, focusing on the benefits to your customers and why there's a demand for your product or service.

Financial Plan: Include comprehensive financial projections, such as revenue forecasts, cash flow statements, and a break-even analysis. This section is vital for understanding the financial viability and planning for profitability.

Tailoring Your Plan to a Sole Proprietorship

Emphasize Personal Branding: As a sole proprietor, your personal brand is intrinsically linked to your business. Your plan should reflect how your personal strengths and network contribute to your business's unique value.

Build in Flexibility: One of the strengths of a sole proprietorship is its ability to adapt quickly. Your business plan should include flexible strategies that allow you to pivot in response to market demands or challenges.

Utilizing Resources and Tools

In the journey of drafting a comprehensive business plan for your sole proprietorship, leveraging the right tools and resources can streamline the process and enhance the quality of your plan. Here are two crucial areas where the right resources can make a significant difference:

Recommended Tools and Software

The market is replete with tools and software designed to simplify the business planning process, from formulating your executive summary to projecting your financials. Utilizing these can save you time, provide structure, and even offer insights you might not have considered. Some top recommendations include:

Business Plan Software: Platforms like Plannit AI or Bizplan offer guided experiences through the planning process, with templates and financial forecasting tools that make it easier to create a professional plan.

Financial Modeling Tools: Software such as Excel or Google Sheets, with templates for cash flow statements, profit and loss forecasts, and break-even analysis, can help you craft detailed financial projections.

Market Research Resources: Tools like Statista or Google Trends can provide valuable data on market trends and consumer behavior, informing your market analysis section.

Project Management Apps: Applications like Trello or Asana can help you organize your business planning process, set deadlines, and track progress.

Seeking Professional Advice

While tools and software can streamline the planning process, the insight and guidance from experienced professionals can be invaluable. Consulting with financial advisors, business mentors, or industry experts can offer several benefits:

Financial Planning: A financial advisor can help you create realistic financial projections, advise on funding strategies, and identify potential financial pitfalls.

Business Strategy: Business mentors or consultants with experience in your industry can offer strategic advice, critique your business model, and suggest ways to enhance your competitive advantage.

Legal and Regulatory Guidance: For questions about the legal structure of your sole proprietorship, intellectual property, or regulatory compliance, consulting with a legal expert is essential.

By combining the power of the right tools and software with the wisdom and experience of professional advisors, you can create a business plan that not only lays a strong foundation for your sole proprietorship but also positions it for long-term success and growth.

Common Pitfalls to Avoid in Your Sole Proprietorship Business Plan

Creating a business plan for a sole proprietorship is a critical step in setting up your business for success. However, even the most diligent entrepreneurs can fall into common traps that potentially hinder their progress. Being aware of these pitfalls can help you navigate your planning process more effectively and set a solid foundation for your business growth. Here are key mistakes to avoid:

1. Overlooking Detailed Market Research

One of the most significant oversights in business planning is insufficient market research. Understanding your target market's needs, preferences, and behaviors is crucial for tailoring your products or services effectively. Moreover, a deep dive into competitor analysis allows you to identify gaps in the market you can exploit. Avoid making assumptions without data to back them up, and invest time in gathering insights that will inform your business strategies.

2. Underestimating Financial Needs

Many sole proprietors underestimate the capital required to start and sustain their business until it becomes profitable. This can lead to cash flow problems, which are a common reason for business failure. When drafting your financial plan, include detailed projections for startup costs, operating expenses, and a buffer for unexpected costs. It's better to overestimate your financial needs and have surplus funds than to find yourself in a financial bind.

3. Neglecting a Marketing and Sales Strategy

Assuming that your product or service will sell itself is a critical mistake. A comprehensive marketing and sales strategy is essential for attracting and retaining customers. This strategy should outline your target market, marketing channels, promotional tactics, and sales process. Without a clear plan for how you will reach your customers and convince them to buy from you, even the best business ideas can flounder.

4. Ignoring the Need for Flexibility and Adaptability

The business landscape is constantly changing, and what works today may not work tomorrow. Your business plan should not be so rigid that it cannot accommodate changes in the market, customer preferences, or new opportunities. Incorporate flexibility into your plan, allowing you to pivot or adjust your strategies as necessary to respond to unforeseen challenges or take advantage of new trends.

5. Skipping Professional Advice

Even if you're a seasoned expert in your field, seeking advice from financial advisors, legal consultants, or business mentors can provide valuable insights you might have missed. These professionals can help you identify potential flaws in your plan and offer solutions you hadn't considered. Skipping this step could mean overlooking crucial aspects of your business that could lead to problems down the line.

A well-crafted business plan is your roadmap to success as a sole proprietor, but it's essential to be mindful of common pitfalls that can derail your efforts. By conducting thorough market research, accurately estimating your financial needs, developing a solid marketing and sales strategy, maintaining flexibility, and seeking professional advice, you can avoid these mistakes and build a strong foundation for your business. Remember, the goal is not just to start a business but to sustain and grow it into a successful venture.

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Free business plan template for small businesses

• Cecilia Lazzaro Blasbalg
• Dec 7, 2023

Creating a successful business is about more than launching a business website or hanging a shingle on your front door. It requires a well-crafted plan that keeps you on track, anticipates obstacles and acts as a concrete roadmap for launching or improving your small business.

Business planning allows you to clarify your vision while providing information to both intrigue and reassure potential investors. The process may seem daunting, but creating a business plan isn’t difficult—and templates like the one below can help simplify the process even further.

Ready to launch your business? Create a website today.

What is a business plan?

A business plan is used by small business owners and entrepreneurs when starting a new business venture. It’s a strategic document that outlines the goals, objectives and strategies of your new or expanding business, including the company's vision, target market, financial projections and operational plans.

A business plan can attract potential partners, convince investors and banks to help you raise capital, and serve as a resource for future growth. Most importantly, you’ll be able to use your business plan as a roadmap for how to structure, operate and manage your new venture, whether it’s a sole proprietorship, a partnership or something larger.

Who needs a business plan?

Every business owner needs a business plan. They’re an essential tool for any person or entity interested in starting a business . There are many benefits, including:

Defining your business idea

Clarifying the market and competitive landscape

Outlining your marketing strategy

Stating your value proposition

Identifying/anticipating potential risks

Seeking investments from banks and other sources

Setting benchmarks, goals and key performance indicators (KPIs)

A business plan also gives you a way to assess the viability of a business before investing too much time or money into it. While all business involves risk, taking the time to create a plan can help mitigate fallout and avoid potentially costly mistakes.

When creating a business plan, it's important to establish your business goals up front and be prepared to spend time researching the market, performing a competitor analysis and understanding your target market .

Download Wix’s free business plan template

Creating a successful business plan is no easy feat. That’s why we’ve put together a simple, customizable, and free-to-download business plan template that takes the guesswork out of getting started. Use it to create a new business plan or to refresh an existing one.

Lean startup versus traditional business plan formats

In terms of types of business plans , there are two main formats to choose from: traditional and lean.

Traditional business plan format

A traditional business plan includes every detail and component that defines a business and contributes to its success. It's typically a sizable document of about 30 to 50 pages that includes:

Executive summary: The executive summary contains a high-level overview of everything included in the plan. It generally provides a short explanation of your business and its goals (e.g., your elevator pitch ). Many authors like to write this section last after fleshing out the sections below.

Company description: A company description should include essential details like your business name, the names of your founders, your locations and your company’s mission statement . Briefly describe your core services (or products if you’re writing an eCommerce business plan ), but don't go into too much detail since you’ll elaborate on this in the service/product section. Wix offers some helpful mission statement examples if you get stuck. It’s also a good idea to create a vision statement . While your mission statement clarifies your company’s purpose, a vision statement outlines what you want your company to achieve over time.

Market analysis: One of the most extensive sections of the business plan, this section requires that you conduct market research and write your conclusions. Include findings for the following: industry background, a SWOT analysis , barriers/obstacles, target market and your business differentiators.

Organization and management: This is where you outline how your business is structured and who's in charge, including founders, executive team members, board members, employees and key stakeholders. To this end, it can be helpful to create a visual layout (e.g., org chart) to illustrate your company structure.

Service or product line: Create a detailed list of your current and future products and services. If you’re still working on your idea, create a concept statement to describe your idea or product. You should also include a proof of concept (POC), which demonstrates the feasibility of your idea. Wherever applicable, include diagrams, product images and other visual components to illustrate the product life cycle.

Marketing and sales: Detail how your business idea translates into selling and delivering your offerings to potential customers. You can start by outlining your brand identity, which includes the colors and fonts you plan to use, your marketing and advertising strategy, and details about planned consumer touchpoints (like your website, mobile app or physical storefront).

Financial projections and funding requests: Include financial statements, such as a balance sheet, profit-and-loss statement (P&L), cash flow statement and break-even analysis. It's not uncommon for a business plan to include multiple pages of financial projections and information. You’ll also want to mention how much funding you seek and what you plan to do with it. If you’ve already secured funding, provide details about your investments.

Lean startup business plan format

A lean startup business plan—also referred to as a “lean canvas”—is presented as a problem/solution framework that provides a high-level description of your business idea. A lean plan is a single-page document that provides a basic overview of the most essential aspects of your business. It’s a good way to dip a toe into business planning since it doesn't require the same level of detail as a traditional plan. This includes:

Problem: What problem does your product or service solve, or what need does it fulfill?

Solution: How do you intend to solve it?

Unique value proposition (UVP): Why should people use your product or service versus someone else’s?

Unfair advantage: What do you have that other companies don’t?

Customers: Who are your ideal customers?

Channels: How will those customers find you?

Key metrics: How do you define success? How will you track and measure it?

Revenue streams: How will your business make money?

Cost structure: What will you spend money on (fixed and variable costs)?

Benefits of a business plan template

Business plan templates offer numerous benefits for entrepreneurs and aspiring business owners. Here are some key advantages:

1. Save time and effort: Templates provide a pre-defined structure, eliminating the need to start from scratch. This frees up valuable time and effort that can be invested in other crucial aspects of business development.

2. Improve structure: Templates ensure a consistent and organized approach to presenting your business plan. This makes it easier for potential investors, lenders and advisors to understand your vision and evaluate the feasibility of your business. 3. Enhance professionalism: Using a well-designed template demonstrates professionalism and seriousness to external stakeholders. This can significantly impact their perception of your business and increase their confidence in your venture. 4. Guide your thought process: Templates act as a helpful framework, prompting you to consider all the key elements of your business plan and ensuring you haven't overlooked any critical areas. 5. Ensure completeness: Templates often include checklists and prompts to ensure you cover all essential information, minimizing the risk of missing crucial details. 6. Standardize formatting: Templates ensure a consistent and uniform appearance throughout your business plan, contributing to a more polished and professional presentation. 7. Access to expert knowledge: Many templates are developed by experienced business professionals or organizations, incorporating best practices and insights gained from successful ventures. 8. Adaptability and customization: While templates offer a basic structure, they can be easily customized to reflect the unique characteristics and needs of your specific business. 9. Cost-effectiveness: Templates are generally available for free or at a low cost, making them an accessible and budget-friendly option for entrepreneurs. 10. Increased success rate: Studies have shown that businesses with well-developed plans are more likely to succeed. Templates can help you create a comprehensive and persuasive plan, increasing your chances of securing funding and achieving your business goals.

Tips for filling out your business plan template

The hardest part of a journey is always the first step, or so the saying goes. Filling out your business plan template can be daunting, but the template itself is meant to get you over that crucial first hurdle—getting started. We’ve provided some tips aimed at helping you get the most from our template.

These are best practices—they’re not rules. Do what works for you. The main thing to remember is that these tips can help you move more easily through the planning process, so that you can advance onto the next (exciting) step, which is launching your business.

Consider your goals: What is the purpose of your business? Are you looking to expand, launch a new product line or fund a specific project? Identifying your goals helps you prioritize important information in your business plan.

Fill out what you can: You may already have a vague—or specific—idea of what you want your business to achieve. Go through each section of the template and fill out what you can. We suggest leaving the executive summary blank for now, since it'll be the last thing you write.

Be realistic: Even though this document is meant to serve as a marketing tool for potential investors, don't exaggerate any numbers or make any false promises.

Dig into the research: Nothing's more motivating than getting some intel about your competitors and your market. If you're truly stuck, a little research can help motivate you and provide valuable insight about what direction to take your business. For example, if you plan to start a landscaping business, learn about the specific pricing offered in your area so that you can differentiate your services and potentially offer better options.

Get help from others: Bouncing your ideas off a friend, mentor or advisor is a great way to get feedback and discover approaches or products to incorporate into your plan. Your network can also give you valuable insight about the industry or even about potential customers. Plus, it's nice to be able to talk through the challenges with someone who understands you and your vision.

Revise and review: Once complete, step back from your plan and let it "cook." In a day or two, review your plan and make sure that everything is current. Have other people review it too, since having another set of eyes can help identify areas that may be lacking detail or need further explanation.

Once you’ve completed your business plan template, it can become a meaningful resource for developing your mission statement, writing business proposals and planning how to move forward with the marketing, distribution and growth of your products and services.

After launch, you can also analyze your value chain to identify key factors that create value for your customers and maximum profitability for you. This can help you develop a more effective business plan that considers the entire value chain, from research and development to sales and customer support.

Business plan template FAQ

What is the easiest way to write a business plan.

The easiest way to write a business plan is to utilize a template. Templates provide a structured format and guide you through each section, simplifying the process of creating a comprehensive plan.

Is there a template for how to write a business plan?

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How to Write a Business Plan for a Sole Proprietorship

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• Preparing a Three-Year Business Plan
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A business plan for a sole proprietorship is just like any other business plan. The main difference in business plans, in general, is the purpose. If you are writing a plan to organize your existing small company, focus on how your company operates and your goals for the future. If you will use it to obtain funding, your focus should be how you will make profits by supplying a commercial need.

Research Your Market

Start your research by describing your target or best customers by gender, age, income level, buying habits and residential location. Then look at your competition. Compare your company to your competition in terms of product offerings, service, prices, marketing, brand image and profitability. This gives you information for establishing the future direction you want your company to take, goals for expansion, product lines, service improvements, marketing to increase market share and ways to increase profitability. If you are a startup business, researching your market helps you develop your business idea, initiate good practices from the start and position your launch to attract the attention of your target market. It also gives you an argument that your company can fill a niche that will result in profits, which is important if you are going after funding.

Sole Proprietorship

There are special problems faced by a sole proprietorship operated by one person. The biggest problem is that you can't do everything. While examining your market, look for outside services that are geared to helping you compete with larger companies. These might be telephone answering services and business center offices that supply office space, office machines, administrative services and conference rooms. The Internet can provide inexpensive, simple-to-use marketing services and other outsourced services to expand your business reach. These are important considerations for the operations section of your business plan.

Develop Your Idea

Use your market research to solidify your vision for your company. Write a one or two sentence mission statement that addresses what you do, for whom, when, where, why and how. Then build on that. Establish in detail how the company operates, your suppliers, sales agents, cost of goods, price points, marketing strategy and growth plans. The more detailed you express this vision, the more likely you will see holes in your plan, which is one of the benefits of writing a business plan; it enables you to solve problems before you encounter them.

Research Your Costs

Make a list of every expense you encounter including rent, employees, travel, legal services, business licensing, insurance, inventory, sales costs, marketing costs and delivery costs. Business plan software is a good source of spreadsheet programs that allow you to plug in these costs to see what kind of revenues you must generate for profitability. These programs also print out a good presentation of your financial projections for use in obtaining funding.

Write the Plan

Your business plan should be shorter than 50 pages and should include the following sections: executive summary, which is written last; description of industry, including how you fit in; business model, describing your products and services; target market, describing who will buy from you and why; marketing model, describing how you will reach your target market; revenue model, estimating revenues and discussing how you will achieve those estimates; management, listing the bios and skills your managers bring to the company as well as your outside advisory board; and your financial projections, which consist of spreadsheets including a profit and loss statement, sales projections, personnel projections, cash flow and balance sheet. Include a discussion of how you arrived at these financial projections and the assumptions you used.

• SBA.gov: How to Write a Business Plan
• Entrepreneur: An Introduction to Business Plans

Victoria Duff specializes in entrepreneurial subjects, drawing on her experience as an acclaimed start-up facilitator, venture catalyst and investor relations manager. Since 1995 she has written many articles for e-zines and was a regular columnist for "Digital Coast Reporter" and "Developments Magazine." She holds a Bachelor of Arts in public administration from the University of California at Berkeley.

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Simple Business Plan Template for Entrepreneurs

Follow This Business Plan Outline to Write Your Own

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

Pros and Cons of Using a Business Plan Template

Do i need a simple or detailed business plan, how to use this business plan template, table of contents, section 1: executive summary, section 2: business/industry overview.

• Section 3: Market Analysis and Competition

Section 4: Sales and Marketing Plan

Section 5: ownership and management plan, section 6: operating plan, section 7: financial plan.

• Section 8: Appendices and Exhibits

Ariel Skelley / Getty Images

Think you have a great idea for a business? The best way to find out whether your idea is feasible is to create a business plan .

A solid, well-researched business plan provides a practical overview of your vision. It can be used to ground your ideas into workable actions and to help pitch your idea to financial institutions or potential investors when looking for funding.

The standard business plan consists of a single document divided into several sections for distinct elements, such as a description of the organization, market research, competitive analysis, sales strategies, capital and labor requirements, and financial data. Your plan may include more or fewer sections to best represent your business.

The template presented here will get you well on your way toward your simple business plan.

Ready-made layouts

Free downloads

Generic, not customized

No financial guidance

Additional skills needed

• Ready-made layouts : Templates offer general guidance about what information is needed and how to organize it, so you’re not stuck looking at a blank page when getting started. Especially detailed templates may offer instructions or helpful text prompts along the way.
• Variations : If you know what type of business plan you need—traditional, lean, industry-specific—chances are you can find a specialized template.
• Free downloads : There are many free business plan templates available online, which can be useful for comparing formats and features, or refining your own.
• Generic, not customized : Templates typically contain just the basics, and there will still be a lot of work involved to tailor the template to your business. For instance, you'll have to reformat, refine copy, and populate tables.
• No financial guidance : You’ll need enough industry knowledge to apply financial models to your specific business, and the math skills to generate formulas and calculate figures.
• Additional skills needed : Some degree of tech savvy is required to integrate charts and graphs, merge data from spreadsheets, and keep it all up-to-date.

A corporate business plan for a large organization can be hundreds of pages long. However, for a small business, it's best to keep the plan short and concise, especially if you're submitting it to bankers or investors . Around 35 to 50 pages should be sufficient, and more allowed for extras, such as photos of products, equipment, logos, or business premises or site plans.  Your audience will likely prefer solid research and analysis over long, wordy descriptions.

An entrepreneur who creates a business plan is nearly twice as likely to secure financing and grow their business compared with those who do not have a plan.

The business plan template below is divided into sections as described in the table of contents. Each section can be copied into a document of your own; you may need to add or delete sections or make adjustments to fit your specific needs.

Once complete, be sure to format it attractively and get it professionally printed and bound. You want your business plan to convey the best possible impression. Make it engaging, something people will to want to pick up and peruse.

Enter your business information, including the legal name and address. If you already have a business logo, you can add it at the top or bottom of the title page.

• Business Plan for "Business Name"
• Business address
• Website URL

If you're addressing it to a company or individual, include:

• Presented to "Name"
• At "Company"
• Executive Summary................................................Page #
• Business/Industry Overview.................................Page #
• Market Analysis and Competition.........................Page #
• Sales and Marketing Plan.......................................Page #
• Ownership and Management Plan.......................Page #
• Operating Plan..........................................................Page #
• Financial Plan............................................................Page #
• Appendices and Exhibits........................................Page #

The  executive summary introduces the plan, but it is written last. It provides a concise and optimistic overview of your business and should capture the reader's attention and create a desire to learn more. The executive summary should be no more than two pages long, with highlights or brief summaries of other sections of the plan.

• Describe your  mission —what is the need for your new business? Sell your vision.
• Introduce your company briefly, sticking to vital details such as size, location, management, and ownership.
• Describe your main product(s) and/or service(s).
• Identify the customer base you plan to target and how your business will serve those customers.
• Summarize the competition and how you will get market share. What is your competitive advantage?
• Outline your financial projections for the first few years of operation.
• State your startup financing requirements.

This section provides an overview of the industry and explains in detail what makes your business stand out.

• Describe the overall nature of the industry, including sales and other statistics. Note trends and demographics, as well as economic, cultural, and governmental influences.
• Explain your business and how it fits into the industry.
• Mention the existing competition, which you'll expand upon in the following section.
• Identify what area(s) of the market you will target and what unique, improved, or lower-cost products and/or services you will offer.

Many business plans cover their products/services in a standalone section to add more detail or emphasize unique aspects.

Section 3: Market Analysis and Competition

This section focuses on the competitive factor of your business and justifies it with financial models and statistics. You need to demonstrate that you have thoroughly analyzed the target market, assessed the competition, and concluded that there is enough demand for your products/services to make your business viable.

• Define the target market(s) for your products/services in your geographic locale.
• Explain the need for your products/services.
• Estimate the overall size of the market and the units of your products/services that the target market might buy. Include forecasts of potential repeat-purchase volume and how the market might be affected by economic or demographic changes.
• Estimate the volume and value of your sales in comparison with any existing competitors. Highlight any key strengths over the competition in easily digestible charts and tables.
• Describe any helpful barriers to entry that may protect your business from competition, such as access to capital, technology, regulations, employee skill sets, or location.  

You may opt to split the target market description and competitive analysis into two separate sections, if either (or both) portray your business especially favorably.

Here's where you dive into profits, giving detailed strategic view of how you intend to entice customers to buy your products and/or services, including advertising or promotion, pricing, sales, distribution, and post-sales support.

Product or Service Offerings

If your products and/or services don't take up a standalone section earlier in the plan, here is where you can answer the question: What is your unique selling proposition? Describe your products and/or services, how they benefit the customer and what sets them apart from competitor offerings.

Pricing Strategy

How will you price your products/services? Pricing must be low enough to attract customers, yet high enough to cover costs and generate a profit. You can base pricing decisions on a number of financial models, such as markup from cost or value to the buyer, or in comparison with similar products and/or services in the marketplace.  

Sales and Distribution

For products, describe how you plan to distribute to the customer. Will you be selling wholesale or retail? What type of packaging will be required? How will products be shipped? If you offer a service, how will it be delivered to the customer? What methods will be used for payment?

Advertising and Promotion

List the various forms of media you will use to get your message to customers (e.g., website, email, social media, or newspapers). Will you use sales promotional methods such as free samples and product demonstrations? What about product launches and trade shows? Don't forget more everyday marketing materials such as business cards, flyers, or brochures. Include an approximate budget.

This section describes the legal structure, ownership, and (if applicable) management and staffing requirements of your business.

• Ownership structure : Describe the legal structure of your company (e.g., corporation, partnership, LLC, or  sole proprietorship ). List ownership percentages, if applicable. If the business is a sole proprietorship, this is the only section required.
• Management team : Describe managers and their roles, key employee positions, and how each will be compensated. Include brief résumés.
• External resources and services : List any external professional resources required, such as accountants, lawyers, or consultants.
• Human resources : List the type and number of employees or contractors you will need, and estimate the salary and benefit costs of each.
• Advisory board : Include an advisory board as a supplemental management resource, if applicable.

The operating plan outlines the physical requirements of your business, such as office, warehouse, or retail space; equipment; supplies; or labor. This section will vary greatly by industry; a large manufacturer, for instance, should provide full details about supply chain or specialty equipment, while a therapist's office can get by with a much shorter list.

If your business is a small operation (like a one-person, home-based consulting firm), you might choose to eliminate the operating plan section altogether and include the operating essentials in the business overview.

• Development : Explain what you have done to date to identify possible locations, sources of equipment, supply chains, and other relevant relationships. Describe your production workflow.
• Production : For manufacturing, explain how long it takes to produce a unit and when you'll be ready to start production. Include factors that may affect the time frame of production and how you'll deal with potential problems, such as rush orders.
• Facilities : Describe the physical location of the business. Include geographical or building requirements; square footage estimates (with room for expansion if expected); mortgage or leasing costs; and estimates of maintenance, utilities, and related  overhead costs . Include zoning approvals and other permissions that are necessary in order to operate.
• Staffing : Outline expected staffing needs and the main duties of staff members, especially the key employees. Describe how the employees will be sourced and the employment relationship (i.e., contract, full-time, part-time) as well as any training needs and how these will be provided.
• Equipment : Include a list of any specialized equipment needed, along with cost, whether it will be leased or purchased, and sources.
• Supplies : If your business is, for example, manufacturing, retail, or food services, include a description of the materials needed, reliable sources, major suppliers, and how you will manage inventory.

The financial plan is the most important section for lenders or investors. The goal is to demonstrate that your business will grow and be profitable. To do this, you will need to create realistic predictions or forecasts.

To avoid inflated expectations, a prudent financial plan underestimates revenues and overestimates expenses.

• Income statements : The income statement displays projected revenues, expenses, and profit. Do this on a monthly basis for at least the first year for a startup business.
• Cash-flow projections : The cash-flow projection shows your monthly anticipated cash revenues and disbursements for expenses. To be considered a good credit risk, it is important to demonstrate that you can manage your cash flow.
• Balance sheet : The  balance sheet  is a snapshot summary of the assets, liabilities, and equity of your business at a particular point in time. For a startup, this would be on the day the business opens.
• Breakeven analysis : Including a breakeven analysis will demonstrate to lenders or investors what level of sales you need to achieve to make a profit.

Section 8: Appendices and Exhibits

The appendices and exhibits section contains any detailed information needed to support other sections of the plan.  

Possible Appendix or Exhibit items include:

• Credit histories for the business owners
• Detailed market research and analysis of competitors
• Résumés of the owners and key employees
• Diagrams and/or research about your products and/or services
• Site, building, or office plans
• Copies of mortgage documents or equipment leases (or quotes)
• Marketing brochures and other materials
• References from business colleagues
• Links to your business website
• Any other material that may impress potential lenders or investors

SCORE. " Business Plan Template for a Startup Business ." Accessed April 28, 2021.

U.S. Small Business Administration. " Write your business plan ." Accessed April 28, 2021.

U.S. Small Business Administration. " SBA Recommended Business Plans and Length ." Accessed April 28, 2021.

Bplans. " Why Plan Your Business? Look at This Data ." Accessed April 28, 2021.

Marketing MO. " Pricing Strategy ." Accessed April 28, 2021.

Incorporate.com. " Write a Business Plan, a Step-by-Step Guide ." Accessed April 29, 2021.

Startup Nation. " The Five Costs You're Most Likely to Underestimate in Your Business Plan ." Accessed April 28, 2021.

How to Make a Business Plan for a Sole Proprietorship

by Devra Gartenstein

Published on 1 Jan 2021

Sole proprietorships tend to be closely held companies whose success and longevity depends on an owner-operator with sufficient skills and resources to keep the business going. A business plan for a sole proprietorship must proactively address the challenge of demonstrating that the owner is financially responsible, as well as sufficiently skilled, to ensure that the company will meet its goals. The process of creating an honest and realistic business plan that highlights your involvement in the company will demonstrate to investors that you are worthy of their money. It will also help you to lay out a useful map to follow as your company grows.

Write a company description that highlights your experience and skills. Provide information that will convince potential investors that you are the ideal person to be owning and operating this particular business. For example, if you are writing a business plan for a new restaurant and you have held chef positions at prestigious restaurants, include this information in your company description. Also provide information about qualities that make you qualified to own and operate a business, such as strong management, marketing or interpersonal skills. If you have built a reputation as an expert in your field, mention this, as well.

Provide detailed information about your personal finances in the financial section of your business plans. Use bank statements, as well as your personal bookkeeping records, to create a balance sheet listing all of the money and tangible assets you own and the money that you owe. Create a cash flow projection for your first three years in business. Incorporate all of the capital that you envision bringing to the business through personal equity, personal loans or outside investment opportunities. Include your personal living expenses in the expenditure section of the chart in order to show that you are thinking about how you will support yourself while your company is getting off the ground.

Create a marketing plan detailing how you will use your personal reputation and connections to promote your business. If possible, develop a strategy to establish yourself as an expert in your field. Sole proprietors are particularly likely to act as the faces of their companies, and your business plan is the ideal place to think through the opportunities and challenges that you will encounter in representing your business and building a name for yourself that will encourage potential customers to support your business. Include strategies, such as writing articles, maintaining a blog, or teaching classes in a relevant field.

Types of Business Structures Explained

13 min. read

Updated January 5, 2024

The choice you make about what type of business structure is appropriate for your company will affect how much you pay in taxes, the level of risk or liability to your personal assets (your house, your savings), and even your ability to raise money from angel investors or venture capitalists.

So, the structure you choose is significant.

This guide will explain the basics of common business structures, but we can’t tell you exactly which structure you should choose—if you need that kind of advice, you should consult a lawyer or an accountant.

• Sole proprietorship

The simplest business structure is the sole proprietorship. If you don’t create a separate legal entity, your business is a sole proprietorship. 

The main advantage of the sole proprietorship is that it’s relatively simple and inexpensive. The disadvantage is that it doesn’t create a legal separation between you and your personal assets and business assets. If you’re sued or your business folds—your personal assets are fair game for creditors and in terms of legal liability.

Who is a sole proprietorship for?

A sole proprietorship is ideal for self-employed individuals like personal trainers offering individual coaching or artists selling unique items on platforms like Etsy.

Key considerations

• Cost-effective setup: The primary expense is usually the DBA (“doing business as”) registration. Some states may require public notice, like a newspaper ad. Generally, the total cost is below $100.
• Simplified taxation: Sole proprietorships are “pass-through” tax entities. Profits and losses are reported directly on the owner’s taxes, necessitating only a few additional tax forms if you’re the sole worker.
• Hiring employees is possible: Being a “sole” proprietor doesn’t restrict hiring. If you employ others, tax processes become slightly more intricate.
• Limited ways to raise funding: You can’t sell company stock, limiting fundraising avenues.
• Potential loan difficulties: Banks might hesitate to grant loans to sole proprietorships due to perceived credibility issues.
• Full personal liability: If the business faces debt or legal issues, your personal assets, including your home, car, and savings, are vulnerable.

Dig deeper:

Should you register as a sole proprietorship?

Explore the pros and cons of incorporating as a sole proprietorship.

How sole proprietorships are taxed

Understand how registering as a sole proprietor impacts your taxes.

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• Partnerships

Still a relatively simple business structure, a partnership involves two or more individuals sharing ownership of their new business. They’ll contribute to the business in some way and share in profits and losses.

Partnerships are harder to describe because they change so much. State laws govern them, but the Uniform Partnership Act has become the law in most states. That act, however, mainly sets the specific partnership agreement as the real legal core of the partnership so that the legal details can vary widely.

Usually, the income or loss from partnerships passes through to the partners without any partnership tax. The agreements can define different levels of risk, which is why you’ll read about some partnerships with general and limited partners, with different levels of risk for each. Your partnership agreement should clearly define what happens if a partner withdraws, buy and sell arrangements for partners and liquidation arrangements if necessary.

What are the types of partnerships?

• General partnership: Assumes equal involvement of all parties in profits, liabilities, and duties. Any intentional imbalance should be specified in the partnership agreement.
• Limited partnership: Suited for partners in an investor role with limited involvement in daily operations. This structure is more complex and less common.
• Joint venture: Designed for a single project or a limited duration, operating similarly to a general partnership.

Who is a partnership for?

A partnership is similar to an extended sole proprietorship and is ideal for two or more individuals wanting to start a business jointly. 

To make the partnership more effective, you and your partners should have skillsets, connections, or other unique benefits that complement each other. 

For example, a personal trainer and nutritionist building an online fitness program. One entrepreneur has experience building an exercise regiment with clients. The other understands how to create balanced meal and supplement recommendations. 

They have unique but complementary knowledge that, when combined, creates a more valuable product/service.

• Partnership agreement: While not mandatory, it’s advisable to draft a partnership agreement, ideally reviewed by legal counsel, to clarify roles and responsibilities, ownership, and what will happen if a partner wants to leave the partnership.
• Tax implications: Partnerships are “pass-through” entities, meaning profits and losses are directly passed to the partners. Refer to the IRS for partnership tax details.
• Additional costs: Since it’s a good idea to have a lawyer look over your partnership agreement, don’t forget to factor in this added expense.
• Trust in partnership: Ensure your partner is trustworthy, as partners share responsibility for business decisions and debts. A well-drafted partnership agreement can prevent future conflicts.

How to create a business partnership agreement

Even if you’re not in an official partnership, you should consider drafting a partnership agreement. Doing so will clearly define rights and responsibilities and help you amicably resolve any disputes.

How partnerships are taxed

Understand how registering as a partnership impacts your taxes.

Plan for changes with a buy-sell agreement

What will you do if you or your partner quits, sells their portion of the business, or passes away?

How to find the right business partner

A partnership is more than a legal structure. It’s a relationship between entrepreneurs who share a passion for an idea and bring unique skill sets. So, how do you find the right person to make your partnership thrive?…

Traits to look for in a business partner

What makes a good business partner? If you’re considering someone with the following traits, you likely have a good fit.

How many partners should you have?

What’s the ideal number of business partners? The right mix of people and skillsets can lead to tremendous business growth. But too many may lead to disaster.

What to do when your business partner is your life partner

Should your significant other be your business partner? Learn your legal options and how to find the right ownership fit for your business and relationship.

• Limited liability company

Should your business fall on hard times, does the idea of being held personally responsible for all losses sound intimidating?

It’s understandable—plenty of would-be entrepreneurs shudder at the thought of the bank seizing their personal assets should the business go south.

A limited liability corporation (or LLC) is, in some ways, the best of both worlds. It allows for the flexibility of a partnership or sole proprietorship but, as the name suggests, limits the liability of those involved, similar to a corporation. An LLC is usually a lot like an S corporation. It offers a combination of some limitations on legal liability and some favorable tax treatment for profits and transfer of assets.

Who is a limited liability corporation for?

An LLC is ideal for those wary of personal liability in business. If you possess significant personal assets or operate in a lawsuit-prone industry—an LLC safeguards your personal finances. 

• Complexity: While offering more protection, an LLC is harder to establish than a sole proprietorship or partnership.
• Tax benefits: LLCs maintain “pass-through” tax status, meaning you’re taxed only on your profit share, which is reported on personal taxes. 
• Single-member LLCs: Most states allow single-person LLCs, making it a potential alternative to sole proprietorships.

How to form a limited liability company

Interested in forming an LLC? Here are the steps you’ll need to take.

How to create an LLC operating agreement

Set the rules for how your LLC will operate, including the management structure, individual responsibilities, ownership percentage, and other important information.

LLC costs and fees explained

Make sure you’re aware of all the costs and fees associated with forming an LLC.

How LLCs are taxed

Understand how registering as an LLC impacts your taxes.

• Corporations

Shareholders, a more complex legal structure, and more intricate tax requirements are all characteristics of a corporation.

Corporations are either the standard C corporation, the small business S corporation, or the benefit corporation or B corp. The C corporation is the classic legal entity of the vast majority of successful companies in the United States.

Corporations can switch from C to S and back again, but not often. The IRS has strict rules for when and how those switches are made. You’ll almost always want to have your CPA, and in some cases, your attorney, guide you through the legal requirements for switching.

Who is a corporation for?

Corporations are best suited for larger, established businesses with multiple employees, plans for rapid scaling, or intentions to trade or attract significant external investments publicly. A corporation might not be the right choice if you’re a small business owner or work with a small team.

What are the types of corporations?

C corporation.

What we typically think of when we refer to corporations, where all shareholders combine funds and are then given stock in the newly formed business. 

A C corp is a separate tax entity, meaning your business can deduct taxes. It also means that earnings can be taxed twice, as they are concerning your business and your personal taxes if you take income as dividends. However, good tax planning can often minimize the impact of double taxation.

Most lawyers would agree (but verify this with your lawyer who is familiar with your unique business) that the C corporation is the structure that provides the best shielding from personal liability for owners, and provides the best non-tax benefits to owners. Many companies with ambitions of raising major investment capital and eventually going public consider the C corporation.

S corporation

An S corp is similar to a traditional C corporation, with one major difference: Profits and losses can be “passed through” to your personal tax return without being taxed separately first.

In practical terms, the owners can take their profits home without first paying the corporation’s separate tax on profits. In most states, an S corporation is owned by a limited number of private owners (25 is a common maximum), and only individuals (not corporations) can hold stock in S corporations.

To become an S corp, you must first set your business up as a corporation within your state and then request S corp status. The IRS instructions for Form 2553 (which you’ll need to file to become an S corp) can help you determine if you qualify.

B corporation

Does your company have a dedicated social mission, a good cause built into its foundation that you’d like to continue furthering as your company grows? If so, you might consider becoming a B corporation, which stands for “benefit corporation.” 

However, the name is a bit misleading; a B corp isn’t an entirely different structure than a regular C corporation. It’s a C corp vetted and approved for B corp status. Some states give tax breaks to B corps, and it’s a great way to stand behind a cause.

So, why would you choose a B corp over a nonprofit? The biggest difference is in ownership—with a nonprofit, no owners or shareholders exist. A B corp, which is still a type of corporation, still has shareholders who own the company. So, a B corp has a social mission but is still a for-profit company (as opposed to a nonprofit) with an end goal of returning profits to the shareholders.

• Liability: Corporations offer the most protection for personal assets.
• Capital raising: The ability to sell stock enhances investment potential.
• Taxation: Corporate taxes are separate (except for S corps), but the structure can lead to double taxation, especially for C corporations.
• Complexity: Establishing a corporation is more intricate than other business structures, requiring more paperwork and formalities.

How to form a corporation

Follow these ten steps to incorporate as a C, S, or B corporation.

How are corporations taxed?

Understand how registering as a corporation impacts your taxes.

S corporation basics

Should you choose an S corp as the legal structure for your business? Learn the basics and what alternatives are available.

B corporation basics

Should you choose a B corp as the legal structure for your business? Check out this detailed overview of how this business entity functions and the pros and cons you’ll contend with.

A nonprofit is a “not-for-profit” business structure, meaning the business does not exist to generate revenue for shareholders, but rather funnel business revenue into a social mission, cause, or purpose.

Who is a nonprofit for?

Nonprofits cater to those with missions centered on charitable, educational, scientific, or religious purposes. Examples include homeless shelters, conservation groups, arts centers, and educational institutions.

What’s the difference between a nonprofit and a cooperative?

Like a nonprofit, a cooperative is a business with a social mission that doesn’t divide income between shareholders but toward a cause or purpose. However, while some states view nonprofits and cooperatives as the same, a cooperative differs because the members own it, referred to as “user-owners.”

If you plan on organizing your business to be democratically owned, looking into the cooperative business structure might be a good idea to look into the cooperative business structure .

• Complex setup: Establishing a nonprofit requires steps similar to forming a corporation, including filing articles of incorporation, creating bylaws, and organizing board meetings.
• Fundraising will be your main priority: Nonprofits generally rely on fundraising and grants to keep a flow of income into their business.

What is a nonprofit corporation and how to start one

Learn the basics of setting up a nonprofit corporation.

How to earn income as a nonprofit corporation

Learn how related and unrelated business activities can generate revenue for a nonprofit corporation.

• Making your business legally compliant

Choosing a business structure is the first legal step you’ll take. Your choice will impact your taxes, fundraising, and personal liability. 

Tim Berry, founder of Palo Alto Software (maker of Bplans) reminds small business and startup founders that choosing a business entity or structure is something to take seriously. He says:

“Make sure you know which legal steps you must take to be in business. I’m not an attorney, and I don’t give legal advice. I strongly recommend working with an attorney to review the details of your company’s legal establishment and licensing. The trade-offs involved in incorporation versus partnership versus other structures are significant. Small problems developed at the early stages of a new business can become horrendous problems later on. In this regard, the cost of simple legal advice is almost always worth it. Don’t skimp on legal costs.”

TLDR: Take time, carefully weigh your options, and consult a legal professional.

Once you’ve chosen, check off the remaining legal requirements to start a business. While you can complete most of these in any order, here are a few suggestions.

• Apply for a federal and state tax ID
• Obtain licenses and permits
• Register your business name

Clarify your ideas and understand how to start your business with LivePlan

Kody Wirth is a content writer and SEO specialist for Palo Alto Software—the creator's of Bplans and LivePlan. He has 3+ years experience covering small business topics and runs a part-time content writing service in his spare time.

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Sole Proprietorship 101: The Easy Guide to Setting One Up

Published: October 17, 2022

For many, working for yourself sounds like a dream. If your goal is to own and operate your own business, you’ll need to set up a sole proprietorship.

Sole proprietors have complete control of their businesses — receiving all profits and managing their own liabilities. This guide explores how you can establish your own sole proprietorship.

• What’s a Sole Proprietor?

How to Start a Sole Proprietorship

Advantages of sole proprietorships, disadvantages of sole proprietorships, sole proprietorship business examples, position your new sole proprietorship for success.

Sole proprietorship is a type of business that is owned and operated by an individual (no partners involved) who pays personal income tax on business income.

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• Outline your idea.
• Pitch to investors.
• Secure funding.
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Click this link to access this resource at any time.

Sole proprietorships are not separate entities by law, so it’s considered one of the easiest types of businesses to start.

Unlike corporations or LLCs, you don’t have to register with the state. However, you must acquire appropriate permits and licenses to operate legally, and you are personally liable for debts, lawsuits, or taxes your company accrues.

Most businesses in the United States are sole proprietorships. Many entrepreneurs love sole proprietorships because of the ownership they have over business decisions and revenue. These businesses are also easy and cost-effective to set up.

So, how can you start a sole proprietorship? There’s an step-by-step guide for you below.

Before you start a business, however, it’s important to have a business plan. Here’s an easy-to-use business plan template to begin.

Now that you have the tools to create a business plan, let’s go over the definition of a sole proprietor and the types of sole proprietorships one would typically launch.

A sole proprietor is a person who has complete control over the revenue and operations of a business. In addition to taking home all profits, the sole proprietor is also responsible for all debts, lawsuits, and taxes their company accrues. If their business is sued, personal assets like their home, credit score, and savings are unprotected.

Types of Sole Proprietorships

A sole proprietor may operate as an independent contractor (a freelancer), a business owner, or a franchisee.

• Independent Contractor : An independent contractor is a self-employed sole proprietor who takes on projects on a contract basis with clients. They have the freedom to choose which clients they take on, but they are often subject to the processes and methods that the client requires.
• Business Owner: Business owners can also be self-employed sole proprietors. Unlike contractors, there is much more autonomy in how the work is completed for clients. The operation itself may even be more complex with employees and/or intellectual property.

Franchisee : Franchise owners may also be sole proprietors. The franchisee benefits from the guidance and business model of a larger brand. In exchange, royalties are paid to the franchisor.

If you want to launch a new business from scratch or you have a side hustle you want to convert into a full-time business, you should consider registering as a sole proprietorship. Here are some steps you can take to get started.

Step 1: Ensure a sole proprietorship is right for you.

First, is starting a sole proprietorship right for you? Or should you launch another type of business?

Choosing the right business structure is key to your venture’s success. As the SBA points out , “The business structure you choose influences everything from day-to-day operations, to taxes, to how much of your personal assets are at risk.”

Sole proprietorships, partnerships, limited liability companies (LLCs) , corporations, and cooperatives are just a few of the ways you can structure your business.

There are also notable differences in LLCs compared to S-corps . While sole proprietorships and LLCs are two of the most common business structures, there are key differences between them.

Sole Proprietorship vs. LLC

A limited liability corporation (LLC) provides the business owner liability protection and tax advantages. Meanwhile, sole proprietors bear personal liability for their businesses. Additionally, an LLC can be owned by investors, while a sole proprietorship is usually owned and managed by an individual.

Once you’ve determined a sole proprietorship is right for you and your business, it’s time to talk to the experts.

Step 2: Talk to your nearest Small Business Development Center.

Before you establish your sole proprietorship, reach out to your nearest Small Business Development Center . There, you can learn the steps your state, city, or county requires to operate your business legally.

Step 3: Choose a name.

Choosing a name is the fun part — researching whether or not it’s taken and trademarked is where things become difficult. Search the United States Patent and Trademark Office (USPTO) to learn whether your chosen name has been trademarked. If it hasn’t, consider filing your name with the USPTO to get a trademark on it, so no one else can operate under that name.

Step 4: Register your DBA.

As a sole proprietor, the legal name of your business is your personal name. However, if you want to operate under a different name, say, “Global Business Consulting Services,” you’d want to register a fictitious or "doing business as" name , also known as a DBA.

In many cases, you’re required to separate business and personal funds. A DBA is often necessary when opening a bank account or credit card for your business. Your state might also require follow-up steps after registration.

Most commonly, you’ll be required to publish the name you’ll be doing business under publicly — and then provide proof of publication to your local government.

A DBA also ensures no one else in your county is doing business under the same name. Bottom line? Register your DBA, and do it soon.

Step 5: Purchase a domain.

Once you’ve picked the perfect name, it’s time to go after a domain. For an easy client experience, your domain name should be the same as your business. Search to see if the domain you want is taken using these ICANN-accredited databases . Even if you’re not ready to build the website, reserve or buy your domain name so no one else can.

Step 6: Register for a business license.

Even sole proprietorships need a business license to operate, in most cities. Don’t skimp here. The fines for operating without a license can be steep. You might also need your business license to open a bank account — but more on that below.

Step 7: Check on other permits or licenses.

The fees associated with not having the correct licenses or permits can be debilitating for a young business. Be sure that you’ve gotten the correct federal licenses and permits and state licenses and permits . These might include:

• A health department permit for preparing or serving food
• A federal license for transporting animals
• A health and safety training for opening a daycare
• A certification exam to become a financial adviser
• A zoning permit to operate your business from home
• Registration with the state tax authority if you have employees or collect sales tax

Do the legwork upfront and find out what licenses and permits you need. The fees you’ll pay during this process are nothing compared to the fines you’ll pay if you haven’t filed the right paperwork.

Step 8: Get an employee identification number (EIN).

If you operate alone, you might not need an employee EIN and can operate and file taxes under your Social Security number. As soon as you hire an employee or set up a retirement plan, however, you must file for a federal employer identification number (EIN). It’s free and can be obtained online.

Step 9: Open a business bank account.

It’s important to keep personal and business expenses separate when running a sole proprietorship (especially if you get audited). Opening a business bank account ensures a certain level of protection for your business funds. This account also allows customers to pay with a credit card and make checks payable to your business. You can also build a good business credit history.

You want to be able to prove to the IRS that you’re running your business to make a profit. This ensures the losses you experience during the first few years will remain tax deductible.

It’s also wise to build a good credit history before starting your business. While credit cards can help you out in your company’s early days when cash flow is low, the interest adds up quickly and can easily become overwhelming.

A personal loan is often a better option. However, a good credit history is necessary for securing a loan of this type.

Step 10: Load up on insurance.

Because one of the biggest risks to starting a sole proprietorship is the liability, having adequate insurance is a must.

Consider property and liability coverage, auto insurance, health coverage, and disability coverage at the very least. This can get expensive, but it ensures you and your personal assets are protected from lawsuits and professional setbacks, should they arise.

Check out this SBA article to learn more about the coverage you need.

Step 11: Pay your taxes.

As a sole proprietor, you’ll pay income tax on all the income your business nets. File your sole proprietorship income taxes by using Schedule C on your Form 1040 . Then, add the income or losses your business incurred to the other income you record.

You can use any business losses to offset other sources of income, like a salary from your day job or a spouse. But be careful not to step into “ hobby business ” territory with the IRS. You must prove your business is not a hobby in order to lower your taxes. When your business becomes profitable, it might be time to file for corporate status or become an S corporation .

Remember, because you’re self-employed, your paychecks don’t have proper withholdings taken out at the time you’re paid. Instead, you can expect to pay quarterly estimated tax payments. You’ll then cover the difference or receive a refund for any shortage or overage come tax season.

Because of this, you should set aside money from each paycheck to cover those quarterly and annual expenses.

The main appeal of a sole proprietorship is the freedom and flexibility it provides for the owner. This is especially true of new entrepreneurship and people looking to scale their side hustle.

Whatever the situation is, sole proprietorship has many advantages. Here are a few common benefits.

1. Full Decision-making Authority

As a sole proprietor, you are fully responsible for making choices and decisions for your business. As opposed to a partnership or an LLC, you don’t need to consider the opinions of shareholders or legal partners. You are free to steer your business in any direction you think works best.

2. Easy to Set Up

A sole proprietorship is much easier to set up than other business forms.

As a sole proprietor, you don’t have to think about legal contracts with other business partners. You also don’t have to do other laborious tasks that other business enterprises require, like giving stock to shareholders or choosing a board of directors.

You do, however, have to get the necessary licenses and permits to legally run your business, such as sales tax permits and zoning permits.

The licenses and permits you’ll apply for depend on the type of business you want to run. Check with your local or state government to learn exactly which ones you’ll need.

3. Lower Up-front Cost

Starting a sole proprietorship is free for the most part. Of course, you’ll have to pay to register your business name, get your business domain, and get the necessary licenses or permits, but you won’t pay the $1,000 average cost of starting an LLC.

This is great if you’re working with a tight budget because you won’t have to invest a lot of money into the business before you begin operations.

4. Simple Tax and Lower Tax Rates

Sole proprietorships have fairly simple and straightforward tax requirements compared to other business entities.

In terms of tax filing, sole proprietorships are taxed as a pass-through business entity. This means that the business’ profits and losses are reported on your personal income tax return. So you don’t have to pay separate taxes for your business.

For example, if you use your own home as your business base, you won’t have to pay more money on space, utilities, and internet. This reduces your personal taxes. You might even get a tax refund when you file your personal tax return.

As a sole proprietorship, you can also take advantage of some tax deductions. For instance, the Tax Cuts and Jobs Act of 2017 allows sole proprietors to deduct 20% of their net income from their taxes.

Additionally, there’s no distinction between the owner and a sole proprietor. Therefore, the IRS does not require separate accounting records for the business — including balance sheets — as part of their tax return.

5. Full Control Over Revenue

As a sole proprietor, you’re in charge of all aspects of your business, including revenue. You decide how much you want to pay yourself and contractors (if you have any). You’ll also choose how much you want to pour back into the business.

As with all business models, sole proprietorships have disadvantages as well. Here are some of them:

1. Personal Assets Are at Risk

As a sole proprietor, you are responsible for the financial aspects of your business, including taxes, contractor wages, and any legal contingencies. What’s more, sole proprietorships don’t offer legal protection over your personal assets if you get into financial trouble.

This means that if your business is sued or you have to file for bankruptcy, the court has the right to seize your personal assets to cover these expenses. That includes your savings, home, cars, and other belongings.

Sure, insurance coverages can help with this, but they’re not foolproof.

2. Difficulty Raising Capital

While the initial costs of starting a sole proprietorship are low, raising capital to finance the business can be difficult. That’s because banks prefer to support incorporated businesses.

Banks consider the sole proprietorship model to be risky, as the owner’s personal assets are usually limited and can run out at any time. Financial institutions are usually reluctant to issue credit or give out loans to sole proprietors for fear that they won’t be able to repay them.

Sole proprietorships may also struggle to get buy-in from investors, as they’re not designed to have shareholders. Without loans and investments, it’s harder to take a sole proprietorship to the next level.

3. Self-employment Tax

As a sole proprietor, you are liable to pay a self-employment tax of 15.3% (12.4% in Social Security taxes and 2.9% for Medicare) on all income generated by the business.

While the 12.9% Social Security taxes are constant, the Medicare tax rate increases by 0.9% once you cross certain threshold levels. In the long run, this tax can become significant.

4. Perceived Lack of Professionalism

It’s not uncommon for potential investors and clients to view a sole proprietorship as less professional than a corporation or LLC. They may also be wary of doing business with an individual, as opposed to a separate legal business entity. You should keep this in mind if you might consider an LLC as an option for your business.

Sole proprietorships are a great choice for people who want to turn their side hustles into something a little more serious — and lucrative. A variety of businesses are operated as sole proprietorships.

Here are some common examples.

1. Web Developer

Web developers design websites for clients using web coding languages, such as HTML , CSS, JavaScript, PHP, and jQuery. An easier entry point into this field would be WordPress web development .

2. Digital Marketer

Digital marketers do anything from managing a brand’s social media accounts to improving a brand’s SEO . Be sure to specialize rather than offering all marketing services.

3. Virtual Assistant

Business owners are busy. They don’t want to hire an office assistant, especially because most tasks can be done online. Enter the virtual assistant.

As a sole proprietor running a virtual assistant business, you’d handle tasks such as bookkeeping and database entering for other business owners.

4. Daycare Operator

Daycare operators run small, affordable daycare facilities for parents who can’t afford expensive day schools or a dedicated nanny. A background education would be helpful before creating a daycare business.

You could, alternatively, found a dog daycare, or a daycare for the elderly.

5. Freelance Graphic Designer

Graphic designers create beautiful things: landing pages, brochures, flyers, and social media ads. As with digital marketing, you should specialize in either digital or print graphic design, and target certain industries that interest you. Creating a banner for a hair salon would be much different from creating one for an engineering firm. You’ll also need a graphic design portfolio.

6. IT Consultant or Computer Specialist

Have you ever run into IT problems? So do countless businesses. As an IT consultant running your own business, you would offer IT troubleshooting services to other companies. You’ll also resolve issues with both the company’s hardware and software solutions. Be open to traveling for this type of sole proprietor business.

7. Freelance Writer

As a freelance writer with a sole proprietorship, you would target brands that need content written for them. These may include nonfiction articles, news articles, blog posts, website pages, and social media ads. As with digital marketing and graphic design, consider specializing in one writing form.

8. Freelance Copy Editor

Freelance copy editors edit someone else’s writing for clarity, concision, and effectiveness. These editors proofread someone else’s work for errors. They also focus on the flow and cohesion of ideas.

You can either go into fiction or nonfiction copy editing. Alternatively, you can become a copy editor specifically for websites and blogs

9. Freelance Nonfiction Book Editor

Nonfiction book editors typically review highly technical or specialized material for flow, accuracy, and logic. These editors are different from other types because they exclusively specialize in manuscript-length works and have an advanced degree in the topic they specialize in.

10. Fitness Coach

Fitness coaching is a great choice if you have a passion for fitness. This type of sole proprietor typically targets gym goers — or those who’d like to start — to help them reach their fitness goals through a customized program. A degree in exercise science would be beneficial, as well as a certification in fitness coaching.

11. Housekeeper

Housekeepers clean houses with more thoroughness than a busy homeowner would. Tasks include mopping, sweeping, taking out the trash, washing dishes, and doing laundry. For optimal success as a sole proprietor, you should target a small geographical area to pitch your housekeeping services.

12. Landscaper

Landscapers mow lawns, trim bushes, check the soil’s health, and do everything related to backyard and front yard maintenance. You can offer something simple, such as lawn mowing, and slowly add more services as you gain more advanced land care knowledge.

13. Caterer

Like cooking? Then a catering sole proprietorship may be for you. Caterers cook large amounts of food for other people’s events and typically take care of delivery and setup. Instagram is a great platform to spread the word about your business.

An alternative sole proprietorship for those who enjoy cooking would be a baking business. You can either specialize in sweets or savory goods, or offer a mixture of both. While we often associate bakers with brick-and-mortar bakeries, you can operate this business out of your home and arrange local pickups.

15. Accountant

As a freelance accountant, you would work with small-business owners and audit their inflow and outflow of cash. Be sure to be proficient in at least one accounting software, such as QuickBooks or FreshBooks.

16. Tax Preparer

Tax preparers target individuals who find tax return documents inaccessible and difficult to fill out. This is one of the easiest sole proprietorships to launch, as there are no education requirements. A course in tax preparation is all you need.

17. Document Assistant

Document assistance is in a similar vein to tax preparation. You would help individuals fill out highly complicated forms — such as immigration applications, visa applications, and unemployment claims. You may also submit them on your client’s behalf.

Proficiency in another language would be beneficial, as those who need assistance are typically non-English speakers.

18. Resume and Cover Letter Writer

Resume and cover letter writers serve those who have a disparate collection of job descriptions, roles, and skills. They then turn the information into an effective resume. A background in writing would be beneficial if you plan to launch this type of sole proprietorship.

19. Event Planner

As a sole proprietor with an event planning business, you would handle all facets of the event planning process. That includes finding a venue, caterer, decorator, DJ, and event furniture supplier. You’ll typically handle part of the event setup as well. One particularly lucrative specialization is wedding planning.

20. Photographer

Freelance photographers take photos and video footage of virtually anything that clients want to capture. As with most business types on this list, you should specialize. A corporate photographer takes photos of a company’s staff. A wedding photographer takes photos of a wedding in an artful way. A maternity photographer takes maternity shoots. These three require different skill sets, so choose the one that best matches your background.

21. Standardized Test Tutor

As a standardized test tutor, you would coach high school and college students to improve their scores on the SAT, ACT, GRE, GMAT, or LSAT standardized tests. You should specialize in one or two tests.

Be sure to advertise the high score you received on your website. A background in education would be helpful.

22. Translator

You can start a translation business if you have advanced or native proficiency in a language other than English. Businesses, churches, and schools need translators to communicate with non-English-speaking clients or groups. You can start this type of business without a degree, but certification would be beneficial.

Starting a business as a sole proprietor is one of the biggest choices you’ll ever make. Though the risk is great, so is the reward. The best part is that you can start it on your own without leasing a building, hiring others, or requiring expensive training. With the steps shared in this post, you’ll build a strong foundation to ensure lasting success.

Editor’s note: This post was originally published in September 2018 and has been updated for comprehensiveness.

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Creating a Business Plan for Your Sole Proprietorship

You have a brilliant business idea that's ready to take flight. But as a sole proprietor, you face unique challenges when it comes to business planning. It's not about following a cookie-cutter template; it's about finding a solution that fits your needs. You're not working with a team of experts; you are the expert.

We shall speak about various aspects of product-market fit, operations, finance, operations, and many other details that must be documented. Here are a few things to remember while crafting a business plan for sole proprietorship.

Collectively, these will be the foundation and vision documents to run the business. You can use it to raise funds or pitch to potential business partnerships. 

Let’s evaluate the importance and contents of each section.

Business Plan: Executive Summary

The first and foremost step for creating a sole proprietorship business plan is to list down every aspect of the business to create a blueprint. It must include the executive summary of the business from the first step to the last, which you can use as a checklist to start successful operations. 

An executive summary of the business includes a brief overview of your business idea, including its name, location, and your products or services. It’ll also have details about your target customers, unique value propositions, and financial projections. Furthermore, the summary must also include the desired online and offline marketing and promotion channels. You can also include the required capital needs and the channels for raising the required capital.

Market Analysis 

Once you have created the executive business summary, the next step is to execute extensive market research to ensure your business’s presence is noted and successful. It is more than likely for the current market to have operational businesses like yours already, which may offer you crucial data on market trends. You can analyze your direct competitors, understand how they market and promote their business, and set a demographic for your target customers. 

Once you have identified your target customers and demographics, you can create multiple sub-business plans to communicate how your products and service offerings will fulfill their needs. Furthermore, you can execute a SWOT analysis to assess your business's strengths, weaknesses, opportunities, and threats. 

Marketing and Sales Strategy

Creating a business plan and streamlining the products or services are vital steps in creating a business plan but must be followed by a comprehensive marketing and sales strategy. A marketing plan includes strategies to create an extensive online and offline business presence. Outline your marketing plan, including your brand, pricing strategy, and promotional efforts, with the overall budget you have in mind for marketing. 

Once you have the marketing plan and goals listed, follow them with comprehensive sales strategies. Analyze the sales target by listing the number of products or services you want to sell in a specific period. Furthermore, include information about the sales channels and the pricing policy, which will help you streamline your profit margin in every sale. 

Product or Service Line

Your business will be as successful as the quality of products or services you offer to the customers. The products and services must align with the chosen demographic and should fulfill their needs. However, it is equally important to communicate relevant information about the features, benefits, and pricing of the products or services to the customers. The information should also include your product/service life cycle and any future development or expansion plans. 

The product or service line you have created must be flexible enough to incorporate customer feedback or change to fit the dynamic market demand better. For example, suppose more customers are seeking to buy the category of products or services you offer online. In that case, your product or service line must follow a process to enlist them online and execute the sales. 

Organization and Management

In a sole proprietorship, you will be the sole owner and have full control over all the aspects of the business. However, with numerous steps in turning your business idea into an operational business, your business plan must have ideal strategies for organizing and managing all the activities from start to finish. For example, if you need raw materials daily, streamline the supply chain and the cost price range for the raw materials. 

Depending on the nature of the business, you may find the management overwhelming for a single individual. Sole proprietorships include the management of various aspects such as accounting, taxation, bookkeeping, payments, etc. Hence, you must analyze your skills and seek the assistance of experts for better management. The business plan should include information about the experts. 

Operational Plan

Day-to-day operations are crucial for a sole proprietorship business to fulfill customer orders promptly and create goodwill. The operational plan must include factors related to your business’s day-to-day operations to ensure that the business runs smoothly. The plan must include the operational location, the facilities to manufacture/store products or services, and the required equipment. 

Furthermore, your business may need raw materials (and their suppliers). The operational plan must include information about the suppliers to outline your production or service delivery process. The operational business plan must provide details if you want to hire other employees to help in the operations. 

Financial Projections

Finance is a vital aspect of a business. It includes effectively recording all transactions in applicable ledgers such as balance sheets, profit and loss accounts, cash flow statements, etc. Furthermore, the financial aspect of the sole proprietorship also includes creating financial projections related to monthly, quarterly, and annual sales and revenue. 

Furthermore, you should detail your revenue and profit goals and outline your pricing strategy. Don’t forget to estimate expenditures, revenues, and profit targets for specific sales. 

The general practice is to create projections for three scenarios, bad, good, and best, to be prepared irrespective of how market conditions change. If you’re making certain assumptions like cost of capital, growth rate, etc, please note them, too.

The appendix in a business plan is a specialized section that includes anything that the sole proprietor feels must be additionally included. These may include any registration, legal, regulatory, and compliance documents. Furthermore, you may also include the resumes of all the applicants for employees you want to hire to analyze them at a specific time in the future and hire the ideal ones. 

India has various Small Business Development Centers offering aspiring entrepreneurs guidance and resources. These centers often provide templates and workshops for creating business plans. You can also visit the websites of the Micro, Small, and Medium Enterprises (MSME) to get real-time updates about the regulatory and administrative compliance for sole proprietorships. Various online platforms, such as Skydo or MyonlineCA , offer business plan templates tailored to the Indian market. You can consult their expert CAs to understand everything about a sole proprietorship business and to create an ideal business plan detailing all the business growth opportunities. 

Conclusion 

Creating a business plan for your sole proprietorship is crucial in setting clear objectives, strategies, and expectations for your venture. While sole proprietorships are relatively simple, a well-thought-out business plan can help you clarify your vision, secure funding (if needed), and guide your business toward success. 

Remember that a business plan should be tailored to your business idea, goals, and growth opportunities. While these resources can provide valuable guidance, it's important to customize your plan based on your unique circumstances and market research. Additionally, regularly update your business plan to reflect business and market conditions changes.

Q1. How can a sole proprietor ensure the quality and adaptability of their product or service line?

Ans: Communicate essential details about features, benefits, pricing, and product/service life cycle. Stay flexible and responsive to market demands and customer feedback.

Q2. What role does the marketing and sales strategy play in a sole proprietorship business plan, and what key components should be outlined?

Ans: The marketing and sales strategy is vital for creating a strong online and offline business presence. This plan should include details on branding, pricing strategy, promotional efforts, and the overall marketing budget. Additionally, the sales strategy should outline sales targets, channels, and pricing policies to ensure profitability. Together, they form a comprehensive approach to promoting and selling products or services.

Free Small Business Income Statements, Spreadsheets, and Templates

By Andy Marker | April 6, 2022

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We’ve compiled a collection of the most helpful small business income statements, worksheets, and templates for small business owners and other stakeholders, free to download. 

Included on this page, you’ll find a small business income statement template , a small business balance sheet and income statement template , a simple small business cash flow template , and a small business comparative income statement . Plus, you’ll find helpful tips on using a small business income statement template .

Printable Small Business Income and Expenses Template

Download Printable Small Business Income and Expenses Template Microsoft Excel | Microsoft Word | Adobe PDF | Google Sheets

Use this printable small business income and expenses template to determine your net income over a period of time. Enter values into the customizable line-item rows, and the template will calculate your revenue and cost of goods sold (COGS) to determine your gross profit. Enter your expenses (such as rent, utilities, and office supplies) to see your total net income. This template is a great tool to track your business's finances over time. 

Read our article on free small business expense templates to find additional resources and to get the most out of your small business budgeting.

Yearly Small Business Income Statement Template

Download Yearly Small Business Income Statement Template Microsoft Excel | Google Sheets

Use this yearly small business income statement template to manage your profit and losses over a three-year timeline. Track your costs in the customizable Expenses column, and enter your revenue and expenses to determine your net income. The template also includes a built-in tax rate calculator for a more accurate account of your net profit. 

To find more resources, check out our comprehensive roundup of free profit and loss templates .

Monthly Small Business Income Statement Template

Download Monthly Small Business Income Statement Template Microsoft Excel | Google Sheets

Use this monthly small business income statement template to track and manage your small business finances. Enter the number of customers and the average sale per customer to determine your total monthly sales. Then, enter your operating, payroll, and office expenses to determine your total expenses. The template will automatically calculate these totals to show your net profit.

Sample Small Business Income Statement Template

Download Sample Small Business Income Statement Template Microsoft Excel | Google Sheets

Use this simple small business income statement template for an overall analysis of your net income. You can customize the Revenue and Expenses lines to include items specific to your business; additionally, the template includes a Years Represented column that allows you to compare numbers over a two-year timeline. This is the perfect tool for taking a quick snapshot of your business cash flow. 

To find more resources, check out our small business budget templates.

Printable Monthly Small Business Income and Expenses Worksheet Template

Download Printable Monthly Small Business Income and Expenses Worksheet Template Microsoft Excel | Adobe PDF | Google Sheets

This simple, printable template is the perfect tool for tracking your business’s income, expenses, and transactions. The template includes three separate worksheets — simply enter monthly financial data, and the template will automatically calculate yearly totals. Help ensure you meet your financial goals, accurately predict projections, and make necessary adjustments with this template.

Freelance Income Statement Template

Download Freelance Income Statement Template Microsoft Excel | Google Sheets

Self-employed individuals can use this template to track their business income from clients, along with any business expenses. Enter your personalized expenses, including rent, office supplies, and insurance, to see your cash outflow. Then, enter your taxes, and the template will automatically calculate your net income. This is a must-have tool for small business owners looking to understand their business profits.

Daily Income and Expenditure Template for Small Business

Download Daily Income and Expenditure Template for Small Business Microsoft Excel | Google Sheets

For a daily analysis of your small business’s cash flow, use this template to track cash receipts, cash payments, and operating expenses. The template automatically calculates these totals on a daily basis to provide you with a detailed financial report. The template also shows your monthly ending cash position, so you can avoid any shortcomings. 

Check out our profit and loss templates for more resources on tracking your business’s cash flow.

Small Business Balance Sheet and Income Statement Template

Download Small Business Balance Sheet and Income Statement Template Microsoft Excel | Google Sheets

Use this income and expenses spreadsheet to help ensure that you never lose sight of your small business’s financial outlook. Enter your revenue and expenses, and the template will automatically calculate your net income. Plus, the customizable year columns enable you to compare your net income over a five-year timeline so that you can easily forecast your business’s economic health. 

Read our article on small business balance sheet templates for more resources on tracking your business expenses.

Small Business Income Statement Template

Download Small Business Income Statement Template Microsoft Excel | Google Sheets

This simple small business income statement template calculates your total revenue and expenses, including advising, equipment, and employee benefits, to determine your net income. Use this template to track and compare your finances over a two-year timeline. Save the document so that you always have quick insight into the financial status of your business.

Startup Business Income and Expenses Template

Download Startup Business Income and Expenses Template Microsoft Excel | Adobe PDF | Google Sheets

Use this startup business income and expenses template to track your business’s cash flow. Compare your budgeted expenses and funding to your actual spending to understand any discrepancies. Overall, this template can help you make well-informed, financially accurate predictions so that you can reach your business goals.

Simple Small Business Cash Flow Template

Download Simple Small Business Cash Flow Template Microsoft Excel | Google Sheets

Use this simple small business cash flow template to monitor your cash increase or decrease over a certain period of time. Enter your cash receipts, payments, COGS, and operating expenses, and the built-in formulas will calculate your total cash payments, net cash change, and month-ending cash position.

Simple Small Business Profit and Loss Template

Download Simple Small Business Profit and Loss Template Microsoft Excel | Google Sheets

Regardless of your industry, you can use this simple small business profit and loss template to analyze your business’s financial status over a specific period of time. Customize your expenses by adding or removing line items, and the built-in formulas will calculate your gross profit and net income. 

Read our article on small business profit and loss templates to find additional resources and to get the most out of your small business’s profit and loss tracking.

Small Business Comparative Income Template

Download Small Business Comparative Income Template Microsoft Excel | Google Sheets

Use this detailed small business comparative template to closely maintain watch over your financial position. Enter line items for income and expenses to compare your budget to actual calculations. With detailed use, this template will enable you to never lose sight of your business's cash flow.

What Is a Small Business Income Statement Template?

A small business income statement template is a financial statement used to report performance. Templates include calculations for revenue, expenses, and overall profit and loss, and they are used to document, analyze, and project business finances. 

If you are a current or prospective small business owner, it’s imperative that you track your income and expenses, as doing so will ensure you have accurate information regarding how your company spends and makes money. An income statement template helps you to identify areas of risk and patterns in profit and loss, and to make educated decisions around your budget. 

A small business income statement template typically includes the following line items for tracking your business's financial status: 

• Budget: A budget is a spending plan for your business based on your estimated income and expenses.
• Cash Ending Position: This refers to the money your business has at any specific point in time. 
• Cash Flow: This is the amount of money that moves in and out of your business. 
• Cost of Goods Sold (COGS): This is any money spent that is associated with your product, such as packaging and labor.
• Expenses: List anything on which you spend money to run your business, such as rent, advertising, equipment, insurance, phone, and employee salaries. 
• Gross Profit: Determine this number by subtracting the COGS from your total sales.
• Gross Revenue: The formula to calculate gross revenue is total revenue less the COGS. 
• Income: List anything that brings money into your business, such as sales and donations. 
• Net Income or Net Profit: This number reflects the amount earned from sales.
• Revenue: Calculate revenue by adding together the total amount of income made by sales and services. 
• Tax: This includes any mandatory monetary contributions made to the government.

Manage Income Statements and Drive Success with Smartsheet for Small Businesses

Discover a better way to connect your people, processes, and tools with one simple, easy-to-use platform that empowers your team to get more done, faster.

With Smartsheet, you can align your team on strategic initiatives, improve collaboration efforts, and automate repetitive processes, giving you the ability to make better business decisions and boost effectiveness as you scale. 

When you wear a lot of hats, you need a tool that empowers you to get more done in less time. Smartsheet helps you achieve that. Try free for 30 days, today .

Connect your people, processes, and tools with one simple, easy-to-use platform.

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Example Business Plan

A. & B. Nursery

February 2022

John A. Smith 724 Nursery Rd. Anytown, PA 10000 555-555-5555

Executive Summary

A. & B. Nursery will be a small part-time ornamental nursery producing four species of quality ornamental trees. The nursery’s target market will be landscape contractors and garden centers. By producing trees for the wholesale market, the owner will be able to operate the business on a part-time basis, enabling him to remain at his current full-time employment and continue operations into retirement.

Currently, landscapers require quality ornamental trees to use for their businesses. The nursery will furnish these trees. The nursery is located in an area of high population growth in the Commonwealth of Pennsylvania. The nursery plans to offer services to area businesses that nurseries outside the area of Adams, Cumberland, and York Counties cannot offer. Since the nursery will be geographically located in the northern portion of Adams County near the border with Cumberland County, the nursery has the advantage of being able to deliver trees to any portion of the two counties within two business days of an order.

A. & B. Nursery plans to produce only four species of trees to enable the owner to concentrate on producing quality trees. The owner has not previously produced ornamental trees, however; the owner was previously engaged in the commercial fruit business. The land used for the nursery was previously part of his fruit growing operation. Because of off-farm employment, depressed apple prices and labor availability, the owner desires to operate the nursery as a part-time operation.

Since the nursery will be small, the owner does not anticipate the need to hire any additional labor. This will eliminate any employee taxes and benefits, as well as any workmen’s compensation insurance. This will reduce or eliminate expenses and overhead costs associated with employees.

In reviewing the business plan concerning the financial statements, the success of a business like A. & B. Nursery depends on offering trees of consistent quality and providing exceptional service. The success will also depend on developing close relationships with customers to determine future needs regarding size, species, and production method. Based on a survey, there are several small nurseries within a fifty-mile radius of the A.& B.'s location, however; these nurseries do not supply the needs of all customers in the area. The owner believes there is a market for the trees he will produce.

By catering to smaller businesses, the owner believes that he can market all of the trees he will produce. A. & B. Nursery will face several challenges. These include:

• the owner has no experience producing ornamental trees
• wholesale sales will not net as much profit as retail sales
• The owner will need to purchase some equipment
• weather conditions, such as drought, can affect the production of trees
• according to a survey conducted by the owner, businesses surveyed preferred to receive trees balled-and-burlapped.

The owner is currently a Penn State Extension employee who will have the resources of the University readily available. The owner also has a close friend who was previously involved in the nursery and landscape business who will serve in an advisory capacity during start-up and operation

To overcome the other challenges, A. & B. Nursery will need to borrow start-up capital for an irrigation system and needed equipment. Over time, the nursery may try to establish an on-farm retail market for a portion of the trees produced. This would expand the initial size of the operation thus spreading the investment in the irrigation system and equipment over a larger number of trees which will reduce the overhead cost per tree sold. To overcome the challenge of customers preferring balled-and-burlapped trees, the owner will either need to purchase a tree spade or contract with a company to harvest the trees or educate the customers about the value of the pot-in-pot system.

The owner has doubts about borrowing money to begin the business at this time because rising interest rates. However, this business plan shows that if the owner installs an irrigation system, the return on the investment will take approximately two years. If the business does not install an irrigation system, the business plan shows the return on investment will be in the fourth year if the nursery can begin marketing trees in three years after business start-up. The break-even analysis performed on a five-year basis, supports this theory. The owner uses a 6% interest rate for the cash-flow analysis of the business. The business should still be viable with moderate interest rates.

After completing this business plan, the owner determines that the business will be viable even without irrigation. However, it will return the initial investment sooner if an irrigation system is installed. The owner will undertake this business opportunity in some form.

Mission, Goals, and Objectives

General description of the business.

A.&B. Nursery is a small nursery, which will specialize in producing deciduous ornamental trees. The business will be a sole proprietorship formed to provide additional income to the owner. The nursery will specialize in four species of trees including Redbud, Elm, Oak, and Locust trees based on current research conducted. These species may change over the course of time as conversations with customers dictate.

This specialization will allow the owner to concentrate on producing quality trees to local landscape contractors and garden centers.

The business plans to produce trees in both the pot-in-pot and balled-and-burlapped method. Initially, by offering both types of products, the business will offer customers the option of purchasing trees as they are accustomed and educate buyers about the benefits of the newer method of pot-in-pot. Potential customers are now purchasing more trees produced by the pot-in-pot method. The pot-in-pot method is a newer, more efficient method of producing trees. The owner plans to offer a small percentage of the inventory of trees balled-and burlapped the first marketing year then only offer trees produced by the pot-in-pot method in subsequent years. Trees produced using the pot-in-pot method do not suffer from replanting shock if sold at the optimal size. Also, the balled-and-burlapped method takes a portion of the operation’s topsoil with the tree when sold. That topsoil then needs to be replaced which adds to the production expense of the tree.

The nursery initially plans to sell all trees on the wholesale market to help alleviate the need for sales personnel and the requirement of having to be at the business during the weekends and evenings. The nursery plans to market trees within a three-county area in south central Pennsylvania. The business will offer wholesale customers the option of purchasing trees at the farm by appointment or the business will offer delivery for a fee within the local area.

Mission Statement

The mission of A. & B. Nursery is to produce and market quality select varieties of deciduous ornamental trees at a competitive price for distribution within the local area.

Goals and Objectives

As a business in the development stages, A. & B. Nursery has several goals relating to quality, growth of the business, and survival of the business. These goals and objectives are as follows:

Goal 1: To produce quality trees for market within three years.

• To plant at least three hundred trees each year over the life of the business.
• To produce trees which meet the customer’s specifications over time.
• To have a survival rate above ninety percent for the years the trees are in the nursery.

Goal 2: To produce trees using the Integrated Pest Management (IPM) system.

• By using the IPM system, the business will use fewer pesticides to reduce pollution.
• The IPM system will help reduce the cost of production for the nursery.
• The IPM system will produce healthier trees to help ensure long-term survival of trees.

Goal 3: To ensure repeat customers throughout the life of the business.

• By constantly surveying customer needs and industry trends, the business will adapt to these needs and trends.
• By offering a one-season warranty, customers will develop trust in the business.
• By developing the customer's trust, the business will help ensure repeat business.

Goal 4: To expand the business after five years.

• To establish customer loyalty and develop new customers after breaking into the market.
• To alter or expand the number of species produced to stay current with changing markets.
• To expand the use of available land and use this land to its best economical use.
• Research the potential for on-farm retail sales.

Goal 5: To produce trees at a profit for the business.

• To produce quality trees at the lowest possible cost by monitoring expenses and following best practices.
• To produce species of trees that will command the highest possible price.
• To produce species of trees which are that customer desire.

Goal 6: To supplement the retirement of the owner.

• To continue to expand the customer base to ensure the longevity of the business.
• To continue to expand the business over the next fifteen years.
• To continue to plant trees for sale for the next twenty years.

Background Information

Background industry information.

According to the IR-4 Project, Robert Prince, of Flushing, New York, opened the first nursery in the United States in 1737. The nursery was operated by four generations of the Price family until it closed sometime around 1865. The first Arbor Day was celebrated in 1872 with over one million trees (primarily fruit trees) planted that day. Fruit trees were overtaken in number by ornamental trees.

With the emphasis on planting and maintaining green spaces and using vegetation to sequester carbon to reduce pollution, the interest in the ornamental industry is growing. Trees also benefit communities by reducing erosion and providing space for nesting birds and other wildlife habitat. In towns and boroughs, they provide shade and help reduce energy costs during the summer months.

According to the United States Census Bureau (July 2020), from 2010 to 2020 the population of Adams County rose 2% with 65 housing units authorized by building permits in 2021. This was a 75% increase from 2020. In Cumberland County, the population change was 10% from 2010 to 2020. New housing units rose by 13% to 989 permits issued in 2021. York County's population rose 5% at the same time and new housing units rose 17% with 91 new homes being constructed.

These figures indicate that the housing industry in the three-county marketing area considered by the researcher is growing. With the growth in the housing industry comes growth in the landscaping industry. New houses, unless they are built in wooded areas, will need some type of landscaping to enhance the exterior aesthetics of the new housing. As stated previously, landscaping also increases the resale value of most homes. If this rate of growth continues throughout the next ten years, existing landscaping companies will need to expand their businesses. With this expansion comes an increased demand for the products they sell or use in their business.

When homeowners purchase existing homes, they may wish to upgrade the curb appeal by replacing existing landscaping with products that they prefer. Increasing the curb appeal prior to putting a property on the market my increase the equity realized in the property. The business may not produce enough volume to service more that residential properties.

Organizational Matters

Business structure.

A.& B. Nursery will be a sole proprietorship at this stage of the planning. It requires only the expenses of doing business, such as office equipment, phone lines, internet connections, and marketing materials. These items would be available to A&B through the current fruit production business in which the owner is engaged. The owner will pursue the expenses associated with becoming a Limited Liability Company (LLC) to determine if this structure is an option for the business.

Management, Personnel, and Outside Services

The owner of the business represents the "management team."

"I have an Associate Degree in Agricultural Business from Penn State University, and a bachelor's degree in Organizational Management from Eastern University. I was previously a self-employed as a fruit grower for sixteen years and am currently employed by Penn State University. As a businessperson, I possess a strong work ethic, excellent organizational skills, and good written and oral communication skills which will aid in the development of the business. The success of the business will depend on these factors."

Since the business is small and part-time, the business will not require additional labor beyond the first marketing year. Additional labor may be required to harvest the percentage of trees planted in the balled-and burlapped method, but the owner plans to do as much of the works as possible.

Outside services will be needed to operate the business. A consultant or company representative will be needed to make pesticide recommendations. These services are readily available to the business. Extension personnel will also be required to make recommendations on several methods regarding production. Both of these outside services are currently used in the owner's existing business.

Risk Management Strategies

The business will use the diversification of species as its main risk management tool. If irrigation is installed, this will be used as a risk management strategy. Irrigation will help lessen the effects of drought, which has plagued the area in three of the last five years. The owner has examined the possibility of crop insurance for the trees. Nursery crops are covered by crop insurance, but slow or reduced growth of trees is not covered. Failure if the irrigation system is a covered loss as well as drought. The United States Department of Agriculture (USDA), Risk Management Agency (RMA) provides a software package to track species and plant inventories. This software would provide useful information for the business and allow the owner to use the information when purchasing the nursery crop insurance policy.

Another option available to the owner is the Whole Farm Revenue Protection policy. This insurance covers the income and not production. The owner should speak to a local crop insurance provider to determine if he would be eligible for coverage in the first year. To qualify for the insurance, the producer must have filed an Internal Revenue Service (IRS) Schedule F which is income from farming. The owner has rented some of his land to a local farmer for the past years and has filed that income under Schedule F. If available the first year, the owner should seriously consider that option in his risk management strategy. This business will not use all tillable land so a portion will still be rented to a neighboring farm.

Marketing Plan

This marketing plan will determine the marketing strategies of the small part-time deciduous ornamental nursery. The production plan for the nursery is to produce approximately three hundred trees per year. The nursery plans to distribute quality products to local landscapers and garden centers. The nursery plans to locate in the Adams County area of Pennsylvania and sell the products in the Adams, Cumberland, and York County areas.

The mission of A. & B. Nursery is to produce and sell quality deciduous ornamental trees at a competitive price for distribution in the local area.

Since this business is owned and operated by a single person, the party involved understands the mission statement. The business is started to supplement the income of the owner, and to provide funds for retirement and the education of the owner's children. The owner anticipates the business will take four years to produce trees for sale. This is due to the time anticipated to grow the trees to a marketable size. The owner plans to focus on producing four species of trees, determined by the clientele to be their most sold species or what they determine will be required in the future.

• To provide quality trees at competitive prices.
• To produce no more than four species of trees for sale.
• To limit production to 300 trees per year.
• To provide consistent quality throughout the life of the business.
• To focus on producing marketable trees within four years.
• To retain customer’s respect.
• To provide trees for customers that will meet their standards.
• To provide trees to the customer that will meet their customer’s expectations.
• To provide additional income for the owner.
• To supplement the retirement of the owner.

Situation Analysis

Internal strengths.

• The owner has available land at this time.
• The owner has most of the equipment needed to proceed with the business.
• The owner has experience growing fruit trees.
• The owner has a current pesticide license.
• The business requires low input costs.
• The owner has business experience.
• The owner can do the required labor to produce the trees.
• With selling wholesale, advertising costs will be low.
• The owner has a truck that will be used for delivery.
• The owner is currently employed by Penn State University and has the educational resources at his disposal.
• Continued growth of the new housing industry in the target area.

Internal Weaknesses

• The owner has no experience producing ornamental trees but does have connections to experienced production and marketing contacts.
• Wholesale sales will not net as much income as retail sales.
• The owner does not have a nursery license but they are easily obtained.
• The owner will need to purchase some equipment.
• With customers preferring balled-and-burlapped trees, the owner will need to purchase topsoil to replace ground removed with the tree.
• The business will require time away from family.

External Opportunities

• The owner has many connections to the nursery industry through his employment.
• The owner has a colleague who has indicated interest in purchasing the trees.
• The owner can join the Pennsylvania Landscape and Nursery Association for additional information.
• The owner has a colleague and friend who was formerly a landscaper and nurseryman.
• The business can sell to the retail market if it produces trees in the pot-in-pot growing system.
• Newly built houses and commercial properties usually require products for landscaping.

External Threats

• Of the last four growing seasons, there have been two years of drought.
• The business may require irrigation to produce the trees, which will be an additional expense.
• There are other suppliers in the area.
• According to the survey, most landscapers and nurseries are satisfied with their current suppliers.
• The market may become saturated with trees.
• The changing consumer demand may cause the business to have unmarketable trees.

Marketing Strategies

The business plans to remain small because of existing employment commitments. The owner does not want to make the business into the sole income source of the family. Because of this, the business plans to specialize in a limited number of species and not sell to the retail market. The retail market will demand the owner to be accessible at all times. The owner will diversify into retail when production experience has increased, and additional time is available.

The target market for the business is landscapers and garden centers in the Adams, Cumberland, and York County area. Before deciding on species to plant, the owner plans to visit with several businesses in the target area to determine the species they are selling. This research will help eliminate the possibility of producing species that will be unmarketable when the trees are to the required size. The owner plans to visit these same businesses to market the trees. This practice will eliminate having to advertise in the traditional sense.

The population in Adams County has been continually growing. Adams County is in the top ten fastest growing Counties in Pennsylvania While Cumberland County is the fastest growing County. The population for the two counties is over 100,000 people and growing. Adams County is growing by over 2% over the last year and Cumberland County has grown over 10% in the same period. York County's population is over 450,000 and grew 5 % in the past year. This sustained growth requires the construction of new houses.

New houses are traditionally being built on land that was previously devoted to agriculture. This land traditionally does not have shade trees existing on the properties. Due to this, most newly constructed houses will need some form of landscaping. The deciduous trees the business plans to produce will complement this need.

The target markets are seeking locally produced trees to lower shipping costs which will lower their input costs. The market is also seeking locally produced trees to ensure survivability of the trees. Trees produced in the area have a higher survivability rate than imported trees. The business will produce trees in the local area to assist in this demand.

The business is located within fifty miles of the target market. This will enable the target market to have better accessibility to trees when they are needed. They will be able to have trees delivered to the job site, or place of business or pick up at the business, within two days. The owner can pull the trees when time permits to have them available when the customer requires the product. This will enable the market to complete jobs quicker and satisfy the customer. With landscapers having to order trees from outside the area, they may have to wait several days or weeks to complete the job for their customer. Having local trees available will benefit the contractors when they bid on jobs.

The business desires to work with other small businesses and help sustain their businesses. This will also help sustain the local economy. With the majority of all proceeds remaining in the local economy, this should help the other local businesses. The business plans to consistently market to small local businesses by word of mouth and reputation. This will help ensure repeat business from customers.

The business is not currently producing trees. The reputation of the business is not yet established. The reputation of the owner as a fair person has been established in the community. In talking with a potential customer, the customer stated that he would purchase as many trees from the owner as possible. This contact owns a garden center and landscape business and may be a primary customer for this business. This is contingent upon the business producing species of trees that this business is currently selling. This business has available land to produce their own trees but does not currently have the required time or labor to do so.

Because of the time required to produce the trees, the business cannot change products easily. This will make changing products difficult. This will also require the business to thoroughly research the species to be produced. The business must have the foresight to predict what species will be desired in four years. Christmas trees will not be an option as they take at least eight years before reaching marketable size. This will make it difficult for the business to expand or contract dramatically or quickly.

The government impacts to the business are requirement of a pesticide license to control pests on the trees, a license to operate a nursery. The Pennsylvania Department of Agriculture (PDA) places these restrictions on the business. The owner has contacts at PDA who will help him through the process of obtaining a nursery license.

Marketing Mix

The owner realizes that business-to-business marketing relies on a few core customers to sustain the business. These core customers should be a mix of larger and smaller businesses to ensure a good marketing mix. The business plans to establish a long-term customer base and develop a close relationship with these customers. This will help ensure the business keeps in tune with industry trends. If the customers see trends towards other species of trees, they can alert the business of these trends. Pricing trends will be determined by continuous research by the business and monitoring of input costs. The business plans to market trees at competitive prices as long as a profit can be established at these prices. If input costs rise, prices will need to rise accordingly. Record keeping will be key in this decision-making process.

The business plans to market, Redbud, Elm, Oak, and Locust trees. These species have cultivars that are commonly used in homeowner landscapes. According to the survey conducted, these were the top four species sold by the respondents of the survey that will survive within this climate zone. The business plans to market two-inch diameter trees since these are the largest seller among the respondents. The business will offer smaller trees at a lower price if requested by a customer. The business plans to harvest trees when they are needed to ensure quality and freshness.

Public Relations

Most nurseries guarantee the trees for one growing season; the business plans to follow this practice. This practice will need to be monitored to determine if additional warranty is needed. In addition, the plantings need to be monitored by the landscape contractor to determine if proper care for the tree was provided. Continuous monitoring of the customers will determine if quality is of acceptable standards and their customers are happy with the value of the trees. Customer service and care will be an important business policy.

Distribution: The business will offer delivery of the trees to the customer or to the jobsite if desired for landscapers. Garden centers will have the same options of delivery or pickup. The business will charge a modest delivery fee if delivery is needed. The business assumes that most customers will pick up the trees at the place of business.

Promotion of the business will be by direct contact via personal conversations with potential customers. This contact will begin before trees are started in the nursery, so the business knows the market desires before entering the business. This promotional tool will be the most effective and cost-effective for the business.

According to the respondents of the questionnaire, the majority of the trees garden centers and landscapers are purchasing trees that range from $65.00 and up. Production costs are predicted to be approximately $50.00 per tree over a five-year period. This figure does not include an irrigation system. If irrigation is installed, the production costs reduce to $47.00 per tree because of starting to market trees at year three over the same five-year period. This is explained in more detail in the cash flow portion of the plan.

Implementation, Evaluation and Control

When the business is established, if the customers require more trees each year, the business may expand slightly. When the business is more comfortable with the production methods, expansion will be easier. If the business expands beyond the initial customer base, more traditional advertising and promotion will be needed. The owner has not previously been engaged in this business and plans to start small until he becomes proficient in the business. The business plans to begin in the spring of 2023. The owner does not have the required time now to begin the business.

Evaluation of the business will be customer based. If the customers are not satisfied with the quality or service, the business will need to make adjustments to ensure continued customer loyalty. The business knows that it is easier to retain customers than to establish new customers. When a customer is not satisfied, the business needs to notice. A survey of customer satisfaction will accompany each sale.

Financial Plan

Record keeping functions.

Because A. & B. Nursery is solely owned and operated by the author, the record keeping functions will be the responsibility of the owner. The owner will keep records of accounts payable, accounts receivable, cash flow, and other related financial records needed. Federal regulations require all pesticide applications to be recorded. Additional production practices will also be tracked to aid in the decision-making concerning any potential changes. For the first three years, if irrigation is not used, there will be no receipts, just expenses. Beginning the fourth-year income will be recorded and financial analysis will be kept.

Other Operations Controls

An accountant will be used to produce income tax reports as needed. The accountant will also perform analysis as a check for the owner to ensure accuracy of records. This procedure will develop a system of "checks and balances" needed by the operation. A qualified crop consultant will periodically scout the nursery for pests. This consultant will then make any recommendations for pest treatment. The business will also consult with Penn State Extension regarding changes needed to improve the business. Cash Flow Assumptions

Cash Flow Assumptions

• The owner will invest $5,000 of personal funds the first year for start-up capital for trees and production supplies.
• No labor will be billed to the business except outside contracted labor. Owner labor will be tracked to determine if the business will be profitable with more hired labor.
• Tree expense is calculated on an average for the species planted and includes shipping saplings to farm.
• Three hundred trees planted with a 5% mortality rate calculated when determining the number of trees sold.
• There is a $100 per acre land fee assessed to offset taxes and insurance costs.
• The nursery will only require one acre of land at start-up.
• Insurance is not calculated since the current policy covering the existing dwelling is adequate for the nursery.
• The use of crop insurance may depend on cost and consultation with a salesperson. No costs are included in the cash flow.
• Separate budgets are developed for non-irrigated and irrigated methods of production.
• The business will need to purchase a small backpack sprayer for $115.00 for applying pesticide.
• The owner now owns a truck and trailer for delivering trees. This equipment will be useful throughout the five-year time period discussed.
• The business will borrow $10,500.00 of start-up capital the first year to cover tree costs, maintenance, and shipping. A loan amount of $6,500 for 3 years to purchase irrigation system. The owner will invest at least $5,000 from personal funds for equipment and startup.
• Interest is calculated a 6% and a 10-year repayment schedule.
• Ten percent per year added to tree sales and tree costs to account for market trends. Production costs, other than shipping should be stable as these costs were rounded up in the initial calculations.
• Cost and Price assumptions  - Sales Price    $65.00 +   Depending on age and size  - Production cost    $50.00    5-year no irrigation  - Production cost    $47.00    3-year with irrigation

Analysis for One Acre of production with Four Species

Cash flow projections for five years without irrigation.

Total expenses per tree: $52

Cash Flow Projection for Five Years With Irrigation

Total expenses per tree: $56

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Bookkeeping Business Plan Template

Written by Dave Lavinsky

Bookkeeping Business Plan

You’ve come to the right place to create your Bookkeeping business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Bookkeeping companies.

Below is a template to help you create each section of your Bookkeeping business plan.

Executive Summary

Business overview.

Pacific Bookkeeping is a new bookkeeping firm located in Seattle, Washington. The firm will focus on providing expert bookkeeping services and exceptional customer service. We will help both small businesses and individuals and provide them with tax preparation, forecasting, budgeting, and other bookkeeping/accounting services.

Pacific Bookkeeping is led by Rebecca Stone, an experienced accountant who has been managing a large bookkeeping firm in Seattle, Washington for the past ten years. She graduated from Washington State University with an accounting degree and has been working at a large payroll firm since then, starting at an entry-level position and working her way up to a management-level role. Her experience and education have fully equipped her to run her own local bookkeeping firm.

Product Offering

Pacific Bookkeeping will provide a full range of bookkeeping services for individuals and small businesses. Some of these services include:

• Recording invoices
• Tax filing and preparation
• Financial reporting
• Payroll processing
• Monitoring accounts receivable
• Documenting receipts
• Forecasting
• Customer analysis

Customer Focus

Pacific Bookkeeping will primarily serve individuals and small businesses in the Seattle, Washington area. The city is home to over four million residents and around 100,000 businesses and many of them have a need for professional bookkeeping services. We will offer a wide variety of bookkeeping services in order to serve as many customers as we can in this target market.

Management Team

Pacific Bookkeeping is led by Rebecca Stone, an experienced accountant who has been working at a large bookkeeping firm in Seattle, Washington for the past ten years. She graduated from Washington State University with an accounting degree and then began working at the firm, starting at an entry-level position and working her way up to a management-level role. Though she has never run an accounting firm of her own, her experience has given her an in-depth knowledge of the bookkeeping industry, including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).

Success Factors

Pacific Bookkeeping will be able to achieve success by offering the following competitive advantages:

• Location: Pacific Bookkeeping is centrally located in the community, which provides ease of access for clients. The firm’s office will be located between the retail and business districts, making it accessible to a larger customer base.
• Competitive pricing: Pacific Bookkeeping’s pricing is more affordable than its closest competitors.
• Management: The management team has years of accounting experience that allows the company to market to and serve clients in a much more sophisticated manner than competitors.
• Relationships: Having lived in the community for over 20 years, Rebecca Stone knows all of the local leaders, newspapers, and other influencers. As such, it will be relatively easy for Pacific Bookkeeping to build brand awareness and an initial customer base.

Financial Highlights

Pacific Bookkeeping is seeking a total funding of $200,000 of debt capital to open its bookkeeping firm. Funding will also be dedicated towards three months of overhead costs including the payroll of the staff, rent, and marketing costs. The breakout of the funding is below:

• Office space build-out: $20,000
• Office equipment, supplies, and materials: $10,000
• Three months of overhead expenses (payroll, rent, utilities): $150,000
• Marketing costs: $10,000
• Working capital: $10,000

Company Overview

Who is pacific bookkeeping, pacific bookkeeping’s history.

Once her market analysis was complete, Rebecca Stone began surveying local office spaces for lease and identified an ideal location for the bookkeeping firm. Rebecca Stone incorporated Pacific Bookkeeping as a Limited Liability Corporation in January 2023.

Once the lease is finalized on the office space, interior design work can begin to make the office an appealing place to meet with clients.

Since incorporation, the company has achieved the following milestones:

• Located available office space for rent that is ideal for the bookkeeping firm
• Developed the company’s name, logo, and website
• Hired an interior decorating company to design and furnish the office
• Determined equipment and necessary supplies
• Began recruiting key employees

Pacific Bookkeeping’s Services

Industry analysis.

The United States Bookkeeping Industry is forecast to generate more than $66B this year. According to research reports, the largest bookkeeping firm in America generates approximately $9.5B annually. There are currently over 1.5M bookkeepers employed throughout the United States.

The top bookkeeping firms industry-wide are Automatic Data Processing (ADP) ($9.5B in annual revenue), Intuit ($7.8B in annual revenue), and Paychex ($4.0 in annual revenue). All other bookkeeping firms in the United States combined generate approximately $43.5B in annual revenue. An estimated 42% of industry revenue is generated through payroll services. Additional services such as billing, general accounting, tax preparation, and bookkeeping make up the remainder.

One of the biggest challenges for bookkeeping firms is the ability to keep up with changes in regulations. Additional hurdles include recruiting and retaining high-quality employees, keeping up with evolving technology, and acquiring new clients.

However, despite the challenges, the bookkeeping industry is expected to grow significantly throughout the rest of the decade. According to Data Intelo, the industry is expected to grow at a compound annual growth rate of 9.5% from now until 2030. This large growth shows that bookkeeping services are still in high demand, meaning that Pacific Bookkeeping has a solid chance of succeeding and maintaining a profit.

Customer Analysis

Demographic profile of target market.

Pacific Bookkeeping will serve individuals and small businesses in the community of Seattle, Washington, and its surrounding areas. Seattle has thousands of individuals and small businesses that would benefit from affordable bookkeeping services.

The precise demographics for Seattle, Washington are:

Customer Segmentation

Pacific Bookkeeping will primarily target the following customer profiles:

• Individuals
• Small businesses and nonprofits
• Government organizations

Competitive Analysis

Direct and indirect competitors.

Pacific Bookkeeping will face competition from other companies with similar business profiles. A description of each competitor company is below.  

Young & Mitchell

Founded in the 1930s, Young & Mitchell has intentionally remained a small business so that the core group of professionals within the company could get to intimately know each one of their clients. The company is one of the leading tax firms in the Four State Region and offers financial guides and tax tools for individuals for free. Listed below is an outline of the services that the company offers according to its website:

• Tax Preparation and Planning Services
• Assurance and Advisory Services
• Estate and Trust Planning and Tax Preparation
• Bookkeeping/Write-up
• IRS Representation
• Accounting Services
• Audits, Reviews, and Compilation
• QuickBooks Accounting Help and Assistance
• Entity Selection and Restructuring
• Payroll Services

A Plus General Bookkeeping Services

A Plus General Bookkeeping Services is a bookkeeping firm that specializes in financial strategy and consulting for businesses of all sizes. The firm has been in business for over a decade and has acquired a loyal client base.

Clients may work with accountants in person, over the phone, through email, on video conferencing software, or completely through a new digital application. Although this firm has an excellent track record for service, it is also the most expensive bookkeeping company on the market.

Smith Brothers Accounting

Established in 1974, Smith Brothers Accounting is a privately held accountant practice that offers a wide variety of financial services including tax planning and preparation, payroll processing, financial planning, and small business accounting. Smith Brothers Accounting serves individuals and businesses.

Smith Brothers Accounting Services:

• Business Services
• Tax Services
• Individual Services
• Notary Services

Competitive Advantage

Pacific Bookkeeping will be able to offer the following advantages over the competition:

Marketing Plan

Brand & value proposition.

Pacific Bookkeeping will offer a unique value proposition to its clientele:

• Client-focused bookkeeping services
• Service built on long-term relationships
• Thorough knowledge of the latest regulations
• Big-firm expertise in a small-firm environment

Promotions Strategy

The promotions strategy for Pacific Bookkeeping is as follows:

Pacific Bookkeeping understands that the best promotion comes from satisfied customers. The company will encourage its clients to refer others by providing economic or financial incentives for every new client produced. This strategy will increase in effectiveness after the business has already been established.

Website/SEO

Pacific Bookkeeping will invest heavily in developing a professional website that displays all of the features and benefits of the bookkeeping company. It will also invest heavily in SEO so that the brand’s website will appear at the top of search engine results.

Social Media Marketing

Social media is one of the most cost-effective and practical marketing methods for improving brand visibility. The company will use social media to develop engaging content and post customer reviews that will increase audience awareness and loyalty.

Special Offers

Offers and incentives are an excellent approach to assisting businesses in replenishing the churn in their customer base that they lose each year. The company will introduce special offers to attract new clients and encourage repeat business.

Pacific Bookkeeping’s pricing will be moderate so consumers feel they receive great value when purchasing the bookkeeping services. The client can expect to receive quality bookkeeping services at a more affordable price than what they pay at other accounting firms.

Operations Plan

The following will be the operations plan for Pacific Bookkeeping.

Operation Functions:

• Rebecca Stone is the Owner and CEO of Pacific Bookkeeping. She will be in charge of the executive and operations aspects of the business. She will also provide bookkeeping services for her initial clients until she hires a full staff of accountants, bookkeepers, and tax preparation professionals.
• Rebecca is joined by Rhonda Wolfe who will be the company’s Administrative Assistant. She will help Rebecca with the administrative functions of the business.
• Rebecca is also joined by Samual Wright. He will act as the Marketing Manager and manage all the marketing and advertising functions for Pacific Bookkeeping.
• As the firm grows and takes on more clients, Rebecca will hire a team of experienced accountants, bookkeepers, and tax preparation professionals to help with the company’s service functions.

Milestones:

Pacific Bookkeeping will have the following milestones completed in the next six months.

• 3/202X Finalize lease agreement
• 4/202X Design and build out Pacific Bookkeeping
• 5/202X Hire and train initial staff
• 6/202X Kickoff of promotional campaign
• 7/202X Launch Pacific Bookkeeping
• 8/202X Reach break-even

Financial Plan

Key revenue & costs.

Pacific Bookkeeping’s revenues will come primarily from its bookkeeping services. The major costs for the company will include the salaries of the staff, marketing spending, and the rent for a prime location in Seattle.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and pay off the startup business loan.

• Annual rent: $50,000
• Year 3: 100
• Year 4: 125
• Year 5: 150

Financial Projections

Income statement, balance sheet, cash flow statement, bookkeeping business plan faqs, what is a bookkeeping business plan.

A bookkeeping business plan is a plan to start and/or grow your bookkeeping business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Bookkeeping business plan using our Bookkeeping Business Plan Template here .

What are the Main Types of Bookkeeping Businesses?

There are a number of different kinds of bookkeeping businesses , some examples include: Traditional Bookkeeping and Accounting Business, Tax Preparation Services, Payroll Services, and Billing Services.

How Do You Get Funding for Your Bookkeeping Business Plan?

Bookkeeping businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Bookkeeping Business?

Starting a bookkeeping business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Bookkeeping Business Plan - The first step in starting a business is to create a detailed bookkeeping business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your bookkeeping business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your bookkeeping business is in compliance with local laws.

3. Register Your Bookkeeping Business - Once you have chosen a legal structure, the next step is to register your bookkeeping business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your bookkeeping business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Bookkeeping Equipment & Supplies - In order to start your bookkeeping business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your bookkeeping business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful bookkeeping business:

• How to Start a Bookkeeping Business

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Counseling Private Practice Business Plan

Free Business Plan Template

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How to Write A Counseling Private Practice Business Plan?

Writing a counseling private practice business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:

1. Executive Summary

An executive summary is the first section planned to offer an overview of the entire business plan. However, it is written after the entire business plan is ready and summarizes each section of your plan.

Here are a few key components to include in your executive summary:

Introduce your Business:

Start your executive summary by briefly introducing your business to your readers.

Market Opportunity:

Counseling services:.

Highlight the counseling practice services you offer your clients. The USPs and differentiators you offer are always a plus.

Marketing & Sales Strategies:

Financial highlights:, call to action:.

Ensure your executive summary is clear, concise, easy to understand, and jargon-free.

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2. Business Overview

The business overview section of your business plan offers detailed information about your company. The details you add will depend on how important they are to your business. Yet, business name, location, business history, and future goals are some of the foundational elements you must consider adding to this section:

Business Description:

Describe your business in this section by providing all the basic information:

Describe what kind of counseling practice you run and the name of it. You may specialize in one of the following counseling practice businesses:

• Individual counseling
• Couples counseling
• Family Counseling
• Group counseling
• Career counseling
• Mental health counseling
• Trauma counseling
• Describe the legal structure of your counseling practice business, whether it is a sole proprietorship, LLC, partnership, or others.
• Explain where your business is located and why you selected the place.

Mission Statement:

Business history:.

If you’re an established counseling practice service provider, briefly describe your business history, like—when it was founded, how it evolved over time, etc.

Future Goals:

This section should provide a thorough understanding of your business, its history, and its future plans. Keep this section engaging, precise, and to the point.

3. Market Analysis

The market analysis section of your business plan should offer a thorough understanding of the industry with the target market, competitors, and growth opportunities. You should include the following components in this section.

Target market:

Start this section by describing your target market. Define your ideal customer and explain what types of services they prefer. Creating a buyer persona will help you easily define your target market to your readers.

For instance, adults seeking therapy or families & parenting would be an ideal target audience for a private practice business.

Market size and growth potential

Competitive analysis:, market trends:.

• For instance, the integration of technology or digital tools has a booming market; explain how you plan on dealing with this potential growth opportunity.

Regulatory Environment:

Here are a few tips for writing the market analysis section of your counseling practice business plan:

• Conduct market research, industry reports, and surveys to gather data.
• Provide specific and detailed information whenever possible.
• Illustrate your points with charts and graphs.
• Write your business plan keeping your target audience in mind.

4. Products And Services

The product and services section should describe the specific services and products that will be offered to customers. To write this section should include the following:

Describe your cuisines:

Mention the counseling private practice services your business will offer. This list may include services like,

• Assessment and evaluation
• Individual therapy
• Couples therapy
• Family therapy
• Group therapy
• Psychoeducation
• Crisis intervention
• Consultation and workshops

Additional services:

Customized approach, expertise or specialization:.

In short, this section of your counseling practice plan must be informative, precise, and client-focused. By providing a clear and compelling description of your offerings, you can help potential investors and readers understand the value of your business.

5. Sales And Marketing Strategies

Writing the sales and marketing strategies section means a list of strategies you will use to attract and retain your clients. Here are some key elements to include in your sales & marketing plan:

Unique Selling Proposition (USP):

Define your business’s USPs depending on the market you serve, the equipment you use, and the unique services you provide. Identifying USPs will help you plan your marketing strategies.

For example, a client-centered approach, holistic approach, or personalized treatment plans, could be some of the great USPs for a counseling private practice business.

Pricing Strategy

Marketing strategies:, sales strategies:, customer retention:.

Overall, this section of your counseling private practice business plan should focus on customer acquisition and retention.

Have a specific, realistic, and data-driven approach while planning sales and marketing strategies for your counseling practice business, and be prepared to adapt or make strategic changes in your strategies based on feedback and results.

6. Operations Plan

The operations plan section of your business plan should outline the processes and procedures involved in your business operations, such as staffing requirements and operational processes. Here are a few components to add to your operations plan:

Staffing & Training:

Operational process:, equipment & software:.

Include the list of equipment and software required for counseling private practice, such as furniture, therapeutic tools, teletherapy tools, etc.

Adding these components to your operations plan will help you lay out your business operations, which will eventually help you manage your business effectively.

7. Management Team

The management team section provides an overview of your counseling private practice business’s management team. This section should provide a detailed description of each manager’s experience and qualifications, as well as their responsibilities and roles.

Founders/CEO:

Key managers:.

Introduce your management and key members of your team, and explain their roles and responsibilities.

Organizational structure:

Compensation plan:, advisors/consultants:.

Mentioning advisors or consultants in your business plans adds credibility to your business idea.

This section should describe the key personnel for your counseling private practice services, highlighting how you have the perfect team to succeed.

8. Financial Plan

Your financial plan section should provide a summary of your business’s financial projections for the first few years. Here are some key elements to include in your financial plan:

Profit & loss statement:

Cash flow statement:, balance sheet:, break-even point:.

Determine and mention your business’s break-even point—the point at which your business costs and revenue will be equal.

Financing Needs:

Be realistic with your financial projections, and make sure you offer relevant information and evidence to support your estimates.

9. Appendix

The appendix section of your plan should include any additional information supporting your business plan’s main content, such as market research, legal documentation, financial statements, and other relevant information.

• Add a table of contents for the appendix section to help readers easily find specific information or sections.
• In addition to your financial statements, provide additional financial documents like tax returns, a list of assets within the business, credit history, and more. These statements must be the latest and offer financial projections for at least the first three or five years of business operations.
• Provide data derived from market research, including stats about the industry, user demographics, and industry trends.
• Include any legal documents such as permits, licenses, and contracts.
• Include any additional documentation related to your business plan, such as product brochures, marketing materials, operational procedures, etc.

Use clear headings and labels for each section of the appendix so that readers can easily find the necessary information.

Remember, the appendix section of your counseling private practice business plan should only include relevant and important information supporting your plan’s main content.

The Quickest Way to turn a Business Idea into a Business Plan

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This sample counseling private practice business plan will provide an idea for writing a successful counseling private practice plan, including all the essential components of your business.

After this, if you still need clarification about writing an investment-ready business plan to impress your audience, download our counseling private practice business plan pdf .

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Frequently asked questions, why do you need a counseling private practice business plan.

A business plan is an essential tool for anyone looking to start or run a successful counseling private practice business. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your business.

Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your counseling private practice business.

How to get funding for your counseling private practice business?

There are several ways to get funding for your counseling private practice business, but self-funding is one of the most efficient and speedy funding options. Other options for funding are

Small Business Administration (SBA) loan

Crowdfunding, angel investors.

Apart from all these options, there are small business grants available, check for the same in your location and you can apply for it.

Where to find business plan writers for your counseling private practice business?

There are many business plan writers available, but no one knows your business and ideas better than you, so we recommend you write your counseling private practice business plan and outline your vision as you have in your mind.

What is the easiest way to write your counseling private practice business plan?

A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any counseling private practice business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business plan software .

About the Author

Vinay Kevadiya

Vinay Kevadiya is the founder and CEO of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He enjoys sharing his insights on business planning and other relevant topics through his articles and blog posts. Read more

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