why do we create a business plan

14 Reasons Why You Need a Business Plan

10 min. read

Updated October 27, 2023

There’s no question that starting and running a business is hard work. But it’s also incredibly rewarding. And, one of the most important things you can do to increase your chances of success is to have a business plan.

A business plan is a foundational document that is essential for any company, no matter the size or age. From attracting potential investors to keeping your business on track—a business plan helps you achieve important milestones and grow in the right direction.

A business plan isn’t just a document you put together once when starting your business. It’s a living, breathing guide for existing businesses – one that business owners should revisit and update regularly.

Unfortunately, writing a business plan is often a daunting task for potential entrepreneurs. So, do you really need a business plan? Is it really worth the investment of time and resources? Can’t you just wing it and skip the whole planning process?

Good questions. Here’s every reason why you need a business plan.

• 1. Business planning is proven to help you grow 30 percent faster

Writing a business plan isn’t about producing a document that accurately predicts the future of your company. The  process  of writing your plan is what’s important. Writing your plan and reviewing it regularly gives you a better window into what you need to do to achieve your goals and succeed. 

You don’t have to just take our word for it. Studies have  proven that companies that plan  and review their results regularly grow 30 percent faster. Beyond faster growth, research also shows that companies that plan actually perform better. They’re less likely to become one of those woeful failure statistics, or experience  cash flow crises  that threaten to close them down. 

• 2. Planning is a necessary part of the fundraising process

One of the top reasons to have a business plan is to make it easier to raise money for your business. Without a business plan, it’s difficult to know how much money you need to raise, how you will spend the money once you raise it, and what your budget should be.

Investors want to know that you have a solid plan in place – that your business is headed in the right direction and that there is long-term potential in your venture. 

A business plan shows that your business is serious and that there are clearly defined steps on how it aims to become successful. It also demonstrates that you have the necessary competence to make that vision a reality. 

Investors, partners, and creditors will want to see detailed financial forecasts for your business that shows how you plan to grow and how you plan on spending their money. 

• 3. Having a business plan minimizes your risk

When you’re just starting out, there’s so much you don’t know—about your customers, your competition, and even about operations. 

As a business owner, you signed up for some of that uncertainty when you started your business, but there’s a lot you can  do to reduce your risk . Creating and reviewing your business plan regularly is a great way to uncover your weak spots—the flaws, gaps, and assumptions you’ve made—and develop contingency plans. 

Your business plan will also help you define budgets and revenue goals. And, if you’re not meeting your goals, you can quickly adjust spending plans and create more realistic budgets to keep your business healthy.

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• 4. Crafts a roadmap to achieve important milestones

A business plan is like a roadmap for your business. It helps you set, track and reach business milestones. 

For your plan to function in this way, your business plan should first outline your company’s short- and long-term goals. You can then fill in the specific steps necessary to reach those goals. This ensures that you measure your progress (or lack thereof) and make necessary adjustments along the way to stay on track while avoiding costly detours.

In fact, one of the top reasons why new businesses fail is due to bad business planning. Combine this with inflexibility and you have a recipe for disaster.

And planning is not just for startups. Established businesses benefit greatly from revisiting their business plan. It keeps them on track, even when the global market rapidly shifts as we’ve seen in recent years.

• 5. A plan helps you figure out if your idea can become a business

To turn your idea into reality, you need to accurately assess the feasibility of your business idea.

You need to verify:

• If there is a market for your product or service
• Who your target audience is
• How you will gain an edge over the current competition
• If your business can run profitably

A business plan forces you to take a step back and look at your business objectively, which makes it far easier to make tough decisions down the road. Additionally, a business plan helps you to identify risks and opportunities early on, providing you with the necessary time to come up with strategies to address them properly.

Finally, a business plan helps you work through the nuts and bolts of how your business will work financially and if it can become sustainable over time.

6. You’ll make big spending decisions with confidence

As your business grows, you’ll have to figure out when to hire new employees, when to expand to a new location, or whether you can afford a major purchase. 

These are always major spending decisions, and if you’re regularly reviewing the forecasts you mapped out in your business plan, you’re going to have better information to use to make your decisions.

7. You’re more likely to catch critical cash flow challenges early

The other side of those major spending decisions is understanding and monitoring your business’s cash flow. Your  cash flow statement  is one of the three key financial statements you’ll put together for your business plan. (The other two are your  balance sheet  and your  income statement  (P&L). 

Reviewing your cash flow statement regularly as part of your regular business plan review will help you see potential cash flow challenges earlier so you can take action to avoid a cash crisis where you can’t pay your bills. 

• 8. Position your brand against the competition

Competitors are one of the factors that you need to take into account when starting a business. Luckily, competitive research is an integral part of writing a business plan. It encourages you to ask questions like:

• What is your competition doing well? What are they doing poorly?
• What can you do to set yourself apart?
• What can you learn from them?
• How can you make your business stand out?
• What key business areas can you outcompete?
• How can you identify your target market?

Finding answers to these questions helps you solidify a strategic market position and identify ways to differentiate yourself. It also proves to potential investors that you’ve done your homework and understand how to compete. 

• 9. Determines financial needs and revenue models

A vital part of starting a business is understanding what your expenses will be and how you will generate revenue to cover those expenses. Creating a business plan helps you do just that while also defining ongoing financial needs to keep in mind. 

Without a business model, it’s difficult to know whether your business idea will generate revenue. By detailing how you plan to make money, you can effectively assess the viability and scalability of your business. 

Understanding this early on can help you avoid unnecessary risks and start with the confidence that your business is set up to succeed.

• 10. Helps you think through your marketing strategy

A business plan is a great way to document your marketing plan. This will ensure that all of your marketing activities are aligned with your overall goals. After all, a business can’t grow without customers and you’ll need a strategy for acquiring those customers. 

Your business plan should include information about your target market, your marketing strategy, and your marketing budget. Detail things like how you plan to attract and retain customers, acquire new leads, how the digital marketing funnel will work, etc. 

Having a documented marketing plan will help you to automate business operations, stay on track and ensure that you’re making the most of your marketing dollars.

• 11. Clarifies your vision and ensures everyone is on the same page

In order to create a successful business, you need a clear vision and a plan for how you’re going to achieve it. This is all detailed with your mission statement, which defines the purpose of your business, and your personnel plan, which outlines the roles and responsibilities of current and future employees. Together, they establish the long-term vision you have in mind and who will need to be involved to get there. 

Additionally, your business plan is a great tool for getting your team in sync. Through consistent plan reviews, you can easily get everyone in your company on the same page and direct your workforce toward tasks that truly move the needle.

• 12. Future-proof your business

A business plan helps you to evaluate your current situation and make realistic projections for the future.

This is an essential step in growing your business, and it’s one that’s often overlooked. When you have a business plan in place, it’s easier to identify opportunities and make informed decisions based on data.

Therefore, it requires you to outline goals, strategies, and tactics to help the organization stay focused on what’s important.

By regularly revisiting your business plan, especially when the global market changes, you’ll be better equipped to handle whatever challenges come your way, and pivot faster.

You’ll also be in a better position to seize opportunities as they arise.

• 13. Tracks your progress and measures success

An often overlooked purpose of a business plan is as a tool to define success metrics. A key part of writing your plan involves pulling together a viable financial plan. This includes financial statements such as your profit and loss, cash flow, balance sheet, and sales forecast.

By housing these financial metrics within your business plan, you suddenly have an easy way to relate your strategy to actual performance. You can track progress, measure results, and follow up on how the company is progressing. Without a plan, it’s almost impossible to gauge whether you’re on track or not.  

Additionally, by evaluating your successes and failures, you learn what works and what doesn’t and you can make necessary changes to your plan. In short, having a business plan gives you a framework for measuring your success. It also helps with building up a “lessons learned” knowledge database to avoid costly mistakes in the future.

• 14. Your business plan is an asset if you ever want to sell

Down the road, you might decide that you want to sell your business or position yourself for acquisition. Having a solid business plan is going to help you make the case for a higher valuation. Your business is likely to be worth more to a buyer if it’s easy for them to understand your business model, your target market, and your overall potential to grow and scale. 

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• Writing your business plan

By taking the time to create a business plan, you ensure that your business is heading in the right direction and that you have a roadmap to get there. We hope that this post has shown you just how important and valuable a business plan can be. While it may still seem daunting, the benefits far outweigh the time investment and learning curve for writing one. 

Luckily, you can write a plan in as little as 30 minutes. And there are plenty of excellent planning tools out there if you’re looking for more step-by-step guidance. Whatever it takes, write your plan and you’ll quickly see how useful it can be.

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

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

Table of Contents

• 6. You’ll make big spending decisions with confidence
• 7. You’re more likely to catch critical cash flow challenges early

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20 Reasons Why You Need a Business Plan in 2024

Written by Dave Lavinsky

What is the Purpose of a Business Plan?

The purpose of a business plan is to provide a clear roadmap for the company’s future. It outlines the vision, goals, and strategies of the business, guiding entrepreneurs and stakeholders in understanding its operations and objectives. A well-crafted business plan template helps attract investors and funding by showcasing the potential for profitability and growth.

Top 20 Reasons Why you Need a Business Plan

1. to prove that you’re serious about your business.

A formal business plan is necessary to show all interested parties — employees, investors, partners and yourself — that you are committed to building the business. Creating your plan forces you to think through and select the strategies that will propel your growth.

2. To Establish Business Milestones

The business plan should clearly lay out the long-term milestones that are most important to the success of your business. To paraphrase Guy Kawasaki, a milestone is something significant enough to come home and tell your spouse about (without boring him or her to death). Would you tell your spouse that you tweaked the company brochure? Probably not. But you’d certainly share the news that you launched your new website or reached $1M in annual revenues.

3. To Better Understand Your Competition

Creating the business plan forces you to analyze the competition. All companies have competition in the form of either direct or indirect competitors, and it is critical to understand your company’s competitive advantages. And if you don’t currently have competitive advantages, to figure out what you must do to gain them.

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4. To Better Understand Your Customer

Why do they buy when they buy? Why don’t they when they don’t? An in-depth customer analysis is essential to an effective business plan and to a successful business. Understanding your customers will not only allow you to create better products and services for them, but will allow you to more cost-effectively reach them via advertising and promotions.

5. To Enunciate Previously Unstated Assumptions

The process of actually writing the business plan helps to bring previously “hidden” assumptions to the foreground. By writing them down and assessing them, you can test them and analyze their validity. For example, you might have assumed that local retailers would carry your product; in your business plan, you could assess the results of the scenario in which this didn’t occur.

6. To Assess the Feasibility of Your Venture

How good is this opportunity? The business plan process involves researching your target market, as well as the competitive landscape, and serves as a feasibility study for the success of your venture. In some cases, the result of your planning will be to table the venture. And it might be to go forward with a different venture that may have a better chance of success.

7. To Document Your Revenue Model

How exactly will your business make money? This is a critical question to answer in writing, for yourself and your investors. Documenting the revenue model helps to address challenges and assumptions associated with the model. And upon reading your plan, others may suggest additional revenue streams to consider.

8. To Determine Your Financial Needs

Does your business need to raise capital? How much? One of the purposes of a business plan is to help you to determine exactly how much capital you need and what you will use it for. This process is essential for raising capital for business and for effectively employing the capital. It will also enable you to plan ahead, particularly if you need to raise additional funding in the future.

9. To Attract Investors

A formal business plan is the basis for financing proposals. The business plan answers investors’ questions such as: Is there a need for this product/service? What are the financial projections? What is the company’s exit strategy? While investors will generally want to meet you in person before writing you a check, in nearly all cases, they will also thoroughly review your business plan.

10. To Reduce the Risk of Pursuing the Wrong Opportunity

The process of creating the business plan helps to minimize opportunity costs. Writing the business plan helps you assess the attractiveness of this particular opportunity, versus other opportunities. So you make the best decisions.

11. To Force You to Research and Really Know Your Market

What are the most important trends in your industry? What are the greatest threats to your industry? Is the market growing or shrinking? What is the size of the target market for your product/service? Creating the business plan will help you to gain a wider, deeper, and more nuanced understanding of your marketplace. And it will allow you to use this knowledge to make decisions to improve your company’s success.

12. To Attract Employees and a Management Team

To attract and retain top quality talent, a business plan is necessary. The business plan inspires employees and management that the idea is sound and that the business is poised to achieve its strategic goals. Importantly, as you grow your company, your employees and not you will do most of the work. So getting them aligned and motivated will be key to your success.

13. To Plot Your Course and Focus Your Efforts

The business plan provides a roadmap from which to operate, and to look to for direction in times of doubt. Without a business plan, you may shift your short-term strategies constantly without a view to your long-term milestones. You wouldn’t go on a long driving trip without a map; think of your business plan as your map.

14. To attract partners

Partners also want to see a business plan, in order to determine whether it is worth partnering with your business. Establishing partnerships often requires time and capital, and companies will be more likely to partner with your venture if they can read a detailed explanation of your company.

15. To Position Your Brand

Creating the business plan helps to define your company’s role in the marketplace. This definition allows you to succinctly describe the business and position the brand to customers, investors, and partners. With the industry, customer and competitive insight you gain during the business planning process, you can best determine how to position your brand.

16. To Judge the Success of Your Business

A formal business plan allows you to compare actual operational results versus the business plan itself. In this way, it allows you to clearly see whether you have achieved your strategic, financing, and operational goals (and why you have or have not).

17. To Reposition Your Business to Deal with Changing Conditions

For example, during difficult economic conditions, if your current sales and operational models aren’t working, you can rewrite your business plan to define, try, and validate new ideas and strategies.

18. To Document Your Marketing Plan

How are you going to reach your customers? How will you retain them? What is your advertising budget? What price will you charge? A well-documented marketing plan is essential to the growth of a business. And the marketing strategies and tactics you use will evolve each year, so revisiting your marketing plan at least annually is critical.

19. To Understand and Forecast Your Company’s Staffing Needs

After completing your business plan, you will not be surprised when you are suddenly short-handed. Rather, your business plan provides a roadmap for your staffing needs, and thus helps to ensure smoother expansion. Importantly your plan can not only help you understand your staffing needs, but ensure your timing is right as it takes time to recruit and train great employees.

20. To Uncover New Opportunities

Through the process of brainstorming, white-boarding and creative interviewing, you will likely see your business in a different light. As a result, you will often come up with new ideas for marketing your product/service and running your business. It’s coming up with these ideas and executing on them which is often the difference between a business that fails or just survives and one that thrives.

Business Plan FAQs

What is a business plan.

A business plan is a document that details your business concept and strategy for growth.

A business plan helps guide your company's efforts and, if applicable, gives investors and lenders the information they need to decide whether or not to fund your company. A business plan template helps you to most easily complete your plan.

Why Do You Need a Business Plan?

A business plan provides details about your company, competition, customers and industry so that you make the best possible decisions to grow your company.

What is the Importance of a Business Plan?

The 3 most important purposes of a business plan are 1) to create an effective strategy for growth, 2) to determine your future financial needs, and 3) to attract investors (including angel investors and VC funding ) and lenders.

Why is a Business Plan Important to an Entrepreneur?

Business plans help entrepreneurs take their visions and turn them into tangible action plans for success.

Need help with your business plan? 

• Speak with a professional business plan consultant from our team.
• Use our simple business plan template .
• Check out our business plan examples .
• Or, if you’re creating your own PPM, you can save time and money with Growthink’s private placement memorandum template .
• Learn more about us via our Growthink Business Plan Review page

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15 Reasons Why You Need a Business Plan in 2024

Posted january 21, 2022 by noah parsons.

As a small business owner or aspiring entrepreneur, a business plan can seem more like a hurdle you have to overcome than a useful tool. It’s a barrier that’s keeping you from moving forward with your business. Maybe the bank won’t review your loan application without a business plan or a potential investor has asked to see your business plan before they will meet with you. 

But, writing a business plan doesn’t have to feel like a homework assignment. Instead, think of writing a business plan as an investment in your business. It’s a tool to figure out a strong and financially viable strategy for growth. And, it’s even been scientifically proven that planning will increase your chances of success and help you grow faster. 

Still not convinced? Read on for our definitive list of reasons why you should write a plan for your business.

What is the key purpose of a business plan? 

Imagine you’re setting out on a journey. You know what your final destination is, but you haven’t figured out how to get there. While it might be fun to just start driving and figure things out as you go, your trip will most likely take longer than you anticipated and cost you more. If you instead take a look at a map and chart the best way to get to your destination, you’ll arrive on time and on budget. Planning for your business isn’t that much different. 

The primary purpose of a business plan is to help you figure out where you want to go with your business and how you’re going to get there. It helps you set your direction and determine a winning strategy. A solid business plan will set your business up for success and help you build an unbeatable company.

If you start off without a plan, you may go down some interesting detours, but you’re unlikely to grow quickly or stick to your budget.

Why do you need to write a business plan?

Establishing a strategic roadmap for your business is the primary benefit of writing a business plan. But what does that really look like for you and your business? Here are our top 15 reasons why you should write a business plan.

1. Reduce your risk

Writing a business plan takes some of the risk out of starting a business. It ensures that you’re thinking through every facet of your business to determine if it can truly be viable. 

Does your solution fit the market? Are your startup or operational costs manageable? Will your proposed business model actually generate sales? What sort of milestones would you need to hit to achieve profitability? These are all questions associated with business risk that you can answer with your plan.

For those already running a business, writing a plan can help you better manage ongoing risk. Should you bring on a new employee? What does cash flow look like for your next month, quarter, or even year? Are you on track to meet your milestones or do you need to change your focus? Keep your plan up to date, review it regularly and you can easily answer these questions and mitigate risk.

2. Uncover your business’s potential

Writing a business plan helps you think about the customers you are serving and what their needs are. Exploring those customer needs will help you uncover new opportunities for your business to serve them and potentially expose new products and services that you could offer. When you use your business plan to manage your business, you’ll be able to see the parts of your strategy that are working and those that aren’t. For example, you may have invested in new marketing efforts to sell one of your products, but that strategy just isn’t working out. With a business plan in hand, you’ll be able to see what’s going to plan and where you need to make adjustments to your strategy, pivoting to new opportunities that will drive profitability.

3. Test a new business idea

When you have a new business idea, it really helps to spend a little time thinking through all the details. A business plan will help you think about your target market, your budget, how much money you’ll need to launch, and how your idea will actually work before you spend any real money. A business plan will also help you easily share your idea with other people to get input and feedback before you get started. 

We recommend using a one-page business plan to test ideas quickly and easily. 

4. Attract investors and get funding to start and grow your business

Sharing your business idea with investors requires a business plan. Now, you probably won’t share a long, detailed business plan to get investors interested, but you probably will share your executive summary — which is an overview of your business plan. Investors may never actually ask for your full business plan, but they will certainly ask you questions that you’ll only be able to answer if you’ve taken the time to write a plan. 

At the very least, they’ll want to see your financial forecasts , so you should be prepared for this. If you end up pitching your business to investors, whether in-person or remotely , having a business plan written makes it much easier to translate the right information into a pitch deck. In short, you’ll have all of the right information ready and available to show why your business is worth investing in.

5. Plan for different scenarios

Even if you have a plan in place, things rarely actually go to plan. The world is always changing, customer tastes change, and new competitors arrive on the scene. Having a plan allows you to experiment with different scenarios to see how changes to your business will impact your forecasts, budgets, profitability, and cash flow. 

6. Research shows that business plans definitely work

A Journal of Management Studies study found that businesses that take the time to plan grow 30% faster than those that don’t. Our own 2021 small business research study found that 58% of small business owners that have or are working on a plan feel confident in their business, even amidst a crisis. And a study in Small Business Economics found that entrepreneurs that write business plans for their ideas are 152% more likely to actually start their businesses. There’s plenty of additional research that links planning with success, so it’s a proven fact that you won’t be wasting your time when you write your plan.

7. Build a better budget and a financial forecast

A core component of any business plan is a financial forecast. When you take the time to plan, you’ll have to think through your expense budget, your sales goals, and the cash that it’s going to take to keep your doors open, purchase inventory, and more. 

The beauty of incorporating forecasts into your business plan is that you don’t need to have the exact numbers to start. You can work with general assumptions and compare against competitive benchmarks to set a baseline for your business. As you operate and collect financial data you can then begin to update your forecasts to generate a more accurate view of how your business will operate.

8. Determine your financial needs

Without a business plan, it’s impossible to really know how much money it’s going to take to start and run your business. You don’t just need money for your initial purchases. You need to have enough cash in the bank to keep your business afloat while you get fully up and running. A plan will help you determine exactly how much money you’ll need and help you keep track of your cash flow and runway .

9. Attract employees

Especially if you’re a young startup company, attracting employees can be hard. Without a proven track record, why should someone take a risk to work for you? Having a business plan can help solve that problem. Your plan can help a prospective employee understand your business strategy and plans for growth so that they can feel confident joining your team. It’s also incredibly useful in determining when and if it’s feasible for you to bring on more employees . 

10. Get your team all on the same page

A great strategy for your business can only be successful if your team understands it. By documenting your strategy with a business plan, you can easily get everyone on the same page, working towards the same goals. It’s even better if you regularly review your plan with members of your team. This ensures that everyone is consistently going back to the core strategy documentation, analyzing it, and exploring how it impacts individual and team goals .

11. Manage your business better 

A business plan is all about setting goals for your company — both financial goals and milestones you hope to accomplish. When you use your plan to regularly check in on your business to see how you’re doing and what your progress is, you’re managing your business. Regular review , ideally monthly, will help you build a strong, resilient business.

12. Understand your market and build a marketing plan

No matter how good your idea is, you have to figure out who your ideal customers are and how you’re going to get the word out to them. That’s where a marketing plan comes in. It can be an indispensable tool for figuring out how you get your first customers as well as your thousandth customer. 

13. It’s easier than you think

You may be procrastinating in writing a business plan because it sounds like a lot of work. The truth is that planning is much less complicated than you think. Start small with a one-page business plan that you complete in half an hour . From there, refine your plan until your idea is solid. At that point, you can invest a little more time in a more detailed business plan. Just start with the basics and expand from there.

14. You’ll sleep better at night

When you have a plan for your business, you have peace of mind. You know that you’ve invested the time to figure out a business model that actually works and you’ve considered different financial scenarios so you can handle the unexpected. And, you’ve got a management tool to run your business better than your competitors. 

15. Effectively navigate a crisis

Having a business plan not only helps you create a roadmap for your business but also helps you navigate unforeseen events. Large-scale economic downturns, supply shortages, payment delays, cash flow problems, and any number of other issues are bound to pop up. But, you can be prepared to face each crisis head-on by leveraging your business plan.

A plan helps you assess your current situation, determine how the crisis will alter your plan, and begin to explore what it will take to recover. With a little planning, you can even prepare your business for future downturns with this same process. It’ll make crisis planning easier and ideally recession-proof your business by having the right plan and processes in place.

Don’t wait, start writing your business plan today

There are plenty of reasons to write a business plan, but the real reason is about finding success for you and your business. Taking the time to plan is an investment in yourself and your business that will pay dividends, whether you’re starting a new business or taking your existing business to the next level. 

You can jump-start your business plan writing process with our article covering how to write a business plan in as little as 30-minutes .

If you’re looking for a tool to help you get more from your business plan, we recommend trying out LivePlan . Our business planning and management tool will guide you through the entire process, including all of your financial forecasts, without ever requiring that you open a spreadsheet.

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Why You Should Write a Business Plan

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.

To Test the Feasibility of Your Business Idea

To give your new business the best chance of success, to secure funding, to make business planning manageable and effective, to attract investors, frequently asked questions (faqs).

The Balance / Getty Images

A business plan  is the blueprint for your business. Starting a business without a business plan is like building a house without a blueprint. Yet, unlike a house, a business isn't static. We often make the mistake of thinking of a business plan as a single document that you put together once when you're starting out and never touch again. But as the business develops, so should its business plan. In fact, any particular business may have multiple business plans as its objectives change.

Writing a business plan is time-consuming, but it's essential if you want to have a successful business that's going to survive the startup phase.

Key Takeaways

• Writing a business plan reveals how tenable your idea is.
• Updating and amending a business plan as the business develops and its goals change is vital to your success.
• A good business plan helps you define your target market, competitive advantage, optimum pricing strategies, and better prepares the business for upcoming challenges.
• A business plan helps you secure funding and attract new investors.

Writing a business plan is the best way—other than going out and doing it—to test whether an idea for starting a business is feasible. In this sense, the business plan is your safety net. If working through a business plan reveals that your business idea is untenable, it will save you a great deal of time and money.

Often, an idea for starting a business is discarded at the marketing analysis or competitive analysis stage , freeing you to move on to a new (and better) idea.

Unfortunately, many prospective business owners are so convinced that their idea for a product or service is a can't-miss proposition, that they don't take the time to do the necessary research and work through a proper business plan. The more you know about your industry, your prospective customers, and the competition, the greater the likelihood that your business will succeed.

Writing a business plan will ensure that you pay attention to the broad operational and financial objectives of your new business and the small details, such as budgeting and market planning. The process will ultimately make for a smoother startup period and fewer unforeseen problems as your business gets up and running.

The exercise of budgeting and market planning will help you define your  target market , your unique selling proposition, optimum pricing strategies, and outline how you intend to sell and deliver your products to customers. In addition, developing a budget for implementation will assist with determining your startup and operating capital requirements.

According to the Small Business Administration, one of the most-cited reasons why businesses fail is inadequate planning. By starting too soon and without a sufficient plan, your business is setting itself up for failure.

Most new businesses need startup and operating capital to get off the ground. Without a well-developed business plan, there is no chance of getting  debt financing from established financial institutions such as banks or  equity financing  from angel investors.

Established businesses often need money, too, to buy new equipment or property, or because of market downturns. Having an up-to-date business plan gives you a much better chance of getting the money you need to keep operating or expand.

Even an angel investor will want to ensure their money is going to a business that knows what it's doing. The easiest way to prove this is via a well-developed business plan.

Investors and financiers are always looking at the risk of default, and word of mouth is no substitute for written facts and figures in a properly prepared business plan.

A business plan is essential if you're thinking of starting a business, but it's also an important tool for established businesses. Viable businesses are dynamic; they change and grow. Your company's original business plan needs to be revised as you set new goals .

Reviewing the business plan can also help you see what goals have been accomplished, what changes need to be made, or what new directions your company's growth should take.

Whether you want to shop your business to venture capitalists or attract angel investors , you need to have a solid business plan. A presentation may pique their interest, but they'll need a well-written document they can study before they'll be prepared to make any investment commitment.​​​

Be prepared to have your business plan scrutinized. Both venture capitalists and angel investors will want to conduct extensive background checks and competitive analyses to be certain that what's written in your business plan is indeed the case.

What are the sections of a business plan?

A comprehensive business plan should include the following sections:

• Executive summary
• Company description
• Competitor analysis
• Industry analysis
• Product and services description
• Financial data

What is the purpose of a business plan?

A business plan has four main purposes:

• Tests the feasibility and model of your business idea
• Attracts investors
• Sets a plan for growth
• Identifies capital needs

Small Business Administration. " Selecting a Business That Fits ."

6 Reasons You Really Need to Write A Business Plan

Published: October 14, 2020

Starting a busine ss can be a daunting task, especially if you’re starting from square one.

It’s easy to feel stuck in the whirlwind of things you’ll need to do, like registering your company, building a team, advertising, the list goes on. Not to mention, a business idea with no foundation can make the process seem incredibly intimidating.

Thankfully, business plans are an antidote for the new business woes that many entrepreneurs feel. Some may shy away from the idea, as they are lengthy documents that require a significant amount of attention and care.

However, there’s a reason why those who take the time to write out a business plan are 16% more likely to be successful than those who don’t. In other words, business plans work.

What is a business plan, and why does it matter?

In brief, a business plan is a roadmap to success. It's a blueprint for entrepreneurs to follow that helps them outline, understand, and cohesively achieve their goals.

Writing a business plan involves defining critical aspects of your business, like brand messaging, conducting market research, and creating pricing strategies — all before starting the company.

A business plan can also increase your confidence. You’ll get a holistic view of your idea and understand whether it's worth pursuing.

So, why not take the time to create a blueprint that will make your job easier? Let’s take a look at six reasons why you should write a business plan before doing anything else.

Six Reasons You Really Need To Write a Business Plan

• Legitimize your business idea.
• Give your business a foundation for success.
• Obtain funding and investments.
• Hire the right people.
• Communicate your needs.
• It makes it easier to sell your business.

1. Legitimize your business idea.

Pursuing business ideas that stem from passions you’ve had for years can be exciting, but that doesn’t necessarily mean it’s a sound venture.

One of the first things a business plan requires you to do is research your target market. You’ll gain a nuanced understanding of industry trends and what your competitors have done, or not, to succeed. You may find that the idea you have when you start is not likely to be successful.

That may feel disheartening, but you can always modify your original idea to better fit market needs. The more you understand about the industry, your future competitors, and your prospective customers, the greater the likelihood of success. If you identify issues early on, you can develop strategies to deal with them rather than troubleshooting as they happen.

It’s better to know sooner rather than later if your business will be successful before investing time and money.

2. Give your business a foundation for success.

Let's say you’re looking to start a clean beauty company. There are thousands of directions you can go in, so just saying, “I’m starting a clean beauty company!” isn’t enough.

You need to know what specific products you want to make, and why you’re deciding to create them. The Pricing and Product Line style="color: #33475b;"> section of a business plan requires you to identify these elements, making it easier to plan for other components of your business strategy.

You’ll also use your initial market research to outline financial projections, goals, objectives, and operational needs. Identifying these factors ahead of time creates a strong foundation, as you’ll be making critical business decisions early on.

You can refer back to the goals you’ve set within your business plan to track your progress over time and prioritize areas that need extra attention.

All in all, every section of your business plan requires you to go in-depth into your future business strategy before even acting on any of those plans. Having a plan at the ready gives your business a solid foundation for growth.

When you start your company, and your product reaches the market, you’ll spend less time troubleshooting and more time focusing on your target audiences and generating revenue.

3. Obtain funding and investments.

Every new business needs capital to get off the ground. Although it would be nice, banks won’t finance loans just because you request one. They want to know what the money is for, where it’s going, and if you’ll eventually be able to pay it back.

If you want investors to be part of your financing plan, they’ll have questions about your business’ pricing strategies and revenue models. Investors can also back out if they feel like their money isn’t put to fair use. They’ll want something to refer back to track your progress over time and understand if you’re meeting the goals you told them you’d meet. They want to know if their investment was worthwhile.

The Financial Considerations section of a business plan will prompt you to estimate costs ahead of time and establish revenue objectives before applying for loans or speaking to investors.

You’ll secure and finalize your strategy in advance to avoid showing up unprepared for meetings with potential investors.

4. Hire the right people.

After you’ve completed your business plan and you have a clear view of your strategies, goals, and financial needs, there may be milestones you need to meet that require skills you don’t yet have. You may need to hire new people to fill in the gaps.

Having a strategic plan to share with prospective partners and employees can prove that they aren’t signing on to a sinking ship.

If your plans are summarized and feasible, they’ll understand why you want them on your team, and why they should agree to work with you.

5. Communicate your needs.

If you don’t understand how your business will run, it’ll be hard to communicate your business’s legitimacy to all involved parties.

Your plan will give you a well-rounded view of how your business will work, and make it easier for you to communicate this to others.

You may have already secured financing from banks and made deals with investors, but a business’ needs are always changing. While your business grows, you’ll likely need more financial support, more partners, or just expand your services and product offers. Using your business plan as a measure of how you’ve met your goals can make it easier to bring people onto your team at all stages of the process.

6. It makes it easier to sell your business.

A buyer won’t want to purchase a business that will run into the ground after signing the papers. They want a successful, established company.

A business plan that details milestones you can prove you’ve already met can be used to show prospective buyers how you’ve generated success within your market. You can use your accomplishments to negotiate higher price points aligned with your business’ value.

A Business Plan Is Essential

Ultimately, having a business plan can increase your confidence in your new venture. You’ll understand what your business needs to succeed, and outline the tactics you’ll use to achieve those goals.

Some people have a lifetime goal of turning their passions into successful business ventures, and a well-crafted business plan can make those dreams come true.

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How to make a business plan

Table of Contents

How to make a good business plan: step-by-step guide.

A business plan is a strategic roadmap used to navigate the challenging journey of entrepreneurship. It's the foundation upon which you build a successful business.

A well-crafted business plan can help you define your vision, clarify your goals, and identify potential problems before they arise.

But where do you start? How do you create a business plan that sets you up for success?

This article will explore the step-by-step process of creating a comprehensive business plan.

What is a business plan?

A business plan is a formal document that outlines a business's objectives, strategies, and operational procedures. It typically includes the following information about a company:

Products or services

Target market

Competitors

Marketing and sales strategies

Financial plan

Management team

A business plan serves as a roadmap for a company's success and provides a blueprint for its growth and development. It helps entrepreneurs and business owners organize their ideas, evaluate the feasibility, and identify potential challenges and opportunities.

As well as serving as a guide for business owners, a business plan can attract investors and secure funding. It demonstrates the company's understanding of the market, its ability to generate revenue and profits, and its strategy for managing risks and achieving success.

Business plan vs. business model canvas

A business plan may seem similar to a business model canvas, but each document serves a different purpose.

A business model canvas is a high-level overview that helps entrepreneurs and business owners quickly test and iterate their ideas. It is often a one-page document that briefly outlines the following:

Key partnerships

Key activities

Key propositions

Customer relationships

Customer segments

Key resources

Cost structure

Revenue streams

On the other hand, a Business Plan Template provides a more in-depth analysis of a company's strategy and operations. It is typically a lengthy document and requires significant time and effort to develop.

A business model shouldn’t replace a business plan, and vice versa. Business owners should lay the foundations and visually capture the most important information with a Business Model Canvas Template . Because this is a fast and efficient way to communicate a business idea, a business model canvas is a good starting point before developing a more comprehensive business plan.

A business plan can aim to secure funding from investors or lenders, while a business model canvas communicates a business idea to potential customers or partners.

Why is a business plan important?

A business plan is crucial for any entrepreneur or business owner wanting to increase their chances of success.

Here are some of the many benefits of having a thorough business plan.

Helps to define the business goals and objectives

A business plan encourages you to think critically about your goals and objectives. Doing so lets you clearly understand what you want to achieve and how you plan to get there.

A well-defined set of goals, objectives, and key results also provides a sense of direction and purpose, which helps keep business owners focused and motivated.

Guides decision-making

A business plan requires you to consider different scenarios and potential problems that may arise in your business. This awareness allows you to devise strategies to deal with these issues and avoid pitfalls.

With a clear plan, entrepreneurs can make informed decisions aligning with their overall business goals and objectives. This helps reduce the risk of making costly mistakes and ensures they make decisions with long-term success in mind.

Attracts investors and secures funding

Investors and lenders often require a business plan before considering investing in your business. A document that outlines the company's goals, objectives, and financial forecasts can help instill confidence in potential investors and lenders.

A well-written business plan demonstrates that you have thoroughly thought through your business idea and have a solid plan for success.

Identifies potential challenges and risks

A business plan requires entrepreneurs to consider potential challenges and risks that could impact their business. For example:

Is there enough demand for my product or service?

Will I have enough capital to start my business?

Is the market oversaturated with too many competitors?

What will happen if my marketing strategy is ineffective?

By identifying these potential challenges, entrepreneurs can develop strategies to mitigate risks and overcome challenges. This can reduce the likelihood of costly mistakes and ensure the business is well-positioned to take on any challenges.

Provides a basis for measuring success

A business plan serves as a framework for measuring success by providing clear goals and financial projections . Entrepreneurs can regularly refer to the original business plan as a benchmark to measure progress. By comparing the current business position to initial forecasts, business owners can answer questions such as:

Are we where we want to be at this point?

Did we achieve our goals?

If not, why not, and what do we need to do?

After assessing whether the business is meeting its objectives or falling short, business owners can adjust their strategies as needed.

How to make a business plan step by step

The steps below will guide you through the process of creating a business plan and what key components you need to include.

1. Create an executive summary

Start with a brief overview of your entire plan. The executive summary should cover your business plan's main points and key takeaways.

Keep your executive summary concise and clear with the Executive Summary Template . The simple design helps readers understand the crux of your business plan without reading the entire document.

2. Write your company description

Provide a detailed explanation of your company. Include information on what your company does, the mission statement, and your vision for the future.

Provide additional background information on the history of your company, the founders, and any notable achievements or milestones.

3. Conduct a market analysis

Conduct an in-depth analysis of your industry, competitors, and target market. This is best done with a SWOT analysis to identify your strengths, weaknesses, opportunities, and threats. Next, identify your target market's needs, demographics, and behaviors.

Use the Competitive Analysis Template to brainstorm answers to simple questions like:

What does the current market look like?

Who are your competitors?

What are they offering?

What will give you a competitive advantage?

Who is your target market?

What are they looking for and why?

How will your product or service satisfy a need?

These questions should give you valuable insights into the current market and where your business stands.

4. Describe your products and services

Provide detailed information about your products and services. This includes pricing information, product features, and any unique selling points.

Use the Product/Market Fit Template to explain how your products meet the needs of your target market. Describe what sets them apart from the competition.

5. Design a marketing and sales strategy

Outline how you plan to promote and sell your products. Your marketing strategy and sales strategy should include information about your:

Pricing strategy

Advertising and promotional tactics

Sales channels

The Go to Market Strategy Template is a great way to visually map how you plan to launch your product or service in a new or existing market.

6. Determine budget and financial projections

Document detailed information on your business’ finances. Describe the current financial position of the company and how you expect the finances to play out.

Some details to include in this section are:

Startup costs

Revenue projections

Profit and loss statement

Funding you have received or plan to receive

Strategy for raising funds

7. Set the organization and management structure

Define how your company is structured and who will be responsible for each aspect of the business. Use the Business Organizational Chart Template to visually map the company’s teams, roles, and hierarchy.

As well as the organization and management structure, discuss the legal structure of your business. Clarify whether your business is a corporation, partnership, sole proprietorship, or LLC.

8. Make an action plan

At this point in your business plan, you’ve described what you’re aiming for. But how are you going to get there? The Action Plan Template describes the following steps to move your business plan forward. Outline the next steps you plan to take to bring your business plan to fruition.

Types of business plans

Several types of business plans cater to different purposes and stages of a company's lifecycle. Here are some of the most common types of business plans.

Startup business plan

A startup business plan is typically an entrepreneur's first business plan. This document helps entrepreneurs articulate their business idea when starting a new business.

Not sure how to make a business plan for a startup? It’s pretty similar to a regular business plan, except the primary purpose of a startup business plan is to convince investors to provide funding for the business. A startup business plan also outlines the potential target market, product/service offering, marketing plan, and financial projections.

Strategic business plan

A strategic business plan is a long-term plan that outlines a company's overall strategy, objectives, and tactics. This type of strategic plan focuses on the big picture and helps business owners set goals and priorities and measure progress.

The primary purpose of a strategic business plan is to provide direction and guidance to the company's management team and stakeholders. The plan typically covers a period of three to five years.

Operational business plan

An operational business plan is a detailed document that outlines the day-to-day operations of a business. It focuses on the specific activities and processes required to run the business, such as:

Organizational structure

Staffing plan

Production plan

Quality control

Inventory management

Supply chain

The primary purpose of an operational business plan is to ensure that the business runs efficiently and effectively. It helps business owners manage their resources, track their performance, and identify areas for improvement.

Growth-business plan

A growth-business plan is a strategic plan that outlines how a company plans to expand its business. It helps business owners identify new market opportunities and increase revenue and profitability. The primary purpose of a growth-business plan is to provide a roadmap for the company's expansion and growth.

The 3 Horizons of Growth Template is a great tool to identify new areas of growth. This framework categorizes growth opportunities into three categories: Horizon 1 (core business), Horizon 2 (emerging business), and Horizon 3 (potential business).

One-page business plan

A one-page business plan is a condensed version of a full business plan that focuses on the most critical aspects of a business. It’s a great tool for entrepreneurs who want to quickly communicate their business idea to potential investors, partners, or employees.

A one-page business plan typically includes sections such as business concept, value proposition, revenue streams, and cost structure.

Best practices for how to make a good business plan

Here are some additional tips for creating a business plan:

Use a template

A template can help you organize your thoughts and effectively communicate your business ideas and strategies. Starting with a template can also save you time and effort when formatting your plan.

Miro’s extensive library of customizable templates includes all the necessary sections for a comprehensive business plan. With our templates, you can confidently present your business plans to stakeholders and investors.

Be practical

Avoid overestimating revenue projections or underestimating expenses. Your business plan should be grounded in practical realities like your budget, resources, and capabilities.

Be specific

Provide as much detail as possible in your business plan. A specific plan is easier to execute because it provides clear guidance on what needs to be done and how. Without specific details, your plan may be too broad or vague, making it difficult to know where to start or how to measure success.

Be thorough with your research

Conduct thorough research to fully understand the market, your competitors, and your target audience . By conducting thorough research, you can identify potential risks and challenges your business may face and develop strategies to mitigate them.

Get input from others

It can be easy to become overly focused on your vision and ideas, leading to tunnel vision and a lack of objectivity. By seeking input from others, you can identify potential opportunities you may have overlooked.

Review and revise regularly

A business plan is a living document. You should update it regularly to reflect market, industry, and business changes. Set aside time for regular reviews and revisions to ensure your plan remains relevant and effective.

Create a winning business plan to chart your path to success

Starting or growing a business can be challenging, but it doesn't have to be. Whether you're a seasoned entrepreneur or just starting, a well-written business plan can make or break your business’ success.

The purpose of a business plan is more than just to secure funding and attract investors. It also serves as a roadmap for achieving your business goals and realizing your vision. With the right mindset, tools, and strategies, you can develop a visually appealing, persuasive business plan.

Ready to make an effective business plan that works for you? Check out our library of ready-made strategy and planning templates and chart your path to success.

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What Is a Business Plan?

Understanding business plans, how to write a business plan, common elements of a business plan, how often should a business plan be updated, the bottom line, business plan: what it is, what's included, and how to write one.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

A business plan is a document that details a company's goals and how it intends to achieve them. Business plans can be of benefit to both startups and well-established companies. For startups, a business plan can be essential for winning over potential lenders and investors. Established businesses can find one useful for staying on track and not losing sight of their goals. This article explains what an effective business plan needs to include and how to write one.

Key Takeaways

• A business plan is a document describing a company's business activities and how it plans to achieve its goals.
• Startup companies use business plans to get off the ground and attract outside investors.
• For established companies, a business plan can help keep the executive team focused on and working toward the company's short- and long-term objectives.
• There is no single format that a business plan must follow, but there are certain key elements that most companies will want to include.

Investopedia / Ryan Oakley

Any new business should have a business plan in place prior to beginning operations. In fact, banks and venture capital firms often want to see a business plan before they'll consider making a loan or providing capital to new businesses.

Even if a business isn't looking to raise additional money, a business plan can help it focus on its goals. A 2017 Harvard Business Review article reported that, "Entrepreneurs who write formal plans are 16% more likely to achieve viability than the otherwise identical nonplanning entrepreneurs."

Ideally, a business plan should be reviewed and updated periodically to reflect any goals that have been achieved or that may have changed. An established business that has decided to move in a new direction might create an entirely new business plan for itself.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. These include being able to think through ideas before investing too much money in them and highlighting any potential obstacles to success. A company might also share its business plan with trusted outsiders to get their objective feedback. In addition, a business plan can help keep a company's executive team on the same page about strategic action items and priorities.

Business plans, even among competitors in the same industry, are rarely identical. However, they often have some of the same basic elements, as we describe below.

While it's a good idea to provide as much detail as necessary, it's also important that a business plan be concise enough to hold a reader's attention to the end.

While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.

Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.

The length of a business plan can vary greatly from business to business. Regardless, it's best to fit the basic information into a 15- to 25-page document. Other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and attached as appendices.

These are some of the most common elements in many business plans:

• Executive summary: This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services: Here, the company should describe the products and services it offers or plans to introduce. That might include details on pricing, product lifespan, and unique benefits to the consumer. Other factors that could go into this section include production and manufacturing processes, any relevant patents the company may have, as well as proprietary technology . Information about research and development (R&D) can also be included here.
• Market analysis: A company needs to have a good handle on the current state of its industry and the existing competition. This section should explain where the company fits in, what types of customers it plans to target, and how easy or difficult it may be to take market share from incumbents.
• Marketing strategy: This section can describe how the company plans to attract and keep customers, including any anticipated advertising and marketing campaigns. It should also describe the distribution channel or channels it will use to get its products or services to consumers.
• Financial plans and projections: Established businesses can include financial statements, balance sheets, and other relevant financial information. New businesses can provide financial targets and estimates for the first few years. Your plan might also include any funding requests you're making.

The best business plans aren't generic ones created from easily accessed templates. A company should aim to entice readers with a plan that demonstrates its uniqueness and potential for success.

2 Types of Business Plans

Business plans can take many forms, but they are sometimes divided into two basic categories: traditional and lean startup. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These plans tend to be much longer than lean startup plans and contain considerably more detail. As a result they require more work on the part of the business, but they can also be more persuasive (and reassuring) to potential investors.
• Lean startup business plans : These use an abbreviated structure that highlights key elements. These business plans are short—as short as one page—and provide only the most basic detail. If a company wants to use this kind of plan, it should be prepared to provide more detail if an investor or a lender requests it.

Why Do Business Plans Fail?

A business plan is not a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections to begin with. Markets and the overall economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All of this calls for building some flexibility into your plan, so you can pivot to a new course if needed.

How frequently a business plan needs to be revised will depend on the nature of the business. A well-established business might want to review its plan once a year and make changes if necessary. A new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is an option when a company prefers to give a quick explanation of its business. For example, a brand-new company may feel that it doesn't have a lot of information to provide yet.

Sections can include: a value proposition ; the company's major activities and advantages; resources such as staff, intellectual property, and capital; a list of partnerships; customer segments; and revenue sources.

A business plan can be useful to companies of all kinds. But as a company grows and the world around it changes, so too should its business plan. So don't think of your business plan as carved in granite but as a living document designed to evolve with your business.

Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."

U.S. Small Business Administration. " Write Your Business Plan ."

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Nine reasons why you need a business plan

Building a great business plan helps you plan, strategize and succeed. Presented by Chase for Business .

Making the decision to create a new business is an exciting yet stressful experience. Starting a business involves many tasks and obstacles, so it’s important to focus before you take action. A solid business plan can provide direction, help you attract investors and ensure you maintain momentum.

No matter what industry you plan on going into, a business plan is the first step for any successful enterprise. Building your business plan helps you figure out where you want your business to go and identify the necessary steps to get you there. This is a key document for your company to both guide your actions and track your progress.

What is the purpose of a business plan?

Think of a business plan like a roadmap. It enables you to solve problems and make key business decisions, such as marketing and competitive analysis, customer and market analysis and logistics and operations plans.

It can also help you organize your thoughts and goals, as well as give you a better idea of how your company will work. Good planning is often the difference between success and failure.

Here are nine reasons your company needs a business plan.

1. Prove your idea is viable

Through the process of writing a business plan, you can assess whether your company will be successful. Understanding market dynamics, as well as competitors, will help determine if your idea is viable.

This is also the time to develop financial projections for your business plan, like estimated startup costs, a profit and loss forecast, a break-even analysis and a cash flow statement . By taking time to investigate the viability of your idea, you can build goals and strategies to support your path to success.

A proper business plan proves to all interested parties—including potential investors, customers, employees, partners and most importantly yourself — that you are serious about your business.

2. Set important goals

As a business owner, the bulk of your time will mostly likely be spent managing day-to-day tasks. As a result, it might be hard to find time after you launch your business to set goals and milestones. Writing a business plan allows you to lay out significant goals for yourself ahead of time for three or even five years down the road. Create both short- and long-term business goals. 

3. Reduce potential risks

Prevent your business from falling victim to unexpected dangers by researching before you break ground. A business plan opens your eyes to potential risks that your business could face. Don’t be afraid to ask yourself the hard questions that may need research and analysis to answer. This is also good practice in how your business would actually manage issues when they arise. Incorporate a contingency plan that identifies risks and how you would respond to them effectively.

The most common reasons businesses fail include:

• Lack of capital
• Lack of market impact or need
• Unresearched pricing (too high or low)
• Explosive growth that drains all your capital
• Stiff competition

Lack of capital is the most prevalent reason why businesses fail. To best alleviate this problem, take time to determine how your business will generate revenue. Build a comprehensive model to help mitigate future risks and long-term pain points. This can be turned into a tool to manage growth and expansion.

4. Secure investments

Whether you’re planning to apply for an SBA loan , build a relationship with angel investors or seek venture capital funding, you need more than just an elevator pitch to get funding. All credible investors will want to review your business plan. Although investors will focus on the financial aspects of the plan, they will also want to see if you’ve spent time researching your industry, developed a viable product or service and created a strong marketing strategy.

While building your business plan, think about how much raised capital you need to get your idea off the ground. Determine exactly how much funding you’ll need and what you will use it for. This is essential for raising and employing capital.

5. Allot resources and plan purchases

You will have many investments to make at the launch of your business, such as product and services development, new technology, hiring, operations, sales and marketing. Resource planning is an important part of your business plan. It gives you an idea of how much you’ll need to spend on resources and it ensures your business will manage those resources effectively.  

A business plan provides clarity about necessary assets and investment for each item. A good business plan can also determine when it is feasible to expand to a larger store or workspace.

In your plan, include research on new products and services, where you can buy reliable equipment and what technologies you may need. Allocate capital and plan how you’ll fund major purchases, such as with a Chase small business checking account or business credit card .

6. Build your team

From seasoned executives to skilled labor, a compelling business plan can help you attract top-tier talent, ideally inspiring management and employees long after hiring. Business plans include an overview of your executive team as well as the different roles you need filled immediately and further down the line.

Small businesses often employ specialized consultants, contractors and freelancers for individual tasks such as marketing, accounting and legal assistance. Sharing a business plan helps the larger team work collectively in the same direction. 

This will also come into play when you begin working with any new partners. As a new business, a potential partner may ask to see your business plan. Building partnerships takes time and money, and with a solid business plan you have the opportunity to attract and work with the type of partners your new business needs.

7. Share your vision 

When you start a business, it's easy to assume you'll be available to guide your team. A business plan helps your team and investors understand your vision for the company. Your plan will outline your goals and can help your team make decisions or take action on your behalf. Share your business plan with employees to align your full staff toward a collective goal or objective for the company.  Consider employee and stakeholder ownership as a compelling and motivating force. 

8. Develop a marketing strategy

A marketing strategy details how you will reach your customers and build brand awareness. The clearer your brand positioning is to investors, customers, partners and employees, the more successful your business will be.

Important questions to consider as you build your marketing strategy include:

• What industry segments are we pursuing?
• What is the value proposition of the products or services we plan to offer?
• Who are our customers?
• How will we retain our customers and keep them engaged with our products or services and marketing?
• What is our advertising budget?
• What price will we charge?
• What is the overall look and feel of our brand? What are our brand guidelines?
• Will we need to hire marketing experts to help us create our brand?
• Who are our competitors? What marketing strategies have worked (or not worked) for them?

With a thoughtful marketing strategy integrated into your business plan, your company goals are significantly more in reach.

9. Focus your energy

Your business plan determines which areas of your business to focus on while also avoiding possible distractions. It provides a roadmap for critical tradeoffs and resource allocation.

As a business owner, you will feel the urge to solve all of your internal and customers’ problems, but it is important to maintain focus. Keep your priorities at the top of your mind as you set off to build your company.

As a small business owner, writing a business plan should be one of your first priorities. Read our checklist for starting a business, and learn how to take your business from a plan to reality. When you’re ready to get started, talk with a Chase business banker to open a Chase business checking or savings account today.

For Informational/Educational Purposes Only: The views expressed in this article may differ from other employees and departments of JPMorgan Chase & Co. Views and strategies described may not be appropriate for everyone and are not intended as specific advice/recommendation for any individual. You should carefully consider your needs and objectives before making any decisions and consult the appropriate professional(s). Outlooks and past performance are not guarantees of future results.

JPMorgan Chase Bank, N.A. Member FDIC. Equal Opportunity Lender, ©2023 JPMorgan Chase & Co

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Step-by-Step Guide to Writing a Simple Business Plan

By Joe Weller | October 11, 2021

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A business plan is the cornerstone of any successful company, regardless of size or industry. This step-by-step guide provides information on writing a business plan for organizations at any stage, complete with free templates and expert advice. 

Included on this page, you’ll find a step-by-step guide to writing a business plan and a chart to identify which type of business plan you should write . Plus, find information on how a business plan can help grow a business and expert tips on writing one .

What Is a Business Plan?

A business plan is a document that communicates a company’s goals and ambitions, along with the timeline, finances, and methods needed to achieve them. Additionally, it may include a mission statement and details about the specific products or services offered.

A business plan can highlight varying time periods, depending on the stage of your company and its goals. That said, a typical business plan will include the following benchmarks:

• Product goals and deadlines for each month
• Monthly financials for the first two years
• Profit and loss statements for the first three to five years
• Balance sheet projections for the first three to five years

Startups, entrepreneurs, and small businesses all create business plans to use as a guide as their new company progresses. Larger organizations may also create (and update) a business plan to keep high-level goals, financials, and timelines in check.

While you certainly need to have a formalized outline of your business’s goals and finances, creating a business plan can also help you determine a company’s viability, its profitability (including when it will first turn a profit), and how much money you will need from investors. In turn, a business plan has functional value as well: Not only does outlining goals help keep you accountable on a timeline, it can also attract investors in and of itself and, therefore, act as an effective strategy for growth.

For more information, visit our comprehensive guide to writing a strategic plan or download free strategic plan templates . This page focuses on for-profit business plans, but you can read our article with nonprofit business plan templates .

Business Plan Steps

The specific information in your business plan will vary, depending on the needs and goals of your venture, but a typical plan includes the following ordered elements:

• Executive summary
• Description of business
• Market analysis
• Competitive analysis
• Description of organizational management
• Description of product or services
• Marketing plan
• Sales strategy
• Funding details (or request for funding)
• Financial projections

If your plan is particularly long or complicated, consider adding a table of contents or an appendix for reference. For an in-depth description of each step listed above, read “ How to Write a Business Plan Step by Step ” below.

Broadly speaking, your audience includes anyone with a vested interest in your organization. They can include potential and existing investors, as well as customers, internal team members, suppliers, and vendors.

Do I Need a Simple or Detailed Plan?

Your business’s stage and intended audience dictates the level of detail your plan needs. Corporations require a thorough business plan — up to 100 pages. Small businesses or startups should have a concise plan focusing on financials and strategy.

How to Choose the Right Plan for Your Business

In order to identify which type of business plan you need to create, ask: “What do we want the plan to do?” Identify function first, and form will follow.

Use the chart below as a guide for what type of business plan to create:

Is the Order of Your Business Plan Important?

There is no set order for a business plan, with the exception of the executive summary, which should always come first. Beyond that, simply ensure that you organize the plan in a way that makes sense and flows naturally.

The Difference Between Traditional and Lean Business Plans

A traditional business plan follows the standard structure — because these plans encourage detail, they tend to require more work upfront and can run dozens of pages. A Lean business plan is less common and focuses on summarizing critical points for each section. These plans take much less work and typically run one page in length.

In general, you should use a traditional model for a legacy company, a large company, or any business that does not adhere to Lean (or another Agile method ). Use Lean if you expect the company to pivot quickly or if you already employ a Lean strategy with other business operations. Additionally, a Lean business plan can suffice if the document is for internal use only. Stick to a traditional version for investors, as they may be more sensitive to sudden changes or a high degree of built-in flexibility in the plan.

How to Write a Business Plan Step by Step

Writing a strong business plan requires research and attention to detail for each section. Below, you’ll find a 10-step guide to researching and defining each element in the plan.

Step 1: Executive Summary

The executive summary will always be the first section of your business plan. The goal is to answer the following questions:

• What is the vision and mission of the company?
• What are the company’s short- and long-term goals?

See our  roundup of executive summary examples and templates for samples. Read our executive summary guide to learn more about writing one.

Step 2: Description of Business

The goal of this section is to define the realm, scope, and intent of your venture. To do so, answer the following questions as clearly and concisely as possible:

• What business are we in?
• What does our business do?

Step 3: Market Analysis

In this section, provide evidence that you have surveyed and understand the current marketplace, and that your product or service satisfies a niche in the market. To do so, answer these questions:

• Who is our customer? 
• What does that customer value?

Step 4: Competitive Analysis

In many cases, a business plan proposes not a brand-new (or even market-disrupting) venture, but a more competitive version — whether via features, pricing, integrations, etc. — than what is currently available. In this section, answer the following questions to show that your product or service stands to outpace competitors:

• Who is the competition? 
• What do they do best? 
• What is our unique value proposition?

Step 5: Description of Organizational Management

In this section, write an overview of the team members and other key personnel who are integral to success. List roles and responsibilities, and if possible, note the hierarchy or team structure.

Step 6: Description of Products or Services

In this section, clearly define your product or service, as well as all the effort and resources that go into producing it. The strength of your product largely defines the success of your business, so it’s imperative that you take time to test and refine the product before launching into marketing, sales, or funding details.

Questions to answer in this section are as follows:

• What is the product or service?
• How do we produce it, and what resources are necessary for production?

Step 7: Marketing Plan

In this section, define the marketing strategy for your product or service. This doesn’t need to be as fleshed out as a full marketing plan , but it should answer basic questions, such as the following:

• Who is the target market (if different from existing customer base)?
• What channels will you use to reach your target market?
• What resources does your marketing strategy require, and do you have access to them?
• If possible, do you have a rough estimate of timeline and budget?
• How will you measure success?

Step 8: Sales Plan

Write an overview of the sales strategy, including the priorities of each cycle, steps to achieve these goals, and metrics for success. For the purposes of a business plan, this section does not need to be a comprehensive, in-depth sales plan , but can simply outline the high-level objectives and strategies of your sales efforts. 

Start by answering the following questions:

• What is the sales strategy?
• What are the tools and tactics you will use to achieve your goals?
• What are the potential obstacles, and how will you overcome them?
• What is the timeline for sales and turning a profit?
• What are the metrics of success?

Step 9: Funding Details (or Request for Funding)

This section is one of the most critical parts of your business plan, particularly if you are sharing it with investors. You do not need to provide a full financial plan, but you should be able to answer the following questions:

• How much capital do you currently have? How much capital do you need?
• How will you grow the team (onboarding, team structure, training and development)?
• What are your physical needs and constraints (space, equipment, etc.)?

Step 10: Financial Projections

Apart from the fundraising analysis, investors like to see thought-out financial projections for the future. As discussed earlier, depending on the scope and stage of your business, this could be anywhere from one to five years. 

While these projections won’t be exact — and will need to be somewhat flexible — you should be able to gauge the following:

• How and when will the company first generate a profit?
• How will the company maintain profit thereafter?

Business Plan Template

Download Business Plan Template

Microsoft Excel | Smartsheet

This basic business plan template has space for all the traditional elements: an executive summary, product or service details, target audience, marketing and sales strategies, etc. In the finances sections, input your baseline numbers, and the template will automatically calculate projections for sales forecasting, financial statements, and more.

For templates tailored to more specific needs, visit this business plan template roundup or download a fill-in-the-blank business plan template to make things easy. 

If you are looking for a particular template by file type, visit our pages dedicated exclusively to Microsoft Excel , Microsoft Word , and Adobe PDF business plan templates.

How to Write a Simple Business Plan

A simple business plan is a streamlined, lightweight version of the large, traditional model. As opposed to a one-page business plan , which communicates high-level information for quick overviews (such as a stakeholder presentation), a simple business plan can exceed one page.

Below are the steps for creating a generic simple business plan, which are reflected in the template below .

• Write the Executive Summary This section is the same as in the traditional business plan — simply offer an overview of what’s in the business plan, the prospect or core offering, and the short- and long-term goals of the company. 
• Add a Company Overview Document the larger company mission and vision. 
• Provide the Problem and Solution In straightforward terms, define the problem you are attempting to solve with your product or service and how your company will attempt to do it. Think of this section as the gap in the market you are attempting to close.
• Identify the Target Market Who is your company (and its products or services) attempting to reach? If possible, briefly define your buyer personas .
• Write About the Competition In this section, demonstrate your knowledge of the market by listing the current competitors and outlining your competitive advantage.
• Describe Your Product or Service Offerings Get down to brass tacks and define your product or service. What exactly are you selling?
• Outline Your Marketing Tactics Without getting into too much detail, describe your planned marketing initiatives.
• Add a Timeline and the Metrics You Will Use to Measure Success Offer a rough timeline, including milestones and key performance indicators (KPIs) that you will use to measure your progress.
• Include Your Financial Forecasts Write an overview of your financial plan that demonstrates you have done your research and adequate modeling. You can also list key assumptions that go into this forecasting. 
• Identify Your Financing Needs This section is where you will make your funding request. Based on everything in the business plan, list your proposed sources of funding, as well as how you will use it.

Simple Business Plan Template

Download Simple Business Plan Template

Microsoft Excel |  Microsoft Word | Adobe PDF  | Smartsheet

Use this simple business plan template to outline each aspect of your organization, including information about financing and opportunities to seek out further funding. This template is completely customizable to fit the needs of any business, whether it’s a startup or large company.

Read our article offering free simple business plan templates or free 30-60-90-day business plan templates to find more tailored options. You can also explore our collection of one page business templates . 

How to Write a Business Plan for a Lean Startup

A Lean startup business plan is a more Agile approach to a traditional version. The plan focuses more on activities, processes, and relationships (and maintains flexibility in all aspects), rather than on concrete deliverables and timelines.

While there is some overlap between a traditional and a Lean business plan, you can write a Lean plan by following the steps below:

• Add Your Value Proposition Take a streamlined approach to describing your product or service. What is the unique value your startup aims to deliver to customers? Make sure the team is aligned on the core offering and that you can state it in clear, simple language.
• List Your Key Partners List any other businesses you will work with to realize your vision, including external vendors, suppliers, and partners. This section demonstrates that you have thoughtfully considered the resources you can provide internally, identified areas for external assistance, and conducted research to find alternatives.
• Note the Key Activities Describe the key activities of your business, including sourcing, production, marketing, distribution channels, and customer relationships.
• Include Your Key Resources List the critical resources — including personnel, equipment, space, and intellectual property — that will enable you to deliver your unique value.
• Identify Your Customer Relationships and Channels In this section, document how you will reach and build relationships with customers. Provide a high-level map of the customer experience from start to finish, including the spaces in which you will interact with the customer (online, retail, etc.). 
• Detail Your Marketing Channels Describe the marketing methods and communication platforms you will use to identify and nurture your relationships with customers. These could be email, advertising, social media, etc.
• Explain the Cost Structure This section is especially necessary in the early stages of a business. Will you prioritize maximizing value or keeping costs low? List the foundational startup costs and how you will move toward profit over time.
• Share Your Revenue Streams Over time, how will the company make money? Include both the direct product or service purchase, as well as secondary sources of revenue, such as subscriptions, selling advertising space, fundraising, etc.

Lean Business Plan Template for Startups

Download Lean Business Plan Template for Startups

Microsoft Word | Adobe PDF

Startup leaders can use this Lean business plan template to relay the most critical information from a traditional plan. You’ll find all the sections listed above, including spaces for industry and product overviews, cost structure and sources of revenue, and key metrics, and a timeline. The template is completely customizable, so you can edit it to suit the objectives of your Lean startups.

See our wide variety of  startup business plan templates for more options.

How to Write a Business Plan for a Loan

A business plan for a loan, often called a loan proposal , includes many of the same aspects of a traditional business plan, as well as additional financial documents, such as a credit history, a loan request, and a loan repayment plan.

In addition, you may be asked to include personal and business financial statements, a form of collateral, and equity investment information.

Download free financial templates to support your business plan.

Tips for Writing a Business Plan

Outside of including all the key details in your business plan, you have several options to elevate the document for the highest chance of winning funding and other resources. Follow these tips from experts:.

• Keep It Simple: Avner Brodsky , the Co-Founder and CEO of Lezgo Limited, an online marketing company, uses the acronym KISS (keep it short and simple) as a variation on this idea. “The business plan is not a college thesis,” he says. “Just focus on providing the essential information.”
• Do Adequate Research: Michael Dean, the Co-Founder of Pool Research , encourages business leaders to “invest time in research, both internal and external (market, finance, legal etc.). Avoid being overly ambitious or presumptive. Instead, keep everything objective, balanced, and accurate.” Your plan needs to stand on its own, and you must have the data to back up any claims or forecasting you make. As Brodsky explains, “Your business needs to be grounded on the realities of the market in your chosen location. Get the most recent data from authoritative sources so that the figures are vetted by experts and are reliable.”
• Set Clear Goals: Make sure your plan includes clear, time-based goals. “Short-term goals are key to momentum growth and are especially important to identify for new businesses,” advises Dean.
• Know (and Address) Your Weaknesses: “This awareness sets you up to overcome your weak points much quicker than waiting for them to arise,” shares Dean. Brodsky recommends performing a full SWOT analysis to identify your weaknesses, too. “Your business will fare better with self-knowledge, which will help you better define the mission of your business, as well as the strategies you will choose to achieve your objectives,” he adds.
• Seek Peer or Mentor Review: “Ask for feedback on your drafts and for areas to improve,” advises Brodsky. “When your mind is filled with dreams for your business, sometimes it is an outsider who can tell you what you’re missing and will save your business from being a product of whimsy.”

Outside of these more practical tips, the language you use is also important and may make or break your business plan.

Shaun Heng, VP of Operations at Coin Market Cap , gives the following advice on the writing, “Your business plan is your sales pitch to an investor. And as with any sales pitch, you need to strike the right tone and hit a few emotional chords. This is a little tricky in a business plan, because you also need to be formal and matter-of-fact. But you can still impress by weaving in descriptive language and saying things in a more elegant way.

“A great way to do this is by expanding your vocabulary, avoiding word repetition, and using business language. Instead of saying that something ‘will bring in as many customers as possible,’ try saying ‘will garner the largest possible market segment.’ Elevate your writing with precise descriptive words and you'll impress even the busiest investor.”

Additionally, Dean recommends that you “stay consistent and concise by keeping your tone and style steady throughout, and your language clear and precise. Include only what is 100 percent necessary.”

Resources for Writing a Business Plan

While a template provides a great outline of what to include in a business plan, a live document or more robust program can provide additional functionality, visibility, and real-time updates. The U.S. Small Business Association also curates resources for writing a business plan.

Additionally, you can use business plan software to house data, attach documentation, and share information with stakeholders. Popular options include LivePlan, Enloop, BizPlanner, PlanGuru, and iPlanner.

How a Business Plan Helps to Grow Your Business

A business plan — both the exercise of creating one and the document — can grow your business by helping you to refine your product, target audience, sales plan, identify opportunities, secure funding, and build new partnerships. 

Outside of these immediate returns, writing a business plan is a useful exercise in that it forces you to research the market, which prompts you to forge your unique value proposition and identify ways to beat the competition. Doing so will also help you build (and keep you accountable to) attainable financial and product milestones. And down the line, it will serve as a welcome guide as hurdles inevitably arise.

Streamline Your Business Planning Activities with Real-Time Work Management in Smartsheet

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The Smartsheet platform makes it easy to plan, capture, manage, and report on work from anywhere, helping your team be more effective and get more done. Report on key metrics and get real-time visibility into work as it happens with roll-up reports, dashboards, and automated workflows built to keep your team connected and informed. 

When teams have clarity into the work getting done, there’s no telling how much more they can accomplish in the same amount of time.  Try Smartsheet for free, today.

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The importance of a business plan

Business plans are like road maps: it’s possible to travel without one, but that will only increase the odds of getting lost along the way.

Owners with a business plan see growth 30% faster than those without one, and 71% of the fast-growing companies have business plans . Before we get into the thick of it, let’s define and go over what a business plan actually is.

What is a business plan?

A business plan is a 15-20 page document that outlines how you will achieve your business objectives and includes information about your product, marketing strategies, and finances. You should create one when you’re starting a new business and keep updating it as your business grows.

Rather than putting yourself in a position where you may have to stop and ask for directions or even circle back and start over, small business owners often use business plans to help guide them. That’s because they help them see the bigger picture, plan ahead, make important decisions, and improve the overall likelihood of success. ‍

Why is a business plan important?

A well-written business plan is an important tool because it gives entrepreneurs and small business owners, as well as their employees, the ability to lay out their goals and track their progress as their business begins to grow. Business planning should be the first thing done when starting a new business. Business plans are also important for attracting investors so they can determine if your business is on the right path and worth putting money into.

Business plans typically include detailed information that can help improve your business’s chances of success, like:

• A market analysis : gathering information about factors and conditions that affect your industry
• Competitive analysis : evaluating the strengths and weaknesses of your competitors
• Customer segmentation : divide your customers into different groups based on specific characteristics to improve your marketing
• Marketing: using your research to advertise your business
• Logistics and operations plans : planning and executing the most efficient production process
• Cash flow projection : being prepared for how much money is going into and out of your business
• An overall path to long-term growth

10 reasons why you need a business plan

I know what you’re thinking: “Do I really need a business plan? It sounds like a lot of work, plus I heard they’re outdated and I like figuring things out as I go...”.

The answer is: yes, you really do need a business plan! As entrepreneur Kevin J. Donaldson said, “Going into business without a business plan is like going on a mountain trek without a map or GPS support—you’ll eventually get lost and starve! Though it may sound tedious and time-consuming, business plans are critical to starting your business and setting yourself up for success.

To outline the importance of business plans and make the process sound less daunting, here are 10 reasons why you need one for your small business.

1. To help you with critical decisions

The primary importance of a business plan is that they help you make better decisions. Entrepreneurship is often an endless exercise in decision making and crisis management. Sitting down and considering all the ramifications of any given decision is a luxury that small businesses can’t always afford. That’s where a business plan comes in.

Building a business plan allows you to determine the answer to some of the most critical business decisions ahead of time.

Creating a robust business plan is a forcing function—you have to sit down and think about major components of your business before you get started, like your marketing strategy and what products you’ll sell. You answer many tough questions before they arise. And thinking deeply about your core strategies can also help you understand how those decisions will impact your broader strategy.

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2. To iron out the kinks

Putting together a business plan requires entrepreneurs to ask themselves a lot of hard questions and take the time to come up with well-researched and insightful answers. Even if the document itself were to disappear as soon as it’s completed, the practice of writing it helps to articulate your vision in realistic terms and better determine if there are any gaps in your strategy.

3. To avoid the big mistakes

Only about half of small businesses are still around to celebrate their fifth birthday . While there are many reasons why small businesses fail, many of the most common are purposefully addressed in business plans.

According to data from CB Insights , some of the most common reasons businesses fail include:

• No market need : No one wants what you’re selling.
• Lack of capital : Cash flow issues or businesses simply run out of money.
• Inadequate team : This underscores the importance of hiring the right people to help you run your business.
• Stiff competition : It’s tough to generate a steady profit when you have a lot of competitors in your space.
• Pricing : Some entrepreneurs price their products or services too high or too low—both scenarios can be a recipe for disaster.

The exercise of creating a business plan can help you avoid these major mistakes. Whether it’s cash flow forecasts or a product-market fit analysis , every piece of a business plan can help spot some of those potentially critical mistakes before they arise. For example, don’t be afraid to scrap an idea you really loved if it turns out there’s no market need. Be honest with yourself!

Get a jumpstart on your business plan by creating your own cash flow projection .

4. To prove the viability of the business

Many businesses are created out of passion, and while passion can be a great motivator, it’s not a great proof point.

Planning out exactly how you’re going to turn that vision into a successful business is perhaps the most important step between concept and reality. Business plans can help you confirm that your grand idea makes sound business sense.

A critical component of your business plan is the market research section. Market research can offer deep insight into your customers, your competitors, and your chosen industry. Not only can it enlighten entrepreneurs who are starting up a new business, but it can also better inform existing businesses on activities like marketing, advertising, and releasing new products or services.

Want to prove there’s a market gap? Here’s how you can get started with market research.

5. To set better objectives and benchmarks

Without a business plan, objectives often become arbitrary, without much rhyme or reason behind them. Having a business plan can help make those benchmarks more intentional and consequential. They can also help keep you accountable to your long-term vision and strategy, and gain insights into how your strategy is (or isn’t) coming together over time.

6. To communicate objectives and benchmarks

Whether you’re managing a team of 100 or a team of two, you can’t always be there to make every decision yourself. Think of the business plan like a substitute teacher, ready to answer questions any time there’s an absence. Let your staff know that when in doubt, they can always consult the business plan to understand the next steps in the event that they can’t get an answer from you directly.

Sharing your business plan with team members also helps ensure that all members are aligned with what you’re doing, why, and share the same understanding of long-term objectives.

7. To provide a guide for service providers

Small businesses typically employ contractors , freelancers, and other professionals to help them with tasks like accounting , marketing, legal assistance, and as consultants. Having a business plan in place allows you to easily share relevant sections with those you rely on to support the organization, while ensuring everyone is on the same page.

8. To secure financing

Did you know you’re 2.5x more likely to get funded if you have a business plan?If you’re planning on pitching to venture capitalists, borrowing from a bank, or are considering selling your company in the future, you’re likely going to need a business plan. After all, anyone that’s interested in putting money into your company is going to want to know it’s in good hands and that it’s viable in the long run. Business plans are the most effective ways of proving that and are typically a requirement for anyone seeking outside financing.

Learn what you need to get a small business loan.

9. To better understand the broader landscape

No business is an island, and while you might have a strong handle on everything happening under your own roof, it’s equally important to understand the market terrain as well. Writing a business plan can go a long way in helping you better understand your competition and the market you’re operating in more broadly, illuminate consumer trends and preferences, potential disruptions and other insights that aren’t always plainly visible.

10. To reduce risk

Entrepreneurship is a risky business, but that risk becomes significantly more manageable once tested against a well-crafted business plan. Drawing up revenue and expense projections, devising logistics and operational plans, and understanding the market and competitive landscape can all help reduce the risk factor from an inherently precarious way to make a living. Having a business plan allows you to leave less up to chance, make better decisions, and enjoy the clearest possible view of the future of your company.

Understanding the importance of a business plan

Now that you have a solid grasp on the “why” behind business plans, you can confidently move forward with creating your own.

Remember that a business plan will grow and evolve along with your business, so it’s an important part of your whole journey—not just the beginning.

Related Posts

Now that you’ve read up on the purpose of a business plan, check out our guide to help you get started.

The information and tips shared on this blog are meant to be used as learning and personal development tools as you launch, run and grow your business. While a good place to start, these articles should not take the place of personalized advice from professionals. As our lawyers would say: “All content on Wave’s blog is intended for informational purposes only. It should not be considered legal or financial advice.” Additionally, Wave is the legal copyright holder of all materials on the blog, and others cannot re-use or publish it without our written consent.

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October 31, 2023

Block Advisors

How to Write a Business Plan Step-By-Step

October 31, 2023 • Block Advisors

QUICK ANSWER:

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

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

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

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

What is a Business Plan?

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

Who are the major players in your business?

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

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

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

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

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

How to Write a Business Plan: 10 Simple Steps

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

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

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

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

2. Create a Business Description

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

The company description should also answer these two questions:

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

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

What business structure is right for my company?

Answer these six questions to help you find your fit

3. Outline Your Business Goals

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

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

4. Conduct and Summarize Market Research

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

5. Conduct a Competitive Analysis

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

6. Outline Your Marketing and Sales Strategies

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

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

7. Describe Your Product or Service

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

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

8. Compile Financial Plans

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

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

9. Build a Management and Operations Plan

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

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

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

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

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

How to Create a Business Plan: The Bottom Line

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

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

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Defining employee compensation and taxable wages, a guide to raising capital as a small business founder, how to onboard new employees for their first day, find tax help in your area..

6 reasons why you need a business plan before starting a business

Table of Contents

1) Know the market

2) plan your growth, 3) minimise risk, 4) help guide future decisions, 5) improve as you learn more, 6) secure financing, making informed business decisions.

Sometimes success comes with luck. Otherwise, it comes with hard work and planning. If you’d like to maximise your success as you launch a business, this article is for you. 

Learn six reasons you need a business plan before starting a business in this article by Countingup. If you’re new to business, a typical business plan includes research on market trends, competition analyses, customer profiles, marketing goals, logistics and operations plans, cash flow information, and an overall strategy on how they will grow.

Find out how a plan helps your business to:

• Know the market
• Plan your growth
• Minimise risk
• Help guide future decisions
• Improve as you learn more
• Secure financing

This article will cover why you should plan and how you can use these elements to build your business more effectively. If you’re ready to write a business plan instead, check out our dedicated article How to write a business plan . There we cover what sort of information is expected and useful in business plans and how to research them.

At Countingup, we want to empower new entrepreneurs to take on new challenges and be financially independent. Read on to find out more.

If you’re to be successful in business, you need to know your market and the value customers are seeking within it. However, this can potentially be a lot of information to gather and manage. Therefore, you need a business plan to centralise and summarise all the important reasons why your business is valuable.  

To do this, you need to consider two main perspectives: what your customers want and what your competitors are already offering. This second question is essential as it will allow you to identify how you can be different.  If you already have something of a business idea or would like to turn a side-hustle into a full-time job, you should do research to understand if your idea will be a viable business and how. This market research in your business plan should look something like the following:

From your research, you can build a detailed picture of where your business should be positioned as you launch from the market gaps you’ve identified. 

As you anticipate what your business might look like in five years, you may have some ideas for milestones to hit. For example: first customer, thousandth customer, break-even financially, first £1,000 in profit, and so on. However, do you know how you’re going to reach each of them? 

From the market research you’ve just completed, your business plan allows you to take various steps to use this information. Therefore, you need a business plan to maximise your growth and create specific objectives and strategies to meet this growth. 

For example, if you run a craft beer business, you might aim to sell 1,000 units within your first year. Your sales objective could be achieved with a strategy to ‘Attend trade fairs and beer festivals to meet potential retailers and interested customers’. Depending on the direction you choose in providing to retailers or selling directly to customers, you can reach this objective (first 1,000 units) in very different ways.

In contrast, if you run a consultancy business in financial services or marketing, you could aim to grow your client base to 12 full-time contracts across the year. Therefore, you might plan to ‘Use social media and industry contacts to advertise to clients’ or ‘Develop your service to retain clients for longer periods and larger projects’. These goals’ methods are critically different from one another – therefore strategies for your goals will need to be relevant and focused.

Once you’ve taken steps to meet these objectives, you can use your business plan to track your progress and identify where you still need to develop your business. With these formalised goals and methods, you can grow your business faster than entrepreneurs who don’t plan. 

Another direction in which to focus market research within your business plan is towards identifying vulnerabilities. Each business has fragile areas where they are threatened. Therefore, you need a business plan to protect weak points and avoid excessive risk sources.

From the SWOT analysis (strengths, weaknesses, opportunities and threats) included in your business plan, you can highlight areas that may need more proactive management and back-up plans in case something goes wrong. For example, this can be recognising whether your business idea is patentable, if external factors are driving up costs for consumers or if customer interest is a fading trend. Each of these threats and weaknesses presents vastly different problems to your business. Therefore, each will also need suitable methods to address them.

As you’re looking to start, having this awareness can mean you can anticipate problems ahead of time. Depending on the severity of these issues, you can take steps to cushion any damage or preserve your profits entirely. Without this insight, you leave yourself open to threats you were able to anticipate and mitigate but didn’t manage to – a critical oversight for any business owner.

On balance, having this awareness of weaknesses and threats can be more important than your opportunities, as you’ll be aware of steps to avoid and what to look out for. Therefore, outline threats to your business’ future to protect it.

Unfortunately, even the best plans have blindspots and circumstances where they’re of limited use. Therefore, you need a business plan to navigate uncertain futures.

Your market research is a snapshot of the market at one point in time. Therefore, the information, objectives and strategies you create are only useful for a certain period after this. If something changes in the market or some element of your business no longer works, you can still fall back on other parts of your business plan without having to start from scratch. 

For example, as you build your business, you can revisit future objectives and decide whether your currently available options can still meet them. If they do, and you’re able to stay on target for your goals, you can grow your business in the direction you initially planned. However, where your plan hasn’t worked out, you’ll need to decide to the best of your ability.

Navigating these future scenarios with updated information is especially important as you balance the short and long-term priorities of growing your business. For example, do you want to take more money to compensate yourself or reinvest a higher proportion of your profits in the hopes of growth later on?

Even if you’ve planned to reinvest every penny for the first 5 years, maybe something in your personal life has meant you need to support yourself.

Some critical information to look out for as your business plan evolves includes: 

• Demand lower than predicted
• Cash flow issues due to poor forecasting
• Not enough differentiation from competitors
• Prices too high or too low for the industry to be sustainable

As the months and years pass by while you trade and grow your business, you can update your plan with more insight. Therefore, you need a business plan to improve your business.

As an example, in some instances, a manufacturing process is harder than anticipated or a planned funding source isn’t available. Here, you can adapt your growth strategies based on this new information and update your plan to be more pragmatic and accurate. Similarly, if you find that certain marketing strategies don’t work, you can rule out certain business strategies in the future to expand your business with more confidence.

There would be little point in planning a course of action for your business, facing difficulties and then not updating your plan with a new direction. This would risk your business being disorganised and ineffective in its growth.

Even if your initial plans and growth strategies go the way you planned, at a certain point, your plan will expire anyway. This is because you can only plan so much on a single market snapshot. Therefore, you can use the experience you gain with time from growing your business to fine-tune your plans. This will make sure your business is always performing at its best within an evolving marketplace.

Finally, investors and lenders want to see entrepreneurs with a good understanding of what they offer to customers and a clear vision of how to grow their business. Therefore, you need a business plan to help convince other people that your business has value and potential.

When seeking funding, having a business plan to share with potential investors and lenders is sometimes a requirement as they’ll want to evaluate your claims more critically. While they may not be familiar with every business plan they come across, they may know more about typical business growth patterns and will be able to spot poor research or naive expectations. 

Therefore, having a detailed and realistic business outline can help your plan withstand their criticism and robustly show your growth potential. Similarly, if you’re considering an exit strategy to sell your business in the future, a business plan may be needed to secure a higher valuation. 

If you’d like to know more about communicating your business’s value and plan to secure funding, read our dedicated article How to present a business plan to potential investors . 

Make your business plan more effective with Countingup.

Countingup is your business current account and accounting software in one app. With it, you can automate your financial admin and save time – so you can get back to doing what you love.

The Countingup app offers real-time profit and loss data so you detect changes in your business’ performance as they happen. So you’ll be able to see success instantly if you change your marketing strategy. 

Get paid faster and improve your cash flow with automated invoicing. Gain complete confidence in your books as they’re always accurate and up to date – even if you’re on the go – with automatic expense categorisation and prompts for receipt capture as you make transactions. Countingup’s tax estimate tool will help you confidently set aside the right amount each year to pay any tax owed. Find out more here and sign up for free today.

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Why Is Strategic Planning Important?

• 06 Oct 2020

Do you know what your organization’s strategy is? How much time do you dedicate to developing that strategy each month?

If your answers are on the low side, you’re not alone. According to research from Bridges Business Consultancy , 48 percent of leaders spend less than one day per month discussing strategy.

It’s no wonder, then, that 48 percent of all organizations fail to meet at least half of their strategic targets. Before an organization can reap the rewards of its business strategy, planning must take place to ensure its strategy remains agile and executable .

Here’s a look at what strategic planning is and how it can benefit your organization.

Access your free e-book today.

What Is Strategic Planning?

Strategic planning is the ongoing organizational process of using available knowledge to document a business's intended direction. This process is used to prioritize efforts, effectively allocate resources, align shareholders and employees on the organization’s goals, and ensure those goals are backed by data and sound reasoning.

It’s important to highlight that strategic planning is an ongoing process—not a one-time meeting. In the online course Disruptive Strategy , Harvard Business School Professor Clayton Christensen notes that in a study of HBS graduates who started businesses, 93 percent of those with successful strategies evolved and pivoted away from their original strategic plans.

“Most people think of strategy as an event, but that’s not the way the world works,” Christensen says. “When we run into unanticipated opportunities and threats, we have to respond. Sometimes we respond successfully; sometimes we don’t. But most strategies develop through this process. More often than not, the strategy that leads to success emerges through a process that’s at work 24/7 in almost every industry.”

Strategic planning requires time, effort, and continual reassessment. Given the proper attention, it can set your business on the right track. Here are three benefits of strategic planning.

Related: 4 Ways to Develop Your Strategic Thinking Skills

Benefits of Strategic Planning

1. create one, forward-focused vision.

Strategy touches every employee and serves as an actionable way to reach your company’s goals.

One significant benefit of strategic planning is that it creates a single, forward-focused vision that can align your company and its shareholders. By making everyone aware of your company’s goals, how and why those goals were chosen, and what they can do to help reach them, you can create an increased sense of responsibility throughout your organization.

This can also have trickle-down effects. For instance, if a manager isn’t clear on your organization’s strategy or the reasoning used to craft it, they could make decisions on a team level that counteract its efforts. With one vision to unite around, everyone at your organization can act with a broader strategy in mind.

2. Draw Attention to Biases and Flaws in Reasoning

The decisions you make come with inherent bias. Taking part in the strategic planning process forces you to examine and explain why you’re making each decision and back it up with data, projections, or case studies, thus combatting your cognitive biases.

A few examples of cognitive biases are:

• The recency effect: The tendency to select the option presented most recently because it’s fresh in your mind
• Occam’s razor bias: The tendency to assume the most obvious decision to be the best decision
• Inertia bias: The tendency to select options that allow you to think, feel, and act in familiar ways

One cognitive bias that may be more difficult to catch in the act is confirmation bias . When seeking to validate a particular viewpoint, it's the tendency to only pay attention to information that supports that viewpoint.

If you’re crafting a strategic plan for your organization and know which strategy you prefer, enlist others with differing views and opinions to help look for information that either proves or disproves the idea.

Combating biases in strategic decision-making requires effort and dedication from your entire team, and it can make your organization’s strategy that much stronger.

Related: 3 Group Decision-Making Techniques for Success

3. Track Progress Based on Strategic Goals

Having a strategic plan in place can enable you to track progress toward goals. When each department and team understands your company’s larger strategy, their progress can directly impact its success, creating a top-down approach to tracking key performance indicators (KPIs) .

By planning your company’s strategy and defining its goals, KPIs can be determined at the organizational level. These goals can then be extended to business units, departments, teams, and individuals. This ensures that every level of your organization is aligned and can positively impact your business’s KPIs and performance.

It’s important to remember that even though your strategy might be far-reaching and structured, it must remain agile. As Christensen asserts in Disruptive Strategy , a business’s strategy needs to evolve with the challenges and opportunities it encounters. Be prepared to pivot your KPIs as goals shift and communicate the reasons for change to your organization.

Improve Your Strategic Planning Skills

Strategic planning can benefit your organization’s vision, execution, and progress toward goals. If strategic planning is a skill you’d like to improve, online courses can provide the knowledge and techniques needed to lead your team and organization.

Strategy courses can range from primers on key concepts (such as Economics for Managers ), to deep-dives on strategy frameworks (such as Disruptive Strategy ), to coursework designed to help you strategize for a specific organizational goal (such as Sustainable Business Strategy ).

Learning how to craft an effective, compelling strategic plan can enable you to not only invest in your career but provide lasting value to your organization.

Do you want to formulate winning strategies for your organization? Explore our portfolio of online strategy courses and download the free flowchart to determine which is the best fit for you and your goals.

About the Author

10 Simple Tips to Write a Successful Business Plan

"The absolute biggest business plan mistake you can make is to not plan at all." So writes Noah Parsons in his helpful blog post 17 Key Business Plan Mistakes to Avoid in 2023 . But how does one pull together all of the necessary components of a cohesive plan? It can feel overwhelming.

Eric Butow, CEO of online marketing ROI improvement firm Butow Communications Group, has teamed up with Entrepreneur Media to update the second edition of our best-selling book Write Your Business Plan to provide you with a simple, step-by-step process for creating a successful business plan. In the following excerpt, he gives ten tips to gather all of the critical information you will need to succeed.

1. Know your competition.

You need to name them and point out what makes you different from (and better than) each of them. But do not disparage your competition.

2. Know your audience.

You may need several versions of your business plan. For example, you may need one for bankers or venture capitalists, one for individual investors, and one for companies that may want to do a joint venture with you rather than fund you.

3. Have proof to back up every claim you make.

If you expect to be the leader in your field in six months, you have to say why you think that is. If you say your product will take the market by storm, you have to support this statement with facts. If you say your management team is fully qualified to make the business a success, be sure staff resumes demonstrate their experience.

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4. Be conservative in all financial estimates and projections.

If you feel certain you'll capture 50 percent of the market in the first year, you can say why you think so and hint at what those numbers may be. But make your financial projections more conservative. For example, a 10 percent market share is much more credible.

5. Be realistic with time and resources available.

If you're working with a big company before you buy a business, you may think things will happen faster than they will once you have to buy the supplies, write the checks, and answer the phones yourself. Being overly optimistic with time and resources is a common error entrepreneurs make. Being realistic is important because it lends credibility to your presentation. Always assume things will take 20 percent longer than you anticipated. Therefore, twenty weeks is now twenty-four weeks.

6. Be logical.

Think like a banker and write what they would want to see.

7. Have a strong management team.

Make sure it has good credentials and expertise. Your team members don't have to have worked in the field. However, you need to draw parallels between what they've done and the skills needed to make your venture succeed. Don't have all the skills you need? Consider adding an advisory board of people skilled in your field and include their resumes.

Write Your Own Business Plan is available now at Entrepreneur Bookstore | Barnes & Noble | Amazon

8. Document why your idea will work.

Have others done something similar that was successful? Have you made a prototype? Include all the variables that can have an impact on the result or outcome of your idea. Show why some of the variables don't apply to your situation or explain how you intend to overcome them or make them better.

9. Describe your facilities and location for performing the work.

That includes equipment you use to create your products and/or services. If you'll need to expand, discuss when, where, and why.

10. Discuss payout options for the investors.

Some investors want a hands-on role. Some want to put associates on your board of directors. Some don't want to be involved in day-to-day activities at all. All investors want to know when they can get their money back and at what rate of return. Most want out within three to five years. Provide a brief description of options for investors, or at least mention that you're ready to discuss options with any serious prospect.

To dig deeper, buy Write Your Own Business Plan and get 1 month of free access to business planning software Liveplan Premium.

More From Forbes

How To Start Writing A Business Plan That Works

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For the entrepreneur, knowing how to start writing a business plan can be as exhilarating as it is overwhelming. The business plan is a foundational document and the blueprint of your business and is critical for securing funding, setting clear goals, and communicating your vision to the world.

Let’s explore the significance of a business plan, the essential elements it should include, and strategies to forge a plan that resonates with stakeholders and steers your business toward success.

Whether you are about to launch your first business or need to revitalize an existing business strategy, a business plan provides the foundation that supports your entrepreneurial journey.

Why a Business Plan Is Needed

A business plan is not solely for the benefit of a bank manager or an investor . The business plan is a document that helps bring clarity to your vision and can guide every decision and strategy within your company.

A well written business plan forces you to put your goals and ideas into concrete, manageable steps. It cuts through the noise, ensuring you stay focused on what truly matters for your business’s growth.

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Trump posts 175 million bond thanks to billionaire don hankey, caitlin clark erupts for 41 points as iowa advances to final four with win over lsu.

For startups looking to secure that critical initial investment, a business plan is often the first point of reference for potential backers. It’s a chance to sell your vision, show your financial acumen, and demonstrate a roadmap to profit.

Identifying potential pitfalls early is a vital aspect of proactive business ownership. A good business plan helps you prepare for the unexpected and develop strategies to mitigate risk and safeguard the longevity of your business.

Setting clear, measurable goals in your business plan provides a framework for tracking your progress. This will give you the insight needed to pivot or double down on strategies as the market dictates.

Creating Your Story

Before you start drafting sections and compiling data, step back and consider the story of your business. Your plan should be like a good book, with a clear narrative arc that compels the reader from the first sentence to the last.

Any good story is rooted in an understanding of the world it inhabits. Your business's narrative begins with a comprehensive analysis of the industry in which you operate, as well as the consumers you aim to serve.

Think about how you define your unique selling proposition (USP) . What sets your business apart from competitors? All good stories have a unique twist, and your business plan should articulate what makes your venture different from, and better than, the competition.

Introduce your team into the story. Highlight their expertise, experience, and any relevant achievements that lend credibility to the business’s ability to execute on its vision.

Writing Your Business Plan Is Just the Beginning

A business plan can span from a quick roadmap sketched on the back of a napkin to a hefty document carefully crafted to align with industry standards. Regardless of size, it should contain certain fundamental elements .

The act of writing a business plan, while pivotal, is just the first step in an ongoing process of refinement and execution.

Here’s how to make sure your business plan is a living document:

1. Regular reviews and updates

Markets shift, consumer behavior changes, and your business will grow. Your plan must evolve with these factors, which makes regular reviews and updates a must-do.

2. Be realistic

It’s essential to be both ambitious and realistic in your plan. Don’t over-inflate projections or underestimate costs. An unrealistic plan is as unattractive to investors as a lack of vision and ambition.

3. Seek professional input

Don’t be afraid to ask for help. Experienced business advisors, accountants, and mentors can provide invaluable feedback and spot issues you may have missed.

4. Start small

Your first draft doesn’t have to be perfect. Write down your initial thoughts, outline your ideas, and refine them over time. Starting with a large plan can be intimidating but working on it gradually can be a more manageable and effective approach.

The bottom line is that writing a business plan can feel overwhelming, but with the right approach and attention to detail, you can create a document that not only articulates your vision but actively works to make that vision a reality. It’s a living, breathing narrative that outlines your business’s course of action, and should be treated with care and enthusiasm.

Melissa Houston, CPA is the author of Cash Confident: An Entrepreneur’s Guide to Creating a Profitable Business . She is the founder of She Means Profit, which is a podcast and blog . As a Finance Strategist for small business owners, Melissa helps successful business owners increase their profit margins so that they keep more money in their pocket and increase their net worth.

The opinions expressed in this article are not intended to replace any professional or expert accounting and/or tax advice whatsoever.

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• Donald Trump

Why Is Trump’s Truth Social Worth Billions? Experts Have Theories

O n the cusp of a financial crisis, Donald Trump got help from an unlikely source: His struggling social media platform. Investors approved a plan on Friday to take Truth Social public, increasing his net worth by billions as he’s drowning in legal expenses and owes New York state half a billion dollars in a civil fraud case. The company started trading on the ​​Nasdaq exchange on Tuesday.

But the financial statements of Trump’s firm show scant evidence of a booming business worthy of the $4.7 to $5.6 billion market capitalization reported on Monday. Trump Media & Technology Group, which owns Truth Social, lost money last year, according to regulatory filings. 

The company’s trajectory has led many to wonder how it could have scored such a high valuation. To close observers of American finance, it’s less a sign that Wall Street investors are buoyed by Trump’s social media platform than they are bullish on his chances of returning to the White House.

“It's a barometer for how he's doing in the election,” says Kristi Marvin, the finance guru who founded SPACInsider. “There are definitely people who like Trump and want to support him. They're probably buying the stock. And there's probably other people thinking: If he wins the presidency, who knows?”

Truth Social’s rally began earlier this year. As Trump notched primary victories over the winter, the Special Purpose Acquisition Company (SPAC) created to merge with his fledgling social media platform issued millions of new shares. 

In early January, Digital World Acquisition Corporation (DWAC) had 163 shares and closed at $17.32. After Trump clinched the Iowa caucuses, the firm had 8 million shares and closed at $22.35. The next week saw more growth. After Trump won New Hampshire, DWAC had 29.5 million shares and closed at $49.69. 

Some are speculating that the company's valuation will crash after Trump's firm replaces Digital World in the stock market under its new ticker, DJT. Others fear what it would mean for investors if Trump were to sell his shares, especially before the election.  

Last week’s initial public offering, Marvin says, was a signal that investors think Truth Social will garner more users and soar in value if Trump beats President Joe Biden in November. Trump currently leads Biden in some national polls and swing states likely to determine the election outcome.

But the election is still eight months away and Biden has been gaining ground. It also isn't clear that Truth Social would become an omnipresent platform even with Trump in office. He would still have other avenues to amplify his message and there’s little reason to believe that non-MAGA Americans would ever subscribe to the app.

Some investors may have other incentives. The largest institutional investor of the shell company that merged with Truth Social is Susquehanna International Group, the trading firm owned by GOP megadonor and billionaire Jeffrey Yass. According to a December regulatory filing, Susquehanna owned two percent of DWAC, roughly 22 million shares based on its share price.

“It looks like there's an opportunity to influence a candidate,” says Virginia Canter, the chief ethics counsel for the watchdog group Citizens for Responsibility and Ethics in Washington (CREW). That infusion of cash “may have provided him some level of access or influence that he might not otherwise have gotten.”

There are already signs that Yass has endeared himself to Trump. After the two recently met, Trump reversed his position on legislation that could lead to a TikTok ban. Yass’s investment company has a 15% stake in ByteDance, the China-based firm that owns the popular video-sharing app. Trump also recently struck a rapprochement with the conservative anti-tax group Club for Growth, of which Yass is its biggest benefactor. “We’re back in love,” Trump told a gathering of its donors, according to Politico, after the organization spent millions over the primary cycle in a failed attempt to crush his campaign. 

“I think it's a way to speculate on his political viability,” says Canter, a former ethics adviser for the International Monetary Fund. “The more successful he is as a politician, the more they’re anticipating success that Truth Social will have as a business entity.”

It’s not the first time that markets have embraced social media companies at levels that appear to exceed their value, according to Karen Petrou, managing partner of Federal Financial Analytics. Other examples she cites include Uber and WeWork.

“These kinds of valuations that seem insane are surprisingly common,” says Petrou, “They're less common than they used to be when interest rates were low. All sorts of firms have been financed significantly, or capitalized through IPO, well above their estimated value. Some of them had no revenues for years. But the markets were chasing yield.”

In other words: they were taking high risks they thought could lead to high rewards. That could also be the case with the lagging Truth Social, where shareholders are betting that a Trump victory could boost their bottom line. Says Petrou: “Some of this may be people hoping he succeeds.” 

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The Tyson plant in Perry, Iowa, is closing after 61 years. What we know about its plans.

Tyson Foods announced Monday, March 11, that it will permanently close its pork packing plant in Perry, Iowa, amid financial struggles for the pork industry.

Here is what we know about the Tyson Foods plant in Perry.

How many people will lose their jobs when Tyson closes in Perry?

As the largest employer in Perry, Tyson employs 1,276 people. The closure is expected to leave all employees without work.

Tyson said it will encourage employees to apply for other jobs within the company. Across Iowa, Tyson employs 9,000 people. A significant number of its employees are immigrants or refugees, with 60% of its national workforce representing those two categories, according to Jobs for the Future .

More: Tyson Foods says it's permanently closing 1,276-employee Perry plant

When will the Tyson plant close in Perry?

Perry Mayor Dirk Cavanaugh said Tyson officials told him the plant will shut down June 28. A Tyson worker also said that was the timeframe given at a meeting Monday where the closure plan was announced.

Why is Tyson closing plants?

Tyson didn't say why the Perry plant is closing. But two things stand out about the plant: its age, at 61 years for the main facility, and, according to an industry analyst, its size, which doesn't lend itself to an efficiency-increasing second shift.

At the same time, Iowa's nation-leading pork industry is coming off its worst downturn in the past 25 years , and Tyson at the end of fiscal 2023 said it had lost $128 million on its pork segment.

Tyson didn't announce any other closures in March, but Perry isn't the first plant to close recently. Plants in Jacksonville, Florida, and Columbia, South Carolina, closed at the start of 2024. Six Tyson plants closed in 2023.

What's being done for Tyson employees?

The Iowa Workforce Development will deploy its IowaWorks Mobile Workforce Center to aid the employees without work come June. The League of United Latin American Citizens Council 307 in Des Moines also said it would help the displaced workers — many of whom are Spanish-speaking — where it can.

More: New Iowa mobile workforce center to be dispatched to Perry for Tyson plant workers

Where is Tyson's Perry plant?

The pork processing facility is located just west of the city limits on a disused rail line that's now part of the Raccoon River Valley Trail.

How has the Tyson plant shaped Perry?

Aside from being its largest employer (and generating more than $200,000 a year in property taxes), the plant at the end of 2022 was advertising starting pay for general production workers of $18.40 an hour with a sign-on bonus of $5,000, plus an extra $1 an hour for good attendance and full benefits. Though a tad below the Iowa hourly average, that's more than 2½ times the state minimum wage of $7.25 an hour. While not all of the workers live in town, they still buy groceries, gas and other services there, Cavanaugh said. "It's our economic base."

The plant's heavily immigrant workforce also has helped make Perry one of the most diverse communities in Iowa. The U.S. Census shows that nearly a third of the city's 8,000 people identify as Hispanic or Latino and that almost 19% are foreign born.

What will happen to Perry after the Tyson plant closes?

The community demonstrated its resiliency earlier this year, when shootings at Perry High School left three dead. The schools are back in session and the ribbons in Perry Bluejay blue and "Perry Strong" remain on display throughout the town.

Cavanaugh vowed to work with other community leaders to seek a buyer for the plant. But barring a new owner, the economic impact of lost wages and population will be felt.

Area farmers also are likely to feel the effects. The plant slaughtered some 9,000 pigs a day, and they'll have to transport them farther to market and at greater expense.

More: Iowa pork producers' losses worst in 25 years amid high costs and declining demand

When did the Tyson plant open in Perry?

The plant has been in operation in Perry since the 1960s. It became a Tyson facility after the Arkansas-based company merged with Iowa Beef Processors in 2001, according to the Perry Economic Development website .

More: Lawsuit by Waterloo Tyson managers fired for COVID-19 bets dismissed

What's the population of Perry, Iowa?

There are 7,929 residents of Perry, according to the U.S. Census Bureau. Perry is nearly 40 miles northwest of Des Moines and is part of Dallas County — one of the fastest growing in the country .

Does Tyson have other plants in Iowa?

Tyson has encouraged employees to apply for other jobs with the company. It operates plants in four other Iowa communities , but none are within easy commuting distance. Tyson facilities can be found in Council Bluffs, Columbus Junction, Storm Lake and Waterloo. Storm Lake would be the closest at about an hour and 55 minutes away. The other locations are between two and three hours away.

Who owns Tyson?

Tyson was originally founded in 1935. The company went public in 1963 as Tyson's Foods, Inc under the leadership of Don Tyson, the son of the founder John Tyson. Don's son, John H. Tyson, is the current CEO and is worth an estimated $2.6 billion .

What brands does Tyson own?

Tyson has 31 brands including Hillshire Farms, Ball Park and Jimmy Dean. Tyson is one of the four big meat packers of the world, producing 20% of America's beef, pork and chicken.

CORRECTION: A previous version of this article incorrectly listed the other communities in Iowa that have Tyson facilities. A facility in Independence was sold in 2021.

Kate Kealey is a general assignment reporter for the Register. Reach her at  [email protected]  or follow her on Twitter at @ Kkealey17 .

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Ronna McDaniel, TV News and the Trump Problem

The former republican national committee chairwoman was hired by nbc and then let go after an outcry..

This transcript was created using speech recognition software. While it has been reviewed by human transcribers, it may contain errors. Please review the episode audio before quoting from this transcript and email [email protected] with any questions.

From “The New York Times,” I’m Michael Barbaro. This is “The Daily.”

[MUSIC PLAYING]

Today, the saga of Ronna McDaniel and NBC and what it reveals about the state of television news headed into the 2024 presidential race. Jim Rutenberg, a “Times” writer at large, is our guest.

It’s Monday, April 1.

Jim, NBC News just went through a very public, a very searing drama over the past week, that we wanted you to make sense of in your unique capacity as a longtime media and political reporter at “The Times.” This is your sweet spot. You were, I believe, born to dissect this story for us.

Oh, brother.

Well, on the one hand, this is a very small moment for a major network like NBC. They hire, as a contributor, not an anchor, not a correspondent, as a contributor, Ronna McDaniel, the former RNC chairwoman. It blows up in a mini scandal at the network.

But to me, it represents a much larger issue that’s been there since that moment Donald J. Trump took his shiny gold escalator down to announce his presidential run in 2015. This struggle by the news media to figure out, especially on television, how do we capture him, cover him for all of his lies, all the challenges he poses to Democratic norms, yet not alienate some 74, 75 million American voters who still follow him, still believe in him, and still want to hear his reality reflected in the news that they’re listening to?

Right. Which is about as gnarly a conundrum as anyone has ever dealt with in the news media.

Well, it’s proven so far unsolvable.

Well, let’s use the story of what actually happened with Ronna McDaniel and NBC to illustrate your point. And I think that means describing precisely what happened in this situation.

The story starts out so simply. It’s such a basic thing that television networks do. As elections get underway, they want people who will reflect the two parties.

They want talking heads. They want insiders. They want them on their payroll so they can rely on them whenever they need them. And they want them to be high level so they can speak with great knowledge about the two major candidates.

Right. And rather than needing to beg these people to come on their show at 6 o’clock, when they might be busy and it’s not their full-time job, they go off and they basically put them on retainer for a bunch of money.

Yeah. And in this case, here’s this perfect scenario because quite recently, Ronna McDaniel, the chairwoman of the Republican National Committee through the Trump era, most of it, is now out on the market. She’s actually recently been forced out of the party. And all the networks are interested because here’s the consummate insider from Trump world ready to get snatched up under contract for the next election and can really represent this movement that they’ve been trying to capture.

So NBC’S key news executives move pretty aggressively, pretty swiftly, and they sign her up for a $300,000 a year contributor’s contract.

Nice money if you can get it.

Not at millions of dollars that they pay their anchors, but a very nice contract. I’ll take it. You’ll take it. In the eyes of NBC execs she was perfect because she can be on “Meet the Press” as a panelist. She can help as they figure out some of their coverage. They have 24 hours a day to fill and here’s an official from the RNC. You can almost imagine the question that would be asked to her. It’s 10:00 PM on election night. Ronna, what are the Trump people thinking right now? They’re looking at the same numbers you are.

That was good, but that’s exactly it. And we all know it, right? This is television in our current era.

So last Friday, NBC makes what should be a routine announcement, but one they’re very proud of, that they’ve hired Ronna McDaniel. And in a statement, they say it couldn’t be a more important moment to have a voice like Ronna’s on the team. So all’s good, right? Except for there’s a fly in the ointment.

Because it turns out that Ronna McDaniel has been slated to appear on “Meet the Press,” not as a paid NBC contributor, but as a former recently ousted RNC chair with the “Meet The Press” host, Kristen Welker, who’s preparing to have a real tough interview with Ronna McDaniel. Because of course, Ronna McDaniel was chair of the party and at Trump’s side as he tried to refuse his election loss. So this was supposed to be a showdown interview.

From NBC News in Washington, the longest-running show in television history. This is “Meet The Press” with Kristen Welker.

And here, all of a sudden, Kristin Welker is thrown for a loop.

In full disclosure to our viewers, this interview was scheduled weeks before it was announced that McDaniel would become a paid NBC News contributor.

Because now, she’s actually interviewing a member of the family who’s on the same payroll.

Right. Suddenly, she’s interviewing a colleague.

This will be a news interview, and I was not involved in her hiring.

So what happens during the interview?

So Welker is prepared for a tough interview, and that’s exactly what she does.

Can you say, as you sit here today, did Joe Biden win the election fair and square?

He won. He’s the legitimate president.

Did he win fair and square?

Fair and square, he won. It’s certified. It’s done.

She presses her on the key question that a lot of Republicans get asked these days — do you accept Joe Biden was the winner of the election?

But, I do think, Kristen —

Ronna, why has it taken you until now to say that? Why has it taken you until now to be able to say that?

I’m going to push back a little.

McDaniel gets defensive at times.

Because I do think it’s fair to say there were problems in 2020. And to say that does not mean he’s not the legitimate president.

But, Ronna, when you say that, it suggests that there was something wrong with the election. And you know that the election was the most heavily scrutinized. Chris Krebs —

It’s a really combative interview.

I want to turn now to your actions in the aftermath of the 2020 election.

And Welker actually really does go deeply into McDaniel’s record in those weeks before January 6.

On November 17, you and Donald Trump were recorded pushing two Republican Michigan election officials not to certify the results of the election. And on the call —

For instance, she presses McDaniel on McDaniel’s role in an attempt to convince a couple county commissioner level canvassers in Michigan to not certify Biden’s victory.

Our call that night was to say, are you OK? Vote your conscience. Not pushing them to do anything.

McDaniel says, look, I was just telling them to vote their conscience. They should do whatever they think is right.

But you said, do not sign it. If you can go home tonight, do not sign it. How can people read that as anything other than a pressure campaign?

And Welker’s not going to just let her off the hook. Welker presses her on Trump’s own comments about January 6 and Trump’s efforts recently to gloss over some of the violence, and to say that those who have been arrested, he’ll free them.

Do you support that?

I want to be very clear. The violence that happened on January 6 is unacceptable.

And this is a frankly fascinating moment because you can hear McDaniel starting to, if not quite reverse some of her positions, though in some cases she does that, at least really soften her language. It’s almost as if she’s switching uniforms from the RNC one to an NBC one or almost like breaking from a role she was playing.

Ronna, why not speak out earlier? Why just speak out about that now?

When you’re the RNC chair, you kind of take one for the whole team, right? Now, I get to be a little bit more myself.

She says, hey, you know what? Sometimes as RNC chair, you just have to take it for the team sometimes.

Right. What she’s really saying is I did things as chairwoman of the Republican National committee that now that I no longer have that job, I can candidly say, I wished I hadn’t done, which is very honest. But it’s also another way of saying I’m two faced, or I was playing a part.

Ronna McDaniel, thank you very much for being here this morning.

Then something extraordinary happens. And I have to say, I’ve never seen a moment like this in decades of watching television news and covering television news.

Welcome back. The panel is here. Chuck Todd, NBC News chief political analyst.

Welker brings her regular panel on, including Chuck Todd, now the senior NBC political analyst.

Chuck, let’s dive right in. What were your takeaways?

And he launches right into what he calls —

Look, let me deal with the elephant in the room.

The elephant being this hiring of McDaniel.

I think our bosses owe you an apology for putting you in this situation.

And he proceeds, on NBC’S air, to lace into management for, as he describes it, putting Welker in this crazy awkward position.

Because I don’t know what to believe. She is now a paid contributor by NBC News. I have no idea whether any answer she gave to you was because she didn’t want to mess up her contract.

And Todd is very hung up on this idea that when she was speaking for the party, she would say one thing. And now that she’s on the payroll at NBC, she’s saying another thing.

She has credibility issues that she still has to deal with. Is she speaking for herself, or is she speaking on behalf of who’s paying her?

Todd is basically saying, how are we supposed to know which one to believe.

What can we believe?

It is important for this network and for always to have a wide aperture. Having ideological diversity on this panel is something I prided myself on.

And what he’s effectively saying is that his bosses should have never hired her in this capacity.

I understand the motivation, but this execution, I think, was poor.

Someone said to me last night we live in complicated times. Thank you guys for being here. I really appreciate it.

Now, let’s just note here, this isn’t just any player at NBC. Chuck Todd is obviously a major news name at the network. And him doing this appears to just open the floodgates across the entire NBC News brand, especially on its sister cable network, MSNBC.

And where I said I’d never seen anything like what I saw on “Meet the Press” that morning, I’d never seen anything like this either. Because now, the entire MSNBC lineup is in open rebellion. I mean, from the minute that the sun comes up. There is Joe Scarborough and Mika Brzezinski.

We weren’t asked our opinion of the hiring. But if we were, we would have strongly objected to it.

They’re on fire over this.

believe NBC News should seek out conservative Republican voices, but it should be conservative Republicans, not a person who used her position of power to be an anti-democracy election denier.

But it rolls out across the entire schedule.

Because Ronna McDaniel has been a major peddler of the big lie.

The fact that Ms. McDaniel is on the payroll at NBC News, to me that is inexplicable. I mean, you wouldn’t hire a mobster to work at a DA’s office.

Rachel Maddow devotes an entire half hour.

It’s not about just being associated with Donald Trump and his time in the Republican Party. It’s not even about lying or not lying. It’s about our system of government.

Thumbing their noses at our bosses and basically accusing them of abetting a traitorous figure in American history. I mean, just extraordinary stuff. It’s television history.

And let’s face it, we journalists, our bosses, we can be seen as crybabies, and we’re paid complaining. Yeah, that’s what we’re paid to do. But in this case, the NBC executives cannot ignore this, because in the outcry, there’s a very clear point that they’re all making. Ronna McDaniel is not just a voice from the other side. She was a fundamental part of Trump’s efforts to deny his election loss.

This is not inviting the other side. This is someone who’s on the wrong side —

Of history.

Of history, of these moments that we’ve covered and are still covering.

And I think it’s fair to say that at this point, everyone understands that Ronna McDaniel’s time at NBC News is going to be very short lived. Yeah, basically, after all this, the executives at NBC have to face facts it’s over. And on Tuesday night, they release a statement to the staff saying as much.

They don’t cite the questions about red lines or what Ronna McDaniel represented or didn’t represent. They just say we need to have a unified newsroom. We want cohesion. This isn’t working.

I think in the end, she was a paid contributor for four days.

Yeah, one of the shortest tenures in television news history. And look, in one respect, by their standards, this is kind of a pretty small contract, a few hundred thousand dollars they may have to pay out. But it was way more costly because they hired her. They brought her on board because they wanted to appeal to these tens of millions of Americans who still love Donald J. Trump.

And what happens now is that this entire thing is blown up in their face, and those very same people now see a network that, in their view, in the view of Republicans across the country, this network will not accept any Republicans. So it becomes more about that. And Fox News, NBC’S longtime rival, goes wall to wall with this.

Now, NBC News just caved to the breathless demands from their far left, frankly, emotionally unhinged host.

I mean, I had it on my desk all day. And every minute I looked at that screen, it was pounding on these liberals at NBC News driving this Republican out.

It’s the shortest tenure in TV history, I think. But why? Well, because she supports Donald Trump, period.

So in a way, this leaves NBC worse off with that Trump Republican audience they had wanted to court than maybe even they were before. It’s like a boomerang with a grenade on it.

Yeah, it completely explodes in their face. And that’s why to me, the whole episode is so representative of this eight-year conundrum for the news media, especially on television. They still haven’t been able to crack the code for how to handle the Trump movement, the Trump candidacy, and what it has wrought on the American political system and American journalism.

We’ll be right back.

Jim, put into context this painful episode of NBC into that larger conundrum you just diagnosed that the media has faced when it comes to Trump.

Well, Michael, it’s been there from the very beginning, from the very beginning of his political rise. The media was on this kind of seesaw. They go back and forth over how to cover him. Sometimes they want to cover him quite aggressively because he’s such a challenging candidate. He was bursting so many norms.

But at other times, there was this instinct to understand his appeal, for the same reason. He’s such an unusual candidate. So there was a great desire to really understand his voters. And frankly, to speak to his voters, because they’re part of the audience. And we all lived it, right?

But just let me take you back anyway because everything’s fresh again with perspective. And so if you go back, let’s look at when he first ran. The networks, if you recall, saw him as almost like a novelty candidate.

He was going to spice up what was expected to be a boring campaign between the usual suspects. And he was a ratings magnet. And the networks, they just couldn’t get enough of it. And they allowed him, at times, to really shatter their own norms.

Welcome back to “Meet the Press,” sir.

Good morning, Chuck.

Good morning. Let me start —

He was able to just call into the studio and riff with the likes of George Stephanopoulos and Chuck Todd.

What does it have to do with Hillary?

She can’t talk about me because nobody respects women more than Donald Trump.

And CNN gave him a lot of unmitigated airtime, if you recall during the campaign. They would run the press conferences.

It’s the largest winery on the East Coast. I own it 100 percent.

And let him promote his Trump steaks and his Trump wine.

Trump steaks. Where are the steaks? Do we have steaks?

I mean, it got that crazy. But again, the ratings were huge. And then he wins. And because they had previously given him all that airtime, they’ve, in retrospect, sort of given him a political gift, and more than that now have a journalistic imperative to really address him in a different way, to cover him as they would have covered any other candidate, which, let’s face it, they weren’t doing initially. So there’s this extra motivation to make up for lost ground and maybe for some journalistic omissions.

Right. Kind of correct for the lack of a rigorous journalistic filter in the campaign.

Exactly. And the big thing that this will be remembered for is we’re going to call a lie a lie.

I don’t want to sugarcoat this because facts matter, and the fact is President Trump lies.

Trump lies. We’re going to say it’s a lie.

And I think we can’t just mince around it because they are lies. And so we need to call them what they are.

We’re no longer going to use euphemisms or looser language we’re. Going to call it for what it is.

Trump lies in tweets. He spreads false information at rallies. He lies when he doesn’t need to. He lies when the truth is more than enough for him.

CNN was running chyrons. They would fact check Trump and call lies lies on the screen while Trump is talking. They were challenging Trump to his face —

One of the statements that you made in the tail end of the campaign in the midterms that —

Here we go.

That — well, if you don’t mind, Mr. President, that this caravan was an invasion.

— in these crazy press conferences —

They’re are hundreds of miles away, though. They’re hundreds and hundreds of miles away. That’s not an invasion.

Honestly, I think you should let me run the country. You run CNN. And if you did it well, your ratings —

Well, let me ask — if I may ask one other question. Mr. President, if I may ask another question. Are you worried —

That’s enough. That’s enough.

And Trump is giving it right back.

I tell you what, CNN should be ashamed of itself having you working for them. You are a rude, terrible person. You shouldn’t be working for CNN.

Very combative.

So this was this incredibly fraught moment for the American press. You’ve got tens of millions of Trump supporters seeing what’s really basic fact checking. These look like attacks to Trump supporters. Trump, in turn, is calling the press, the reporters are enemies of the people. So it’s a terrible dynamic.

And when January 6 happens, it’s so obviously out of control. And what the traditional press that follows, traditional journalistic rules has to do is make it clear that the claims that Trump is making about a stolen election are just so abjectly false that they don’t warrant a single minute of real consideration once the reporting has been done to show how false they are. And I think that American journalism really emerged from that feeling strongly about its own values and its own place in society.

But then there’s still tens of millions of Trump voters, and they don’t feel so good about the coverage. And they don’t agree that January 6 was an insurrection. And so we enter yet another period, where the press is going to have to now maybe rethink some things.

In what way?

Well, there’s a kind of quiet period after January 6. Trump is off of social media. The smoke is literally dissipating from the air in Washington. And news executives are kind of standing there on the proverbial battlefield, taking a new look at their situation.

And they’re seeing that in this clearer light, they’ve got some new problems, perhaps none more important for their entire business models than that their ratings are quickly crashing. And part of that diminishment is that a huge part of the country, that Trump-loving part of the audience, is really now severed from him from their coverage.

They see the press as actually, in some cases, being complicit in stealing an election. And so these news executives, again, especially on television, which is so ratings dependent, they’ve got a problem. So after presumably learning all these lessons about journalism and how to confront power, there’s a first subtle and then much less subtle rethinking.

Maybe we need to pull back from that approach. And maybe we need to take some new lessons and switch it up a little bit and reverse some of what we did. And one of the best examples of this is none other than CNN.

It had come under new management, was being led by a guy named Chris Licht, a veteran of cable news, but also Stephen Colbert’s late night show in his last job. And his new job under this new management is we’re going to recalibrate a little bit. So Chris Licht proceeds to try to bring the network back to the center.

And how does he do that?

Well, we see some key personalities who represented the Trump combat era start losing air time and some of them lose their jobs. There’s talk of, we want more Republicans on the air. There was a famous magazine article about Chris Licht’s balancing act here.

And Chris Licht says to a reporter, Tim Alberta of the “Atlantic” magazine, look, a lot in the media, including at his own network, quote unquote, “put on a jersey, took a side.” They took a side. And he says, I think we understand that jersey cannot go back on him. Because he says in the end of the day, by the way, it didn’t even work. We didn’t change anyone’s mind.

He’s saying that confrontational approach that defined the four years Trump was in office, that was a reaction to the feeling that TV news had failed to properly treat Trump with sufficient skepticism, that that actually was a failure both of journalism and of the TV news business. Is that what he’s saying?

Yeah. On the business side, it’s easier call, right? You want a bigger audience, and you’re not getting the bigger audience. But he’s making a journalistic argument as well that if the job is to convey the truth and take it to the people, and they take that into account as they make their own voting decisions and formulate their own opinions about American politics, if tens of millions of people who do believe that election was stolen are completely tuning you out because now they see you as a political combatant, you’re not achieving your ultimate goal as a journalist.

And what does Licht’s “don’t put a jersey back on” approach look like on CNN for its viewers?

Well, It didn’t look good. People might remember this, but the most glaring example —

Please welcome, the front runner for the Republican nomination for president, Donald Trump.

— was when he held a town hall meeting featuring Donald J. Trump, now candidate Trump, before an audience packed with Trump’s fans.

You look at what happened during that election. Unless you’re a very stupid person, you see what happens. A lot of the people —

Trump let loose a string of falsehoods.

Most people understand what happened. It was a rigged election.

The audience is pro-Trump audience, was cheering him on.

Are you ready? Are you ready? Can I talk?

Yeah, what’s your answer?

Can I? Do you mind?

I would like for you to answer the question.

OK. It’s very simple to answer.

That’s why I asked it.

It’s very simple. You’re a nasty person, I’ll tell you that.

And during, the CNN anchor hosting this, Kaitlan Collins, on CNN’s own air, it was a disaster.

It felt like a callback to the unlearned lessons of 2016.

Yeah. And in this case, CNN’s staff was up in arms.

Big shakeup in the cable news industry as CNN makes another change at the top.

Chris Licht is officially out at CNN after a chaotic run as chairman and CEO.

And Chris Licht didn’t survive it.

The chief executive’s departure comes as he faced criticism in recent weeks after the network hosted a town hall with Donald Trump and the network’s ratings started to drop.

But I want to say that the CNN leadership still, even after that, as they brought new leadership in, said, this is still the path we’re going to go on. Maybe that didn’t work out, but we’re still here. This is still what we have to do.

Right. And this idea is very much in the water of TV news, that this is the right overall direction.

Yeah. This is, by no means, isolated to CNN. This is throughout the traditional news business. These conversations are happening everywhere. But CNN was living it at that point.

And this, of course, is how we get to NBC deciding to hire Ronna McDaniel.

Right. Because they’re picking up — right where that conversation leaves off, they’re having the same conversation. But for NBC, you could argue this tension between journalistic values and audience. It’s even more pressing. Because even though MSNBC is a niche cable network, NBC News is part of an old-fashioned broadcast network. It’s on television stations throughout the country.

And in fact, those networks, they still have 6:30 newscasts. And believe it or not, millions of people still watch those every night. Maybe not as many as they used to, but there’s still some six or seven million people tuning in to nightly news. That’s important.

Right. We should say that kind of number is sometimes double or triple that of the cable news prime time shows that get all the attention.

On their best nights. So this is big business still. And that business is based on broad — it’s called broadcast for a reason. That’s based on broad audiences. So NBC had a business imperative, and they argue they had a journalistic imperative.

So given all of that, Jim, I think the big messy question here is, when it comes to NBC, did they make a tactical error around hiring the wrong Republican which blew up? Or did they make an even larger error in thinking that the way you handle Trump and his supporters is to work this hard to reach them, when they might not even be reachable?

The best way to answer that question is to tell you what they’re saying right now, NBC management. What the management saying is, yes, this was a tactical error. This was clearly the wrong Republican. We get it.

But they’re saying, we are going to — and they said this in their statement, announcing that they were severing ties with McDaniel. They said, we’re going to redouble our efforts to represent a broad spectrum of the American votership. And that’s what they meant was that we’re going to still try to reach these Trump voters with people who can relate to them and they can relate to.

But the question is, how do you even do that when so many of his supporters believe a lie? How is NBC, how is CNN, how are any of these TV networks, if they have decided that this is their mission, how are they supposed to speak to people who believe something fundamentally untrue as a core part of their political identity?

That’s the catch-22. How do you get that Trump movement person who’s also an insider, when the litmus test to be an insider in the Trump movement is to believe in the denialism or at least say you do? So that’s a real journalistic problem. And the thing that we haven’t really touched here is, what are these networks doing day in and day out?

They’re not producing reported pieces, which I think it’s a little easier. You just report the news. You go out into the world. You talk to people, and then you present it to the world as a nuanced portrait of the country. This thing is true. This thing is false. Again, in many cases, pretty straightforward. But their bread and butter is talking heads. It’s live. It’s not edited. It’s not that much reported.

So their whole business model especially, again, on cable, which has 24 hours to fill, is talking heads. And if you want the perspective from the Trump movement, journalistically, especially when it comes to denialism, but when it comes to some other major subjects in American life, you’re walking into a place where they’re going to say things that aren’t true, that don’t pass your journalistic standards, the most basic standards of journalism.

Right. So you’re saying if TV sticks with this model, the kind of low cost, lots of talk approach to news, then they are going to have to solve the riddle of who to bring on, who represents Trump’s America if they want that audience. And now they’ve got this red line that they’ve established, that that person can’t be someone who denies the 2020 election reality. But like you just said, that’s the litmus test for being in Trump’s orbit.

So this doesn’t really look like a conundrum. This looks like a bit of a crisis for TV news because it may end up meaning that they can’t hire that person that they need for this model, which means that perhaps a network like NBC does need to wave goodbye to a big segment of these viewers and these eyeballs who support Trump.

I mean, on the one hand, they are not ready to do that, and they would never concede that that’s something they’re ready to do. The problem is barring some kind of change in their news model, there’s no solution to this.

But why bar changes to their news model, I guess, is the question. Because over the years, it’s gotten more and more expensive to produce news, the news that I’m talking about, like recorded packages and what we refer to as reporting. Just go out and report the news.

Don’t gab about it. Just what’s going on, what’s true, what’s false. That’s actually very expensive in television. And they don’t have the kind of money they used to have. So the talking heads is their way to do programming at a level where they can afford it.

They do some packages. “60 Minutes” still does incredible work. NBC does packages, but the lion’s share of what they do is what we’re talking about. And that’s not going to change because the economics aren’t there.

So then a final option, of course, to borrow something Chris Licht said, is that a network like NBC perhaps doesn’t put a jersey on, but accepts the reality that a lot of the world sees them wearing a jersey.

Yeah. I mean, nobody wants to be seen as wearing a jersey in our business. No one wants to be wearing a jersey on our business. But maybe what they really have to accept is that we’re just sticking to the true facts, and that may look like we’re wearing a jersey, but we’re not. And that may, at times, look like it’s lining up more with the Democrats, but we’re not.

If Trump is lying about a stolen election, that’s not siding against him. That’s siding for the truth, and that’s what we’re doing. Easier said than done. And I don’t think any of these concepts are new.

I think there have been attempts to do that, but it’s the world they’re in. And it’s the only option they really have. We’re going to tell you the truth, even if it means that we’re going to lose a big part of the country.

Well, Jim, thank you very much.

Thank you, Michael.

Here’s what else you need to know today.

[PROTESTERS CHANTING]

Over the weekend, thousands of protesters took to the streets of Tel Aviv and Jerusalem in some of the largest domestic demonstrations against the government of Prime Minister Benjamin Netanyahu since Israel invaded Gaza in the fall.

[NON-ENGLISH SPEECH]

Some of the protesters called on Netanyahu to reach a cease fire deal that would free the hostages taken by Hamas on October 7. Others called for early elections that would remove Netanyahu from office.

During a news conference on Sunday, Netanyahu rejected calls for early elections, saying they would paralyze his government at a crucial moment in the war.

Today’s episode was produced by Rob Szypko, Rikki Novetsky, and Alex Stern, with help from Stella Tan.

It was edited by Brendan Klinkenberg with help from Rachel Quester and Paige Cowett. Contains original music by Marion Lozano, Dan Powell, and Rowan Niemisto and was engineered by Chris Wood. Our theme music is by Jim Brunberg and Ben Landsverk of Wonderly.

That’s it for “The Daily.” I’m Michael Barbaro. See you tomorrow.

• April 2, 2024   •   29:32 Kids Are Missing School at an Alarming Rate
• April 1, 2024   •   36:14 Ronna McDaniel, TV News and the Trump Problem
• March 29, 2024   •   48:42 Hamas Took Her, and Still Has Her Husband
• March 28, 2024   •   33:40 The Newest Tech Start-Up Billionaire? Donald Trump.
• March 27, 2024   •   28:06 Democrats’ Plan to Save the Republican House Speaker
• March 26, 2024   •   29:13 The United States vs. the iPhone
• March 25, 2024   •   25:59 A Terrorist Attack in Russia
• March 24, 2024   •   21:39 The Sunday Read: ‘My Goldendoodle Spent a Week at Some Luxury Dog ‘Hotels.’ I Tagged Along.’
• March 22, 2024   •   35:30 Chuck Schumer on His Campaign to Oust Israel’s Leader
• March 21, 2024   •   27:18 The Caitlin Clark Phenomenon
• March 20, 2024   •   25:58 The Bombshell Case That Will Transform the Housing Market
• March 19, 2024   •   27:29 Trump’s Plan to Take Away Biden’s Biggest Advantage

Hosted by Michael Barbaro

Featuring Jim Rutenberg

Produced by Rob Szypko ,  Rikki Novetsky and Alex Stern

With Stella Tan

Edited by Brendan Klinkenberg ,  Rachel Quester and Paige Cowett

Original music by Marion Lozano ,  Dan Powell and Rowan Niemisto

Engineered by Chris Wood

Listen and follow The Daily Apple Podcasts | Spotify | Amazon Music

Ronna McDaniel’s time at NBC was short. The former Republican National Committee chairwoman was hired as an on-air political commentator but released just days later after an on-air revolt by the network’s leading stars.

Jim Rutenberg, a writer at large for The Times, discusses the saga and what it might reveal about the state of television news heading into the 2024 presidential race.

On today’s episode

Jim Rutenberg , a writer at large for The New York Times.

Background reading

Ms. McDaniel’s appointment had been immediately criticized by reporters at the network and by viewers on social media.

The former Republican Party leader tried to downplay her role in efforts to overturn the 2020 election. A review of the record shows she was involved in some key episodes .

There are a lot of ways to listen to The Daily. Here’s how.

We aim to make transcripts available the next workday after an episode’s publication. You can find them at the top of the page.

The Daily is made by Rachel Quester, Lynsea Garrison, Clare Toeniskoetter, Paige Cowett, Michael Simon Johnson, Brad Fisher, Chris Wood, Jessica Cheung, Stella Tan, Alexandra Leigh Young, Lisa Chow, Eric Krupke, Marc Georges, Luke Vander Ploeg, M.J. Davis Lin, Dan Powell, Sydney Harper, Mike Benoist, Liz O. Baylen, Asthaa Chaturvedi, Rachelle Bonja, Diana Nguyen, Marion Lozano, Corey Schreppel, Rob Szypko, Elisheba Ittoop, Mooj Zadie, Patricia Willens, Rowan Niemisto, Jody Becker, Rikki Novetsky, John Ketchum, Nina Feldman, Will Reid, Carlos Prieto, Ben Calhoun, Susan Lee, Lexie Diao, Mary Wilson, Alex Stern, Dan Farrell, Sophia Lanman, Shannon Lin, Diane Wong, Devon Taylor, Alyssa Moxley, Summer Thomad, Olivia Natt, Daniel Ramirez and Brendan Klinkenberg.

Our theme music is by Jim Brunberg and Ben Landsverk of Wonderly. Special thanks to Sam Dolnick, Paula Szuchman, Lisa Tobin, Larissa Anderson, Julia Simon, Sofia Milan, Mahima Chablani, Elizabeth Davis-Moorer, Jeffrey Miranda, Renan Borelli, Maddy Masiello, Isabella Anderson and Nina Lassam.

Jim Rutenberg is a writer at large for The Times and The New York Times Magazine and writes most often about media and politics. More about Jim Rutenberg

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