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What Is a Business Plan?
Understanding business plans, how to write a business plan, common elements of a business plan, the bottom line, business plan: what it is, what's included, and how to write one.
Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.
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A business plan is a document that outlines a company's goals and the strategies to achieve them. It's valuable for both startups and established companies. For startups, a well-crafted business plan is crucial for attracting potential lenders and investors. Established businesses use business plans to stay on track and aligned with their growth objectives. This article will explain the key components of an effective business plan and guidance on how to write one.
Key Takeaways
- A business plan is a document detailing a company's business activities and strategies for achieving its goals.
- Startup companies use business plans to launch their venture and to attract outside investors.
- For established companies, a business plan helps keep the executive team focused on short- and long-term objectives.
- There's no single required format for a business plan, but certain key elements are essential for most companies.
Investopedia / Ryan Oakley
Any new business should have a business plan in place before beginning operations. Banks and venture capital firms often want to see a business plan before considering making a loan or providing capital to new businesses.
Even if a company doesn't need additional funding, having a business plan helps it stay focused on its goals. Research from the University of Oregon shows that businesses with a plan are significantly more likely to secure funding than those without one. Moreover, companies with a business plan grow 30% faster than those that don't plan. According to a Harvard Business Review article, entrepreneurs who write formal plans are 16% more likely to achieve viability than those who don't.
A business plan should ideally be reviewed and updated periodically to reflect achieved goals or changes in direction. An established business moving in a new direction might even create an entirely new plan.
There are numerous benefits to creating (and sticking to) a well-conceived business plan. It allows for careful consideration of ideas before significant investment, highlights potential obstacles to success, and provides a tool for seeking objective feedback from trusted outsiders. A business plan may also help ensure that a company’s executive team remains aligned on strategic action items and priorities.
While business plans vary widely, even among competitors in the same industry, they often share basic elements detailed below.
A well-crafted business plan is essential for attracting investors and guiding a company's strategic growth. It should address market needs and investor requirements and provide clear financial projections.
While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.
Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.
The length of a business plan can vary greatly from business to business. Regardless, gathering the basic information into a 15- to 25-page document is best. Any additional crucial elements, such as patent applications, can be referenced in the main document and included as appendices.
Common elements in many business plans include:
- Executive summary : This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
- Products and services : Describe the products and services the company offers or plans to introduce. Include details on pricing, product lifespan, and unique consumer benefits. Mention production and manufacturing processes, relevant patents , proprietary technology , and research and development (R&D) information.
- Market analysis : Explain the current state of the industry and the competition. Detail where the company fits in, the types of customers it plans to target, and how it plans to capture market share from competitors.
- Marketing strategy : Outline the company's plans to attract and retain customers, including anticipated advertising and marketing campaigns. Describe the distribution channels that will be used to deliver products or services to consumers.
- Financial plans and projections : Established businesses should include financial statements, balance sheets, and other relevant financial information. New businesses should provide financial targets and estimates for the first few years. This section may also include any funding requests.
Investors want to see a clear exit strategy, expected returns, and a timeline for cashing out. It's likely a good idea to provide five-year profitability forecasts and realistic financial estimates.
2 Types of Business Plans
Business plans can vary in format, often categorized into traditional and lean startup plans. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.
- Traditional business plans : These are detailed and lengthy, requiring more effort to create but offering comprehensive information that can be persuasive to potential investors.
- Lean startup business plans : These are concise, sometimes just one page, and focus on key elements. While they save time, companies should be ready to provide additional details if requested by investors or lenders.
Why Do Business Plans Fail?
A business plan isn't a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections. Markets and the economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All this calls for building flexibility into your plan, so you can pivot to a new course if needed.
How Often Should a Business Plan Be Updated?
How frequently a business plan needs to be revised will depend on its nature. Updating your business plan is crucial due to changes in external factors (market trends, competition, and regulations) and internal developments (like employee growth and new products). While a well-established business might want to review its plan once a year and make changes if necessary, a new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.
What Does a Lean Startup Business Plan Include?
The lean startup business plan is ideal for quickly explaining a business, especially for new companies that don't have much information yet. Key sections may include a value proposition , major activities and advantages, resources (staff, intellectual property, and capital), partnerships, customer segments, and revenue sources.
A well-crafted business plan is crucial for any company, whether it's a startup looking for investment or an established business wanting to stay on course. It outlines goals and strategies, boosting a company's chances of securing funding and achieving growth.
As your business and the market change, update your business plan regularly. This keeps it relevant and aligned with your current goals and conditions. Think of your business plan as a living document that evolves with your company, not something carved in stone.
University of Oregon Department of Economics. " Evaluation of the Effectiveness of Business Planning Using Palo Alto's Business Plan Pro ." Eason Ding & Tim Hursey.
Bplans. " Do You Need a Business Plan? Scientific Research Says Yes ."
Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."
Harvard Business Review. " How to Write a Winning Business Plan ."
U.S. Small Business Administration. " Write Your Business Plan ."
SCORE. " When and Why Should You Review Your Business Plan? "
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How to Write a Business Plan, Step by Step
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What is a business plan?
1. write an executive summary, 2. describe your company, 3. state your business goals, 4. describe your products and services, 5. do your market research, 6. outline your marketing and sales plan, 7. perform a business financial analysis, 8. make financial projections, 9. summarize how your company operates, 10. add any additional information to an appendix, business plan tips and resources.
A business plan outlines your business’s financial goals and explains how you’ll achieve them over the next three to five years. Here’s a step-by-step guide to writing a business plan that will offer a strong, detailed road map for your business.
![a business plan is best described as a ZenBusiness](https://www.nerdwallet.com/cdn-cgi/image/quality=85/cdn/software/logos/ZenB.png)
LLC Formation
A business plan is a document that explains what your business does, how it makes money and who its customers are. Internally, writing a business plan should help you clarify your vision and organize your operations. Externally, you can share it with potential lenders and investors to show them you’re on the right track.
Business plans are living documents; it’s OK for them to change over time. Startups may update their business plans often as they figure out who their customers are and what products and services fit them best. Mature companies might only revisit their business plan every few years. Regardless of your business’s age, brush up this document before you apply for a business loan .
» Need help writing? Learn about the best business plan software .
This is your elevator pitch. It should include a mission statement, a brief description of the products or services your business offers and a broad summary of your financial growth plans.
Though the executive summary is the first thing your investors will read, it can be easier to write it last. That way, you can highlight information you’ve identified while writing other sections that go into more detail.
» MORE: How to write an executive summary in 6 steps
Next up is your company description. This should contain basic information like:
Your business’s registered name.
Address of your business location .
Names of key people in the business. Make sure to highlight unique skills or technical expertise among members of your team.
Your company description should also define your business structure — such as a sole proprietorship, partnership or corporation — and include the percent ownership that each owner has and the extent of each owner’s involvement in the company.
Lastly, write a little about the history of your company and the nature of your business now. This prepares the reader to learn about your goals in the next section.
» MORE: How to write a company overview for a business plan
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The third part of a business plan is an objective statement. This section spells out what you’d like to accomplish, both in the near term and over the coming years.
If you’re looking for a business loan or outside investment, you can use this section to explain how the financing will help your business grow and how you plan to achieve those growth targets. The key is to provide a clear explanation of the opportunity your business presents to the lender.
For example, if your business is launching a second product line, you might explain how the loan will help your company launch that new product and how much you think sales will increase over the next three years as a result.
» MORE: How to write a successful business plan for a loan
In this section, go into detail about the products or services you offer or plan to offer.
You should include the following:
An explanation of how your product or service works.
The pricing model for your product or service.
The typical customers you serve.
Your supply chain and order fulfillment strategy.
You can also discuss current or pending trademarks and patents associated with your product or service.
Lenders and investors will want to know what sets your product apart from your competition. In your market analysis section , explain who your competitors are. Discuss what they do well, and point out what you can do better. If you’re serving a different or underserved market, explain that.
Here, you can address how you plan to persuade customers to buy your products or services, or how you will develop customer loyalty that will lead to repeat business.
Include details about your sales and distribution strategies, including the costs involved in selling each product .
» MORE: R e a d our complete guide to small business marketing
If you’re a startup, you may not have much information on your business financials yet. However, if you’re an existing business, you’ll want to include income or profit-and-loss statements, a balance sheet that lists your assets and debts, and a cash flow statement that shows how cash comes into and goes out of the company.
Accounting software may be able to generate these reports for you. It may also help you calculate metrics such as:
Net profit margin: the percentage of revenue you keep as net income.
Current ratio: the measurement of your liquidity and ability to repay debts.
Accounts receivable turnover ratio: a measurement of how frequently you collect on receivables per year.
This is a great place to include charts and graphs that make it easy for those reading your plan to understand the financial health of your business.
This is a critical part of your business plan if you’re seeking financing or investors. It outlines how your business will generate enough profit to repay the loan or how you will earn a decent return for investors.
Here, you’ll provide your business’s monthly or quarterly sales, expenses and profit estimates over at least a three-year period — with the future numbers assuming you’ve obtained a new loan.
Accuracy is key, so carefully analyze your past financial statements before giving projections. Your goals may be aggressive, but they should also be realistic.
NerdWallet’s picks for setting up your business finances:
The best business checking accounts .
The best business credit cards .
The best accounting software .
Before the end of your business plan, summarize how your business is structured and outline each team’s responsibilities. This will help your readers understand who performs each of the functions you’ve described above — making and selling your products or services — and how much each of those functions cost.
If any of your employees have exceptional skills, you may want to include their resumes to help explain the competitive advantage they give you.
Finally, attach any supporting information or additional materials that you couldn’t fit in elsewhere. That might include:
Licenses and permits.
Equipment leases.
Bank statements.
Details of your personal and business credit history, if you’re seeking financing.
If the appendix is long, you may want to consider adding a table of contents at the beginning of this section.
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We’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.
Here are some tips to write a detailed, convincing business plan:
Avoid over-optimism: If you’re applying for a business bank loan or professional investment, someone will be reading your business plan closely. Providing unreasonable sales estimates can hurt your chances of approval.
Proofread: Spelling, punctuation and grammatical errors can jump off the page and turn off lenders and prospective investors. If writing and editing aren't your strong suit, you may want to hire a professional business plan writer, copy editor or proofreader.
Use free resources: SCORE is a nonprofit association that offers a large network of volunteer business mentors and experts who can help you write or edit your business plan. The U.S. Small Business Administration’s Small Business Development Centers , which provide free business consulting and help with business plan development, can also be a resource.
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What Is a Business Plan? Definition and Planning Essentials Explained
Posted february 21, 2022 by kody wirth.
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What is a business plan? It’s the roadmap for your business. The outline of your goals, objectives, and the steps you’ll take to get there. It describes the structure of your organization, how it operates, as well as the financial expectations and actual performance.
A business plan can help you explore ideas, successfully start a business, manage operations, and pursue growth. In short, a business plan is a lot of different things. It’s more than just a stack of paper and can be one of your most effective tools as a business owner.
Let’s explore the basics of business planning, the structure of a traditional plan, your planning options, and how you can use your plan to succeed.
What is a business plan?
A business plan is a document that explains how your business operates. It summarizes your business structure, objectives, milestones, and financial performance. Again, it’s a guide that helps you, and anyone else, better understand how your business will succeed.
Why do you need a business plan?
The primary purpose of a business plan is to help you understand the direction of your business and the steps it will take to get there. Having a solid business plan can help you grow up to 30% faster and according to our own 2021 Small Business research working on a business plan increases confidence regarding business health—even in the midst of a crisis.
These benefits are directly connected to how writing a business plan makes you more informed and better prepares you for entrepreneurship. It helps you reduce risk and avoid pursuing potentially poor ideas. You’ll also be able to more easily uncover your business’s potential. By regularly returning to your plan you can understand what parts of your strategy are working and those that are not.
That just scratches the surface for why having a plan is valuable. Check out our full write-up for fifteen more reasons why you need a business plan .
What can you do with your plan?
So what can you do with a business plan once you’ve created it? It can be all too easy to write a plan and just let it be. Here are just a few ways you can leverage your plan to benefit your business.
Test an idea
Writing a plan isn’t just for those that are ready to start a business. It’s just as valuable for those that have an idea and want to determine if it’s actually possible or not. By writing a plan to explore the validity of an idea, you are working through the process of understanding what it would take to be successful.
The market and competitive research alone can tell you a lot about your idea. Is the marketplace too crowded? Is the solution you have in mind not really needed? Add in the exploration of milestones, potential expenses, and the sales needed to attain profitability and you can paint a pretty clear picture of the potential of your business.
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For those starting or managing a business understanding where you’re going and how you’re going to get there are vital. Writing your plan helps you do that. It ensures that you are considering all aspects of your business, know what milestones you need to hit, and can effectively make adjustments if that doesn’t happen.
With a plan in place, you’ll have an idea of where you want your business to go as well as how you’ve performed in the past. This alone better prepares you to take on challenges, review what you’ve done before, and make the right adjustments.
Pursue funding
Even if you do not intend to pursue funding right away, having a business plan will prepare you for it. It will ensure that you have all of the information necessary to submit a loan application and pitch to investors. So, rather than scrambling to gather documentation and write a cohesive plan once it’s relevant, you can instead keep your plan up-to-date and attempt to attain funding. Just add a use of funds report to your financial plan and you’ll be ready to go.
The benefits of having a plan don’t stop there. You can then use your business plan to help you manage the funding you receive. You’ll not only be able to easily track and forecast how you’ll use your funds but easily report on how it’s been used.
Better manage your business
A solid business plan isn’t meant to be something you do once and forget about. Instead, it should be a useful tool that you can regularly use to analyze performance, make strategic decisions, and anticipate future scenarios. It’s a document that you should regularly update and adjust as you go to better fit the actual state of your business.
Doing so makes it easier to understand what’s working and what’s not. It helps you understand if you’re truly reaching your goals or if you need to make further adjustments. Having your plan in place makes that process quicker, more informative, and leaves you with far more time to actually spend running your business.
What should your business plan include?
The content and structure of your business plan should include anything that will help you use it effectively. That being said, there are some key elements that you should cover and that investors will expect to see.
Executive summary
The executive summary is a simple overview of your business and your overall plan. It should serve as a standalone document that provides enough detail for anyone—including yourself, team members, or investors—to fully understand your business strategy. Make sure to cover the problem you’re solving, a description of your product or service, your target market, organizational structure, a financial summary, and any necessary funding requirements.
This will be the first part of your plan but it’s easiest to write it after you’ve created your full plan.
Products & Services
When describing your products or services, you need to start by outlining the problem you’re solving and why what you offer is valuable. This is where you’ll also address current competition in the market and any competitive advantages your products or services bring to the table. Lastly, be sure to outline the steps or milestones that you’ll need to hit to successfully launch your business. If you’ve already hit some initial milestones, like taking pre-orders or early funding, be sure to include it here to further prove the validity of your business.
Market analysis
A market analysis is a qualitative and quantitative assessment of the current market you’re entering or competing in. It helps you understand the overall state and potential of the industry, who your ideal customers are, the positioning of your competition, and how you intend to position your own business. This helps you better explore the long-term trends of the market, what challenges to expect, and how you will need to initially introduce and even price your products or services.
Check out our full guide for how to conduct a market analysis in just four easy steps .
Marketing & sales
Here you detail how you intend to reach your target market. This includes your sales activities, general pricing plan, and the beginnings of your marketing strategy. If you have any branding elements, sample marketing campaigns, or messaging available—this is the place to add it.
Additionally, it may be wise to include a SWOT analysis that demonstrates your business or specific product/service position. This will showcase how you intend to leverage sales and marketing channels to deal with competitive threats and take advantage of any opportunities.
Check out our full write-up to learn how to create a cohesive marketing strategy for your business.
Organization & management
This section addresses the legal structure of your business, your current team, and any gaps that need to be filled. Depending on your business type and longevity, you’ll also need to include your location, ownership information, and business history. Basically, add any information that helps explain your organizational structure and how you operate. This section is particularly important for pitching to investors but should be included even if attempted funding is not in your immediate future.
Financial projections
Possibly the most important piece of your plan, your financials section is vital for showcasing the viability of your business. It also helps you establish a baseline to measure against and makes it easier to make ongoing strategic decisions as your business grows. This may seem complex on the surface, but it can be far easier than you think.
Focus on building solid forecasts, keep your categories simple, and lean on assumptions. You can always return to this section to add more details and refine your financial statements as you operate.
Here are the statements you should include in your financial plan:
- Sales and revenue projections
- Profit and loss statement
- Cash flow statement
- Balance sheet
The appendix is where you add additional detail, documentation, or extended notes that support the other sections of your plan. Don’t worry about adding this section at first and only add documentation that you think will be beneficial for anyone reading your plan.
Types of business plans explained
While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. So, to get the most out of your plan, it’s best to find a format that suits your needs. Here are a few common business plan types worth considering.
Traditional business plan
The tried-and-true traditional business plan is a formal document meant to be used for external purposes. Typically this is the type of plan you’ll need when applying for funding or pitching to investors. It can also be used when training or hiring employees, working with vendors, or any other situation where the full details of your business must be understood by another individual.
This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix. We recommend only starting with this business plan format if you plan to immediately pursue funding and already have a solid handle on your business information.
Business model canvas
The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea.
The structure ditches a linear structure in favor of a cell-based template. It encourages you to build connections between every element of your business. It’s faster to write out and update, and much easier for you, your team, and anyone else to visualize your business operations. This is really best for those exploring their business idea for the first time, but keep in mind that it can be difficult to actually validate your idea this way as well as adapt it into a full plan.
One-page business plan
The true middle ground between the business model canvas and a traditional business plan is the one-page business plan. This format is a simplified version of the traditional plan that focuses on the core aspects of your business. It basically serves as a beefed-up pitch document and can be finished as quickly as the business model canvas.
By starting with a one-page plan, you give yourself a minimal document to build from. You’ll typically stick with bullet points and single sentences making it much easier to elaborate or expand sections into a longer-form business plan. This plan type is useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.
Now, the option that we here at LivePlan recommend is the Lean Plan . This is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance.
It holds all of the benefits of the single-page plan, including the potential to complete it in as little as 27-minutes . However, it’s even easier to convert into a full plan thanks to how heavily it’s tied to your financials. The overall goal of Lean Planning isn’t to just produce documents that you use once and shelve. Instead, the Lean Planning process helps you build a healthier company that thrives in times of growth and stable through times of crisis.
It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.
Try the LivePlan Method for Lean Business Planning
Now that you know the basics of business planning, it’s time to get started. Again we recommend leveraging a Lean Plan for a faster, easier, and far more useful planning process.
To get familiar with the Lean Plan format, you can download our free Lean Plan template . However, if you want to elevate your ability to create and use your lean plan even further, you may want to explore LivePlan.
It features step-by-step guidance that ensures you cover everything necessary while reducing the time spent on formatting and presenting. You’ll also gain access to financial forecasting tools that propel you through the process. Finally, it will transform your plan into a management tool that will help you easily compare your forecasts to your actual results.
Check out how LivePlan streamlines Lean Planning by downloading our Kickstart Your Business ebook .
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How to Write a Business Plan: Step-by-Step Guide + Examples
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Noah Parsons
24 min. read
Updated July 29, 2024
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Writing a business plan doesn’t have to be complicated.
In this step-by-step guide, you’ll learn how to write a business plan that’s detailed enough to impress bankers and potential investors, while giving you the tools to start, run, and grow a successful business.
- The basics of business planning
If you’re reading this guide, then you already know why you need a business plan .
You understand that planning helps you:
- Raise money
- Grow strategically
- Keep your business on the right track
As you start to write your plan, it’s useful to zoom out and remember what a business plan is .
At its core, a business plan is an overview of the products and services you sell, and the customers that you sell to. It explains your business strategy: how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.
Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow.
A good business plan is much more than just a document that you write once and forget about. It’s also a guide that helps you outline and achieve your goals.
After completing your plan, you can use it as a management tool to track your progress toward your goals. Updating and adjusting your forecasts and budgets as you go is one of the most important steps you can take to run a healthier, smarter business.
We’ll dive into how to use your plan later in this article.
There are many different types of plans , but we’ll go over the most common type here, which includes everything you need for an investor-ready plan. However, if you’re just starting out and are looking for something simpler—I recommend starting with a one-page business plan . It’s faster and easier to create.
It’s also the perfect place to start if you’re just figuring out your idea, or need a simple strategic plan to use inside your business.
Dig deeper : How to write a one-page business plan
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- What to include in your business plan
Executive summary
The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally just one to two pages. Most people write it last because it’s a summary of the complete business plan.
Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan.
In fact, it’s common for investors to ask only for the executive summary when evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation , or more in-depth financial forecasts .
Your executive summary should include:
- A summary of the problem you are solving
- A description of your product or service
- An overview of your target market
- A brief description of your team
- A summary of your financials
- Your funding requirements (if you are raising money)
Dig Deeper: How to write an effective executive summary
Products and services description
This is where you describe exactly what you’re selling, and how it solves a problem for your target market. The best way to organize this part of your plan is to start by describing the problem that exists for your customers. After that, you can describe how you plan to solve that problem with your product or service.
This is usually called a problem and solution statement .
To truly showcase the value of your products and services, you need to craft a compelling narrative around your offerings. How will your product or service transform your customers’ lives or jobs? A strong narrative will draw in your readers.
This is also the part of the business plan to discuss any competitive advantages you may have, like specific intellectual property or patents that protect your product. If you have any initial sales, contracts, or other evidence that your product or service is likely to sell, include that information as well. It will show that your idea has traction , which can help convince readers that your plan has a high chance of success.
Market analysis
Your target market is a description of the type of people that you plan to sell to. You might even have multiple target markets, depending on your business.
A market analysis is the part of your plan where you bring together all of the information you know about your target market. Basically, it’s a thorough description of who your customers are and why they need what you’re selling. You’ll also include information about the growth of your market and your industry .
Try to be as specific as possible when you describe your market.
Include information such as age, income level, and location—these are what’s called “demographics.” If you can, also describe your market’s interests and habits as they relate to your business—these are “psychographics.”
Related: Target market examples
Essentially, you want to include any knowledge you have about your customers that is relevant to how your product or service is right for them. With a solid target market, it will be easier to create a sales and marketing plan that will reach your customers. That’s because you know who they are, what they like to do, and the best ways to reach them.
Next, provide any additional information you have about your market.
What is the size of your market ? Is the market growing or shrinking? Ideally, you’ll want to demonstrate that your market is growing over time, and also explain how your business is positioned to take advantage of any expected changes in your industry.
Dig Deeper: Learn how to write a market analysis
Competitive analysis
Part of defining your business opportunity is determining what your competitive advantage is. To do this effectively, you need to know as much about your competitors as your target customers.
Every business has some form of competition. If you don’t think you have competitors, then explore what alternatives there are in the market for your product or service.
For example: In the early years of cars, their main competition was horses. For social media, the early competition was reading books, watching TV, and talking on the phone.
A good competitive analysis fully lays out the competitive landscape and then explains how your business is different. Maybe your products are better made, or cheaper, or your customer service is superior. Maybe your competitive advantage is your location – a wide variety of factors can ultimately give you an advantage.
Dig Deeper: How to write a competitive analysis for your business plan
Marketing and sales plan
The marketing and sales plan covers how you will position your product or service in the market, the marketing channels and messaging you will use, and your sales tactics.
The best place to start with a marketing plan is with a positioning statement .
This explains how your business fits into the overall market, and how you will explain the advantages of your product or service to customers. You’ll use the information from your competitive analysis to help you with your positioning.
For example: You might position your company as the premium, most expensive but the highest quality option in the market. Or your positioning might focus on being locally owned and that shoppers support the local economy by buying your products.
Once you understand your positioning, you’ll bring this together with the information about your target market to create your marketing strategy .
This is how you plan to communicate your message to potential customers. Depending on who your customers are and how they purchase products like yours, you might use many different strategies, from social media advertising to creating a podcast. Your marketing plan is all about how your customers discover who you are and why they should consider your products and services.
While your marketing plan is about reaching your customers—your sales plan will describe the actual sales process once a customer has decided that they’re interested in what you have to offer.
If your business requires salespeople and a long sales process, describe that in this section. If your customers can “self-serve” and just make purchases quickly on your website, describe that process.
A good sales plan picks up where your marketing plan leaves off. The marketing plan brings customers in the door and the sales plan is how you close the deal.
Together, these specific plans paint a picture of how you will connect with your target audience, and how you will turn them into paying customers.
Dig deeper: What to include in your sales and marketing plan
Business operations
The operations section describes the necessary requirements for your business to run smoothly. It’s where you talk about how your business works and what day-to-day operations look like.
Depending on how your business is structured, your operations plan may include elements of the business like:
- Supply chain management
- Manufacturing processes
- Equipment and technology
- Distribution
Some businesses distribute their products and reach their customers through large retailers like Amazon.com, Walmart, Target, and grocery store chains.
These businesses should review how this part of their business works. The plan should discuss the logistics and costs of getting products onto store shelves and any potential hurdles the business may have to overcome.
If your business is much simpler than this, that’s OK. This section of your business plan can be either extremely short or more detailed, depending on the type of business you are building.
For businesses selling services, such as physical therapy or online software, you can use this section to describe the technology you’ll leverage, what goes into your service, and who you will partner with to deliver your services.
Dig Deeper: Learn how to write the operations chapter of your plan
Key milestones and metrics
Although it’s not required to complete your business plan, mapping out key business milestones and the metrics can be incredibly useful for measuring your success.
Good milestones clearly lay out the parameters of the task and set expectations for their execution. You’ll want to include:
- A description of each task
- The proposed due date
- Who is responsible for each task
If you have a budget, you can include projected costs to hit each milestone. You don’t need extensive project planning in this section—just list key milestones you want to hit and when you plan to hit them. This is your overall business roadmap.
Possible milestones might be:
- Website launch date
- Store or office opening date
- First significant sales
- Break even date
- Business licenses and approvals
You should also discuss the key numbers you will track to determine your success. Some common metrics worth tracking include:
- Conversion rates
- Customer acquisition costs
- Profit per customer
- Repeat purchases
It’s perfectly fine to start with just a few metrics and grow the number you are tracking over time. You also may find that some metrics simply aren’t relevant to your business and can narrow down what you’re tracking.
Dig Deeper: How to use milestones in your business plan
Organization and management team
Investors don’t just look for great ideas—they want to find great teams. Use this chapter to describe your current team and who you need to hire . You should also provide a quick overview of your location and history if you’re already up and running.
Briefly highlight the relevant experiences of each key team member in the company. It’s important to make the case for why yours is the right team to turn an idea into a reality.
Do they have the right industry experience and background? Have members of the team had entrepreneurial successes before?
If you still need to hire key team members, that’s OK. Just note those gaps in this section.
Your company overview should also include a summary of your company’s current business structure . The most common business structures include:
- Sole proprietor
- Partnership
Be sure to provide an overview of how the business is owned as well. Does each business partner own an equal portion of the business? How is ownership divided?
Potential lenders and investors will want to know the structure of the business before they will consider a loan or investment.
Dig Deeper: How to write about your company structure and team
Financial plan
Last, but certainly not least, is your financial plan chapter.
Entrepreneurs often find this section the most daunting. But, business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast.
A typical financial forecast in a business plan includes the following:
- Sales forecast : An estimate of the sales expected over a given period. You’ll break down your forecast into the key revenue streams that you expect to have.
- Expense budget : Your planned spending such as personnel costs , marketing expenses, and taxes.
- Profit & Loss : Brings together your sales and expenses and helps you calculate planned profits.
- Cash Flow : Shows how cash moves into and out of your business. It can predict how much cash you’ll have on hand at any given point in the future.
- Balance Sheet : A list of the assets, liabilities, and equity in your company. In short, it provides an overview of the financial health of your business.
A strong business plan will include a description of assumptions about the future, and potential risks that could impact the financial plan. Including those will be especially important if you’re writing a business plan to pursue a loan or other investment.
Dig Deeper: How to create financial forecasts and budgets
This is the place for additional data, charts, or other information that supports your plan.
Including an appendix can significantly enhance the credibility of your plan by showing readers that you’ve thoroughly considered the details of your business idea, and are backing your ideas up with solid data.
Just remember that the information in the appendix is meant to be supplementary. Your business plan should stand on its own, even if the reader skips this section.
Dig Deeper : What to include in your business plan appendix
Optional: Business plan cover page
Adding a business plan cover page can make your plan, and by extension your business, seem more professional in the eyes of potential investors, lenders, and partners. It serves as the introduction to your document and provides necessary contact information for stakeholders to reference.
Your cover page should be simple and include:
- Company logo
- Business name
- Value proposition (optional)
- Business plan title
- Completion and/or update date
- Address and contact information
- Confidentiality statement
Just remember, the cover page is optional. If you decide to include it, keep it very simple and only spend a short amount of time putting it together.
Dig Deeper: How to create a business plan cover page
How to use AI to help write your business plan
Generative AI tools such as ChatGPT can speed up the business plan writing process and help you think through concepts like market segmentation and competition. These tools are especially useful for taking ideas that you provide and converting them into polished text for your business plan.
The best way to use AI for your business plan is to leverage it as a collaborator , not a replacement for human creative thinking and ingenuity.
AI can come up with lots of ideas and act as a brainstorming partner. It’s up to you to filter through those ideas and figure out which ones are realistic enough to resonate with your customers.
There are pros and cons of using AI to help with your business plan . So, spend some time understanding how it can be most helpful before just outsourcing the job to AI.
Learn more: 10 AI prompts you need to write a business plan
- Writing tips and strategies
To help streamline the business plan writing process, here are a few tips and key questions to answer to make sure you get the most out of your plan and avoid common mistakes .
Determine why you are writing a business plan
Knowing why you are writing a business plan will determine your approach to your planning project.
For example: If you are writing a business plan for yourself, or just to use inside your own business , you can probably skip the section about your team and organizational structure.
If you’re raising money, you’ll want to spend more time explaining why you’re looking to raise the funds and exactly how you will use them.
Regardless of how you intend to use your business plan , think about why you are writing and what you’re trying to get out of the process before you begin.
Keep things concise
Probably the most important tip is to keep your business plan short and simple. There are no prizes for long business plans . The longer your plan is, the less likely people are to read it.
So focus on trimming things down to the essentials your readers need to know. Skip the extended, wordy descriptions and instead focus on creating a plan that is easy to read —using bullets and short sentences whenever possible.
Have someone review your business plan
Writing a business plan in a vacuum is never a good idea. Sometimes it’s helpful to zoom out and check if your plan makes sense to someone else. You also want to make sure that it’s easy to read and understand.
Don’t wait until your plan is “done” to get a second look. Start sharing your plan early, and find out from readers what questions your plan leaves unanswered. This early review cycle will help you spot shortcomings in your plan and address them quickly, rather than finding out about them right before you present your plan to a lender or investor.
If you need a more detailed review, you may want to explore hiring a professional plan writer to thoroughly examine it.
Use a free business plan template and business plan examples to get started
Knowing what information to include in a business plan is sometimes not quite enough. If you’re struggling to get started or need additional guidance, it may be worth using a business plan template.
There are plenty of great options available (we’ve rounded up our 8 favorites to streamline your search).
But, if you’re looking for a free downloadable business plan template , you can get one right now; download the template used by more than 1 million businesses.
Or, if you just want to see what a completed business plan looks like, check out our library of over 550 free business plan examples .
We even have a growing list of industry business planning guides with tips for what to focus on depending on your business type.
Common pitfalls and how to avoid them
It’s easy to make mistakes when you’re writing your business plan. Some entrepreneurs get sucked into the writing and research process, and don’t focus enough on actually getting their business started.
Here are a few common mistakes and how to avoid them:
Not talking to your customers : This is one of the most common mistakes. It’s easy to assume that your product or service is something that people want. Before you invest too much in your business and too much in the planning process, make sure you talk to your prospective customers and have a good understanding of their needs.
- Overly optimistic sales and profit forecasts: By nature, entrepreneurs are optimistic about the future. But it’s good to temper that optimism a little when you’re planning, and make sure your forecasts are grounded in reality.
- Spending too much time planning: Yes, planning is crucial. But you also need to get out and talk to customers, build prototypes of your product and figure out if there’s a market for your idea. Make sure to balance planning with building.
- Not revising the plan: Planning is useful, but nothing ever goes exactly as planned. As you learn more about what’s working and what’s not—revise your plan, your budgets, and your revenue forecast. Doing so will provide a more realistic picture of where your business is going, and what your financial needs will be moving forward.
- Not using the plan to manage your business: A good business plan is a management tool. Don’t just write it and put it on the shelf to collect dust – use it to track your progress and help you reach your goals.
- Presenting your business plan
The planning process forces you to think through every aspect of your business and answer questions that you may not have thought of. That’s the real benefit of writing a business plan – the knowledge you gain about your business that you may not have been able to discover otherwise.
With all of this knowledge, you’re well prepared to convert your business plan into a pitch presentation to present your ideas.
A pitch presentation is a summary of your plan, just hitting the highlights and key points. It’s the best way to present your business plan to investors and team members.
Dig Deeper: Learn what key slides should be included in your pitch deck
Use your business plan to manage your business
One of the biggest benefits of planning is that it gives you a tool to manage your business better. With a revenue forecast, expense budget, and projected cash flow, you know your targets and where you are headed.
And yet, nothing ever goes exactly as planned – it’s the nature of business.
That’s where using your plan as a management tool comes in. The key to leveraging it for your business is to review it periodically and compare your forecasts and projections to your actual results.
Start by setting up a regular time to review the plan – a monthly review is a good starting point. During this review, answer questions like:
- Did you meet your sales goals?
- Is spending following your budget?
- Has anything gone differently than what you expected?
Now that you see whether you’re meeting your goals or are off track, you can make adjustments and set new targets.
Maybe you’re exceeding your sales goals and should set new, more aggressive goals. In that case, maybe you should also explore more spending or hiring more employees.
Or maybe expenses are rising faster than you projected. If that’s the case, you would need to look at where you can cut costs.
A plan, and a method for comparing your plan to your actual results , is the tool you need to steer your business toward success.
Learn More: How to run a regular plan review
How to write a business plan FAQ
What is a business plan?
A document that describes your business , the products and services you sell, and the customers that you sell to. It explains your business strategy, how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.
What are the benefits of a business plan?
A business plan helps you understand where you want to go with your business and what it will take to get there. It reduces your overall risk, helps you uncover your business’s potential, attracts investors, and identifies areas for growth.
Having a business plan ultimately makes you more confident as a business owner and more likely to succeed for a longer period of time.
What are the 7 steps of a business plan?
The seven steps to writing a business plan include:
- Write a brief executive summary
- Describe your products and services.
- Conduct market research and compile data into a cohesive market analysis.
- Describe your marketing and sales strategy.
- Outline your organizational structure and management team.
- Develop financial projections for sales, revenue, and cash flow.
- Add any additional documents to your appendix.
What are the 5 most common business plan mistakes?
There are plenty of mistakes that can be made when writing a business plan. However, these are the 5 most common that you should do your best to avoid:
- 1. Not taking the planning process seriously.
- Having unrealistic financial projections or incomplete financial information.
- Inconsistent information or simple mistakes.
- Failing to establish a sound business model.
- Not having a defined purpose for your business plan.
What questions should be answered in a business plan?
Writing a business plan is all about asking yourself questions about your business and being able to answer them through the planning process. You’ll likely be asking dozens and dozens of questions for each section of your plan.
However, these are the key questions you should ask and answer with your business plan:
- How will your business make money?
- Is there a need for your product or service?
- Who are your customers?
- How are you different from the competition?
- How will you reach your customers?
- How will you measure success?
How long should a business plan be?
The length of your business plan fully depends on what you intend to do with it. From the SBA and traditional lender point of view, a business plan needs to be whatever length necessary to fully explain your business. This means that you prove the viability of your business, show that you understand the market, and have a detailed strategy in place.
If you intend to use your business plan for internal management purposes, you don’t necessarily need a full 25-50 page business plan. Instead, you can start with a one-page plan to get all of the necessary information in place.
What are the different types of business plans?
While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. Here are a few common business plan types worth considering.
Traditional business plan: The tried-and-true traditional business plan is a formal document meant to be used when applying for funding or pitching to investors. This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix.
Business model canvas: The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea.
One-page business plan: This format is a simplified version of the traditional plan that focuses on the core aspects of your business. You’ll typically stick with bullet points and single sentences. It’s most useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.
Lean Plan: The Lean Plan is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance. It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.
What’s the difference between a business plan and a strategic plan?
A business plan covers the “who” and “what” of your business. It explains what your business is doing right now and how it functions. The strategic plan explores long-term goals and explains “how” the business will get there. It encourages you to look more intently toward the future and how you will achieve your vision.
However, when approached correctly, your business plan can actually function as a strategic plan as well. If kept lean, you can define your business, outline strategic steps, and track ongoing operations all with a single plan.
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Table of Contents
- Use AI to help write your plan
- Common planning mistakes
- Manage with your business plan
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How To Write A Business Plan (2024 Guide)
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Updated: Apr 17, 2024, 11:59am
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Table of Contents
Brainstorm an executive summary, create a company description, brainstorm your business goals, describe your services or products, conduct market research, create financial plans, bottom line, frequently asked questions.
Every business starts with a vision, which is distilled and communicated through a business plan. In addition to your high-level hopes and dreams, a strong business plan outlines short-term and long-term goals, budget and whatever else you might need to get started. In this guide, we’ll walk you through how to write a business plan that you can stick to and help guide your operations as you get started.
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Drafting the Summary
An executive summary is an extremely important first step in your business. You have to be able to put the basic facts of your business in an elevator pitch-style sentence to grab investors’ attention and keep their interest. This should communicate your business’s name, what the products or services you’re selling are and what marketplace you’re entering.
Ask for Help
When drafting the executive summary, you should have a few different options. Enlist a few thought partners to review your executive summary possibilities to determine which one is best.
After you have the executive summary in place, you can work on the company description, which contains more specific information. In the description, you’ll need to include your business’s registered name , your business address and any key employees involved in the business.
The business description should also include the structure of your business, such as sole proprietorship , limited liability company (LLC) , partnership or corporation. This is the time to specify how much of an ownership stake everyone has in the company. Finally, include a section that outlines the history of the company and how it has evolved over time.
Wherever you are on the business journey, you return to your goals and assess where you are in meeting your in-progress targets and setting new goals to work toward.
Numbers-based Goals
Goals can cover a variety of sections of your business. Financial and profit goals are a given for when you’re establishing your business, but there are other goals to take into account as well with regard to brand awareness and growth. For example, you might want to hit a certain number of followers across social channels or raise your engagement rates.
Another goal could be to attract new investors or find grants if you’re a nonprofit business. If you’re looking to grow, you’ll want to set revenue targets to make that happen as well.
Intangible Goals
Goals unrelated to traceable numbers are important as well. These can include seeing your business’s advertisement reach the general public or receiving a terrific client review. These goals are important for the direction you take your business and the direction you want it to go in the future.
The business plan should have a section that explains the services or products that you’re offering. This is the part where you can also describe how they fit in the current market or are providing something necessary or entirely new. If you have any patents or trademarks, this is where you can include those too.
If you have any visual aids, they should be included here as well. This would also be a good place to include pricing strategy and explain your materials.
This is the part of the business plan where you can explain your expertise and different approach in greater depth. Show how what you’re offering is vital to the market and fills an important gap.
You can also situate your business in your industry and compare it to other ones and how you have a competitive advantage in the marketplace.
Other than financial goals, you want to have a budget and set your planned weekly, monthly and annual spending. There are several different costs to consider, such as operational costs.
Business Operations Costs
Rent for your business is the first big cost to factor into your budget. If your business is remote, the cost that replaces rent will be the software that maintains your virtual operations.
Marketing and sales costs should be next on your list. Devoting money to making sure people know about your business is as important as making sure it functions.
Other Costs
Although you can’t anticipate disasters, there are likely to be unanticipated costs that come up at some point in your business’s existence. It’s important to factor these possible costs into your financial plans so you’re not caught totally unaware.
Business plans are important for businesses of all sizes so that you can define where your business is and where you want it to go. Growing your business requires a vision, and giving yourself a roadmap in the form of a business plan will set you up for success.
How do I write a simple business plan?
When you’re working on a business plan, make sure you have as much information as possible so that you can simplify it to the most relevant information. A simple business plan still needs all of the parts included in this article, but you can be very clear and direct.
What are some common mistakes in a business plan?
The most common mistakes in a business plan are common writing issues like grammar errors or misspellings. It’s important to be clear in your sentence structure and proofread your business plan before sending it to any investors or partners.
What basic items should be included in a business plan?
When writing out a business plan, you want to make sure that you cover everything related to your concept for the business, an analysis of the industry―including potential customers and an overview of the market for your goods or services―how you plan to execute your vision for the business, how you plan to grow the business if it becomes successful and all financial data around the business, including current cash on hand, potential investors and budget plans for the next few years.
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Business Plan Example and Template
Learn how to create a business plan
What is a Business Plan?
A business plan is a document that contains the operational and financial plan of a business, and details how its objectives will be achieved. It serves as a road map for the business and can be used when pitching investors or financial institutions for debt or equity financing .
![a business plan is best described as a Business Plan - Document with the words Business Plan on the title](https://cdn.corporatefinanceinstitute.com/assets/business-plan1-1024x682.jpeg)
A business plan should follow a standard format and contain all the important business plan elements. Typically, it should present whatever information an investor or financial institution expects to see before providing financing to a business.
Contents of a Business Plan
A business plan should be structured in a way that it contains all the important information that investors are looking for. Here are the main sections of a business plan:
1. Title Page
The title page captures the legal information of the business, which includes the registered business name, physical address, phone number, email address, date, and the company logo.
2. Executive Summary
The executive summary is the most important section because it is the first section that investors and bankers see when they open the business plan. It provides a summary of the entire business plan. It should be written last to ensure that you don’t leave any details out. It must be short and to the point, and it should capture the reader’s attention. The executive summary should not exceed two pages.
3. Industry Overview
The industry overview section provides information about the specific industry that the business operates in. Some of the information provided in this section includes major competitors, industry trends, and estimated revenues. It also shows the company’s position in the industry and how it will compete in the market against other major players.
4. Market Analysis and Competition
The market analysis section details the target market for the company’s product offerings. This section confirms that the company understands the market and that it has already analyzed the existing market to determine that there is adequate demand to support its proposed business model.
Market analysis includes information about the target market’s demographics , geographical location, consumer behavior, and market needs. The company can present numbers and sources to give an overview of the target market size.
A business can choose to consolidate the market analysis and competition analysis into one section or present them as two separate sections.
5. Sales and Marketing Plan
The sales and marketing plan details how the company plans to sell its products to the target market. It attempts to present the business’s unique selling proposition and the channels it will use to sell its goods and services. It details the company’s advertising and promotion activities, pricing strategy, sales and distribution methods, and after-sales support.
6. Management Plan
The management plan provides an outline of the company’s legal structure, its management team, and internal and external human resource requirements. It should list the number of employees that will be needed and the remuneration to be paid to each of the employees.
Any external professionals, such as lawyers, valuers, architects, and consultants, that the company will need should also be included. If the company intends to use the business plan to source funding from investors, it should list the members of the executive team, as well as the members of the advisory board.
7. Operating Plan
The operating plan provides an overview of the company’s physical requirements, such as office space, machinery, labor, supplies, and inventory . For a business that requires custom warehouses and specialized equipment, the operating plan will be more detailed, as compared to, say, a home-based consulting business. If the business plan is for a manufacturing company, it will include information on raw material requirements and the supply chain.
8. Financial Plan
The financial plan is an important section that will often determine whether the business will obtain required financing from financial institutions, investors, or venture capitalists. It should demonstrate that the proposed business is viable and will return enough revenues to be able to meet its financial obligations. Some of the information contained in the financial plan includes a projected income statement , balance sheet, and cash flow.
9. Appendices and Exhibits
The appendices and exhibits part is the last section of a business plan. It includes any additional information that banks and investors may be interested in or that adds credibility to the business. Some of the information that may be included in the appendices section includes office/building plans, detailed market research , products/services offering information, marketing brochures, and credit histories of the promoters.
![a business plan is best described as a Business Plan Template - Components](https://cdn.corporatefinanceinstitute.com/assets/business-plan.png)
Business Plan Template
Here is a basic template that any business can use when developing its business plan:
Section 1: Executive Summary
- Present the company’s mission.
- Describe the company’s product and/or service offerings.
- Give a summary of the target market and its demographics.
- Summarize the industry competition and how the company will capture a share of the available market.
- Give a summary of the operational plan, such as inventory, office and labor, and equipment requirements.
Section 2: Industry Overview
- Describe the company’s position in the industry.
- Describe the existing competition and the major players in the industry.
- Provide information about the industry that the business will operate in, estimated revenues, industry trends, government influences, as well as the demographics of the target market.
Section 3: Market Analysis and Competition
- Define your target market, their needs, and their geographical location.
- Describe the size of the market, the units of the company’s products that potential customers may buy, and the market changes that may occur due to overall economic changes.
- Give an overview of the estimated sales volume vis-à-vis what competitors sell.
- Give a plan on how the company plans to combat the existing competition to gain and retain market share.
Section 4: Sales and Marketing Plan
- Describe the products that the company will offer for sale and its unique selling proposition.
- List the different advertising platforms that the business will use to get its message to customers.
- Describe how the business plans to price its products in a way that allows it to make a profit.
- Give details on how the company’s products will be distributed to the target market and the shipping method.
Section 5: Management Plan
- Describe the organizational structure of the company.
- List the owners of the company and their ownership percentages.
- List the key executives, their roles, and remuneration.
- List any internal and external professionals that the company plans to hire, and how they will be compensated.
- Include a list of the members of the advisory board, if available.
Section 6: Operating Plan
- Describe the location of the business, including office and warehouse requirements.
- Describe the labor requirement of the company. Outline the number of staff that the company needs, their roles, skills training needed, and employee tenures (full-time or part-time).
- Describe the manufacturing process, and the time it will take to produce one unit of a product.
- Describe the equipment and machinery requirements, and if the company will lease or purchase equipment and machinery, and the related costs that the company estimates it will incur.
- Provide a list of raw material requirements, how they will be sourced, and the main suppliers that will supply the required inputs.
Section 7: Financial Plan
- Describe the financial projections of the company, by including the projected income statement, projected cash flow statement, and the balance sheet projection.
Section 8: Appendices and Exhibits
- Quotes of building and machinery leases
- Proposed office and warehouse plan
- Market research and a summary of the target market
- Credit information of the owners
- List of product and/or services
Related Readings
Thank you for reading CFI’s guide to Business Plans. To keep learning and advancing your career, the following CFI resources will be helpful:
- Corporate Structure
- Three Financial Statements
- Business Model Canvas Examples
- See all management & strategy resources
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How to make a business plan
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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?
Business Plan Explained in Less Than 5 Minutes
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Definition and Examples of a Business Plan
How a business plan works, types of business plans, business plan vs. business model.
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A business plan is a detailed written document that describes your business’s activities, goals, and strategy. A strong plan outlines everything from the products a company sells to the executive summary to the overall management. In essence, a business plan should guide a founder’s actions through each stage of growth
Think of your business plan as a road map. It documents the various stages of starting and running your business, including business activities and objectives. Business plans create the structure you need to make decisions by outlining the financial and operational goals you’re striving toward.
One of the most common reasons for crafting a business plan is to attract investors—and, in return, receive funding. As an early stage company, for example, you may leverage your business plan to convince investors or banks that your entity is credible and worthy of funding. The business plan should prove that their money will be returned .
A business plan can also be useful for when a well-developed company goes through a merger or acquisition . As outlined by the U.S. Small Business Administration (SBA), a merger creates a new entity via the combination of two businesses. An acquisition, on the other hand, is when a company is purchased and absorbed into an existing business. In either case, a business plan helps establish relationships between business entities, making a merger or acquisition more likely.
- Alternate name : Strategic plan
A business plan is a formalized outline of the business operations, finances, and goals you aim to achieve to be a successful company. When designing a business plan, companies have leeway for how long, short, or detailed it can be. So long as it outlines the foundational aspects of the business, in most cases, it will be effective.
The most common type of business plan is a traditional business plan. This style tends to have the following common elements, generally in this order.
- Executive summary : Tells your reader why your company will be successful. Includes the company’s mission statement , product information, and basics regarding the business structure.
- Company description : Where you brag about your entity’s strengths. Answer the question, what problem is your team solving?
- Market analysis : A deep dive into your industry and the competition. Consider why competitors are successful. How can your offering do it better? If applicable, how can you enhance the experience for the consumer?
- Management plan : Outlines leadership structure of the company and may be best detailed as a chart. This way, readers can see exactly who is planning to run the company and how they will impact growth.
- Marketing and sales plan : Details how you’ll attract consumers with your product or service, and how you will retain those customers. All strategies outlined in this section, such as the use of digital marketing , will be referenced in your financial plan.
- Funding request : For those companies asking for funding, this is where you’ll detail the amount of funding you’ll need to achieve your goals. Clearly explain how much you need and what it will be used for.
- Financial plan : Convinces the reader that your company is financially stable and can turn a profit . You will need to include a balance sheet , an income statement, and the cash flow statement (or cash flow projection, in the case of a new venture).
- Appendix : Where any supporting documents, such as legal documents, licenses of employees, and pictures of the product will be included.
Your company’s business plan should fit your needs, which will often depend on what stage of growth you are in. If you are considering starting a new venture, for example, writing a detailed business plan can help prove if your concept is viable or not.
If your business is seeking financial capital, though, you will want your business plan to be investor-ready. This will require you to have a funding request section, which would be placed right above your financial plan.
You should avoid using lofty terms or technical jargon that those outside your team won’t understand. A business plan is meant to be shared with those inside and outside your organization. Simple and effective language is best.
Your business’s stage impacts the length and detail of a business plan. As discussed, a traditional plan follows a detailed structure, from the executive summary to the appendix. It is a lengthier document, often amounting to dozens of pages, and is often used when seeking funding to prove business viability. In most cases, crafting a traditional plan will take lots of due diligence work.
The other main type of business plan is a lean startup plan. A lean startup plan is much more high-level and shorter than the traditional version. Companies just starting development will often create a lean startup plan to help them navigate where they should start. These can be as short as one or two pages.
A lean plan will include the following elements.
- Key partnerships : Notes other services or businesses you will work with, such as manufacturers and suppliers.
- Key activities and resources : Outlines how your company will gain a competitive advantage and create value for your consumers. Resources you may leverage include capital, staff, or intellectual property.
- Value proposition : Clearly defines the unique value your company offers.
- Customer relationships : Details the customer experience from start to finish.
- Channels : How will you stay connected with your customers? Detail those methods here.
- Cost structure and revenue streams : Details the most significant costs you will face as well as how your business will actually make money.
Remember that business plans are meant to change as your company grows or pivots. You should actively review and edit your business plan to keep it up to date with business activities. For example, you may start with a lean plan and move to a traditional plan when you hit the fundraising stage.
Describes a business’s operations and objectives, including financial goals | Describes the method by which a company generates profits |
Is the structure of the business | Is the foundation of the business |
Sections include mission statement, market analysis, and financial plan | Examples include retailer, franchise, and distributor |
Needs review and revisions over time | Needs review and revisions over time |
A business plan may often be confused with a business model, and it is easy to understand why. Simply put, a business plan is the holistic overview of the business, while a business model is a skeleton for how money will be made.
Key Takeaways
- A business plan is a comprehensive document that outlines a business’s operations, finances, and goals. It guides the business’s day-to-day decisions.
- A business plan is necessary for your company’s success, as it creates a path to scalability.
- There are two main types of business plans: a traditional business plan and a lean startup plan.
- A traditional business plan will be essential when you begin to seek debt or equity capital for your company.
U.S. Small Business Administration. “ Merge and Acquire Businesses .” Accessed June 8, 2021.
U.S. Small Business Administration. " Write Your Business Plan ." Accessed June 8, 2021.
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What Is A Business Plan (& Do I Really Need One?)
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The term "business plan" is a familiar one, often bandied about in entrepreneurial circles. Yet, despite its ubiquity, it's remarkable how much mystery and confusion can surround this essential business tool.
What exactly is a business plan? What purpose does it serve? How is it structured? This article aims to lift the veil, demystifying the business plan and revealing its multifaceted nature.
Business Plan Definition
A business plan is a document that describes a company's objectives and its marketing, financial, and operational strategies for achieving them. It's more than a mere document; it's a structured communication tool designed to articulate the vision of the business, allowing stakeholders to easily find the information they seek.
The business plan is a tangible reflection of the strategic planning that has gone into the business's future. While the plan is a static document, the planning is a dynamic process, capturing the strategic thinking and decision-making that shape the business's direction.
Purposes of a Business Plan
1. attracting funding opportunities.
A well-crafted business plan illustrates the company's potential for growth and profitability. It outlines the company's vision, mission, and strategies, providing a clear roadmap for success. A potential investor, whether venture capitalists or angel investors, can see how capital will be utilized, fostering trust and confidence in the business venture. A bank or financial institution can assess your company's ability to meet debt service obligations and compliance with strict financial accounting to meet underwriting requirements.
2. Aligning Organizational Objectives
A business plan acts as a unifying document that aligns the team with the company's goals and strategies. It ensures that everyone is on the same page, working towards common objectives. This alignment fosters collaboration and efficiency, driving the business towards its targets.
3. Validating the Business Concept
Before launching, a business plan helps in validating the feasibility of the business idea. It's a rigorous process that tests the concept against real-world scenarios, ensuring that the idea is not only innovative but also practical and sustainable. This validation builds credibility and prepares the business for the challenges ahead. For an existing business, a business plan can help address a possible merger and acquisition (M&A), rolling out a new business product or location, or expanding the target market.
4. Facilitating Legal and Regulatory Compliance
Whether it's securing a visa for international operations or meeting other regulatory requirements, a business plan can be an essential tool. It provides the necessary information in a structured format, demonstrating compliance with legal and regulatory standards. This can streamline processes and prevent potential legal hurdles.
5. Articulating and Formalizing the Business Vision
The business plan is more than a set of numbers and projections; it's the embodiment of the business vision. It communicates the essence of the business to stakeholders, turning abstract ideas into a concrete operational plan. It's a vital tool for leadership to articulate and formalize the vision, setting the stage for strategic execution.
Identifying the Right Type of Business Plan
Once you understand who your business plan is for and what specific needs it must address, you can identify the type of plan that best suits your situation. Business plans can be categorized into two main types: traditional and lean, each serveing its own unique purpose.
Traditional Business Plan
The Traditional Business Plan is a detailed and comprehensive document, often used by a new business, especially those seeking significant funding. It provides a complete picture of the company's vision, strategies, and operations. A traditional business plan leaves no stone unturned, offering a robust tool that communicates the business's entire vision and plan to stakeholders.
Lean Business Plan
In contrast, the Lean Business Plan is an abbreviated structure that still emphasizes the key elements of a Traditional Business Plan, but in less detail. It's suitable for early-stage startups, small businesses, or situations where agility and speed are essential. The Lean Business Plan focuses on the essentials, providing a quick overview without overwhelming details. It's a flexible and adaptable tool that can evolve with the business. One of the primary distinctions between it and a Traditional Business Plan is that a Lean Business Plan does not typically include financial planning, or if it does, it's a simple financial forecast or cash burn.
Components of a Business Plan
There are many places online where you can buy a business plan template. Often, those documents are just an outline of the sections of the business plan and what is included in each. If that's what you're looking for, here's a good business plan outline:
Executive Summary
The Executive Summary is the first section read but often the last written, as it encapsulates the entire plan. If the company has a mission statement, it's typically included here. When used for funding, it includes the ask or uses of funds, and for investment, it may contain an investor proposition. It's a concise overview that sets the tone, summarizing each section that follows.
Company Overview
The Company Overview is the foundation of the business, articulating how it operates, generates revenue, and delivers unique value to its customers. This section defines products and/or service the business sells, as well as the company’s business model and unique value proposition. It covers key partners, pricing strategy, revenue model, and other essential business activities.
Market Analysis Summary
The Market Analysis is the business intelligence portion of the plan. It comprises an industry analysis, market segments, target customers, competitive analysis, competitive advantage. This section provides insights into the market landscape, identifying opportunities, challenges, and how the business positions itself uniquely within the industry.
Strategy & Implementation Summary
Here, the business plan should outline the short-term and long-term objectives, marketing strategy and sales approach. It's a roadmap that details how the business will achieve its goals, including tactical steps, timelines, and resources. In a business plan for investors, the inclusion of an exit strategy can provide a vision for the future, considering various potential outcomes.
Management Summary
The Management Summary offers profiles of key personnel, their qualifications, roles, and plans to fill talent gaps. It's a snapshot of the leadership team, providing assurance that the right people are in place to execute the business plan successfully.
Financial Projections
This section includes standard financial statements like the profit & loss statement (P&L), the balance sheet, and the cash flow statement. It offers a detailed financial blueprint, illustrating the company’s revenue drivers and unit assumptions, income statement, a break-even analysis, and a sensitivity analysis to examine how changes in variables affect outcomes. For businesses with complex structures, framing the revenue in terms of market share can offer additional insight into the viability and feasibility of the financial projections.
The Appendices often include year 1 and year 2 monthly financial statements, intellectual property like patents and trademarks, construction blueprints, and other essential documentation. It's a repository for supporting information that adds depth and context to the main sections of the plan.
Do I Need a Business Plan?
The question "Do I need a business plan?" is one that many entrepreneurs and business leaders grapple with. The answer, however, is not as straightforward as it might seem. While not every business requires a traditional business plan, the strategic planning process is essential for all.
In some cases, a traditional business plan is required. Applying for a Small Business Administration (SBA) loan , obtaining a entrepreneurship visa , or meeting specific investor requirements may mandate a comprehensive business plan.
However a traditional business plan isn’t always necessary. For example, in early-stage investor funding, particularly in industries like SaaS, a lean business plan accompanied by a pitch deck presentation will often suffice. The focus here is on agility and essential information rather than exhaustive detail.
Every Business Needs Business Planning
Unlike the traditional business plan, which may or may not be required depending on the situation, business planning as a process is indispensable for every business, regardless of size or stage.
Business planning is a dynamic, continuous process. It's not confined to a single document but evolves with the business, adapting to changes, challenges, and opportunities. Effective strategic planning ensures internal alignment with both long-term vision and short-term objectives. It's a holistic approach that guides business goal-setting decision-making, resource allocation, and strategic direction. It often serves as the basis for a fully developed marketing plan.
Every business, from a small startup to a large corporation, benefits from strategic planning. It's a practice that fosters growth, innovation, and resilience, providing a roadmap for success.
Not every business needs a traditional business plan as a document, but all businesses need to engage in business planning as a process. While the traditional business plan serves specific purposes and audiences, business planning is a universal practice that guides and grows the business.
Entrepreneurs and business leaders must assess their specific needs, recognizing that the traditional business plan is just one tool among many. The true value of the business plan lies in continuous planning, adapting, and aligning with the unique vision and goals of the business.
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How to Write a Management Summary for Your Business Plan
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5.6 The Business Plan
Learning objective.
- Discuss the importance of planning for your business, and identify the key sections of a business plan.
If you want to start a business, you must prepare a business plan. This essential document should tell the story of your business concept, provide an overview of the industry in which you will operate, describe the goods or services you will provide, identify your customers and proposed marketing activities, explain the qualifications of your management team, and state your projected income and borrowing needs.
Purpose of a Business Plan
The business plan is a plan or blueprint for the company, and it’s an indispensable tool in attracting investors, obtaining loans, or both. Remember, too, that the value of your business plan isn’t limited to the planning stages of your business and the process of finding start-up money. Once you’ve acquired start-up capital, don’t just stuff your plan in a drawer. Treat it as an ongoing guide to your business and its operations, as well as a yardstick by which you can measure your performance. Keep it handy, update it periodically, and use it to assess your progress.
In developing and writing your business plan, you must make strategic decisions in the areas of management, operations, marketing, accounting, and finance—in short, in all the functional areas of business that we described in Chapter 1 “The Foundations of Business” . Granted, preparing a business plan takes a lot of time and work, but it’s well worth the effort. A business plan forces you to think critically about your proposed business and reduces your risk of failure. It forces you to analyze your business concept and the industry in which you’ll be operating, and it helps you determine how you can grab a percentage of sales in that industry.
The most common use of a business plan is persuading investors, lenders, or both, to provide financing. These two groups look for different things. Investors are particularly interested in the quality of your business concept and the ability of management to make your venture successful. Bankers and other lenders are primarily concerned with your company’s ability to generate cash to repay loans. To persuade investors and lenders to support your business, you need a professional, well-written business plan that paints a clear picture of your proposed business.
Sections of the Business Plan
Though formats can vary, a business plan generally includes the following sections: executive summary, description of proposed business, industry analysis, mission statement and core values, management plan, goods or services and (if applicable) production processes, marketing, global issues, and financial plan. Let’s explore each of these sections in more detail. ( Note : More detailed documents and an Excel template are available for those classes in which the optional business plan project is assigned.)
Executive Summary
The executive summary is a one- to three-page overview of the business plan. It’s actually the most important part of the business plan: it’s what the reader looks at first, and if it doesn’t capture the reader’s attention, it might be the only thing that he or she looks at. It should therefore emphasize the key points of the plan and get the reader excited about the prospects of the business.
Even though the executive summary is the first thing read, it’s written after the other sections of the plan are completed. An effective approach in writing the executive summary is to paraphrase key sentences from each section of the business plan. This process will ensure that the key information of each section is included in the executive summary.
Description of Proposed Business
Here, you present a brief description of the company and tell the reader why you’re starting your business, what benefits it provides, and why it will be successful. Some of the questions to answer in this section include the following:
- What will your proposed company do? Will it be a manufacturer, a retailer, or a service provider?
- What goods or services will it provide?
- Why are your goods or services unique?
- Who will be your main customers?
- How will your goods or services be sold?
- Where will your business be located?
Because later parts of the plan will provide more detailed discussions of many of these issues, this section should provide only an overview of these topics.
Industry Analysis
This section provides a brief introduction to the industry in which you propose to operate. It describes both the current situation and the future possibilities, and it addresses such questions as the following:
- How large is the industry? What are total sales for the industry, in volume and dollars?
- Is the industry mature or are new companies successfully entering it?
- What opportunities exist in the industry? What threats exist?
- What factors will influence future expansion or contraction of the industry?
- What is the overall outlook for the industry?
- Who are your major competitors in the industry?
- How does your product differ from those of your competitors?
Mission Statement and Core Values
This portion of the business plan states the company’s mission statement and core values . The mission statement describes the purpose or mission of your organization—its reason for existence. It tells the reader what the organization is committed to doing. For example, one mission statement reads, “The mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit” (Southwest Airline’s, 2011).
Core values are fundamental beliefs about what’s important and what is (and isn’t) appropriate in conducting company activities. Core values are not about profits, but rather about ideals. They should help guide the behavior of individuals in the organization. Coca-Cola, for example, intends that its core values—leadership, passion, integrity, collaboration, diversity, quality, and accountability—will let employees know what behaviors are (and aren’t) acceptable (The Coca-Cola Company, 2011).
Management Plan
Management makes the key decisions for the business, such as its legal form and organizational structure. This section of the business plan should outline these decisions and provide information about the qualifications of the key management personnel.
A. Legal Form of Organization
This section dentifies the chosen legal form of business ownership: sole proprietorship (personal ownership), partnership (ownership shared with one or more partners), or corporation (ownership through shares of stock).
B. Qualifications of Management Team and Compensation Package
It isn’t enough merely to have a good business idea: you need a talented management team that can turn your concept into a profitable venture. This part of the management plan section provides information about the qualifications of each member of the management team. Its purpose is to convince the reader that the company will be run by experienced, well-qualified managers. It describes each individual’s education, experience, and expertise, as well as each person’s responsibilities. It also indicates the estimated annual salary to be paid to each member of the management team.
C. Organizational Structure
This section of the management plan describes the relationships among individuals within the company, listing the major responsibilities of each member of the management team.
Goods, Services, and the Production Process
To succeed in attracting investors and lenders, you must be able to describe your goods or services clearly (and enthusiastically). Here, you describe all the goods and services that you will provide the marketplace. This section explains why your proposed offerings are better than those of competitors and indicates what market needs will be met by your goods or services. In other words, it addresses a key question: What competitive advantage will the company’s goods and services have over similar products on the market?
This section also indicates how you plan to obtain or make your products. Naturally, the write-up will vary, depending on whether you’re proposing a service company, a retailer, or a manufacturer. If it’s a service company, describe the process by which you’ll deliver your services. If it’s a retail company, tell the reader where you’ll purchase products for resale.
If you’re going to be a manufacturer, you must furnish information on product design, development, and production processes. You must address questions such as the following:
- How will products be designed?
- What technology will be needed to design and manufacture products?
- Will the company run its own production facilities, or will its products be manufactured by someone else?
- Where will production facilities be located?
- What type of equipment will be used?
- What are the design and layout of the facilities?
- How many workers will be employed in the production process?
- How many units will be produced?
- How will the company ensure that products are of high quality?
This critical section focuses on four marketing-related areas—target market, pricing, distribution, and promotion:
- Target market . Describe future customers and profile them according to age, gender, income, interests, and so forth. If your company will sell to other companies, describe your typical business customer.
- Pricing . State the proposed price for each product. Compare your pricing strategy to that of competitors.
- Distribution . Explain how your goods or services will be distributed to customers. Indicate whether they’ll be sold directly to customers or through retail outlets.
- Promotion . Explain your promotion strategy, indicating what types of advertising you’ll be using.
In addition, if you intend to use the Internet to promote or sell your products, also provide answers to these questions:
- Will your company have a Web site? Who will visit the site?
- What will the site look like? What information will it supply?
- Will you sell products over the Internet?
- How will you attract customers to your site and entice them to buy from your company?
Global Issues
In this section, indicate whether you’ll be involved in international markets, by either buying or selling in other countries. If you’re going to operate across borders, identify the challenges that you’ll face in your global environment, and explain how you’ll meet them. If you don’t plan initially to be involved in international markets, state what strategies, if any, you’ll use to move into international markets when the time comes.
Financial Plan
In preparing the financial section of your business plan, specify the company’s cash needs and explain how you’ll be able to repay debt. This information is vital in obtaining financing. It reports the amount of cash needed by the company for start-up and initial operations and provides an overview of proposed funding sources. It presents financial projections, including expected sales, costs, and profits (or losses). It refers to a set of financial statements included in an appendix to the business plan.
Here, you furnish supplemental information that may be of interest to the reader. In addition to a set of financial statements, for example, you might attach the résumés of your management team.
Key Takeaways
- A business plan tells the story of your business concept, provides an overview of the industry in which you will operate, describes the goods or services you will provide, identifies your customers and proposed marketing activities, explains the qualifications of your management team, and states your projected income and borrowing needs.
- In your business plan, you make strategic decisions in the areas of management, operations, marketing, accounting, and finance. Developing your business plan forces you to analyze your business concept and the industry in which you’ll be operating. Its most common use is persuading investors and lenders to provide financing.
A business plan generally includes the following sections:
- Executive summary . One- to three-page overview.
- Description of proposed business . Brief description of the company that answers such questions as what your proposed company will do, what goods or services it will provide, and who its main customers will be.
- Industry analysis . Short introduction to the industry in which you propose to operate.
- Mission statement and core values . Declaration of your mission statement , which are fundamental beliefs about what’s important and what is (and isn’t) appropriate in conducting company activities.
- Management plan . Information about management team qualifications and responsibilities, and designation of your proposed legal form of organization.
- Goods, services, and the production process . Description of the goods and services that you’ll provide in the marketplace; explanation of how you plan to obtain or make your products or of the process by which you’ll deliver your services.
- Marketing . Description of your plans in four marketing-related areas: target market, pricing, distribution, and promotion.
- Global issues . Description of your involvement, if any, in international markets.
- Financial plan . Report on the cash you’ll need for start-up and initial operations, proposed funding sources, and means of repaying your debt.
- Appendices . Supplemental information that may be of interest to the reader.
(AACSB) Analysis
Let’s start with three givens: (1) college students love chocolate chip cookies, (2) you have a special talent for baking cookies, and (3) you’re always broke. Given these three conditions, you’ve come up with the idea of starting an on-campus business—selling chocolate chip cookies to fellow students. As a business major, you want to do things right by preparing a business plan. First, you identified a number of specifics about your proposed business. Now, you need to put these various pieces of information into the relevant section of your business plan. Using the business plan format described in this chapter, indicate the section of the business plan into which you’d put each of the following:
- You’ll bake the cookies in the kitchen of a friend’s apartment.
- You’ll charge $1 each or $10 a dozen.
- Your purpose is to make the best cookies on campus and deliver them fresh. You value integrity, consideration of others, and quality.
- Each cookie will have ten chocolate chips and will be superior to those sold in nearby bakeries and other stores.
- You expect sales of $6,000 for the first year.
- Chocolate chip cookies are irresistible to college students. There’s a lot of competition from local bakeries, but your cookies will be superior and popular with college students. You’ll make them close to campus using only fresh ingredients and sell them for $1 each. Your management team is excellent. You expect first-year sales of $6,000 and net income of $1,500. You estimate start-up costs at $600.
- You’ll place ads for your product in the college newspaper.
- You’ll hire a vice president at a salary of $100 a week.
- You can ship cookies anywhere in the United States and in Canada.
- You need $600 in cash to start the business.
- There are six bakeries within walking distance of the college.
- You’ll bake nothing but cookies and sell them to college students. You’ll make them in an apartment near campus and deliver them fresh.
The Coca-Cola Company, “Workplace Culture,” The Coca-Cola Company, http://www.thecoca-colacompany.com/citizenship/workplace_culture.html (accessed August 31, 2011).
Southwest Airline’s company Web site, about SWA section, http://www.southwest.com/about_swa/mission.html (accessed August 31, 2011).
Exploring Business Copyright © 2016 by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.
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How to Write a Business Plan in 9 Steps (+ Template and Examples)
Every successful business has one thing in common, a good and well-executed business plan. A business plan is more than a document, it is a complete guide that outlines the goals your business wants to achieve, including its financial goals . It helps you analyze results, make strategic decisions, show your business operations and growth.
If you want to start a business or already have one and need to pitch it to investors for funding, writing a good business plan improves your chances of attracting financiers. As a startup, if you want to secure loans from financial institutions, part of the requirements involve submitting your business plan.
Writing a business plan does not have to be a complicated or time-consuming process. In this article, you will learn the step-by-step process for writing a successful business plan.
You will also learn what you need a business plan for, tips and strategies for writing a convincing business plan, business plan examples and templates that will save you tons of time, and the alternatives to the traditional business plan.
Let’s get started.
What Do You Need A Business Plan For?
Businesses create business plans for different purposes such as to secure funds, monitor business growth, measure your marketing strategies, and measure your business success.
1. Secure Funds
One of the primary reasons for writing a business plan is to secure funds, either from financial institutions/agencies or investors.
For you to effectively acquire funds, your business plan must contain the key elements of your business plan . For example, your business plan should include your growth plans, goals you want to achieve, and milestones you have recorded.
A business plan can also attract new business partners that are willing to contribute financially and intellectually. If you are writing a business plan to a bank, your project must show your traction , that is, the proof that you can pay back any loan borrowed.
Also, if you are writing to an investor, your plan must contain evidence that you can effectively utilize the funds you want them to invest in your business. Here, you are using your business plan to persuade a group or an individual that your business is a source of a good investment.
2. Monitor Business Growth
A business plan can help you track cash flows in your business. It steers your business to greater heights. A business plan capable of tracking business growth should contain:
- The business goals
- Methods to achieve the goals
- Time-frame for attaining those goals
A good business plan should guide you through every step in achieving your goals. It can also track the allocation of assets to every aspect of the business. You can tell when you are spending more than you should on a project.
You can compare a business plan to a written GPS. It helps you manage your business and hints at the right time to expand your business.
3. Measure Business Success
A business plan can help you measure your business success rate. Some small-scale businesses are thriving better than more prominent companies because of their track record of success.
Right from the onset of your business operation, set goals and work towards them. Write a plan to guide you through your procedures. Use your plan to measure how much you have achieved and how much is left to attain.
You can also weigh your success by monitoring the position of your brand relative to competitors. On the other hand, a business plan can also show you why you have not achieved a goal. It can tell if you have elapsed the time frame you set to attain a goal.
4. Document Your Marketing Strategies
You can use a business plan to document your marketing plans. Every business should have an effective marketing plan.
Competition mandates every business owner to go the extraordinary mile to remain relevant in the market. Your business plan should contain your marketing strategies that work. You can measure the success rate of your marketing plans.
In your business plan, your marketing strategy must answer the questions:
- How do you want to reach your target audience?
- How do you plan to retain your customers?
- What is/are your pricing plans?
- What is your budget for marketing?
![a business plan is best described as a Business Plan Infographic](https://www.founderjar.com/wp-content/uploads/2021/07/Business-Plan-Infographic.jpg)
How to Write a Business Plan Step-by-Step
1. create your executive summary.
The executive summary is a snapshot of your business or a high-level overview of your business purposes and plans . Although the executive summary is the first section in your business plan, most people write it last. The length of the executive summary is not more than two pages.
![a business plan is best described as a Executive Summary of the business plan](https://www.founderjar.com/wp-content/uploads/2021/07/Executive-Summary-of-the-business-plan.jpg)
Generally, there are nine sections in a business plan, the executive summary should condense essential ideas from the other eight sections.
A good executive summary should do the following:
- A Snapshot of Growth Potential. Briefly inform the reader about your company and why it will be successful)
- Contain your Mission Statement which explains what the main objective or focus of your business is.
- Product Description and Differentiation. Brief description of your products or services and why it is different from other solutions in the market.
- The Team. Basic information about your company’s leadership team and employees
- Business Concept. A solid description of what your business does.
- Target Market. The customers you plan to sell to.
- Marketing Strategy. Your plans on reaching and selling to your customers
- Current Financial State. Brief information about what revenue your business currently generates.
- Projected Financial State. Brief information about what you foresee your business revenue to be in the future.
The executive summary is the make-or-break section of your business plan. If your summary cannot in less than two pages cannot clearly describe how your business will solve a particular problem of your target audience and make a profit, your business plan is set on a faulty foundation.
Avoid using the executive summary to hype your business, instead, focus on helping the reader understand the what and how of your plan.
View the executive summary as an opportunity to introduce your vision for your company. You know your executive summary is powerful when it can answer these key questions:
- Who is your target audience?
- What sector or industry are you in?
- What are your products and services?
- What is the future of your industry?
- Is your company scaleable?
- Who are the owners and leaders of your company? What are their backgrounds and experience levels?
- What is the motivation for starting your company?
- What are the next steps?
Writing the executive summary last although it is the most important section of your business plan is an excellent idea. The reason why is because it is a high-level overview of your business plan. It is the section that determines whether potential investors and lenders will read further or not.
The executive summary can be a stand-alone document that covers everything in your business plan. It is not uncommon for investors to request only the executive summary when evaluating your business. If the information in the executive summary impresses them, they will ask for the complete business plan.
If you are writing your business plan for your planning purposes, you do not need to write the executive summary.
2. Add Your Company Overview
The company overview or description is the next section in your business plan after the executive summary. It describes what your business does.
Adding your company overview can be tricky especially when your business is still in the planning stages. Existing businesses can easily summarize their current operations but may encounter difficulties trying to explain what they plan to become.
Your company overview should contain the following:
- What products and services you will provide
- Geographical markets and locations your company have a presence
- What you need to run your business
- Who your target audience or customers are
- Who will service your customers
- Your company’s purpose, mission, and vision
- Information about your company’s founders
- Who the founders are
- Notable achievements of your company so far
When creating a company overview, you have to focus on three basics: identifying your industry, identifying your customer, and explaining the problem you solve.
If you are stuck when creating your company overview, try to answer some of these questions that pertain to you.
- Who are you targeting? (The answer is not everyone)
- What pain point does your product or service solve for your customers that they will be willing to spend money on resolving?
- How does your product or service overcome that pain point?
- Where is the location of your business?
- What products, equipment, and services do you need to run your business?
- How is your company’s product or service different from your competition in the eyes of your customers?
- How many employees do you need and what skills do you require them to have?
After answering some or all of these questions, you will get more than enough information you need to write your company overview or description section. When writing this section, describe what your company does for your customers.
![a business plan is best described as a It describes what your business does](https://www.founderjar.com/wp-content/uploads/2021/07/Company-Description-describes-what-your-business-does.jpg)
The company description or overview section contains three elements: mission statement, history, and objectives.
- Mission Statement
The mission statement refers to the reason why your business or company is existing. It goes beyond what you do or sell, it is about the ‘why’. A good mission statement should be emotional and inspirational.
Your mission statement should follow the KISS rule (Keep It Simple, Stupid). For example, Shopify’s mission statement is “Make commerce better for everyone.”
When describing your company’s history, make it simple and avoid the temptation of tying it to a defensive narrative. Write it in the manner you would a profile. Your company’s history should include the following information:
- Founding Date
- Major Milestones
- Location(s)
- Flagship Products or Services
- Number of Employees
- Executive Leadership Roles
When you fill in this information, you use it to write one or two paragraphs about your company’s history.
Business Objectives
Your business objective must be SMART (specific, measurable, achievable, realistic, and time-bound.) Failure to clearly identify your business objectives does not inspire confidence and makes it hard for your team members to work towards a common purpose.
3. Perform Market and Competitive Analyses to Proof a Big Enough Business Opportunity
The third step in writing a business plan is the market and competitive analysis section. Every business, no matter the size, needs to perform comprehensive market and competitive analyses before it enters into a market.
Performing market and competitive analyses are critical for the success of your business. It helps you avoid entering the right market with the wrong product, or vice versa. Anyone reading your business plans, especially financiers and financial institutions will want to see proof that there is a big enough business opportunity you are targeting.
This section is where you describe the market and industry you want to operate in and show the big opportunities in the market that your business can leverage to make a profit. If you noticed any unique trends when doing your research, show them in this section.
Market analysis alone is not enough, you have to add competitive analysis to strengthen this section. There are already businesses in the industry or market, how do you plan to take a share of the market from them?
You have to clearly illustrate the competitive landscape in your business plan. Are there areas your competitors are doing well? Are there areas where they are not doing so well? Show it.
Make it clear in this section why you are moving into the industry and what weaknesses are present there that you plan to explain. How are your competitors going to react to your market entry? How do you plan to get customers? Do you plan on taking your competitors' competitors, tap into other sources for customers, or both?
Illustrate the competitive landscape as well. What are your competitors doing well and not so well?
Answering these questions and thoughts will aid your market and competitive analysis of the opportunities in your space. Depending on how sophisticated your industry is, or the expectations of your financiers, you may need to carry out a more comprehensive market and competitive analysis to prove that big business opportunity.
Instead of looking at the market and competitive analyses as one entity, separating them will make the research even more comprehensive.
Market Analysis
Market analysis, boarding speaking, refers to research a business carried out on its industry, market, and competitors. It helps businesses gain a good understanding of their target market and the outlook of their industry. Before starting a company, it is vital to carry out market research to find out if the market is viable.
![a business plan is best described as a Market Analysis for Online Business](https://www.founderjar.com/wp-content/uploads/2021/07/Market-Analysis-for-Online-Business.jpg)
The market analysis section is a key part of the business plan. It is the section where you identify who your best clients or customers are. You cannot omit this section, without it your business plan is incomplete.
A good market analysis will tell your readers how you fit into the existing market and what makes you stand out. This section requires in-depth research, it will probably be the most time-consuming part of the business plan to write.
- Market Research
To create a compelling market analysis that will win over investors and financial institutions, you have to carry out thorough market research . Your market research should be targeted at your primary target market for your products or services. Here is what you want to find out about your target market.
- Your target market’s needs or pain points
- The existing solutions for their pain points
- Geographic Location
- Demographics
The purpose of carrying out a marketing analysis is to get all the information you need to show that you have a solid and thorough understanding of your target audience.
Only after you have fully understood the people you plan to sell your products or services to, can you evaluate correctly if your target market will be interested in your products or services.
You can easily convince interested parties to invest in your business if you can show them you thoroughly understand the market and show them that there is a market for your products or services.
How to Quantify Your Target Market
One of the goals of your marketing research is to understand who your ideal customers are and their purchasing power. To quantify your target market, you have to determine the following:
- Your Potential Customers: They are the people you plan to target. For example, if you sell accounting software for small businesses , then anyone who runs an enterprise or large business is unlikely to be your customers. Also, individuals who do not have a business will most likely not be interested in your product.
- Total Households: If you are selling household products such as heating and air conditioning systems, determining the number of total households is more important than finding out the total population in the area you want to sell to. The logic is simple, people buy the product but it is the household that uses it.
- Median Income: You need to know the median income of your target market. If you target a market that cannot afford to buy your products and services, your business will not last long.
- Income by Demographics: If your potential customers belong to a certain age group or gender, determining income levels by demographics is necessary. For example, if you sell men's clothes, your target audience is men.
What Does a Good Market Analysis Entail?
Your business does not exist on its own, it can only flourish within an industry and alongside competitors. Market analysis takes into consideration your industry, target market, and competitors. Understanding these three entities will drastically improve your company’s chances of success.
![a business plan is best described as a Market Analysis Steps](https://www.founderjar.com/wp-content/uploads/2021/07/Market-Analysis-Steps.jpg)
You can view your market analysis as an examination of the market you want to break into and an education on the emerging trends and themes in that market. Good market analyses include the following:
- Industry Description. You find out about the history of your industry, the current and future market size, and who the largest players/companies are in your industry.
- Overview of Target Market. You research your target market and its characteristics. Who are you targeting? Note, it cannot be everyone, it has to be a specific group. You also have to find out all information possible about your customers that can help you understand how and why they make buying decisions.
- Size of Target Market: You need to know the size of your target market, how frequently they buy, and the expected quantity they buy so you do not risk overproducing and having lots of bad inventory. Researching the size of your target market will help you determine if it is big enough for sustained business or not.
- Growth Potential: Before picking a target market, you want to be sure there are lots of potential for future growth. You want to avoid going for an industry that is declining slowly or rapidly with almost zero growth potential.
- Market Share Potential: Does your business stand a good chance of taking a good share of the market?
- Market Pricing and Promotional Strategies: Your market analysis should give you an idea of the price point you can expect to charge for your products and services. Researching your target market will also give you ideas of pricing strategies you can implement to break into the market or to enjoy maximum profits.
- Potential Barriers to Entry: One of the biggest benefits of conducting market analysis is that it shows you every potential barrier to entry your business will likely encounter. It is a good idea to discuss potential barriers to entry such as changing technology. It informs readers of your business plan that you understand the market.
- Research on Competitors: You need to know the strengths and weaknesses of your competitors and how you can exploit them for the benefit of your business. Find patterns and trends among your competitors that make them successful, discover what works and what doesn’t, and see what you can do better.
The market analysis section is not just for talking about your target market, industry, and competitors. You also have to explain how your company can fill the hole you have identified in the market.
Here are some questions you can answer that can help you position your product or service in a positive light to your readers.
- Is your product or service of superior quality?
- What additional features do you offer that your competitors do not offer?
- Are you targeting a ‘new’ market?
Basically, your market analysis should include an analysis of what already exists in the market and an explanation of how your company fits into the market.
Competitive Analysis
In the competitive analysis section, y ou have to understand who your direct and indirect competitions are, and how successful they are in the marketplace. It is the section where you assess the strengths and weaknesses of your competitors, the advantage(s) they possess in the market and show the unique features or qualities that make you different from your competitors.
![a business plan is best described as a Four Steps to Create a Competitive Marketing Analysis](https://www.founderjar.com/wp-content/uploads/2021/07/Four-Steps-to-Create-a-Competitive-Marketing-Analysis.jpg)
Many businesses do market analysis and competitive analysis together. However, to fully understand what the competitive analysis entails, it is essential to separate it from the market analysis.
Competitive analysis for your business can also include analysis on how to overcome barriers to entry in your target market.
The primary goal of conducting a competitive analysis is to distinguish your business from your competitors. A strong competitive analysis is essential if you want to convince potential funding sources to invest in your business. You have to show potential investors and lenders that your business has what it takes to compete in the marketplace successfully.
Competitive analysis will s how you what the strengths of your competition are and what they are doing to maintain that advantage.
When doing your competitive research, you first have to identify your competitor and then get all the information you can about them. The idea of spending time to identify your competitor and learn everything about them may seem daunting but it is well worth it.
Find answers to the following questions after you have identified who your competitors are.
- What are your successful competitors doing?
- Why is what they are doing working?
- Can your business do it better?
- What are the weaknesses of your successful competitors?
- What are they not doing well?
- Can your business turn its weaknesses into strengths?
- How good is your competitors’ customer service?
- Where do your competitors invest in advertising?
- What sales and pricing strategies are they using?
- What marketing strategies are they using?
- What kind of press coverage do they get?
- What are their customers saying about your competitors (both the positive and negative)?
If your competitors have a website, it is a good idea to visit their websites for more competitors’ research. Check their “About Us” page for more information.
![a business plan is best described as a How to Perform Competitive Analysis](https://www.founderjar.com/wp-content/uploads/2021/07/How-to-Perform-Competitive-Analysis.jpg)
If you are presenting your business plan to investors, you need to clearly distinguish yourself from your competitors. Investors can easily tell when you have not properly researched your competitors.
Take time to think about what unique qualities or features set you apart from your competitors. If you do not have any direct competition offering your product to the market, it does not mean you leave out the competitor analysis section blank. Instead research on other companies that are providing a similar product, or whose product is solving the problem your product solves.
The next step is to create a table listing the top competitors you want to include in your business plan. Ensure you list your business as the last and on the right. What you just created is known as the competitor analysis table.
Direct vs Indirect Competition
You cannot know if your product or service will be a fit for your target market if you have not understood your business and the competitive landscape.
There is no market you want to target where you will not encounter competition, even if your product is innovative. Including competitive analysis in your business plan is essential.
If you are entering an established market, you need to explain how you plan to differentiate your products from the available options in the market. Also, include a list of few companies that you view as your direct competitors The competition you face in an established market is your direct competition.
In situations where you are entering a market with no direct competition, it does not mean there is no competition there. Consider your indirect competition that offers substitutes for the products or services you offer.
For example, if you sell an innovative SaaS product, let us say a project management software , a company offering time management software is your indirect competition.
There is an easy way to find out who your indirect competitors are in the absence of no direct competitors. You simply have to research how your potential customers are solving the problems that your product or service seeks to solve. That is your direct competition.
Factors that Differentiate Your Business from the Competition
There are three main factors that any business can use to differentiate itself from its competition. They are cost leadership, product differentiation, and market segmentation.
1. Cost Leadership
A strategy you can impose to maximize your profits and gain an edge over your competitors. It involves offering lower prices than what the majority of your competitors are offering.
A common practice among businesses looking to enter into a market where there are dominant players is to use free trials or pricing to attract as many customers as possible to their offer.
2. Product Differentiation
Your product or service should have a unique selling proposition (USP) that your competitors do not have or do not stress in their marketing.
Part of the marketing strategy should involve making your products unique and different from your competitors. It does not have to be different from your competitors, it can be the addition to a feature or benefit that your competitors do not currently have.
3. Market Segmentation
As a new business seeking to break into an industry, you will gain more success from focusing on a specific niche or target market, and not the whole industry.
If your competitors are focused on a general need or target market, you can differentiate yourself from them by having a small and hyper-targeted audience. For example, if your competitors are selling men’s clothes in their online stores , you can sell hoodies for men.
4. Define Your Business and Management Structure
The next step in your business plan is your business and management structure. It is the section where you describe the legal structure of your business and the team running it.
Your business is only as good as the management team that runs it, while the management team can only strive when there is a proper business and management structure in place.
If your company is a sole proprietor or a limited liability company (LLC), a general or limited partnership, or a C or an S corporation, state it clearly in this section.
Use an organizational chart to show the management structure in your business. Clearly show who is in charge of what area in your company. It is where you show how each key manager or team leader’s unique experience can contribute immensely to the success of your company. You can also opt to add the resumes and CVs of the key players in your company.
The business and management structure section should show who the owner is, and other owners of the businesses (if the business has other owners). For businesses or companies with multiple owners, include the percent ownership of the various owners and clearly show the extent of each others’ involvement in the company.
Investors want to know who is behind the company and the team running it to determine if it has the right management to achieve its set goals.
Management Team
The management team section is where you show that you have the right team in place to successfully execute the business operations and ideas. Take time to create the management structure for your business. Think about all the important roles and responsibilities that you need managers for to grow your business.
Include brief bios of each key team member and ensure you highlight only the relevant information that is needed. If your team members have background industry experience or have held top positions for other companies and achieved success while filling that role, highlight it in this section.
![a business plan is best described as a Create Management Team For Business Plan](https://www.founderjar.com/wp-content/uploads/2021/07/Create-Management-Team-For-Business-Plan.jpg)
A common mistake that many startups make is assigning C-level titles such as (CMO and CEO) to everyone on their team. It is unrealistic for a small business to have those titles. While it may look good on paper for the ego of your team members, it can prevent investors from investing in your business.
Instead of building an unrealistic management structure that does not fit your business reality, it is best to allow business titles to grow as the business grows. Starting everyone at the top leaves no room for future change or growth, which is bad for productivity.
Your management team does not have to be complete before you start writing your business plan. You can have a complete business plan even when there are managerial positions that are empty and need filling.
If you have management gaps in your team, simply show the gaps and indicate you are searching for the right candidates for the role(s). Investors do not expect you to have a full management team when you are just starting your business.
Key Questions to Answer When Structuring Your Management Team
- Who are the key leaders?
- What experiences, skills, and educational backgrounds do you expect your key leaders to have?
- Do your key leaders have industry experience?
- What positions will they fill and what duties will they perform in those positions?
- What level of authority do the key leaders have and what are their responsibilities?
- What is the salary for the various management positions that will attract the ideal candidates?
Additional Tips for Writing the Management Structure Section
1. Avoid Adding ‘Ghost’ Names to Your Management Team
There is always that temptation to include a ‘ghost’ name to your management team to attract and influence investors to invest in your business. Although the presence of these celebrity management team members may attract the attention of investors, it can cause your business to lose any credibility if you get found out.
Seasoned investors will investigate further the members of your management team before committing fully to your business If they find out that the celebrity name used does not play any actual role in your business, they will not invest and may write you off as dishonest.
2. Focus on Credentials But Pay Extra Attention to the Roles
Investors want to know the experience that your key team members have to determine if they can successfully reach the company’s growth and financial goals.
While it is an excellent boost for your key management team to have the right credentials, you also want to pay extra attention to the roles they will play in your company.
Organizational Chart
![a business plan is best described as a Organizational chart Infographic](https://www.founderjar.com/wp-content/uploads/2021/07/An-organizational-chart-helps-to-identify-how-best-to-structure-your-management-team.jpg)
Adding an organizational chart in this section of your business plan is not necessary, you can do it in your business plan’s appendix.
If you are exploring funding options, it is not uncommon to get asked for your organizational chart. The function of an organizational chart goes beyond raising money, you can also use it as a useful planning tool for your business.
An organizational chart can help you identify how best to structure your management team for maximum productivity and point you towards key roles you need to fill in the future.
You can use the organizational chart to show your company’s internal management structure such as the roles and responsibilities of your management team, and relationships that exist between them.
5. Describe Your Product and Service Offering
In your business plan, you have to describe what you sell or the service you plan to offer. It is the next step after defining your business and management structure. The products and services section is where you sell the benefits of your business.
Here you have to explain how your product or service will benefit your customers and describe your product lifecycle. It is also the section where you write down your plans for intellectual property like patent filings and copyrighting.
The research and development that you are undertaking for your product or service need to be explained in detail in this section. However, do not get too technical, sell the general idea and its benefits.
If you have any diagrams or intricate designs of your product or service, do not include them in the products and services section. Instead, leave them for the addendum page. Also, if you are leaving out diagrams or designs for the addendum, ensure you add this phrase “For more detail, visit the addendum Page #.”
Your product and service section in your business plan should include the following:
- A detailed explanation that clearly shows how your product or service works.
- The pricing model for your product or service.
- Your business’ sales and distribution strategy.
- The ideal customers that want your product or service.
- The benefits of your products and services.
- Reason(s) why your product or service is a better alternative to what your competitors are currently offering in the market.
- Plans for filling the orders you receive
- If you have current or pending patents, copyrights, and trademarks for your product or service, you can also discuss them in this section.
![](http://writinghelp.online/777/templates/cheerup/res/banner1.gif)
What to Focus On When Describing the Benefits, Lifecycle, and Production Process of Your Products or Services
In the products and services section, you have to distill the benefits, lifecycle, and production process of your products and services.
When describing the benefits of your products or services, here are some key factors to focus on.
- Unique features
- Translating the unique features into benefits
- The emotional, psychological, and practical payoffs to attract customers
- Intellectual property rights or any patents
When describing the product life cycle of your products or services, here are some key factors to focus on.
- Upsells, cross-sells, and down-sells
- Time between purchases
- Plans for research and development.
When describing the production process for your products or services, you need to think about the following:
- The creation of new or existing products and services.
- The sources for the raw materials or components you need for production.
- Assembling the products
- Maintaining quality control
- Supply-chain logistics (receiving the raw materials and delivering the finished products)
- The day-to-day management of the production processes, bookkeeping, and inventory.
Tips for Writing the Products or Services Section of Your Business Plan
1. Avoid Technical Descriptions and Industry Buzzwords
The products and services section of your business plan should clearly describe the products and services that your company provides. However, it is not a section to include technical jargons that anyone outside your industry will not understand.
A good practice is to remove highly detailed or technical descriptions in favor of simple terms. Industry buzzwords are not necessary, if there are simpler terms you can use, then use them. If you plan to use your business plan to source funds, making the product or service section so technical will do you no favors.
2. Describe How Your Products or Services Differ from Your Competitors
When potential investors look at your business plan, they want to know how the products and services you are offering differ from that of your competition. Differentiating your products or services from your competition in a way that makes your solution more attractive is critical.
If you are going the innovative path and there is no market currently for your product or service, you need to describe in this section why the market needs your product or service.
For example, overnight delivery was a niche business that only a few companies were participating in. Federal Express (FedEx) had to show in its business plan that there was a large opportunity for that service and they justified why the market needed that service.
3. Long or Short Products or Services Section
Should your products or services section be short? Does the long products or services section attract more investors?
There are no straightforward answers to these questions. Whether your products or services section should be long or relatively short depends on the nature of your business.
If your business is product-focused, then automatically you need to use more space to describe the details of your products. However, if the product your business sells is a commodity item that relies on competitive pricing or other pricing strategies, you do not have to use up so much space to provide significant details about the product.
Likewise, if you are selling a commodity that is available in numerous outlets, then you do not have to spend time on writing a long products or services section.
The key to the success of your business is most likely the effectiveness of your marketing strategies compared to your competitors. Use more space to address that section.
If you are creating a new product or service that the market does not know about, your products or services section can be lengthy. The reason why is because you need to explain everything about the product or service such as the nature of the product, its use case, and values.
A short products or services section for an innovative product or service will not give the readers enough information to properly evaluate your business.
4. Describe Your Relationships with Vendors or Suppliers
Your business will rely on vendors or suppliers to supply raw materials or the components needed to make your products. In your products and services section, describe your relationships with your vendors and suppliers fully.
Avoid the mistake of relying on only one supplier or vendor. If that supplier or vendor fails to supply or goes out of business, you can easily face supply problems and struggle to meet your demands. Plan to set up multiple vendor or supplier relationships for better business stability.
5. Your Primary Goal Is to Convince Your Readers
The primary goal of your business plan is to convince your readers that your business is viable and to create a guide for your business to follow. It applies to the products and services section.
When drafting this section, think like the reader. See your reader as someone who has no idea about your products and services. You are using the products and services section to provide the needed information to help your reader understand your products and services. As a result, you have to be clear and to the point.
While you want to educate your readers about your products or services, you also do not want to bore them with lots of technical details. Show your products and services and not your fancy choice of words.
Your products and services section should provide the answer to the “what” question for your business. You and your management team may run the business, but it is your products and services that are the lifeblood of the business.
Key Questions to Answer When Writing your Products and Services Section
Answering these questions can help you write your products and services section quickly and in a way that will appeal to your readers.
- Are your products existing on the market or are they still in the development stage?
- What is your timeline for adding new products and services to the market?
- What are the positives that make your products and services different from your competitors?
- Do your products and services have any competitive advantage that your competitors’ products and services do not currently have?
- Do your products or services have any competitive disadvantages that you need to overcome to compete with your competitors? If your answer is yes, state how you plan to overcome them,
- How much does it cost to produce your products or services? How much do you plan to sell it for?
- What is the price for your products and services compared to your competitors? Is pricing an issue?
- What are your operating costs and will it be low enough for you to compete with your competitors and still take home a reasonable profit margin?
- What is your plan for acquiring your products? Are you involved in the production of your products or services?
- Are you the manufacturer and produce all the components you need to create your products? Do you assemble your products by using components supplied by other manufacturers? Do you purchase your products directly from suppliers or wholesalers?
- Do you have a steady supply of products that you need to start your business? (If your business is yet to kick-off)
- How do you plan to distribute your products or services to the market?
You can also hint at the marketing or promotion plans you have for your products or services such as how you plan to build awareness or retain customers. The next section is where you can go fully into details about your business’s marketing and sales plan.
6. Show and Explain Your Marketing and Sales Plan
Providing great products and services is wonderful, but it means nothing if you do not have a marketing and sales plan to inform your customers about them. Your marketing and sales plan is critical to the success of your business.
The sales and marketing section is where you show and offer a detailed explanation of your marketing and sales plan and how you plan to execute it. It covers your pricing plan, proposed advertising and promotion activities, activities and partnerships you need to make your business a success, and the benefits of your products and services.
There are several ways you can approach your marketing and sales strategy. Ideally, your marketing and sales strategy has to fit the unique needs of your business.
In this section, you describe how the plans your business has for attracting and retaining customers, and the exact process for making a sale happen. It is essential to thoroughly describe your complete marketing and sales plans because you are still going to reference this section when you are making financial projections for your business.
Outline Your Business’ Unique Selling Proposition (USP)
![a business plan is best described as a Unique Selling Proposition (USP)](https://www.founderjar.com/wp-content/uploads/2021/07/Unique-Selling-Proposition-USP.jpg)
The sales and marketing section is where you outline your business’s unique selling proposition (USP). When you are developing your unique selling proposition, think about the strongest reasons why people should buy from you over your competition. That reason(s) is most likely a good fit to serve as your unique selling proposition (USP).
Target Market and Target Audience
Plans on how to get your products or services to your target market and how to get your target audience to buy them go into this section. You also highlight the strengths of your business here, particularly what sets them apart from your competition.
![a business plan is best described as a Target Market Vs Target Audience](https://www.founderjar.com/wp-content/uploads/2021/07/Target-Market-Vs-Target-Audience.jpg)
Before you start writing your marketing and sales plan, you need to have properly defined your target audience and fleshed out your buyer persona. If you do not first understand the individual you are marketing to, your marketing and sales plan will lack any substance and easily fall.
Creating a Smart Marketing and Sales Plan
Marketing your products and services is an investment that requires you to spend money. Like any other investment, you have to generate a good return on investment (ROI) to justify using that marketing and sales plan. Good marketing and sales plans bring in high sales and profits to your company.
Avoid spending money on unproductive marketing channels. Do your research and find out the best marketing and sales plan that works best for your company.
Your marketing and sales plan can be broken into different parts: your positioning statement, pricing, promotion, packaging, advertising, public relations, content marketing, social media, and strategic alliances.
Your Positioning Statement
Your positioning statement is the first part of your marketing and sales plan. It refers to the way you present your company to your customers.
Are you the premium solution, the low-price solution, or are you the intermediary between the two extremes in the market? What do you offer that your competitors do not that can give you leverage in the market?
Before you start writing your positioning statement, you need to spend some time evaluating the current market conditions. Here are some questions that can help you to evaluate the market
- What are the unique features or benefits that you offer that your competitors lack?
- What are your customers’ primary needs and wants?
- Why should a customer choose you over your competition? How do you plan to differentiate yourself from the competition?
- How does your company’s solution compare with other solutions in the market?
After answering these questions, then you can start writing your positioning statement. Your positioning statement does not have to be in-depth or too long.
All you need to explain with your positioning statement are two focus areas. The first is the position of your company within the competitive landscape. The other focus area is the core value proposition that sets your company apart from other alternatives that your ideal customer might consider.
Here is a simple template you can use to develop a positioning statement.
For [description of target market] who [need of target market], [product or service] [how it meets the need]. Unlike [top competition], it [most essential distinguishing feature].
For example, let’s create the positioning statement for fictional accounting software and QuickBooks alternative , TBooks.
“For small business owners who need accounting services, TBooks is an accounting software that helps small businesses handle their small business bookkeeping basics quickly and easily. Unlike Wave, TBooks gives small businesses access to live sessions with top accountants.”
You can edit this positioning statement sample and fill it with your business details.
After writing your positioning statement, the next step is the pricing of your offerings. The overall positioning strategy you set in your positioning statement will often determine how you price your products or services.
Pricing is a powerful tool that sends a strong message to your customers. Failure to get your pricing strategy right can make or mar your business. If you are targeting a low-income audience, setting a premium price can result in low sales.
You can use pricing to communicate your positioning to your customers. For example, if you are offering a product at a premium price, you are sending a message to your customers that the product belongs to the premium category.
Basic Rules to Follow When Pricing Your Offering
Setting a price for your offering involves more than just putting a price tag on it. Deciding on the right pricing for your offering requires following some basic rules. They include covering your costs, primary and secondary profit center pricing, and matching the market rate.
- Covering Your Costs: The price you set for your products or service should be more than it costs you to produce and deliver them. Every business has the same goal, to make a profit. Depending on the strategy you want to use, there are exceptions to this rule. However, the vast majority of businesses follow this rule.
- Primary and Secondary Profit Center Pricing: When a company sets its price above the cost of production, it is making that product its primary profit center. A company can also decide not to make its initial price its primary profit center by selling below or at even with its production cost. It rather depends on the support product or even maintenance that is associated with the initial purchase to make its profit. The initial price thus became its secondary profit center.
- Matching the Market Rate: A good rule to follow when pricing your products or services is to match your pricing with consumer demand and expectations. If you price your products or services beyond the price your customer perceives as the ideal price range, you may end up with no customers. Pricing your products too low below what your customer perceives as the ideal price range may lead to them undervaluing your offering.
Pricing Strategy
Your pricing strategy influences the price of your offering. There are several pricing strategies available for you to choose from when examining the right pricing strategy for your business. They include cost-plus pricing, market-based pricing, value pricing, and more.
![a business plan is best described as a Pricing strategy influences the price of offering](https://www.founderjar.com/wp-content/uploads/2021/07/Pricing-strategy-influences-the-price-of-offering.jpg)
- Cost-plus Pricing: This strategy is one of the simplest and oldest pricing strategies. Here you consider the cost of producing a unit of your product and then add a profit to it to arrive at your market price. It is an effective pricing strategy for manufacturers because it helps them cover their initial costs. Another name for the cost-plus pricing strategy is the markup pricing strategy.
- Market-based Pricing: This pricing strategy analyses the market including competitors’ pricing and then sets a price based on what the market is expecting. With this pricing strategy, you can either set your price at the low-end or high-end of the market.
- Value Pricing: This pricing strategy involves setting a price based on the value you are providing to your customer. When adopting a value-based pricing strategy, you have to set a price that your customers are willing to pay. Service-based businesses such as small business insurance providers , luxury goods sellers, and the fashion industry use this pricing strategy.
After carefully sorting out your positioning statement and pricing, the next item to look at is your promotional strategy. Your promotional strategy explains how you plan on communicating with your customers and prospects.
As a business, you must measure all your costs, including the cost of your promotions. You also want to measure how much sales your promotions bring for your business to determine its usefulness. Promotional strategies or programs that do not lead to profit need to be removed.
There are different types of promotional strategies you can adopt for your business, they include advertising, public relations, and content marketing.
Advertising
Your business plan should include your advertising plan which can be found in the marketing and sales plan section. You need to include an overview of your advertising plans such as the areas you plan to spend money on to advertise your business and offers.
Ensure that you make it clear in this section if your business will be advertising online or using the more traditional offline media, or the combination of both online and offline media. You can also include the advertising medium you want to use to raise awareness about your business and offers.
Some common online advertising mediums you can use include social media ads, landing pages, sales pages, SEO, Pay-Per-Click, emails, Google Ads, and others. Some common traditional and offline advertising mediums include word of mouth, radios, direct mail, televisions, flyers, billboards, posters, and others.
A key component of your advertising strategy is how you plan to measure the effectiveness and success of your advertising campaign. There is no point in sticking with an advertising plan or medium that does not produce results for your business in the long run.
Public Relations
A great way to reach your customers is to get the media to cover your business or product. Publicity, especially good ones, should be a part of your marketing and sales plan. In this section, show your plans for getting prominent reviews of your product from reputable publications and sources.
Your business needs that exposure to grow. If public relations is a crucial part of your promotional strategy, provide details about your public relations plan here.
Content Marketing
Content marketing is a popular promotional strategy used by businesses to inform and attract their customers. It is about teaching and educating your prospects on various topics of interest in your niche, it does not just involve informing them about the benefits and features of the products and services you have,
![a business plan is best described as a The Benefits of Content Marketing](https://www.founderjar.com/wp-content/uploads/2021/07/The-Benefits-of-Content-Marketing.jpg)
Businesses publish content usually for free where they provide useful information, tips, and advice so that their target market can be made aware of the importance of their products and services. Content marketing strategies seek to nurture prospects into buyers over time by simply providing value.
Your company can create a blog where it will be publishing content for its target market. You will need to use the best website builder such as Wix and Squarespace and the best web hosting services such as Bluehost, Hostinger, and other Bluehost alternatives to create a functional blog or website.
If content marketing is a crucial part of your promotional strategy (as it should be), detail your plans under promotions.
Including high-quality images of the packaging of your product in your business plan is a lovely idea. You can add the images of the packaging of that product in the marketing and sales plan section. If you are not selling a product, then you do not need to include any worry about the physical packaging of your product.
When organizing the packaging section of your business plan, you can answer the following questions to make maximum use of this section.
- Is your choice of packaging consistent with your positioning strategy?
- What key value proposition does your packaging communicate? (It should reflect the key value proposition of your business)
- How does your packaging compare to that of your competitors?
Social Media
Your 21st-century business needs to have a good social media presence. Not having one is leaving out opportunities for growth and reaching out to your prospect.
You do not have to join the thousands of social media platforms out there. What you need to do is join the ones that your customers are active on and be active there.
![a business plan is best described as a Most popular social media platforms](https://www.founderjar.com/wp-content/uploads/2021/07/Most-popular-social-media-platforms.jpg)
Businesses use social media to provide information about their products such as promotions, discounts, the benefits of their products, and content on their blogs.
Social media is also a platform for engaging with your customers and getting feedback about your products or services. Make no mistake, more and more of your prospects are using social media channels to find more information about companies.
You need to consider the social media channels you want to prioritize your business (prioritize the ones your customers are active in) and your branding plans in this section.
![a business plan is best described as a Choosing the right social media platform](https://www.founderjar.com/wp-content/uploads/2021/07/Choosing-the-right-social-media-platform.jpg)
Strategic Alliances
If your company plans to work closely with other companies as part of your sales and marketing plan, include it in this section. Prove details about those partnerships in your business plan if you have already established them.
Strategic alliances can be beneficial for all parties involved including your company. Working closely with another company in the form of a partnership can provide access to a different target market segment for your company.
The company you are partnering with may also gain access to your target market or simply offer a new product or service (that of your company) to its customers.
Mutually beneficial partnerships can cover the weaknesses of one company with the strength of another. You should consider strategic alliances with companies that sell complimentary products to yours. For example, if you provide printers, you can partner with a company that produces ink since the customers that buy printers from you will also need inks for printing.
Steps Involved in Creating a Marketing and Sales Plan
1. Focus on Your Target Market
Identify who your customers are, the market you want to target. Then determine the best ways to get your products or services to your potential customers.
2. Evaluate Your Competition
One of the goals of having a marketing plan is to distinguish yourself from your competition. You cannot stand out from them without first knowing them in and out.
You can know your competitors by gathering information about their products, pricing, service, and advertising campaigns.
These questions can help you know your competition.
- What makes your competition successful?
- What are their weaknesses?
- What are customers saying about your competition?
3. Consider Your Brand
Customers' perception of your brand has a strong impact on your sales. Your marketing and sales plan should seek to bolster the image of your brand. Before you start marketing your business, think about the message you want to pass across about your business and your products and services.
4. Focus on Benefits
The majority of your customers do not view your product in terms of features, what they want to know is the benefits and solutions your product offers. Think about the problems your product solves and the benefits it delivers, and use it to create the right sales and marketing message.
Your marketing plan should focus on what you want your customer to get instead of what you provide. Identify those benefits in your marketing and sales plan.
5. Focus on Differentiation
Your marketing and sales plan should look for a unique angle they can take that differentiates your business from the competition, even if the products offered are similar. Some good areas of differentiation you can use are your benefits, pricing, and features.
Key Questions to Answer When Writing Your Marketing and Sales Plan
- What is your company’s budget for sales and marketing campaigns?
- What key metrics will you use to determine if your marketing plans are successful?
- What are your alternatives if your initial marketing efforts do not succeed?
- Who are the sales representatives you need to promote your products or services?
- What are the marketing and sales channels you plan to use? How do you plan to get your products in front of your ideal customers?
- Where will you sell your products?
You may want to include samples of marketing materials you plan to use such as print ads, website descriptions, and social media ads. While it is not compulsory to include these samples, it can help you better communicate your marketing and sales plan and objectives.
The purpose of the marketing and sales section is to answer this question “How will you reach your customers?” If you cannot convincingly provide an answer to this question, you need to rework your marketing and sales section.
7. Clearly Show Your Funding Request
If you are writing your business plan to ask for funding from investors or financial institutions, the funding request section is where you will outline your funding requirements. The funding request section should answer the question ‘How much money will your business need in the near future (3 to 5 years)?’
A good funding request section will clearly outline and explain the amount of funding your business needs over the next five years. You need to know the amount of money your business needs to make an accurate funding request.
Also, when writing your funding request, provide details of how the funds will be used over the period. Specify if you want to use the funds to buy raw materials or machinery, pay salaries, pay for advertisements, and cover specific bills such as rent and electricity.
In addition to explaining what you want to use the funds requested for, you need to clearly state the projected return on investment (ROI) . Investors and creditors want to know if your business can generate profit for them if they put funds into it.
Ensure you do not inflate the figures and stay as realistic as possible. Investors and financial institutions you are seeking funds from will do their research before investing money in your business.
If you are not sure of an exact number to request from, you can use some range of numbers as rough estimates. Add a best-case scenario and a work-case scenario to your funding request. Also, include a description of your strategic future financial plans such as selling your business or paying off debts.
Funding Request: Debt or Equity?
When making your funding request, specify the type of funding you want. Do you want debt or equity? Draw out the terms that will be applicable for the funding, and the length of time the funding request will cover.
Case for Equity
If your new business has not yet started generating profits, you are most likely preparing to sell equity in your business to raise capital at the early stage. Equity here refers to ownership. In this case, you are selling a portion of your company to raise capital.
Although this method of raising capital for your business does not put your business in debt, keep in mind that an equity owner may expect to play a key role in company decisions even if he does not hold a major stake in the company.
Most equity sales for startups are usually private transactions . If you are making a funding request by offering equity in exchange for funding, let the investor know that they will be paid a dividend (a share of the company’s profit). Also, let the investor know the process for selling their equity in your business.
Case for Debt
You may decide not to offer equity in exchange for funds, instead, you make a funding request with the promise to pay back the money borrowed at the agreed time frame.
When making a funding request with an agreement to pay back, note that you will have to repay your creditors both the principal amount borrowed and the interest on it. Financial institutions offer this type of funding for businesses.
Large companies combine both equity and debt in their capital structure. When drafting your business plan, decide if you want to offer both or one over the other.
Before you sell equity in exchange for funding in your business, consider if you are willing to accept not being in total control of your business. Also, before you seek loans in your funding request section, ensure that the terms of repayment are favorable.
You should set a clear timeline in your funding request so that potential investors and creditors can know what you are expecting. Some investors and creditors may agree to your funding request and then delay payment for longer than 30 days, meanwhile, your business needs an immediate cash injection to operate efficiently.
Additional Tips for Writing the Funding Request Section of your Business Plan
The funding request section is not necessary for every business, it is only needed by businesses who plan to use their business plan to secure funding.
If you are adding the funding request section to your business plan, provide an itemized summary of how you plan to use the funds requested. Hiring a lawyer, accountant, or other professionals may be necessary for the proper development of this section.
You should also gather and use financial statements that add credibility and support to your funding requests. Ensure that the financial statements you use should include your projected financial data such as projected cash flows, forecast statements, and expenditure budgets.
If you are an existing business, include all historical financial statements such as cash flow statements, balance sheets and income statements .
Provide monthly and quarterly financial statements for a year. If your business has records that date back beyond the one-year mark, add the yearly statements of those years. These documents are for the appendix section of your business plan.
8. Detail Your Financial Plan, Metrics, and Projections
If you used the funding request section in your business plan, supplement it with a financial plan, metrics, and projections. This section paints a picture of the past performance of your business and then goes ahead to make an informed projection about its future.
The goal of this section is to convince readers that your business is going to be a financial success. It outlines your business plan to generate enough profit to repay the loan (with interest if applicable) and to generate a decent return on investment for investors.
If you have an existing business already in operation, use this section to demonstrate stability through finance. This section should include your cash flow statements, balance sheets, and income statements covering the last three to five years. If your business has some acceptable collateral that you can use to acquire loans, list it in the financial plan, metrics, and projection section.
Apart from current financial statements, this section should also contain a prospective financial outlook that spans the next five years. Include forecasted income statements, cash flow statements, balance sheets, and capital expenditure budget.
If your business is new and is not yet generating profit, use clear and realistic projections to show the potentials of your business.
When drafting this section, research industry norms and the performance of comparable businesses. Your financial projections should cover at least five years. State the logic behind your financial projections. Remember you can always make adjustments to this section as the variables change.
The financial plan, metrics, and projection section create a baseline which your business can either exceed or fail to reach. If your business fails to reach your projections in this section, you need to understand why it failed.
Investors and loan managers spend a lot of time going through the financial plan, metrics, and projection section compared to other parts of the business plan. Ensure you spend time creating credible financial analyses for your business in this section.
Many entrepreneurs find this section daunting to write. You do not need a business degree to create a solid financial forecast for your business. Business finances, especially for startups, are not as complicated as they seem. There are several online tools and templates that make writing this section so much easier.
Use Graphs and Charts
The financial plan, metrics, and projection section is a great place to use graphs and charts to tell the financial story of your business. Charts and images make it easier to communicate your finances.
Accuracy in this section is key, ensure you carefully analyze your past financial statements properly before making financial projects.
Address the Risk Factors and Show Realistic Financial Projections
Keep your financial plan, metrics, and projection realistic. It is okay to be optimistic in your financial projection, however, you have to justify it.
You should also address the various risk factors associated with your business in this section. Investors want to know the potential risks involved, show them. You should also show your plans for mitigating those risks.
What You Should In The Financial Plan, Metrics, and Projection Section of Your Business Plan
The financial plan, metrics, and projection section of your business plan should have monthly sales and revenue forecasts for the first year. It should also include annual projections that cover 3 to 5 years.
A three-year projection is a basic requirement to have in your business plan. However, some investors may request a five-year forecast.
Your business plan should include the following financial statements: sales forecast, personnel plan, income statement, income statement, cash flow statement, balance sheet, and an exit strategy.
1. Sales Forecast
Sales forecast refers to your projections about the number of sales your business is going to record over the next few years. It is typically broken into several rows, with each row assigned to a core product or service that your business is offering.
One common mistake people make in their business plan is to break down the sales forecast section into long details. A sales forecast should forecast the high-level details.
For example, if you are forecasting sales for a payroll software provider, you could break down your forecast into target market segments or subscription categories.
![a business plan is best described as a Benefits of Sales Forecasting](https://www.founderjar.com/wp-content/uploads/2021/07/Benefits-of-Sales-Forecasting.jpg)
Your sales forecast section should also have a corresponding row for each sales row to cover the direct cost or Cost of Goods Sold (COGS). The objective of these rows is to show the expenses that your business incurs in making and delivering your product or service.
Note that your Cost of Goods Sold (COGS) should only cover those direct costs incurred when making your products. Other indirect expenses such as insurance, salaries, payroll tax, and rent should not be included.
For example, the Cost of Goods Sold (COGS) for a restaurant is the cost of ingredients while for a consulting company it will be the cost of paper and other presentation materials.
![a business plan is best described as a Factors that affect sales forecasting](https://www.founderjar.com/wp-content/uploads/2021/07/Factors-that-affect-sales-forecasting.jpg)
2. Personnel Plan
The personnel plan section is where you provide details about the payment plan for your employees. For a small business, you can easily list every position in your company and how much you plan to pay in the personnel plan.
However, for larger businesses, you have to break the personnel plan into functional groups such as sales and marketing.
The personnel plan will also include the cost of an employee beyond salary, commonly referred to as the employee burden. These costs include insurance, payroll taxes , and other essential costs incurred monthly as a result of having employees on your payroll.
![a business plan is best described as a True HR Cost Infographic](https://www.founderjar.com/wp-content/uploads/2021/07/True-HR-Cost.jpg)
3. Income Statement
The income statement section shows if your business is making a profit or taking a loss. Another name for the income statement is the profit and loss (P&L). It takes data from your sales forecast and personnel plan and adds other ongoing expenses you incur while running your business.
![a business plan is best described as a The income statement section](https://www.founderjar.com/wp-content/uploads/2021/07/The-income-statement-section.jpg)
Every business plan should have an income statement. It subtracts your business expenses from its earnings to show if your business is generating profit or incurring losses.
The income statement has the following items: sales, Cost of Goods Sold (COGS), gross margin, operating expenses, total operating expenses, operating income , total expenses, and net profit.
- Sales refer to the revenue your business generates from selling its products or services. Other names for sales are income or revenue.
- Cost of Goods Sold (COGS) refers to the total cost of selling your products. Other names for COGS are direct costs or cost of sales. Manufacturing businesses use the Costs of Goods Manufactured (COGM) .
- Gross Margin is the figure you get when you subtract your COGS from your sales. In your income statement, you can express it as a percentage of total sales (Gross margin / Sales = Gross Margin Percent).
- Operating Expenses refer to all the expenses you incur from running your business. It exempts the COGS because it stands alone as a core part of your income statement. You also have to exclude taxes, depreciation, and amortization. Your operating expenses include salaries, marketing expenses, research and development (R&D) expenses, and other expenses.
- Total Operating Expenses refers to the sum of all your operating expenses including those exemptions named above under operating expenses.
- Operating Income refers to earnings before interest, taxes, depreciation, and amortization. It is simply known as the acronym EBITDA (earnings before interest, taxes, depreciation, and amortization). Calculating your operating income is simple, all you need to do is to subtract your COGS and total operating expenses from your sales.
- Total Expenses refer to the sum of your operating expenses and your business’ interest, taxes, depreciation, and amortization.
- Net profit shows whether your business has made a profit or taken a loss during a given timeframe.
4. Cash Flow Statement
The cash flow statement tracks the money you have in the bank at any given point. It is often confused with the income statement or the profit and loss statement. They are both different types of financial statements. The income statement calculates your profits and losses while the cash flow statement shows you how much you have in the bank.
![a business plan is best described as a Cash Flow Statement Example](https://www.founderjar.com/wp-content/uploads/2021/07/Cash-Flow-Statement-Example.jpg)
5. Balance Sheet
The balance sheet is a financial statement that provides an overview of the financial health of your business. It contains information about the assets and liabilities of your company, and owner’s or shareholders’ equity.
You can get the net worth of your company by subtracting your company’s liabilities from its assets.
![a business plan is best described as a Balance sheet Formula](https://www.founderjar.com/wp-content/uploads/2021/07/Balance-sheet-Formula.jpg)
6. Exit Strategy
The exit strategy refers to a probable plan for selling your business either to the public in an IPO or to another company. It is the last thing you include in the financial plan, metrics, and projection section.
You can choose to omit the exit strategy from your business plan if you plan to maintain full ownership of your business and do not plan on seeking angel investment or virtual capitalist (VC) funding.
Investors may want to know what your exit plan is. They invest in your business to get a good return on investment.
Your exit strategy does not have to include long and boring details. Ensure you identify some interested parties who may be interested in buying the company if it becomes a success.
![a business plan is best described as a Exit Strategy Section of Business Plan Infographic](https://www.founderjar.com/wp-content/uploads/2021/07/Exit-Strategy-Section-of-Business-Plan-Infographic.jpg)
Key Questions to Answer with Your Financial Plan, Metrics, and Projection
Your financial plan, metrics, and projection section helps investors, creditors, or your internal managers to understand what your expenses are, the amount of cash you need, and what it takes to make your company profitable. It also shows what you will be doing with any funding.
You do not need to show actual financial data if you do not have one. Adding forecasts and projections to your financial statements is added proof that your strategy is feasible and shows investors you have planned properly.
Here are some key questions to answer to help you develop this section.
- What is your sales forecast for the next year?
- When will your company achieve a positive cash flow?
- What are the core expenses you need to operate?
- How much money do you need upfront to operate or grow your company?
- How will you use the loans or investments?
9. Add an Appendix to Your Business Plan
Adding an appendix to your business plan is optional. It is a useful place to put any charts, tables, legal notes, definitions, permits, résumés, and other critical information that do not fit into other sections of your business plan.
The appendix section is where you would want to include details of a patent or patent-pending if you have one. You can always add illustrations or images of your products here. It is the last section of your business plan.
When writing your business plan, there are details you cut short or remove to prevent the entire section from becoming too lengthy. There are also details you want to include in the business plan but are not a good fit for any of the previous sections. You can add that additional information to the appendix section.
Businesses also use the appendix section to include supporting documents or other materials specially requested by investors or lenders.
You can include just about any information that supports the assumptions and statements you made in the business plan under the appendix. It is the one place in the business plan where unrelated data and information can coexist amicably.
If your appendix section is lengthy, try organizing it by adding a table of contents at the beginning of the appendix section. It is also advisable to group similar information to make it easier for the reader to access them.
A well-organized appendix section makes it easier to share your information clearly and concisely. Add footnotes throughout the rest of the business plan or make references in the plan to the documents in the appendix.
The appendix section is usually only necessary if you are seeking funding from investors or lenders, or hoping to attract partners.
People reading business plans do not want to spend time going through a heap of backup information, numbers, and charts. Keep these documents or information in the Appendix section in case the reader wants to dig deeper.
Common Items to Include in the Appendix Section of Your Business Plan
The appendix section includes documents that supplement or support the information or claims given in other sections of the business plans. Common items you can include in the appendix section include:
- Additional data about the process of manufacturing or creation
- Additional description of products or services such as product schematics
- Additional financial documents or projections
- Articles of incorporation and status
- Backup for market research or competitive analysis
- Bank statements
- Business registries
- Client testimonials (if your business is already running)
- Copies of insurances
- Credit histories (personal or/and business)
- Deeds and permits
- Equipment leases
- Examples of marketing and advertising collateral
- Industry associations and memberships
- Images of product
- Intellectual property
- Key customer contracts
- Legal documents and other contracts
- Letters of reference
- Links to references
- Market research data
- Organizational charts
- Photographs of potential facilities
- Professional licenses pertaining to your legal structure or type of business
- Purchase orders
- Resumes of the founder(s) and key managers
- State and federal identification numbers or codes
- Trademarks or patents’ registrations
Avoid using the appendix section as a place to dump any document or information you feel like adding. Only add documents or information that you support or increase the credibility of your business plan.
Tips and Strategies for Writing a Convincing Business Plan
To achieve a perfect business plan, you need to consider some key tips and strategies. These tips will raise the efficiency of your business plan above average.
1. Know Your Audience
When writing a business plan, you need to know your audience . Business owners write business plans for different reasons. Your business plan has to be specific. For example, you can write business plans to potential investors, banks, and even fellow board members of the company.
The audience you are writing to determines the structure of the business plan. As a business owner, you have to know your audience. Not everyone will be your audience. Knowing your audience will help you to narrow the scope of your business plan.
Consider what your audience wants to see in your projects, the likely questions they might ask, and what interests them.
- A business plan used to address a company's board members will center on its employment schemes, internal affairs, projects, stakeholders, etc.
- A business plan for financial institutions will talk about the size of your market and the chances for you to pay back any loans you demand.
- A business plan for investors will show proof that you can return the investment capital within a specific time. In addition, it discusses your financial projections, tractions, and market size.
2. Get Inspiration from People
Writing a business plan from scratch as an entrepreneur can be daunting. That is why you need the right inspiration to push you to write one. You can gain inspiration from the successful business plans of other businesses. Look at their business plans, the style they use, the structure of the project, etc.
To make your business plan easier to create, search companies related to your business to get an exact copy of what you need to create an effective business plan. You can also make references while citing examples in your business plans.
When drafting your business plan, get as much help from others as you possibly can. By getting inspiration from people, you can create something better than what they have.
3. Avoid Being Over Optimistic
Many business owners make use of strong adjectives to qualify their content. One of the big mistakes entrepreneurs make when preparing a business plan is promising too much.
The use of superlatives and over-optimistic claims can prepare the audience for more than you can offer. In the end, you disappoint the confidence they have in you.
In most cases, the best option is to be realistic with your claims and statistics. Most of the investors can sense a bit of incompetency from the overuse of superlatives. As a new entrepreneur, do not be tempted to over-promise to get the interests of investors.
The concept of entrepreneurship centers on risks, nothing is certain when you make future analyses. What separates the best is the ability to do careful research and work towards achieving that, not promising more than you can achieve.
To make an excellent first impression as an entrepreneur, replace superlatives with compelling data-driven content. In this way, you are more specific than someone promising a huge ROI from an investment.
4. Keep it Simple and Short
When writing business plans, ensure you keep them simple throughout. Irrespective of the purpose of the business plan, your goal is to convince the audience.
One way to achieve this goal is to make them understand your proposal. Therefore, it would be best if you avoid the use of complex grammar to express yourself. It would be a huge turn-off if the people you want to convince are not familiar with your use of words.
Another thing to note is the length of your business plan. It would be best if you made it as brief as possible.
You hardly see investors or agencies that read through an extremely long document. In that case, if your first few pages can’t convince them, then you have lost it. The more pages you write, the higher the chances of you derailing from the essential contents.
To ensure your business plan has a high conversion rate, you need to dispose of every unnecessary information. For example, if you have a strategy that you are not sure of, it would be best to leave it out of the plan.
5. Make an Outline and Follow Through
A perfect business plan must have touched every part needed to convince the audience. Business owners get easily tempted to concentrate more on their products than on other sections. Doing this can be detrimental to the efficiency of the business plan.
For example, imagine you talking about a product but omitting or providing very little information about the target audience. You will leave your clients confused.
To ensure that your business plan communicates your full business model to readers, you have to input all the necessary information in it. One of the best ways to achieve this is to design a structure and stick to it.
This structure is what guides you throughout the writing. To make your work easier, you can assign an estimated word count or page limit to every section to avoid making it too bulky for easy reading. As a guide, the necessary things your business plan must contain are:
- Table of contents
- Introduction
- Product or service description
- Target audience
- Market size
- Competition analysis
- Financial projections
Some specific businesses can include some other essential sections, but these are the key sections that must be in every business plan.
6. Ask a Professional to Proofread
When writing a business plan, you must tie all loose ends to get a perfect result. When you are done with writing, call a professional to go through the document for you. You are bound to make mistakes, and the way to correct them is to get external help.
You should get a professional in your field who can relate to every section of your business plan. It would be easier for the professional to notice the inner flaws in the document than an editor with no knowledge of your business.
In addition to getting a professional to proofread, get an editor to proofread and edit your document. The editor will help you identify grammatical errors, spelling mistakes, and inappropriate writing styles.
Writing a business plan can be daunting, but you can surmount that obstacle and get the best out of it with these tips.
Business Plan Examples and Templates That’ll Save You Tons of Time
1. hubspot's one-page business plan.
![a business plan is best described as a HubSpot's One Page Business Plan](https://www.founderjar.com/wp-content/uploads/2021/07/HubSpots-One-Page-Business-Plan.jpg)
The one-page business plan template by HubSpot is the perfect guide for businesses of any size, irrespective of their business strategy. Although the template is condensed into a page, your final business plan should not be a page long! The template is designed to ask helpful questions that can help you develop your business plan.
Hubspot’s one-page business plan template is divided into nine fields:
- Business opportunity
- Company description
- Industry analysis
- Target market
- Implementation timeline
- Marketing plan
- Financial summary
- Funding required
2. Bplan’s Free Business Plan Template
![a business plan is best described as a Bplan’s Free Business Plan Template](https://www.founderjar.com/wp-content/uploads/2021/07/Bplans-Free-Business-Plan-Template.jpg)
Bplans' free business plan template is investor-approved. It is a rich template used by prestigious educational institutions such as Babson College and Princeton University to teach entrepreneurs how to create a business plan.
The template has six sections: the executive summary, opportunity, execution, company, financial plan, and appendix. There is a step-by-step guide for writing every little detail in the business plan. Follow the instructions each step of the way and you will create a business plan that impresses investors or lenders easily.
3. HubSpot's Downloadable Business Plan Template
![a business plan is best described as a HubSpot's Downloadable Business Plan Template](https://www.founderjar.com/wp-content/uploads/2021/07/HubSpots-Downloadable-Business-Plan-Template.jpg)
HubSpot’s downloadable business plan template is a more comprehensive option compared to the one-page business template by HubSpot. This free and downloadable business plan template is designed for entrepreneurs.
The template is a comprehensive guide and checklist for business owners just starting their businesses. It tells you everything you need to fill in each section of the business plan and how to do it.
There are nine sections in this business plan template: an executive summary, company and business description, product and services line, market analysis, marketing plan, sales plan, legal notes, financial considerations, and appendix.
4. Business Plan by My Own Business Institute
![a business plan is best described as a The Business Profile](https://www.founderjar.com/wp-content/uploads/2021/07/The-Business-Profile.jpg)
My Own Business Institute (MOBI) which is a part of Santa Clara University's Center for Innovation and Entrepreneurship offers a free business plan template. You can either copy the free business template from the link provided above or download it as a Word document.
The comprehensive template consists of a whopping 15 sections.
- The Business Profile
- The Vision and the People
- Home-Based Business and Freelance Business Opportunities
- Organization
- Licenses and Permits
- Business Insurance
- Communication Tools
- Acquisitions
- Location and Leasing
- Accounting and Cash Flow
- Opening and Marketing
- Managing Employees
- Expanding and Handling Problems
There are lots of helpful tips on how to fill each section in the free business plan template by MOBI.
5. Score's Business Plan Template for Startups
![a business plan is best described as a Score's Business Plan Template for Startups](https://www.founderjar.com/wp-content/uploads/2021/07/Scores-Business-Plan-Template-for-Startups.jpg)
Score is an American nonprofit organization that helps entrepreneurs build successful companies. This business plan template for startups by Score is available for free download. The business plan template asks a whooping 150 generic questions that help entrepreneurs from different fields to set up the perfect business plan.
The business plan template for startups contains clear instructions and worksheets, all you have to do is answer the questions and fill the worksheets.
There are nine sections in the business plan template: executive summary, company description, products and services, marketing plan, operational plan, management and organization, startup expenses and capitalization, financial plan, and appendices.
The ‘refining the plan’ resource contains instructions that help you modify your business plan to suit your specific needs, industry, and target audience. After you have completed Score’s business plan template, you can work with a SCORE mentor for expert advice in business planning.
6. Minimalist Architecture Business Plan Template by Venngage
![a business plan is best described as a Minimalist Architecture Business Plan Template by Venngage](https://www.founderjar.com/wp-content/uploads/2021/07/Minimalist-Architecture-Business-Plan-Template-by-Venngage.jpg)
The minimalist architecture business plan template is a simple template by Venngage that you can customize to suit your business needs .
There are five sections in the template: an executive summary, statement of problem, approach and methodology, qualifications, and schedule and benchmark. The business plan template has instructions that guide users on what to fill in each section.
7. Small Business Administration Free Business Plan Template
![a business plan is best described as a Small Business Administration Free Business Plan Template](https://www.founderjar.com/wp-content/uploads/2021/07/Small-Business-Administration-Free-Business-Plan-Template.jpg)
The Small Business Administration (SBA) offers two free business plan templates, filled with practical real-life examples that you can model to create your business plan. Both free business plan templates are written by fictional business owners: Rebecca who owns a consulting firm, and Andrew who owns a toy company.
There are five sections in the two SBA’s free business plan templates.
- Executive Summary
- Company Description
- Service Line
- Marketing and Sales
8. The $100 Startup's One-Page Business Plan
![a business plan is best described as a The $100 Startup's One Page Business Plan](https://www.founderjar.com/wp-content/uploads/2021/07/The-100-Startups-One-Page-Business-Plan.jpg)
The one-page business plan by the $100 startup is a simple business plan template for entrepreneurs who do not want to create a long and complicated plan . You can include more details in the appendices for funders who want more information beyond what you can put in the one-page business plan.
There are five sections in the one-page business plan such as overview, ka-ching, hustling, success, and obstacles or challenges or open questions. You can answer all the questions using one or two sentences.
9. PandaDoc’s Free Business Plan Template
![a business plan is best described as a PandaDoc’s Free Business Plan Template](https://www.founderjar.com/wp-content/uploads/2021/07/PandaDocs-Free-Business-Plan-Template.jpg)
The free business plan template by PandaDoc is a comprehensive 15-page document that describes the information you should include in every section.
There are 11 sections in PandaDoc’s free business plan template.
- Executive summary
- Business description
- Products and services
- Operations plan
- Management organization
- Financial plan
- Conclusion / Call to action
- Confidentiality statement
You have to sign up for its 14-day free trial to access the template. You will find different business plan templates on PandaDoc once you sign up (including templates for general businesses and specific businesses such as bakeries, startups, restaurants, salons, hotels, and coffee shops)
PandaDoc allows you to customize its business plan templates to fit the needs of your business. After editing the template, you can send it to interested parties and track opens and views through PandaDoc.
10. Invoiceberry Templates for Word, Open Office, Excel, or PPT
![a business plan is best described as a Invoiceberry Templates Business Concept](https://www.founderjar.com/wp-content/uploads/2021/07/Invoiceberry-Templates-Business-Concept.jpg)
InvoiceBerry is a U.K based online invoicing and tracking platform that offers free business plan templates in .docx, .odt, .xlsx, and .pptx formats for freelancers and small businesses.
Before you can download the free business plan template, it will ask you to give it your email address. After you complete the little task, it will send the download link to your inbox for you to download. It also provides a business plan checklist in .xlsx file format that ensures you add the right information to the business plan.
Alternatives to the Traditional Business Plan
A business plan is very important in mapping out how one expects their business to grow over a set number of years, particularly when they need external investment in their business. However, many investors do not have the time to watch you present your business plan. It is a long and boring read.
Luckily, there are three alternatives to the traditional business plan (the Business Model Canvas, Lean Canvas, and Startup Pitch Deck). These alternatives are less laborious and easier and quicker to present to investors.
Business Model Canvas (BMC)
The business model canvas is a business tool used to present all the important components of setting up a business, such as customers, route to market, value proposition, and finance in a single sheet. It provides a very focused blueprint that defines your business initially which you can later expand on if needed.
![a business plan is best described as a Business Model Canvas (BMC) Infographic](https://www.founderjar.com/wp-content/uploads/2021/07/Business-Model-Canvas-BMC.jpg)
The sheet is divided mainly into company, industry, and consumer models that are interconnected in how they find problems and proffer solutions.
Segments of the Business Model Canvas
The business model canvas was developed by founder Alexander Osterwalder to answer important business questions. It contains nine segments.
![a business plan is best described as a Segments of the Business Model Canvas](https://www.founderjar.com/wp-content/uploads/2021/07/Segments-of-the-Business-Model-Canvas.jpg)
- Key Partners: Who will be occupying important executive positions in your business? What do they bring to the table? Will there be a third party involved with the company?
- Key Activities: What important activities will production entail? What activities will be carried out to ensure the smooth running of the company?
- The Product’s Value Propositions: What does your product do? How will it be different from other products?
- Customer Segments: What demography of consumers are you targeting? What are the habits of these consumers? Who are the MVPs of your target consumers?
- Customer Relationships: How will the team support and work with its customer base? How do you intend to build and maintain trust with the customer?
- Key Resources: What type of personnel and tools will be needed? What size of the budget will they need access to?
- Channels: How do you plan to create awareness of your products? How do you intend to transport your product to the customer?
- Cost Structure: What is the estimated cost of production? How much will distribution cost?
- Revenue Streams: For what value are customers willing to pay? How do they prefer to pay for the product? Are there any external revenues attached apart from the main source? How do the revenue streams contribute to the overall revenue?
Lean Canvas
The lean canvas is a problem-oriented alternative to the standard business model canvas. It was proposed by Ash Maurya, creator of Lean Stack as a development of the business model generation. It uses a more problem-focused approach and it majorly targets entrepreneurs and startup businesses.
![a business plan is best described as a The lean canvas is a problem oriented alternative to the standard business model canvas](https://www.founderjar.com/wp-content/uploads/2021/07/The-lean-canvas-is-a-problem-oriented-alternative-to-the-standard-business-model-canvas.jpg)
Lean Canvas uses the same 9 blocks concept as the business model canvas, however, they have been modified slightly to suit the needs and purpose of a small startup. The key partners, key activities, customer relationships, and key resources are replaced by new segments which are:
- Problem: Simple and straightforward number of problems you have identified, ideally three.
- Solution: The solutions to each problem.
- Unfair Advantage: Something you possess that can't be easily bought or replicated.
- Key Metrics: Important numbers that will tell how your business is doing.
Startup Pitch Deck
While the business model canvas compresses into a factual sheet, startup pitch decks expand flamboyantly.
Pitch decks, through slides, convey your business plan, often through graphs and images used to emphasize estimations and observations in your presentation. Entrepreneurs often use pitch decks to fully convince their target audience of their plans before discussing funding arrangements.
![a business plan is best described as a Startup Pitch Deck Presentation](https://www.founderjar.com/wp-content/uploads/2021/07/Startup-Pitch-Deck-Presentation.jpg)
Considering the likelihood of it being used in a small time frame, a good startup pitch deck should ideally contain 20 slides or less to have enough time to answer questions from the audience.
Unlike the standard and lean business model canvases, a pitch deck doesn't have a set template on how to present your business plan but there are still important components to it. These components often mirror those of the business model canvas except that they are in slide form and contain more details.
![a business plan is best described as a Airbnb Pitch Deck](https://www.founderjar.com/wp-content/uploads/2021/07/Airbnb-Pitch-Deck.jpg)
Using Airbnb (one of the most successful start-ups in recent history) for reference, the important components of a good slide are listed below.
- Cover/Introduction Slide: Here, you should include your company's name and mission statement. Your mission statement should be a very catchy tagline. Also, include personal information and contact details to provide an easy link for potential investors.
- Problem Slide: This slide requires you to create a connection with the audience or the investor that you are pitching. For example in their pitch, Airbnb summarized the most important problems it would solve in three brief points – pricing of hotels, disconnection from city culture, and connection problems for local bookings.
- Solution Slide: This slide includes your core value proposition. List simple and direct solutions to the problems you have mentioned
- Customer Analysis: Here you will provide information on the customers you will be offering your service to. The identity of your customers plays an important part in fundraising as well as the long-run viability of the business.
- Market Validation: Use competitive analysis to show numbers that prove the presence of a market for your product, industry behavior in the present and the long run, as well as the percentage of the market you aim to attract. It shows that you understand your competitors and customers and convinces investors of the opportunities presented in the market.
- Business Model: Your business model is the hook of your presentation. It may vary in complexity but it should generally include a pricing system informed by your market analysis. The goal of the slide is to confirm your business model is easy to implement.
- Marketing Strategy: This slide should summarize a few customer acquisition methods that you plan to use to grow the business.
- Competitive Advantage: What this slide will do is provide information on what will set you apart and make you a more attractive option to customers. It could be the possession of technology that is not widely known in the market.
- Team Slide: Here you will give a brief description of your team. Include your key management personnel here and their specific roles in the company. Include their educational background, job history, and skillsets. Also, talk about their accomplishments in their careers so far to build investors' confidence in members of your team.
- Traction Slide: This validates the company’s business model by showing growth through early sales and support. The slide aims to reduce any lingering fears in potential investors by showing realistic periodic milestones and profit margins. It can include current sales, growth, valuable customers, pre-orders, or data from surveys outlining current consumer interest.
- Funding Slide: This slide is popularly referred to as ‘the ask'. Here you will include important details like how much is needed to get your business off the ground and how the funding will be spent to help the company reach its goals.
- Appendix Slides: Your pitch deck appendix should always be included alongside a standard pitch presentation. It consists of additional slides you could not show in the pitch deck but you need to complement your presentation.
It is important to support your calculations with pictorial renditions. Infographics, such as pie charts or bar graphs, will be more effective in presenting the information than just listing numbers. For example, a six-month graph that shows rising profit margins will easily look more impressive than merely writing it.
Lastly, since a pitch deck is primarily used to secure meetings and you may be sharing your pitch with several investors, it is advisable to keep a separate public version that doesn't include financials. Only disclose the one with projections once you have secured a link with an investor.
Advantages of the Business Model Canvas, Lean Canvas, and Startup Pitch Deck over the Traditional Business Plan
- Time-Saving: Writing a detailed traditional business plan could take weeks or months. On the other hand, all three alternatives can be done in a few days or even one night of brainstorming if you have a comprehensive understanding of your business.
- Easier to Understand: Since the information presented is almost entirely factual, it puts focus on what is most important in running the business. They cut away the excess pages of fillers in a traditional business plan and allow investors to see what is driving the business and what is getting in the way.
- Easy to Update: Businesses typically present their business plans to many potential investors before they secure funding. What this means is that you may regularly have to amend your presentation to update statistics or adjust to audience-specific needs. For a traditional business plan, this could mean rewriting a whole section of your plan. For the three alternatives, updating is much easier because they are not voluminous.
- Guide for a More In-depth Business Plan: All three alternatives have the added benefit of being able to double as a sketch of your business plan if the need to create one arises in the future.
Business Plan FAQ
Business plans are important for any entrepreneur who is looking for a framework to run their company over some time or seeking external support. Although they are essential for new businesses, every company should ideally have a business plan to track their growth from time to time. They can be used by startups seeking investments or loans to convey their business ideas or an employee to convince his boss of the feasibility of starting a new project. They can also be used by companies seeking to recruit high-profile employee targets into key positions or trying to secure partnerships with other firms.
Business plans often vary depending on your target audience, the scope, and the goals for the plan. Startup plans are the most common among the different types of business plans. A start-up plan is used by a new business to present all the necessary information to help get the business up and running. They are usually used by entrepreneurs who are seeking funding from investors or bank loans. The established company alternative to a start-up plan is a feasibility plan. A feasibility plan is often used by an established company looking for new business opportunities. They are used to show the upsides of creating a new product for a consumer base. Because the audience is usually company people, it requires less company analysis. The third type of business plan is the lean business plan. A lean business plan is a brief, straight-to-the-point breakdown of your ideas and analysis for your business. It does not contain details of your proposal and can be written on one page. Finally, you have the what-if plan. As it implies, a what-if plan is a preparation for the worst-case scenario. You must always be prepared for the possibility of your original plan being rejected. A good what-if plan will serve as a good plan B to the original.
A good business plan has 10 key components. They include an executive plan, product analysis, desired customer base, company analysis, industry analysis, marketing strategy, sales strategy, financial projection, funding, and appendix. Executive Plan Your business should begin with your executive plan. An executive plan will provide early insight into what you are planning to achieve with your business. It should include your mission statement and highlight some of the important points which you will explain later. Product Analysis The next component of your business plan is your product analysis. A key part of this section is explaining the type of item or service you are going to offer as well as the market problems your product will solve. Desired Consumer Base Your product analysis should be supplemented with a detailed breakdown of your desired consumer base. Investors are always interested in knowing the economic power of your market as well as potential MVP customers. Company Analysis The next component of your business plan is your company analysis. Here, you explain how you want to run your business. It will include your operational strategy, an insight into the workforce needed to keep the company running, and important executive positions. It will also provide a calculation of expected operational costs. Industry Analysis A good business plan should also contain well laid out industry analysis. It is important to convince potential investors you know the companies you will be competing with, as well as your plans to gain an edge on the competition. Marketing Strategy Your business plan should also include your marketing strategy. This is how you intend to spread awareness of your product. It should include a detailed explanation of the company brand as well as your advertising methods. Sales Strategy Your sales strategy comes after the market strategy. Here you give an overview of your company's pricing strategy and how you aim to maximize profits. You can also explain how your prices will adapt to market behaviors. Financial Projection The financial projection is the next component of your business plan. It explains your company's expected running cost and revenue earned during the tenure of the business plan. Financial projection gives a clear idea of how your company will develop in the future. Funding The next component of your business plan is funding. You have to detail how much external investment you need to get your business idea off the ground here. Appendix The last component of your plan is the appendix. This is where you put licenses, graphs, or key information that does not fit in any of the other components.
The business model canvas is a business management tool used to quickly define your business idea and model. It is often used when investors need you to pitch your business idea during a brief window.
A pitch deck is similar to a business model canvas except that it makes use of slides in its presentation. A pitch is not primarily used to secure funding, rather its main purpose is to entice potential investors by selling a very optimistic outlook on the business.
Business plan competitions help you evaluate the strength of your business plan. By participating in business plan competitions, you are improving your experience. The experience provides you with a degree of validation while practicing important skills. The main motivation for entering into the competitions is often to secure funding by finishing in podium positions. There is also the chance that you may catch the eye of a casual observer outside of the competition. These competitions also provide good networking opportunities. You could meet mentors who will take a keen interest in guiding you in your business journey. You also have the opportunity to meet other entrepreneurs whose ideas can complement yours.
Exlore Further
- 12 Key Elements of a Business Plan (Top Components Explained)
- 13 Sources of Business Finance For Companies & Sole Traders
- 5 Common Types of Business Structures (+ Pros & Cons)
- How to Buy a Business in 8 Steps (+ Due Diligence Checklist)
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Martin luenendonk.
Martin loves entrepreneurship and has helped dozens of entrepreneurs by validating the business idea, finding scalable customer acquisition channels, and building a data-driven organization. During his time working in investment banking, tech startups, and industry-leading companies he gained extensive knowledge in using different software tools to optimize business processes.
This insights and his love for researching SaaS products enables him to provide in-depth, fact-based software reviews to enable software buyers make better decisions.
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Business plans might seem like an old-school stiff-collared practice, but they deserve a place in the startup realm, too. It’s probably not going to be the frame-worthy document you hang in the office—yet, it may one day be deserving of the privilege.
Whether you’re looking to win the heart of an angel investor or convince a bank to lend you money, you’ll need a business plan. And not just any ol’ notes and scribble on the back of a pizza box or napkin—you’ll need a professional, standardized report.
Bah. Sounds like homework, right?
Yes. Yes, it does.
However, just like bookkeeping, loan applications, and 404 redirects, business plans are an essential step in cementing your business foundation.
Don’t worry. We’ll show you how to write a business plan without boring you to tears. We’ve jam-packed this article with all the business plan examples, templates, and tips you need to take your non-existent proposal from concept to completion.
Table of Contents
What Is a Business Plan?
Tips to Make Your Small Business Plan Ironclad
How to Write a Business Plan in 6 Steps
Startup Business Plan Template
Business Plan Examples
Work on Making Your Business Plan
How to Write a Business Plan FAQs
What is a business plan why do you desperately need one.
A business plan is a roadmap that outlines:
- Who your business is, what it does, and who it serves
- Where your business is now
- Where you want it to go
- How you’re going to make it happen
- What might stop you from taking your business from Point A to Point B
- How you’ll overcome the predicted obstacles
While it’s not required when starting a business, having a business plan is helpful for a few reasons:
- Secure a Bank Loan: Before approving you for a business loan, banks will want to see that your business is legitimate and can repay the loan. They want to know how you’re going to use the loan and how you’ll make monthly payments on your debt. Lenders want to see a sound business strategy that doesn’t end in loan default.
- Win Over Investors: Like lenders, investors want to know they’re going to make a return on their investment. They need to see your business plan to have the confidence to hand you money.
- Stay Focused: It’s easy to get lost chasing the next big thing. Your business plan keeps you on track and focused on the big picture. Your business plan can prevent you from wasting time and resources on something that isn’t aligned with your business goals.
Beyond the reasoning, let’s look at what the data says:
- Simply writing a business plan can boost your average annual growth by 30%
- Entrepreneurs who create a formal business plan are 16% more likely to succeed than those who don’t
- A study looking at 65 fast-growth companies found that 71% had small business plans
- The process and output of creating a business plan have shown to improve business performance
Convinced yet? If those numbers and reasons don’t have you scrambling for pen and paper, who knows what will.
Don’t Skip: Business Startup Costs Checklist
Before we get into the nitty-gritty steps of how to write a business plan, let’s look at some high-level tips to get you started in the right direction:
Be Professional and Legit
You might be tempted to get cutesy or revolutionary with your business plan—resist the urge. While you should let your brand and creativity shine with everything you produce, business plans fall more into the realm of professional documents.
Think of your business plan the same way as your terms and conditions, employee contracts, or financial statements. You want your plan to be as uniform as possible so investors, lenders, partners, and prospective employees can find the information they need to make important decisions.
If you want to create a fun summary business plan for internal consumption, then, by all means, go right ahead. However, for the purpose of writing this external-facing document, keep it legit.
Know Your Audience
Your official business plan document is for lenders, investors, partners, and big-time prospective employees. Keep these names and faces in your mind as you draft your plan.
Think about what they might be interested in seeing, what questions they’ll ask, and what might convince (or scare) them. Cut the jargon and tailor your language so these individuals can understand.
Remember, these are busy people. They’re likely looking at hundreds of applicants and startup investments every month. Keep your business plan succinct and to the point. Include the most pertinent information and omit the sections that won’t impact their decision-making.
Invest Time Researching
You might not have answers to all the sections you should include in your business plan. Don’t skip over these!
Your audience will want:
- Detailed information about your customers
- Numbers and solid math to back up your financial claims and estimates
- Deep insights about your competitors and potential threats
- Data to support market opportunities and strategy
Your answers can’t be hypothetical or opinionated. You need research to back up your claims. If you don’t have that data yet, then invest time and money in collecting it. That information isn’t just critical for your business plan—it’s essential for owning, operating, and growing your company.
Stay Realistic
Your business may be ambitious, but reign in the enthusiasm just a teeny-tiny bit. The last thing you want to do is have an angel investor call BS and say “I’m out” before even giving you a chance.
The folks looking at your business and evaluating your plan have been around the block—they know a thing or two about fact and fiction. Your plan should be a blueprint for success. It should be the step-by-step roadmap for how you’re going from Point A to Point B.
![a business plan is best described as a Button to visit the free training for starting a side hustle](https://foundr.com/wp-content/uploads/2021/04/side-hustle-free-training-button.png)
How to Write a Business Plan—6 Essential Elements
Not every business plan looks the same, but most share a few common elements. Here’s what they typically include:
- Executive Summary
- Business Overview
- Products and Services
- Market Analysis
- Competitive Analysis
- Financial Strategy
Below, we’ll break down each of these sections in more detail.
1. Executive Summary
While your executive summary is the first page of your business plan, it’s the section you’ll write last. That’s because it summarizes your entire business plan into a succinct one-pager.
Begin with an executive summary that introduces the reader to your business and gives them an overview of what’s inside the business plan.
Your executive summary highlights key points of your plan. Consider this your elevator pitch. You want to put all your juiciest strengths and opportunities strategically in this section.
2. Business Overview
In this section, you can dive deeper into the elements of your business, including answering:
- What’s your business structure? Sole proprietorship, LLC, corporation, etc.
- Where is it located?
- Who owns the business? Does it have employees?
- What problem does it solve, and how?
- What’s your mission statement? Your mission statement briefly describes why you are in business. To write a proper mission statement, brainstorm your business’s core values and who you serve.
Don’t overlook your mission statement. This powerful sentence or paragraph could be the inspiration that drives an investor to take an interest in your business. Here are a few examples of powerful mission statements that just might give you the goosebumps:
- Patagonia: Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.
- Tesla: To accelerate the world’s transition to sustainable energy.
- InvisionApp : Question Assumptions. Think Deeply. Iterate as a Lifestyle. Details, Details. Design is Everywhere. Integrity.
- TED : Spread ideas.
- Warby Parker : To offer designer eyewear at a revolutionary price while leading the way for socially conscious businesses.
3. Products and Services
As the owner, you know your business and the industry inside and out. However, whoever’s reading your document might not. You’re going to need to break down your products and services in minute detail.
For example, if you own a SaaS business, you’re going to need to explain how this business model works and what you’re selling.
You’ll need to include:
- What services you sell: Describe the services you provide and how these will help your target audience.
- What products you sell: Describe your products (and types if applicable) and how they will solve a need for your target and provide value.
- How much you charge: If you’re selling services, will you charge hourly, per project, retainer, or a mixture of all of these? If you’re selling products, what are the price ranges?
4. Market Analysis
Your market analysis essentially explains how your products and services address customer concerns and pain points. This section will include research and data on the state and direction of your industry and target market.
This research should reveal lucrative opportunities and how your business is uniquely positioned to seize the advantage. You’ll also want to touch on your marketing strategy and how it will (or does) work for your audience.
Include a detailed analysis of your target customers. This describes the people you serve and sell your product to. Be careful not to go too broad here—you don’t want to fall into the common entrepreneurial trap of trying to sell to everyone and thereby not differentiating yourself enough to survive the competition.
The market analysis section will include your unique value proposition. Your unique value proposition (UVP) is the thing that makes you stand out from your competitors. This is your key to success.
If you don’t have a UVP, you don’t have a way to take on competitors who are already in this space. Here’s an example of an ecommerce internet business plan outlining their competitive edge:
FireStarters’ competitive advantage is offering product lines that make a statement but won’t leave you broke. The major brands are expensive and not distinctive enough to satisfy the changing taste of our target customers. FireStarters offers products that are just ahead of the curve and so affordable that our customers will return to the website often to check out what’s new.
5. Competitive Analysis
Your competitive analysis examines the strengths and weaknesses of competing businesses in your market or industry. This will include direct and indirect competitors. It can also include threats and opportunities, like economic concerns or legal restraints.
The best way to sum up this section is with a classic SWOT analysis. This will explain your company’s position in relation to your competitors.
6. Financial Strategy
Your financial strategy will sum up your revenue, expenses, profit (or loss), and financial plan for the future. It’ll explain how you make money, where your cash flow goes, and how you’ll become profitable or stay profitable.
This is one of the most important sections for lenders and investors. Have you ever watched Shark Tank? They always ask about the company’s financial situation. How has it performed in the past? What’s the ongoing outlook moving forward? How does the business plan to make it happen?
Answer all of these questions in your financial strategy so that your audience doesn’t have to ask. Go ahead and include forecasts and graphs in your plan, too:
- Balance sheet: This includes your assets, liabilities, and equity.
- Profit & Loss (P&L) statement: This details your income and expenses over a given period.
- Cash flow statement: Similar to the P&L, this one will show all cash flowing into and out of the business each month.
It takes cash to change the world—lenders and investors get it. If you’re short on funding, explain how much money you’ll need and how you’ll use the capital. Where are you looking for financing? Are you looking to take out a business loan, or would you rather trade equity for capital instead?
Read More: 16 Financial Concepts Every Entrepreneur Needs to Know
Startup Business Plan Template (Copy/Paste Outline)
Ready to write your own business plan? Copy/paste the startup business plan template below and fill in the blanks.
Executive Summary Remember, do this last. Summarize who you are and your business plan in one page.
Business Overview Describe your business. What’s it do? Who owns it? How’s it structured? What’s the mission statement?
Products and Services Detail the products and services you offer. How do they work? What do you charge?
Market Analysis Write about the state of the market and opportunities. Use date. Describe your customers. Include your UVP.
Competitive Analysis Outline the competitors in your market and industry. Include threats and opportunities. Add a SWOT analysis of your business.
Financial Strategy Sum up your revenue, expenses, profit (or loss), and financial plan for the future. If you’re applying for a loan, include how you’ll use the funding to progress the business.
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5 Frame-Worthy Business Plan Examples
Want to explore other templates and examples? We got you covered. Check out these 5 business plan examples you can use as inspiration when writing your plan:
- SBA Wooden Grain Toy Company
- SBA We Can Do It Consulting
- OrcaSmart Business Plan Sample
- Plum Business Plan Template
- PandaDoc Free Business Plan Templates
Get to Work on Making Your Business Plan
If you find you’re getting stuck on perfecting your document, opt for a simple one-page business plan —and then get to work. You can always polish up your official plan later as you learn more about your business and the industry.
Remember, business plans are not a requirement for starting a business—they’re only truly essential if a bank or investor is asking for it.
Ask others to review your business plan. Get feedback from other startups and successful business owners. They’ll likely be able to see holes in your planning or undetected opportunities—just make sure these individuals aren’t your competitors (or potential competitors).
Your business plan isn’t a one-and-done report—it’s a living, breathing document. You’ll make changes to it as you grow and evolve. When the market or your customers change, your plan will need to change to adapt.
That means when you’re finished with this exercise, it’s not time to print your plan out and stuff it in a file cabinet somewhere. No, it should sit on your desk as a day-to-day reference. Use it (and update it) as you make decisions about your product, customers, and financial plan.
Review your business plan frequently, update it routinely, and follow the path you’ve developed to the future you’re building.
Keep Learning: New Product Development Process in 8 Easy Steps
What financial information should be included in a business plan?
Be as detailed as you can without assuming too much. For example, include your expected revenue, expenses, profit, and growth for the future.
What are some common mistakes to avoid when writing a business plan?
The most common mistake is turning your business plan into a textbook. A business plan is an internal guide and an external pitching tool. Cut the fat and only include the most relevant information to start and run your business.
Who should review my business plan before I submit it?
Co-founders, investors, or a board of advisors. Otherwise, reach out to a trusted mentor, your local chamber of commerce, or someone you know that runs a business.
Ready to Write Your Business Plan?
Don’t let creating a business plan hold you back from starting your business. Writing documents might not be your thing—that doesn’t mean your business is a bad idea.
Let us help you get started.
Join our free training to learn how to start an online side hustle in 30 days or less. We’ll provide you with a proven roadmap for how to find, validate, and pursue a profitable business idea (even if you have zero entrepreneurial experience).
Stuck on the ideas part? No problem. When you attend the masterclass, we’ll send you a free ebook with 100 of the hottest side hustle trends right now. It’s chock full of brilliant business ideas to get you up and running in the right direction.
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About Jesse Sumrak
Jesse Sumrak is a writing zealot focused on creating killer content. He’s spent almost a decade writing about startup, marketing, and entrepreneurship topics, having built and sold his own post-apocalyptic fitness bootstrapped business. A writer by day and a peak bagger by night (and early early morning), you can usually find Jesse preparing for the apocalypse on a precipitous peak somewhere in the Rocky Mountains of Colorado.
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How to Write the Perfect Business Plan: A Comprehensive Guide
Thinking of starting a business here's the best step-by-step template for writing the perfect business plan when creating your startup..
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Maybe you think you don't need a step-by-step guide to writing a great business plan . Maybe you think you don't need a template for writing a business plan. After all, some entrepreneurs succeed without writing a business plan. With great timing, solid business skills, entrepreneurial drive, and a little luck , some founders build thriving businesses without creating even an informal business plan .
But the odds are greater that those entrepreneurs will fail.
Does a business plan make startup success inevitable? Absolutely not. But great planning often means the difference between success and failure. Where your entrepreneurial dreams are concerned, you should do everything possible to set the stage for success.
And that's why a great business plan is one that helps you succeed .
The following is a comprehensive guide to creating a great business plan. We'll start with an overview of key concepts. Then we'll look at each section of a typical business plan:
Executive Summary
Overview and objectives, products and services, market opportunities, sales and marketing.
- Competitive Analysis
Management Team
Financial analysis.
So first let's gain a little perspective on why you need a business plan.
Key Concepts
Many business plans are fantasies. That's because many aspiring entrepreneurs see a business plan as simply a tool--filled with strategies and projections and hyperbole--that will convince lenders or investors the business makes sense.
That's a huge mistake.
First and foremost, your business plan should convince you that your idea makes sense--because your time, your money, and your effort are on the line.
So a solid business plan should be a blueprint for a successful business . It should flesh out strategic plans, develop marketing and sales plans, create the foundation for smooth operations, and maybe--just maybe--persuade a lender or investor to jump on board.
For many entrepreneurs, developing a business plan is the first step in the process of deciding whether to actually start a business. Determining if an idea fails on paper can help a prospective founder avoid wasting time and money on a business with no realistic hope of success.
So, at a minimum, your plan should:
- Be as objective and logical as possible. What may have seemed like a good idea for a business can, after some thought and analysis, prove not viable because of heavy competition, insufficient funding, or a nonexistent market. (Sometimes even the best ideas are simply ahead of their time.)
- Serve as a guide to the business's operations for the first months and sometimes years, creating a blueprint for company leaders to follow.
- Communicate the company's purpose and vision, describe management responsibilities, detail personnel requirements, provide an overview of marketing plans, and evaluate current and future competition in the marketplace.
- Create the foundation of a financing proposal for investors and lenders to use to evaluate the company.
A good business plan delves into each of the above categories, but it should also accomplish other objectives. Most of all, a good business plan is convincing . It proves a case. It provides concrete, factual evidence showing your idea for a business is in fact sound and reasonable and has every chance of success.
Who must your business plan convince?
First and foremost, your business plan should convince you that your idea for a business is not just a dream but can be a viable reality. Entrepreneurs are by nature confident, positive, can-do people. After you objectively evaluate your capital needs, products or services, competition, marketing plans, and potential to make a profit, you'll have a much better grasp on your chances for success.
And if you're not convinced, fine: Take a step back and refine your ideas and your plans.
Who can your business plan convince?
1. Potential sources of financing. If you need seed money from a bank or friends and relatives, your business plan can help you make a great case. Financial statements can show where you have been. Financial projections describe where you plan to go.
Your business plan shows how you will get there. Lending naturally involves risk, and a great business plan can help lenders understand and quantity that risk, increasing your chances for approval.
2. Potential partners and investors. Where friends and family are concerned, sharing your business plan may not be necessary (although it certainly could help).
Other investors--including angel investors or venture capitalists--generally require a business plan in order to evaluate your business.
3. Skilled employees . When you need to attract talent, you need something to show prospective employees since you're still in the startup phase. Early on, your business is more of an idea than a reality, so your business plan can help prospective employees understand your goals--and, more important, their place in helping you achieve those goals.
4. Potential joint ventures. Joint ventures are like partnerships between two companies. A joint venture is a formal agreement to share the work--and share the revenue and profit. As a new company, you will likely be an unknown quantity in your market. Setting up a joint venture with an established partner could make all the difference in getting your business off the ground.
But above all, your business plan should convince you that it makes sense to move forward.
As you map out your plan, you may discover issues or challenges you had not anticipated.
Maybe the market isn't as large as you thought. Maybe, after evaluating the competition, you realize your plan to be the low-cost provider isn't feasible since the profit margins will be too low to cover your costs.
Or you might realize the fundamental idea for your business is sound, but how you implement that idea should change. Maybe establishing a storefront for your operation isn't as cost-effective as taking your products directly to customers--not only will your operating costs be lower, but you can charge a premium since you provide additional customer convenience.
Think of it this way. Successful businesses do not remain static. They learn from mistakes, and adapt and react to changes: changes in the economy, the marketplace, their customers, their products and services, etc. Successful businesses identify opportunities and challenges and react accordingly.
Creating a business plan lets you spot opportunities and challenges without risk. Use your plan to dip your toe in the business water. It's the perfect way to review and revise your ideas and concepts before you ever spend a penny.
Many people see writing a business plan as a "necessary evil" required to attract financing or investors. Instead, see your plan as a no-cost way to explore the viability of your potential business and avoid costly mistakes.
Now let's look at the first section of your business plan: The Executive Summary.
The Executive Summary is a brief outline of the company's purpose and goals. While it can be tough to fit on one or two pages, a good Summary includes:
- A brief description of products and services
- A summary of objectives
- A solid description of the market
- A high-level justification for viability (including a quick look at your competition and your competitive advantage)
- A snapshot of growth potential
- An overview of funding requirements
I know that seems like a lot, and that's why it's so important you get it right. The Executive Summary is often the make-or-break section of your business plan.
A great business solves customer problems. If your Summary cannot clearly describe, in one or two pages, how your business will solve a particular problem and make a profit, then it's very possible the opportunity does not exist--or your plan to take advantage of a genuine opportunity is not well developed.
So think of it as a snapshot of your business plan. Don't try to "hype" your business--focus on helping a busy reader get a great feel for what you plan to do, how you plan to do it, and how you will succeed.
Since a business plan should above all help you start and grow your business, your Executive Summary should first and foremost help you do the following.
1. Refine and tighten your concept.
Think of it as a written elevator pitch (with more detail, of course). Your Summary describes the highlights of your plan, includes only the most critical points, and leaves out less important issues and factors.
As you develop your Summary, you will naturally focus on the issues that contribute most to potential success. If your concept is too fuzzy, too broad, or too complicated, go back and start again. Most great businesses can be described in several sentences, not several pages.
2. Determine your priorities.
Your business plan walks the reader through your plan. What ranks high in terms of importance? Product development? Research? Acquiring the right location? Creating strategic partnerships?
Your Summary can serve as a guide to writing the rest of your plan.
3. Make the rest of the process easy.
Once your Summary is complete, you can use it as an outline for the rest of your plan. Simply flesh out the highlights with more detail.
Then work to accomplish your secondary objective by focusing on your readers. Even though you may be creating a business plan solely for your own purposes, at some point you may decide to seek financing or to bring on other investors, so make sure your Summary meets their needs as well. Work hard to set the stage for the rest of the plan. Let your excitement for your idea and your business shine through.
In short, make readers want to turn the page and keep reading. Just make sure your sizzle meets your steak by providing clear, factual descriptions.
How? The following is how an Executive Summary for a bicycle rental store might read.
Introduction
Blue Mountain Cycle Rentals will offer road and mountain bike rentals in a strategic location directly adjacent to an entrance to the George Washington National Forest. Our primary strategy is to develop Blue Mountain Cycle Rentals as the most convenient and cost-effective rental alternative for the thousands of visitors who flock to the area each year.
Once underway, we will expand our scope and take advantage of high-margin new equipment sales and leverage our existing labor force to sell and service those products. Within three years we intend to create the area's premier destination for cycling enthusiasts.
Company and Management
Blue Mountain Cycle Rentals will be located at 321 Mountain Drive, a location providing extremely high visibility as well as direct entry and exit from a primary national park access road. The owner of the company, Marty Cycle, has over 20 years experience in the bicycle business, having served as a product manager for Acme Cycles as well as the general manager of Epic Cycling.
Because of his extensive industry contacts, initial equipment inventory will be purchased at significant discounts from OEM suppliers as well by sourcing excess inventory from shops around the country.
Because of the somewhat seasonal nature of the business, part-time employees will be hired to handle spikes in demand. Those employees will be attracted through competitive wages as well as discounts products and services.
460,000 people visited the George Washington National Forest during the last 12 months. While the outdoor tourism industry as a whole is flat, the park expects its number of visitors to grow over the next few years.
- The economic outlook indicates fewer VA, WV, NC, and MD cycling enthusiasts will travel outside the region
- The park has added a camping and lodging facilities that should attract an increased number of visitors
- The park has opened up additional areas for trail exploration and construction, ensuring a greater number of single-track options and therefore a greater number of visitors
The market potential inherent in those visitors is substantial. According to third-party research data, approximately 30 percent of all cyclists would rather rent than transport their own bicycles, especially those who are visiting the area for reasons other than cycling.
Competitive Advantages
The cycling shops located in Harrisonburg, VA, are direct and established competitors. Our two primary competitive advantages will be location and lower costs.
Our location is also a key disadvantage where non-park rentals are concerned. We will overcome that issue by establishing a satellite location in Harrisonburg for enthusiasts who wish to rent bicycles to use in town or on other local trails.
We will also use online tools to better engage customers, allowing them to reserve and pay online as well as create individual profiles regarding sizes, preferences, and special needs.
Financial Projections
Blue Mountain Cycle Rentals expects to earn a modest profit by year two based on projected sales. Our projections are based on the following key assumptions:
- Initial growth will be moderate as we establish awareness in the market
- Initial equipment purchases will stay in service for an average of three to four years; after two years we will begin investing in "new" equipment to replace damaged or obsolete equipment
- Marketing costs will not exceed 14 percent of sales
- Residual profits will be reinvested in expanding the product and service line
We project first-year revenue of $720,000 and a 10 percent growth rate for the next two years. Direct cost of sales is projected to average 60 percent of gross sales, including 50 percent for the purchase of equipment and 10 percent for the purchase of ancillary items. Net income is projected to reach $105,000 in year three as sales increase and operations become more efficient.
And so on ...
Keep in mind this is just a made-up example of how your Summary might read. Also keep in mind this example focused on the rental business, so a description of products was not included. (They'll show up later.) If your business will manufacture or sell products, or provide a variety of services, then be sure to include a Products and Services section in your Summary. (In this case the products and services are obvious, so including a specific section would be redundant.)
Bottom line: Provide some sizzle in your Executive Summary, but make sure you show a reasonable look at the steak, too.
Providing an overview of your business can be tricky, especially when you're still in the planning stages. If you already own an existing business, summarizing your current operation should be relatively easy; it can be a lot harder to explain what you plan to become .
So start by taking a step back.
Think about what products and services you will provide, how you will provide those items, what you need to have in order to provide those items, exactly who will provide those items, and most important, whom you will provide those items to.
Consider our bicycle rental business example. It's serves retail customers. It has an online component, but the core of the business is based on face-to-face transactions for bike rentals and support.
So you'll need a physical location, bikes, racks and tools and supporting equipment, and other brick-and-mortar related items. You'll need employees with a very particular set of skills to serve those customers, and you'll need an operating plan to guide your everyday activities.
Sound like a lot? It boils down to:
- What you will provide
- What you need to run your business
- Who will service your customers, and
- Who your customers are.
In our example, defining the above is fairly simple. You know what you will provide to meet your customer's needs. You will of course need a certain quantity of bikes to service demand, but you will not need a number of different types of bikes. You need a retail location, furnished to meet the demands of your business. You need semi-skilled employees capable of sizing, customizing, and repairing bikes.
And you know your customers: cycling enthusiasts.
In other businesses and industries, answering the above questions can be more difficult. If you open a restaurant, what you plan to serve will in some ways determine your labor needs, the location you choose, the equipment you need to purchase. And, most important, it will help define your customer. Changing any one element may change other elements; if you cannot afford to purchase expensive kitchen equipment, you may need to adapt your menu accordingly. If you hope to attract an upscale clientele, you may need to invest more in purchasing a prime location and creating an appealing ambience.
So where do you start? Focus on the basics first:
- Identify your industry. Retail, wholesale, service, manufacturing, etc. Clearly define your type of business.
- Identify your customer. You cannot market and sell to customers until you know who they are.
- Explain the problem you solve. Successful businesses create customer value by solving problems. In our rental example, one problem is cycling enthusiasts who don't--or can't--travel with bikes. Another problem is casual cyclists who can't--or choose not to--spend significant sums on their own bikes. The rental shop will solve that problem by offering a lower-cost and convenient alternative.
- Show how you will solve that problem. Our rental shop will offer better prices and enhanced services like remote deliveries, off-hours equipment returns, and online reservations.
If you are still stuck, try answering these questions. Some may pertain to you; others may not.
- Who is my average customer? Who am I targeting? (Unless you plan to open a grocery store, you should be unlikely to answer, "Everyone!")
- What pain point do I solve for my customers?
- How will I overcome that paint point?
- Where will I fail to solve a customer problem, and what can I do to overcome that issue? (In our rental example, one problem is a potential lack of convenience; we will overcome that issue by offering online reservations, on-resort deliveries, and drive-up equipment returns.)
- Where will I locate my business?
- What products, services, and equipment do I need to run my business?
- What skills do my employees need, and how many do I need?
- How will I beat my competition?
- How can I differentiate myself from my competition in the eyes of my customers? (You can have a great plan to beat your competition, but you also must win the perception battle among your customers. If customers don't feel you are different, then you aren't truly different. Perception is critical.)
Once you work through this list you will probably end up with a lot more detail than is necessary for your business plan. That is not a problem: Start summarizing the main points. For example, your Business Overview and Objectives section could start something like this:
History and Vision
Blue Mountain Cycle Rentals is a new retail venture that will be located at 321 Mountain Drive, directly adjacent to an extremely popular cycling destination. Our initial goal is to become the premier provider for bicycle rentals. We will then leverage our customer base and position in the market to offer new equipment sales as well as comprehensive maintenance and service, custom equipment fittings, and expert trail advice.
- Achieve the largest market share bicycle rentals in the area
- Generate a net income of $235,000 at the end of the second year of operation
- Minimize rental inventory replacement costs by maintaining a 7 percent attrition rate on existing equipment (industry average is 12 percent)
Keys to Success
- Provide high-quality equipment, sourcing that equipment as inexpensively as possible through existing relationships with equipment manufacturers and other cycling shops
- Use signage to attract visitors traveling to the national forest, highlighting our cost and service advantage
- Create additional customer convenience factors to overcome a perceived lack of convenience for customers planning to ride roads and trails some distance away from our shop
- Develop customer incentive and loyalty programs to leverage customer relationships and create positive word of mouth
You could certainly include more detail in each section; this is simply a quick guide. And if you plan to develop a product or service, you should thoroughly describe the development process as well as the end result.
The key is to describe what you will do for your customers--if you can't, you won't have any customers.
In the Products and Services section of your business plan, you will clearly describe--yep--the products and services your business will provide.
Keep in mind that highly detailed or technical descriptions are not necessary and definitely not recommended. Use simple terms and avoid industry buzzwords.
On the other hand, describing how the company's products and services will differ from the competition is critical. So is describing why your products and services are needed if no market currently exists. (For example, before there was Federal Express, overnight delivery was a niche business served by small companies. FedEx had to define the opportunity for a new, large-scale service and justify why customers needed--and would actually use --that service.)
Patents, copyrights, and trademarks you own or have applied for should also be listed in this section.
Depending on the nature of your business, your Products and Services section could be very long or relatively short. If your business is product-focused, you will want to spend more time describing those products.
If you plan to sell a commodity item and the key to your success lies in, say, competitive pricing, you probably don't need to provide significant product detail. Or if you plan to sell a commodity readily available in a variety of outlets, the key to your business may not be the commodity itself but your ability to market in a more cost-effective way than your competition.
But if you're creating a new product (or service), make sure you thoroughly explain the nature of the product, its uses, and its value, etc.--otherwise your readers will not have enough information to evaluate your business.
Key questions to answer:
- Are products or services in development or existing (and on the market)?
- What is the timeline for bringing new products and services to market?
- What makes your products or services different? Are there competitive advantages compared with offerings from other competitors? Are there competitive disadvantages you will need to overcome? (And if so, how?)
- Is price an issue? Will your operating costs be low enough to allow a reasonable profit margin?
- How will you acquire your products? Are you the manufacturer? Do you assemble products using components provided by others? Do you purchase products from suppliers or wholesalers? If your business takes off, is a steady supply of products available?
In the cycling rental business example we've been using, products and services could be a relatively simple section to complete or it could be fairly involved. It depends on the nature of the products the company plans to rent to customers.
If Blue Mountain Cycling Rentals plans to market itself as a provider of high-end bikes, describing those bikes--and the sources for those bikes--is important, since "high-end cycling rentals" is intended to be a market differentiation. If the company plans to be the low-cost provider, then describing specific brands of equipment is probably not necessary.
Also, keep in mind that if a supplier runs out of capacity--or goes out of business altogether--you may not have a sufficient supply to meet your demand. Plan to set up multiple vendor or supplier relationships, and describe those relationships fully.
Remember, the primary goal of your business plan is to convince you that the business is viable--and to create a road map for you to follow.
The Products and Services section for our cycling rental business could start something like this:
Product Description
Blue Mountain Cycle Rentals will provide a comprehensive line of bicycles and cycling equipment for all ages and levels of ability. Since the typical customer seeks medium-quality equipment and excellent services at competitive prices, we will focus on providing brands like Trek bikes, Shimano footwear, and Giro helmets. These manufacturers have a widespread reputation as mid- to high-level quality, unlike equipment typically found in the rental market.
The following is a breakdown of anticipated rental price points, per day and per week:
- Bicycle $30/$120
- Helmet $6/$30
- Customers can extend the rental term online without visiting the store.
- A grace period of two hours will be applied to all rentals; customers who return equipment within that two-hour period will not be charged an additional fee.
Competition
Blue Mountain Cycle Rentals will have clear advantages over its primary competitors, the bike shops located in Harrisonburg, VA:
- Newer equipment inventory with higher perceived quality
- Price points 15 percent below the competition
- Online renewals offering greater convenience
- A liberal return grace period that will reinforce our reputation as a customer-friendly rental experience
Future Products
Expansion will allow us to move product offerings into new equipment sales. We will also explore maintenance and fitting services, leveraging our existing maintenance staff to provide value-added services at a premium price.
When you draft your Products and Services section, think of your reader as a person who knows little to nothing about your business. Be clear and to the point.
Think of it this way: The Products and Services section answers the "what" question for your business. Make sure you fully understand the "what" factor; you may run the business, but your products and services are its lifeblood.
Market research is critical to business success. A good business plan analyzes and evaluates customer demographics, purchasing habits, buying cycles, and willingness to adopt new products and services.
The process starts with understanding your market and the opportunities inherent in that market. And that means you'll need to do a little research. Before you start a business you must be sure there is a viable market for what you plan to offer.
That process requires asking, and more importantly answering, a number of questions. The more thoroughly you answer the following questions, the better you will understand your market.
Start by evaluating the market at a relatively high level, answering some high-level questions about your market and your industry:
- What is the size of the market? Is it growing, stable, or in decline?
- Is the overall industry growing, stable, or in decline?
- What segment of the market do I plan to target? What demographics and behaviors make up the market I plan to target?
- Is demand for my specific products and services rising or falling?
- Can I differentiate myself from the competition in a way customers will find meaningful? If so, can I differentiate myself in a cost-effective manner?
- What do customers expect to pay for my products and services? Are they considered to be a commodity or to be custom and individualized?
Fortunately, you've already done some of the legwork. You've already defined and mapped out your products and services. The Market Opportunities section provides a sense-check of that analysis, which is particularly important since choosing the right products and services is such a critical factor in business success.
But your analysis should go further: Great products are great, but there still must be a market for those products. (Ferraris are awesome, but you're unlikely to sell many where I live.)
So let's dig deeper and quantify your market. Your goal is to thoroughly understand the characteristics and purchasing ability of potential customers in your market. A little Googling can yield a tremendous amount of data.
For the market you hope to serve, determine:
- Your potential customers. In general terms, potential customers are the people in the market segment you plan to target. Say you sell jet skis; anyone under the age of 16 and over the age of 60 or so is unlikely to be a customer. Plus, again in general terms, women make up a relatively small percentage of jet ski purchasers. Determining the total population for the market is not particularly helpful if your product or service does not serve a need for the entire population. Most products and services do not.
- Total households. In some cases determining the number of total households is important depending on your business. For example, if you sell heating and air conditioning systems, knowing the number of households is more important than simply knowing the total population in your area. While people purchase HVAC systems, "households" consume those systems.
- Median income. Spending ability is important. Does your market area have sufficient spending power to purchase enough of your products and services to enable you to make a profit? Some areas are more affluent than others. Don't assume every city or locality is the same in terms of spending power. A service that is viable in New York City may not be viable in your town.
- Income by demographics. You can also determine income levels by age group, by ethnic group, and by gender. (Again, potential spending power is an important number to quantify.) Senior citizens could very well have a lower income level than males or females age 45 to 55 in the prime of their careers. Or say you plan to sell services to local businesses; in that case, try to determine the amount they currently spend on similar services.
The key is to understand the market in general terms and then to dig deeper to understand whether there are specific segments within that market--the segments you plan to target--that can become customers and support the growth of your business.
Also keep in mind that if you plan to sell products online the global marketplace is incredibly crowded and competitive. Any business can sell a product online and ship that product around the world. Don't simply assume that just because "the bicycle industry is a $62 billion business" (a number I just made up) that you can capture a meaningful percentage of that market.
On the other hand, if you live in an area with 50,000 people and there's only one bicycle shop, you may be able to enter that market and attract a major portion of bicycle customers in your area.
Always remember it's much easier to serve a market you can define and quantify.
After you complete your research you may feel a little overwhelmed. While data is good, and more data is great, sifting through and making sense of too much data can be daunting.
For the purposes of your business plan, narrow your focus and focus on answering these main questions:
- What is your market? Include geographic descriptions, target demographics, and company profiles (if you're B2B). In short: Who are your customers?
- What segment of your market will you focus on? What niche will you attempt to carve out? What percentage of that market do you hope to penetrate and acquire?
- What is the size of your intended market? What is the population and spending habits and levels?
- Why do customers need and why will they be willing to purchase your products and services?
- How will you price your products and services? Will you be the low cost provider or provide value-added services at higher prices?
- Is your market likely to grow? How much? Why?
- How can you increase your market share over time?
The Market Opportunities section for our cycling rental business could start something like this:
Market Summary
Consumer spending on cycling equipment reached $9,250,000 in the states of VA, WV, MD, and NC last year. While we expect sales to rise, for the purposes of performing a conservative analysis we have projected a zero growth rate for the next three years.
In those states 2,500,000 people visited a national forest last year. Our target market includes customers visiting the Shenandoah National Forest; last year 120,000 people visited the area during spring, summer, and fall months.
Over time, however, we do expect equipment rentals and sales to increase as the popularity of cycling continues to rise. In particular we forecast a spike in demand in 2015 since the national road racing championships will be held in Richmond, VA.
Market Trends
Participation and population trends favor our venture:
- Recreational sports in general and both family-oriented and "extreme" sports continue to gain in exposure and popularity.
- Western VA and eastern WV have experienced population growth rates nearly double that of the country as a whole.
- Industry trends show cycling has risen at a more rapid rate than most other recreational activities.
Market Growth
According to the latest studies, recreation spending in our target market has grown by 14 percent per year for the past three years.
In addition, we anticipate greater than industry-norm growth rates for cycling in the area due to the increase in popularity of cycling events like the Alpine Loop Gran Fondo.
Market Needs
Out target market has one basic need: The availability to source bicycle rentals at a competitive price. Our only other competition are the bike shops in Harrisonburg, VA, and our location will give us a competitive advantage over those and other companies who try to serve our market.
You may want to add other categories to this section based on your particular industry.
For example, you might decide to provide information about Market Segments. In our case, the cycling rental business does not require much segmentation. Rentals are typically not broken down into segments like "inexpensive," "midrange," and "high-end." For the most part rental bikes are more of a commodity. (Although you'll notice in our Products and Services section, we decided to provide "high-end" rentals.)
But say you decide to open a clothing store. You could focus on high fashion, or children's clothes, or outdoor wear, or casual--you could segment the market in a number of ways. If that's the case, provide detail on segmentation that supports your plan.
The key is to define your market--and then show how you will serve your market.
Providing great products and services is wonderful, but customers must actually know those products and services exist. That's why marketing plans and strategies are critical to business success. (Duh, right?)
But keep in mind marketing is not just advertising. Marketing--whether advertising, public relations, promotional literature, etc.--is an investment in the growth of your business.
Like any other investment you would make, money spent on marketing must generate a return. (Otherwise why make the investment?) While that return could simply be greater cash flow, good marketing plans result in higher sales and profits.
So don't simply plan to spend money on a variety of advertising efforts. Do your homework and create a smart marketing program .
Here are some of the basic steps involved in creating your marketing plan:
- Focus on your target market. Who are your customers? Who will you target? Who makes the decisions? Determine how you can best reach potential customers.
- Evaluate your competition. Your marketing plan must set you apart from your competition, and you can't stand out unless you know your competition. (It's hard to stand out from a crowd if you don't know where the crowd stands.) Know your competitors by gathering information about their products, service, quality, pricing, and advertising campaigns. In marketing terms, what does your competition do that works well? What are their weaknesses? How can you create a marketing plan that highlights the advantages you offer to customers?
- Consider your brand. How customers perceive your business makes a dramatic impact on sales. Your marketing program should consistently reinforce and extend your brand. Before you start to market your business, think about how you want your marketing to reflect on your business and your products and services. Marketing is the face of your to potential customers--make sure you put your best face forward.
- Focus on benefits. What problems do you solve? What benefits do you deliver? Customers don't think in terms of products--they think in terms of benefits and solutions. Your marketing plan should clearly identify benefits customers will receive. Focus on what customers get instead of on what you provide. (Take Dominos; theoretically they're in the pizza business, but really they're a delivery business.)
- Focus on differentiation. Your products and services have to stand out from the competition in some way. How will you compete in terms of price, product, or service?
Then focus on providing detail and backup for your marketing plan.
- What is your budget for sales and marketing efforts?
- How will you determine if your initial marketing efforts are successful? In what ways will you adapt if your initial efforts do not succeed?
- Will you need sales representatives (inside or external) to promote your products?
- Can you set up public relations activities to help market your business?
The Sales and Marketing section for our cycling rental business could start something like this:
Target Market
The target market for Blue Mountain Cycling Rentals is western VA, eastern WV, southwestern MD, and northern NC. While customers in the counties surrounding the George Washington National Forest make up 35 percent of our potential customer base, much of our market travels from outside that geographic area.
Marketing Strategy
Our marketing strategy will focus on three basic initiatives:
- Road signage. Access to the forest is restricted to a few primary entrances, and visitors reach those entrances after traveling on one of several main roadways. Since customers currently rent bicycles in the local town of Harrisonburg, road signage will communicate our value proposition to all potential customers.
- Web initiatives. Our website will attract potential visitors to the resort. We will partner with local businesses that serve our target market to provide discounts and incentives.
- Promotional events. We will hold regular events with professional cyclists, like demonstrations and autograph signings, to bring more customers to the store as well as to extend the athletes' "brand" to our brand.
Pricing Strategy
We will not be the low-cost provider for our target market. Our goal is to provide mid- to high-end equipment. However, we will create web-based loyalty programs to incent customers to set up online profiles and reserve and renew equipment rentals online, and provide discounts for those who do. Over time we will be able to market specifically to those customers.
Just as in the Market Opportunity section, you may want to include a few more categories. For example, if your business involves a commission-compensated sales force, describe your Sales Programs and incentives. If you distribute products to other companies or suppliers and those distribution efforts will impact your overall marketing plans, lay out your Distribution Strategy.
The key is to show you understand your market and you understand how you will reach your market. Marketing and promotions must result in customers--your goal is to thoroughly describe how you will acquire and keep your customers.
Also keep in mind you may want to include examples of marketing materials you have already prepared, like website descriptions, print ads, web-based advertising programs, etc. While you don't need to include samples, taking the time to create actual marketing materials might help you better understand and communicate your marketing plans and objectives.
Make sure your Sales and Marketing section answers the "How will I reach my customers?" question.
Competitive Advantage
The Competitive Analysis section of your business plan is devoted to analyzing your competition--both your current competition and potential competitors who might enter your market.
Every business has competition. Understanding the strengths and weaknesses of your competition--or potential competition--is critical to making sure your business survives and grows. While you don't need to hire a private detective, you do need to thoroughly assess your competition on a regular basis even if you plan to run only a small business.
In fact, small businesses can be especially vulnerable to competition, especially when new companies enter a marketplace.
Competitive analysis can be incredibly complicated and time-consuming, but it doesn't have to be. Here is a simple process you can follow to identify, analyze, and determine the strengths and weaknesses of your competition.
Profile Current Competitors
First, develop a basic profile of each of your current competition. For example, if you plan to open an office supply store, you may have three competing stores in your market.
Online retailers will also provide competition, but thoroughly analyzing those companies will be less valuable unless you also decide you want to sell office supplies online. (Although it's also possible that they--or, say, Amazon--are your real competition. Only you can determine that.)
To make the process easier, stick to analyzing companies you will directly compete with. If you plan to set up an accounting firm, you will compete with other accounting firms in your area. If you plan to open a clothing store, you will compete with other clothing retailers in your area.
Again, if you run a clothing store, you also compete with online retailers, but there is relatively little you can do about that type of competition other than to work hard to distinguish yourself in other ways: great service, friendly salespeople, convenient hours, truly understanding your customers, etc.
Once you identify your main competitors, answer these questions about each one. And be objective. It's easy to identify weaknesses in your competition, but less easy (and a lot less fun) to recognize how they may be able to outperform you:
- What are their strengths? Price, service, convenience, and extensive inventory are all areas where you may be vulnerable.
- What are their weaknesses? Weaknesses are opportunities you should plan to take advantage of.
- What are their basic objectives? Do they seek to gain market share? Do they attempt to capture premium clients? See your industry through their eyes. What are they trying to achieve?
- What marketing strategies do they use? Look at their advertising, public relations, etc.
- How can you take market share away from their business?
- How will they respond when you enter the market?
While these questions may seem like a lot of work to answer, in reality the process should be fairly easy. You should already have a feel for the competition's strengths and weaknesses--if you know your market and your industry.
To gather information, you can also:
- Check out their websites and marketing materials. Most of the information you need about products, services, prices, and company objectives should be readily available. If that information is not available, you may have identified a weakness.
- Visit their locations. Take a look around. Check out sales materials and promotional literature. Have friends stop in or call to ask for information.
- Evaluate their marketing and advertising campaigns. How a company advertises creates a great opportunity to uncover the objectives and strategies of that business. Advertising should help you quickly determine how a company positions itself, who it markets to, and what strategies it employs to reach potential customers.
- Browse. Search the Internet for news, public relations, and other mentions of your competition. Search blogs and Twitter feeds as well as review and recommendation sites. While most of the information you find will be anecdotal and based on the opinion of just a few people, you may at least get a sense of how some consumers perceive your competition. Plus you may also get advance warning about expansion plans, new markets they intend to enter, or changes in management.
Keep in mind competitive analysis does more than help you understand your competition. Competitive analysis can also help you identify changes you should make to your business strategies. Learn from competitor strengths, take advantage of competitor's weaknesses, and apply the same analysis to your own business plan.
You might be surprised by what you can learn about your business by evaluating other businesses.
Identify Potential Competitors
It can be tough to predict when and where new competitors may pop up. For starters, regularly search for news on your industry, your products, your services, and your target market.
But there are other ways to predict when competition may follow you into a market. Other people may see the same opportunity you see. Think about your business and your industry, and if the following conditions exist, you may face competition does the road:
- The industry enjoys relatively high profit margins
- Entering the market is relatively easy and inexpensive
- The market is growing--the more rapidly it is growing the greater the risk of competition
- Supply and demand is off--supply is low and demand is high
- Very little competition exists, so there is plenty of "room" for others to enter the market
In general terms, if serving your market seems easy you can safely assume competitors will enter your market. A good business plan anticipates and accounts for new competitors.
Now distill what you've learned by answering these questions in your business plan:
- Who are my current competitors? What is their market share? How successful are they?
- What market do current competitors target? Do they focus on a specific customer type, on serving the mass market, or on a particular niche?
- Are competing businesses growing or scaling back their operations? Why? What does that mean for your business?
- How will your company be different from the competition? What competitor weaknesses can you exploit? What competitor strengths will you need to overcome to be successful?
- What will you do if competitors drop out of the marketplace? What will you do to take advantage of the opportunity?
- What will you do if new competitors enter the marketplace? How will you react to and overcome new challenges?
The Competitive Analysis section for our cycling rental business could start something like this:
Primary Competitors
Our nearest and only competition is the bike shops in Harrisonburg, VA. Our next closest competitor is located over 100 miles away.
The in-town bike shops will be strong competitors. They are established businesses with excellent reputations. On the other hand, they offer inferior-quality equipment and their location is significantly less convenient.
Secondary Competitors
We do not plan to sell bicycles for at least the first two years of operation. However, sellers of new equipment do indirectly compete with our business since a customer who buys equipment no longer needs to rent equipment.
Later, when we add new equipment sales to our operation, we will face competition from online retailers. We will compete with new equipment retailers through personalized service and targeted marketing to our existing customer base, especially through online initiatives.
Opportunities
- By offering mid- to high-end quality equipment, we provide customers the opportunity to "try out" bikes they may wish to purchase at a later date, providing additional incentive (besides cost savings) to use our service.
- Offering drive-up, express rental return services will be seen as a much more attractive option compared with the hassle of renting bikes in Harrisonburg and transporting them to intended take-off points for rides.
- Online initiatives like online renewals and online reservations enhances customer convenience and positions us as a cutting-edge supplier in a market largely populated, especially in the cycling segment, by customers who tend to be early technology adapters.
- Renting bikes and cycling equipment may be perceived by some of our target market as a commodity transaction. If we do not differentiate ourselves in terms of quality, convenience, and service, we could face additional competition from other entrants to the market.
- One of the bike shops in Harrisonburg is a subsidiary of a larger corporation with significant financial assets. If we, as hoped, carve out a significant market share, the corporation may use those assets to increase service, improve equipment quality, or cut prices.
While your business plan is primarily intended to convince you that your business makes sense, keep in mind most investors look closely at your competitive analysis. A common mistake made by entrepreneurs is assuming they will simply "do it better" than any competition.
Experienced businesspeople know you will face stiff competition: showing you understand your competition, understand your strengths and weaknesses relative to that competition, and that you understand you will have to adapt and change based on that competition is critical.
And, even if you do not ever plan to seek financing or bring in investors, you absolutely must know your competition.
The Competitive Analysis section helps you answer the "Against whom?" question.
The next step in creating your business plan is to develop an Operations Plan that will serve your customers, keep your operating costs in line, and ensure profitability . Your ops plan should detail strategies for managing, staffing, manufacturing, fulfillment, inventory--all the stuff involved in operating your business on a day-to-day basis.
Fortunately, most entrepreneurs have a better handle on their operations plan than on any other aspect of their business. After all, while it may not seem natural to analyze your market or your competition, most budding entrepreneurs tend to spend a lot of time thinking about how they will run their businesses.
Your goal is to answer the following key questions:
- What facilities, equipment, and supplies do you need?
- What is your organizational structure? Who is responsible for which aspects of the business?
- Is research and development required, either during start up or as an ongoing operation? If so, how will you accomplish this task?
- What are your initial staffing needs? When and how will you add staff?
- How will you establish business relationships with vendors and suppliers? How will those relationships impact your day-to-day operations?
- How will your operations change as the company grows? What steps will you take to cut costs if the company initially does not perform up to expectations?
Operations plans should be highly specific to your industry, your market sector, and your customers. Instead of providing an example like I've done with other sections, use the following to determine the key areas your plan should address:
Location and Facility Management
In terms of location, describe:
- Zoning requirements
- The type of building you need
- The space you need
- Power and utility requirements
- Access: Customers, suppliers, shipping, etc.
- Specialized construction or renovations
- Interior and exterior remodeling and preparation
Daily Operations
- Production methods
- Service methods
- Inventory control
- Sales and customer service
- Receiving and Delivery
- Maintenance, cleaning, and re-stocking
- Licenses and permits
- Environmental or health regulations
- Patents, trademarks, and copyrights
Personnel Requirements
- Typical staffing
- Breakdown of skills required
- Recruiting and retention
- Policies and procedures
- Pay structures
- Anticipated inventory levels
- Turnover rate
- Seasonal fluctuations in demand
- Major suppliers
- Back-up suppliers and contingency plans
- Credit and payment policies
Sound like a lot? It can be, but not all of the above needs to be in your business plan.
You should think through and create a detailed plan for each category, but you won't need to share the results with the people who read your business plan
Working through each issue and developing concrete operations plans helps you in two major ways:
- If you don't plan to seek financing or outside capital, you can still take advantage of creating a comprehensive plan that addresses all of your operational needs.
- If you do seek financing or outside capital, you may not include all the detail in your business plan--but you will have answers to any operations questions at your fingertips.
Think of Operations as the "implementation" section of your business plan. What do you need to do? How will you get it done? Then create an overview of that plan to make sure your milestones and timeline make sense.
That way the operations section answers the "How?" question.
Many investors and lenders feel the quality and experience of the management team is one of the most important factors used to evaluate the potential of a new business.
But putting work into the Management Team section will not only benefit people who may read your plan. It will also help you evaluate the skills, experiences, and resources your management team will need . Addressing your company's needs during implementation will make a major impact on your chances for success.
- Who are the key leaders? (If actual people have not been identified, describe the type of people needed.) What are their experiences, educational backgrounds, and skills?
- Do your key leaders have industry experience? If not, what experience do they bring to the business that is applicable?
- What duties will each position perform? (Creating an organization chart might be helpful.) What authority is granted to and what responsibilities are expected in each position?
- What salary levels will be required to attract qualified candidates for each position? What is the salary structure for the company, by position?
The Management Team section for our cycling rental business could start something like this:
Jim Rouleur, Owner and Manager
Joe has over 20 years experience in the cycling business. He served for 10 years as a product manager for Acme Bikes. After that he was the operations manager of Single Track Cycles, a full-service bike shop located in Bend, Oregon. He has an undergraduate degree in marketing from Duke University and an MBA from Virginia Commonwealth University. (A complete resume for Mr. Rouleur can be found in the Appendix.)
Mary Gearset, Assistant Manager
Mary was the 2009 U.S. Mountain Biking National Champion. She worked in product development for High Tec frames, creating custom frames and frame modifications for professional cyclists. She also has extensive customer service and sales experience, having worked for four years as the online manager of Pro Parts Unlimited, an online retailer of high-end cycling equipment and accessories.
In some instances you may also wish to describe your staffing plans.
For example, if you manufacture a product or provide a service and will hire a key skilled employee, describe that employee's credentials. Otherwise, include staffing plans in the Operations section.
One key note: Don't be tempted to add a "name" to your management team in hopes of attracting investors. Celebrity management team members may attract the attention of your readers, but experienced lenders and investors will immediately ask what role that person will actually play in the running of the business--and in most cases those individuals won't play any meaningful role.
If you don't have a lot of experience--but are willing to work hard to overcome that lack of experience--don't be tempted to include people in your plan who will not actually work in the business.
If you can't survive without help, that's okay. In fact, that's expected; no one does anything worthwhile on their own. Just make plans to get help from the right people.
Finally, when you create your Management section, focus on credentials but pay extra attention to what each person actually will do . Experience and reputation are great, but action is everything.
That way your Management section will answer the "Who is in charge?" question.
Numbers tell the story. Bottom line results indicate the success or failure of any business.
Financial projections and estimates help entrepreneurs, lenders, and investors or lenders objectively evaluate a company's potential for success. If a business seeks outside funding, providing comprehensive financial reports and analysis is critical.
But most important, financial projections tell you whether your business has a chance of being viable--and if not let you know you have more work to do.
Most business plans include at least five basic reports or projections:
- Balance Sheet: Describes the company cash position including assets, liabilities, shareholders, and earnings retained to fund future operations or to serve as funding for expansion and growth. It indicates the financial health of a business.
- Income Statement: Also called a Profit and Loss statement, this report lists projected revenue and expenses. It shows whether a company will be profitable during a given time period.
- Cash Flow Statement: A projection of cash receipts and expense payments. It shows how and when cash will flow through the business; without cash, payments (including salaries) cannot be made.
- Operating Budget: A detailed breakdown of income and expenses; provides a guide for how the company will operate from a "dollars" point of view.
- Break-Even Analysis: A projection of the revenue required to cover all fixed and variable expenses. Shows when, under specific conditions, a business can expect to become profitable.
It's easy to find examples of all of the above. Even the most basic accounting software packages include templates and samples. You can also find templates in Excel and Google Docs. (A quick search like "google docs profit and loss statement" yields plenty of examples.)
Or you can work with an accountant to create the necessary financial projections and documents. Certainly feel free to do so, but first play around with the reports yourself. While you don't need to be an accountant to run a business, you do need to understand your numbers, and the best way to understand your numbers is usually to actually work with your numbers.
But ultimately the tools you use to develop your numbers are not as important as whether those numbers are as accurate as possible--and whether those numbers help you decide whether to take the next step and put your business plan into action.
Then Financial Analysis can help you answer the most important business question: "Can we make a profit?"
Some business plans include less essential but potentially important information in an Appendix section. You may decide to include, as backup or additional information:
- Resumes of key leaders
- Additional descriptions of products and services
- Legal agreements
- Organizational charts
- Examples of marketing and advertising collateral
- Photographs of potential facilities, products, etc.
- Backup for market research or competitive analysis
- Additional financial documents or projections
Keep in mind creating an Appendix is usually only necessary if you're seeking financing or hoping to bring in partners or investors. Initially the people reading your business plan don't wish to plow through reams and reams of charts, numbers, and backup information. If one does want to dig deeper, fine--he or she can check out the documents in the Appendix.
That way your business plan can share your story clearly and concisely.
Otherwise, since you created your business plan, you should already have the backup.
Tying It All Together
While you may use your business plan to attract investors, partners, suppliers, etc., never forget that the goal of your business plan is to convince you that your idea makes sense.
Because ultimately it's your time, your money, and your effort on the line.
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18 of My Favorite Sample Business Plans & Examples For Your Inspiration
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Published: July 01, 2024
I believe that reading sample business plans is essential when writing your own.
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As you explore business plan examples from real companies and brands, it’s easier for you to learn how to write a good one.
So what does a good business plan look like? And how do you write one that’s both viable and convincing? I’ll walk you through the ideal business plan format along with some examples to help you get started.
Table of Contents
Business Plan Types
Business plan format, sample business plan: section by section, sample business plan templates, top business plan examples.
Ultimately, the format of your business plan will vary based on your goals for that plan. I’ve added this quick review of different business plan types that achieve differing goals.
For a more detailed exploration of business plan types, you can check out this post .
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1. Startups
Startup business plans are for proposing new business ideas. If you’re planning to start a small business, preparing a business plan is crucial. The plan should include all the major factors of your business.
You can check out this guide for more detailed business plan inspiration .
2. Feasibility Studies
Feasibility business plans focus on that business's product or service. Feasibility plans are sometimes added to startup business plans. They can also be a new business plan for an already thriving organization.
3. Internal Use
You can use internal business plans to share goals, strategies, or performance updates with stakeholders. In my opinion, internal business plans are useful for alignment and building support for ambitious goals.
4. Strategic Initiatives
A strategic business plan is another business plan that's often shared internally. This plan covers long-term business objectives that might not have been included in the startup business plan.
5. Business Acquisition or Repositioning
When a business is moving forward with an acquisition or repositioning, it may need extra structure and support. These types of business plans expand on a company's acquisition or repositioning strategy.
Growth sometimes just happens as a business continues operations. But more often, a business needs to create a structure with specific targets to meet set goals for expansion. This business plan type can help a business focus on short-term growth goals and align resources with those goals.
I’m going to focus on a startup business plan that needs to be detailed and research-backed as well as compelling enough to convince investors to offer funding. In my experience, the most comprehensive and convincing business plans contain the following sections.
Executive Summary
This all-important introduction to your business plan sets the tone and includes the company description as well as what you will be exchanging for money — whether that’s product lines, services, or product-service hybrids.
Market Opportunity
Information about gaps in your industry’s market and how you plan to fill them, focused on demand and potential for growth.
Competitive Landscape Analysis
An overview of your competitors that includes consideration of their strengths and how you’ll manage them, their weaknesses and how you’ll capitalize on them, and how you can differentiate your offerings in the industry.
Target Audience
Descriptions of your ideal customers, their various problems that you can solve, and your customer acquisition strategy.
Marketing Strategy
This section details how you will market your brand to achieve specific goals, the channels and tactics you’ll utilize to reach those goals, and the metrics you’ll be using to measure your progress.
Key Features and Benefits
This is where you’ll use plain language to emphasize the value of your product/service, how it solves the problems of your target audiences, and how you’ll scale up over time.
Pricing and Revenue
This section describes your pricing strategy and plans for building revenue streams that fit your audiences while achieving your business goals.
This is the final section, communicating with investors that your business idea is worth investing in via profit/loss statements, cash flow statements, and balance sheets to prove viability.
Okay, so now that we have a format established, I’ll give you more specific details about each section along with examples. Truthfully, I wish I’d had this resource to help me flesh out those first business plans long ago.
1. Executive Summary
I’d say the executive summary is the most important section of the entire business plan. It is essentially an overview of and introduction to your entire project.
Write this in such a way that it grabs your readers' attention and guides them through the rest of the business plan. This is important because a business plan can be dozens or hundreds of pages long.
There are two main elements I’d recommend including in your executive summary: your company description and your products and services.
Company Description
This is the perfect space to highlight your company’s mission statement and goals, a brief overview of your history and leadership, and your top accomplishments as a business.
Tell potential investors who you are and why what you do matters. Naturally, they’re going to want to know who they’re getting into business with up front. This is a great opportunity to showcase your impact.
Need some extra help firming up your business goals? I’d recommend HubSpot Academy’s free course to help you set meaningful goals that matter most for your business.
Products and Services
Here, you will incorporate an overview of your offerings. This doesn’t have to be extensive, as it is just a chance to introduce your industry and overall purpose as a business. I recommend including snippets of information about your financial projections and competitive advantage here as well.
Keep in mind that you'll cover many of these topics in more detail later on in the business plan. The executive summary should be clear and brief, only including the most important takeaways.
Executive Summary Business Plan Examples
This example was created with HubSpot’s business plan template . What makes this executive summary good is that it tells potential investors a short story while still covering all of the most important details.
Our Mission
Maria’s Gluten Free Bagels offers gluten-free bagels, along with various toppings, other gluten-free breakfast sandwich items, and coffee. The facility is entirely gluten free. Our team expects to catch the interest of gluten-free, celiac, or health-conscious community members who are seeking an enjoyable cafe to socialize. Due to a lack of gluten-free bagel products in the food industry currently, we expect mild competition and are confident we will be able to build a strong market position.
The Company and Management
Maria’s Gluten Free Bagels was founded in 2010 by Maria Jones, who first began selling her gluten-free bagels online from her home, using social media to spread the word. In 2012 she bought a retail location in Hamilton, MA, which now employs four full-time employees and six part-time employees. Prior to her bagel shop, Maria was a chef in New York and has extensive experience in the food industry.
Along with Maria Jones, Gluten Free Bagel Shop has a board of advisors. The advisors are:
- Jeni King, partner at Winding Communications, Ltd.
- Henry Wilson, president of Blue Robin, LLP.
Our Product
We offer gluten-free products ranging from bagels and cream cheese to blueberry muffins, coffee, and pastries. Our customers are health-conscious, community-oriented people who enjoy gluten-free products. We will create a welcoming, warm environment with opportunities for open mic nights, poetry readings, and other community functions. We will focus on creating an environment in which someone feels comfortable meeting a friend for lunch, or working remotely.
Our Competitive Advantages
While there are other coffee shops and cafes in the North Shore region, there are none that offer purely gluten-free options. This restricts those suffering from gluten-free illnesses or simply those with a gluten-free preference. This will be our primary selling point. Additionally, our market research [see Section 3] has shown a demand for a community-oriented coffee and bagel shop in the town of Hamilton, MA.
Financial Considerations
Our sales projections for the first year are $400,000. We project a 15% growth rate over the next two years. By year three, we project 61% gross margins.
We will have four full-time employees. The salary for each employee will be $50,000.
Start-up Financing Requirements
We are seeking to raise $125,000 in startup to finance year one. The owner has invested $50,000 to meet working capital requirements, and will use a loan of $100,000 to supplement the rest.
Example 2 :
Marianne and Keith Bean have been involved with the food industry for several years. They opened their first restaurant in Antlers, Oklahoma in 1981, and their second in Hugo in 1988. Although praised for the quality of many of the items on their menu, they have attained a special notoriety for their desserts. After years of requests for their flavored whipped cream toppings, they have decided to pursue marketing these products separately from the restaurants.
Marianne and Keith Bean have developed several recipes for flavored whipped cream topping. They include chocolate, raspberry, cinnamon almond, and strawberry. These flavored dessert toppings have been used in the setting of their two restaurants over the past 18 years, and have been produced in large quantities. The estimated shelf life of the product is 21 days at refrigeration temperatures and up to six months when frozen. The Beans intend to market this product in its frozen state in 8 and 12-ounce plastic tubs. They also intend to have the products available in six ounce pressurized cans. Special attention has been given to developing an attractive label that will stress the gourmet/specialty nature of the products.
Distribution of Fancy's Foods Whipped Dream product will begin in the local southeastern Oklahoma area. The Beans have an established name and reputation in this area, and product introduction should encounter little resistance.
Financial analyses show that the company will have both a positive cash flow and profit in the first year. The expected return on equity in the first year is 10.88%
Tips for Writing Your Executive Summary
- Start with a strong introduction of your company that showcases your mission and impact, then outline the products and services you provide.
- Clearly define a problem, explain how your product solves that problem, and show why the market needs your business.
- Be sure to highlight your value proposition, market opportunity, and growth potential.
- Keep it concise and support ideas with data.
- Customize your summary to your audience. For example, you might emphasize finances and return on investment for venture capitalists, whereas you might emphasize community benefits and minimal environmental impact for progressive nonprofits.
For more guidance, check out our tips for writing an effective executive summary .
2. Market Opportunity
This is where you'll detail the opportunity in the market. Ask and answer: Where is the gap in the current industry, and how will my product fill that gap?
To get a thorough understanding of the market opportunity, you'll want to conduct a TAM, SAM, SOM analysis , a SWOT analysis , and perform market research on your industry to get some insights for this section. More specifically, here’s what I’d include.
- The size of the market
- Current or potential market share
- Trends in the industry and consumer behavior
- Where the gap is
- What caused the gap
- How you intend to fill it
Market Opportunity Business Plan Example
I like this example because it uses critical data to underline the size of the potential market and what part of that market this service hopes to capture.
Example: The market for Doggie Pause is all of the dog owners in the metropolitan area and surrounding areas of the city. We believe that this is going to be 2/3 of the population, and we have a goal of gaining a 50% market share. We have a target of a 20% yearly profit increase as the business continues.
Tips for Writing Your Market Opportunity Section
- Focus on demand and potential for growth.
- Use market research, surveys, and industry trend data to support your market forecast and projections.
- Add a review of regulation shifts, tech advances, and consumer behavior changes.
- Refer to reliable sources.
- Showcase how your business can make the most of this opportunity.
3. Competitive Landscape Analysis
Since we’re already speaking of market share, you‘ll also need to create a section that shares details on who the top competitors are. After all, your customers likely have more than one brand to choose from, and you’ll want to understand exactly why they might choose one over another.
My favorite part of performing a competitive analysis is that it can help you uncover the following:
- Industry trends that other brands may not be utilizing.
- Strengths in your competition that may be obstacles to handle.
- Weaknesses in your competition that may help you develop selling points.
- The unique proposition you bring to the market that may resonate with customers.
Competitive Landscape Business Plan Example
I like how the competitive landscape section of this business plan shows a clear outline of who the top competitors are. It also highlights specific industry knowledge and the importance of location. This demonstrates useful experience in the industry, helping to build trust in your ability to execute your business plan.
Competitive Environment
Currently, there are four primary competitors in the Greater Omaha Area: Pinot’s Palette Lakeside (franchise partner), Village Canvas and Cabernet, The Corky Canvas, and Twisted Vine Collective. The first three competitors are in Omaha and the fourth is located in Papillion.
Despite the competition, all locations have both public and private events. Each location has a few sold-out painting events each month. The Omaha locations are in new, popular retail locations, while the existing Papillion location is in a downtown business district.
There is an opportunity to take advantage of the environment and open a studio in a well-traveled or growing area. Pinot’s Palette La Vista will differentiate itself from its competitors by offering a premium experience in a high-growth, influential location.
Tips for Writing Your Competitive Landscape
- Complete in-depth research, then emphasize your most important findings.
- Compare your unique selling proposition (USP) to your direct and indirect competitors.
- Show a clear and realistic plan for product and brand differentiation.
- Look for specific advantages and barriers in the competitive landscape. Then, highlight how that information could impact your business.
- Outline growth opportunities from a competitive perspective.
- Add customer feedback and insights to support your competitive analysis.
4. Target Audience
Use this section to describe who your customer segments are in detail. What is the demographic and psychographic information of your audience? I’d recommend building a buyer persona to get in the mindset of your ideal customers and be clear about why you're targeting them. Here are some questions I’d ask myself:
- What demographics will most likely need/buy your product or service?
- What are the psychographics of this audience? (Desires, triggering events, etc.)
- Why are your offerings valuable to them?
Target Audience Business Plan Example
I like the example below because it uses in-depth research to draw conclusions about audience priorities. It also analyzes how to create the right content for this audience.
The Audience
Recognize that audiences are often already aware of important issues. Outreach materials should:
- Emphasize a pollution-prevention practice
- Tell audience a little about how to prevent pollution
- Tell audience where they can obtain information about prevention.
Message Content
- Focus the content for outreach materials on cost savings, such as when and where pollution prevention is as cheap as or cheaper than traditional techniques. Include facts and figures.
- Emphasize how easy it is to do the right thing and the impacts of not engaging in pollution prevention.
- Stress benefits such as efficiency or better relations with government, for businesses not primarily concerned with public image.
Tips for Writing Your Target Audience Section
- Include details on the size and growth potential of your target audience.
- Figure out and refine the pain points for your target audience , then show why your product is a useful solution.
- Describe your targeted customer acquisition strategy in detail.
- Share anticipated challenges your business may face in acquiring customers and how you plan to address them.
- Add case studies, testimonials, and other data to support your target audience ideas.
- Remember to consider niche audiences and segments of your target audience in your business plan.
5. Marketing Strategy
Here, you‘ll discuss how you’ll acquire new customers with your marketing strategy. I think it’s helpful to have a marketing plan built out in advance to make this part of your business plan easier. I’d suggest including these details:
- Your brand positioning vision and how you'll cultivate it.
- The goal targets you aim to achieve.
- The metrics you'll use to measure success.
- The channels and distribution tactics you'll use.
Marketing Strategy Business Plan Example
This business plan example includes the marketing strategy for the town of Gawler. In my opinion, it works because it offers a comprehensive picture of how they plan to use digital marketing to promote the community.
![a business plan is best described as a Screenshot of sample marketing plan](https://knowledge.hubspot.com/hubfs/sample-business-plan-1-20240628-7175828.webp)
You’ll also learn the financial benefits investors can reap from putting money into your venture rather than trying to sell them on how great your product or service is.
This business plan guide focuses less on the individual parts of a business plan, and more on the overarching goal of writing one. For that reason, it’s one of my favorites to supplement any template you choose to use. Harvard Business Review’s guide is instrumental for both new and seasoned business owners.
7. HubSpot’s Complete Guide to Starting a Business
![a business plan is best described as a Screenshot of business startup kit download page from hubspot](https://knowledge.hubspot.com/hubfs/sample-business-plan-7-20240628-9740856.webp)
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Israel news features every important moment from the Jewish State involving politics, celebrities, and innovation. This is the hard hitting, fast paced news that represents the Jewish nation in an un bias frame so that truth about Israel is represented in the media. There is no other substitute for the best Israel news on the web...
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Money blog: Hotel Chocolat moves into Greggs territory
Welcome to the Money blog, your place for personal finance and consumer news and tips. Leave your Money Problem or consumer dispute in the box below - remember, we can't look into it unless you leave an email address or phone number.
Thursday 1 August 2024 08:17, UK
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Hotel Chocolat is to open its first bakery and hot food offer.
The move is part of the expansion of its Velvetiser Café format and will arrive at four Yorkshire sites (Harrogate, Leeds Springs Trinity and Ilkley) in August, industry magazine The Grocer reports.
New owner Mars is kicking off a store investment plan.
Customers will be able to enjoy sweet and savoury goods, with products ranging from a chocolatier's carrot cake to a Caribbean chicken curry.
Ian Mackie, head of Velvetiser Café, said: "This launch represents a significant milestone for the Velvetiser Café, as we expand our offerings to include a diverse and delectable menu inspired by our commitment to quality and innovation.
"Each item is crafted with care and precision, using the finest ingredients, sourced responsibly, reflecting our dedication to ethical and sustainable practices."
By James Sillars , business reporter
Anyone who can tell you with certainty what the Bank of England will do today is, frankly, a mug.
The prospect of a first interest rate cut is hanging in the balance.
It has been dangled seductively by the Bank throughout this year, only to be withdrawn month after month as elements of inflation remain too high for the liking of a majority on the rate-setting committee.
After all the sacrifices of the cost of living crisis to date, lower borrowing costs are closer than ever but still not nailed on having risen as far back as December 2021.
Yes folks, the progress in getting inflation down to the 2% target has continued and we have seen two successive months of the CPI measure coming in, bang on, at 2%.
But is that progress beneath the headline number "sustainable"?
Basic wage growth eased from a stubborn 6% level in June but services inflation remained at 5.7% - partly blamed by some commentators as a "Taylor Swift effect" due to the impact the singer's recent concerts had on prices in big cities where she performed.
The Bank had been expecting services inflation to come in at 5.1% by that time.
It all leaves borrowers such as mortgage holders, especially those facing the prospect of securing a new deal, sweating on how the Bank's monetary policy committee sees the outlook.
Some of the members could, for example, choose to look past the temporary effects within services inflation and swell the ranks of the two members to have previously backed a cut.
A poll of economists by the Reuters news agency found a small majority backing a cut to 5% from 5.25%.
Financial markets see a 64% chance of that.
One factor that could sway a cut is that August's rate decision coincides with the release of the Bank's latest monetary policy report.
That means the media is invited to a news conference - held every three months - giving governor Andrew Bailey the opportunity to give the TV news cameras some good news.
While such an idea would be tempting, can the Bank really say that inflation has returned "sustainably" to target?
We haven't seen them yet but much will depend on the new forecasts the Bank's rate-setters had to hand.
None of the members of the MPC have signalled any intent on changing their vote in public speeches since the last meeting.
Without a material change to the Bank's own inflation outlook, which currently sees CPI rising across the rest of the year, how can members justify a cut?
We will learn, either way, soon enough.
For Savings Guide this week, Savings Champion co-founder Anna Bowes picks out the best fixed rate ISAs, bonds and easy access accounts on the market.
Best buy savings rates have remained almost static over the past month, presumably waiting for the next Monetary Policy Committee (MPC) meeting at the Bank of England - happening at lunchtime today.
The markets seem divided about what's going to happen today, but whether the base rate holds or falls, now is a great time to review your savings.
The reason for the lack of clarity is that although headline inflation CPI - the Consumer Prices Index - has fallen back to the government target of 2% for the last couple of months, there are still worrying indicators that could push inflation higher again going forward.
And at the same time, the economy seems to be coping well, despite interest rates still at a level not seen for 16 years.
If the base rate remains at 5.25% following today's meeting, savers can probably breathe another sigh of relief that once again they can enjoy some respite.
But if the base rate falls, we are likely to see savings rates follow suit, in particular variable rate accounts which are more closely pegged to the base rate changes as they happen.
If you can lock some of your cash up for a while therefore, you may be able to hedge against any rate cuts for a while, although remember that you can generally have no access to your money deposited into a fixed rate bond.
Fixed rate ISAs, on the other hand, do allow access, although normally with a hefty penalty.
And with more and more savers paying income tax on the interest they earn, it's definitely worth considering if now is the time to use cash ISAs.
Here's a look at the best savings rates available right now...
Asda has announced a major store reset - and admitted big improvements are needed - after its sales and market share declined.
The chain was the only major supermarket that had sales decline in the 12 weeks to July, according to NIQ figures - while its market share has fallen more than 2% since it was bought by brothers Mohsin and Zuber Issa and TDR.
It is now injecting £30m in emergency investment to try and lure back customers.
"We recognise that there are some areas where we can, and need to, improve, and have set out our plan for colleagues to improve the availability of products in stores, the overall customer experience, and ensuring we have the right trade plan throughout the remainder of the year," a spokesman for the retailer told The Grocer.
"We are investing an additional £30m during the remainder of the year to improve the in-store experience. This includes putting extra hours into store to help colleagues provide an even better service to customers."
Major projects, such as an IT overhaul needed after parting ways with Walmart, have diverted resources from the supermarket's core services.
Asda has endured criticism of its store experience (the chart below is from February) and it has faced staff strikes over hours being cut.
This week, The Daily Telegraph revealed the results of a staff survey that showed fewer than half of workers are confident in the strategy at the supermarket.
Waste workers in Scotland are to walk out on strike next month, with union leaders warning the action will be "disruptive".
Unison, the largest local government union, confirmed staff in 13 council areas will walk out for more than a week in August.
The GMB said its members will take action over the same eight days in August, including staff at Edinburgh City Council who will strike during the capital's busy summer festival period.
Scotland's largest city, Glasgow, will also be affected by the action, which is due to start on 14 August and last until 22 August.
GMB members in 18 of Scotland's 32 local authority areas will strike, and the union said the action will mean bins are not emptied "from the smallest villages to the biggest cities".
Aldi is set to open four new stores in London by the end of the year.
The budget supermarket chain will open stores in Leytonstone and Beckton in the next couple of months, while Holloway Road and Muswell Hill are also set to see new stores within the year.
Southern Europe has seen a boom in luxury home prices this year.
According to research by Savills, cities in the region saw some of the strongest value growth in the world in the first six months of 2024.
Lisbon came out top with a 4.2% rise in prime property value, while Madrid and Athens also saw price increases of more than 3%, according to its index which tracks prime residential property in cities around the world
In contrast, London and Berlin saw price falls of 0.1% and 0.8% respectively over the same period.
Undersupply in many European locations, particularly southern Europe, is driving price rises, Savills said, with US buyers now the "key prospective buyer base".
Less than half of young people watch traditional television in the average week, according to a report.
Ofcom's annual Media Nations report found that just 48% of young people tuned in to live TV each week in 2023, which represented a drop off from 76% in 2018.
Those aged between 16-24 were found to watch just 20 minutes of television a day, the media regulator found.
But when it came to video streaming/sharing platforms, 93% of people aged 16-24 spent time consuming content in the average day, watching one hour and 33 minutes of content.
Ofcom said the TV set "remains at the heart of household viewing", but an increase in its use was being primarily driven by an uptick in the viewing of video-sharing platforms, which rose by 12% between 2022 and 2023.
Ian Macrae, Ofcom's director of market intelligence, said young people craved "the flexibility, immediacy and choice that on-demand services offer".
"Gen Z and Alpha are used to swiping and streaming, not flipping through broadcast TV channels," he said.
The Victoria line was the hottest underground line in 2023.
Running between Brixton in south London and Walthamstow Central in the northeast, the line hit an average temperature of 28C last year - beating the notoriously hot Central line, which saw average mercury levels reach 27C.
The hottest temperature reached on the Victoria line last year was in September when temperatures hit 31C, according to the London datastore .
The Central line in the same month came very close to this temperature and hit 30.89C
Transport for London have said they had doubled the capacity of ventilation shafts on the Victoria line which would provide more air flow.
They have also installed air cooling units and mechanical chillers at some key busy stations, such as Oxford Circus.
By Emily Mee, news reporter
Some of the worst property conditions are seen in the private rental sector.
The Decent Homes Standard, the minimum standard set for decency and habitability, only applies to social housing - but it's thought if it were used in the private rental sector, about a quarter of properties would fail.
Damp and mould are some of the most common problems faced by tenants, and can present a serious health hazard - but it's tricky to know what to do about it.
Jenny Lamb, policy officer at Shelter, took us through what you can do (but a warning, she says taking action can be risky - read on to see what we mean)...
Find out who you're dealing with
First, you should know who handles the management of your property.
Some landlords deal with maintaining and looking after the property, while others will hand this over to the letting agent.
If your property is managed by a landlord
Jenny says your options are "pretty limited", but your first step is to approach your landlord and make them aware of the issue.
Effectively you're putting them on notice that there is a problem.
You'll need to give them a reasonable amount of time to respond - although Jenny says a "reasonable time" is not defined in law.
"You can make some rough guesstimates - it depends on how much is affected and the source of the damp," she says.
If the landlord doesn't respond at all, or if they refuse to do any work, the timeframe may be shorter before you can take further action.
The next step is to go through your local authority's environmental health team, who can come and investigate.
They'll usually want to see the property in person to do an inspection, and they'll then assess how severe the hazard is - for example, whether it presents a threat to health and safety.
Jenny explains they could then choose to serve one of two notices to the landlord.
One is a more severe enforceable improvement notice, which means the landlord could be fined or face enforcement action if they don't fix the issue. In this case, the tenant is protected from eviction for six months.
The other option is a notice to the landlord that there's a problem with the property and advice that they should fix it.
However, Jenny warns this doesn't provide protection for the tenant - and they're therefore at risk of a "revenge eviction" (more on that later).
If your property is managed by a letting agent
In this case, Jenny says you should find out what the letting agent's internal process is for complaints.
If, and only if, you've exhausted this process, you should find out which of the redress schemes the letting agent is part of.
Letting agents are legally obligated to be part of one of two redress schemes - the Property Ombudsman or the Property Redress Scheme.
These organisations can help mediate and may be able to get the tenant an apology, work done in the property or even compensation in some cases.
That's how it should work - but is it too risky for tenants?
While these options can be successful in some cases, the threat of "revenge evictions" means tenants may fear making a fuss.
Currently, landlords are able to evict tenants without giving a reason - also known as a no-fault eviction, or a Section 21 notice.
Tenants must be given two months' notice, and this can only happen during a rolling periodic tenancy or during a fixed-term contract if there is a break clause.
In some cases, landlords have been known to issue "revenge evictions" - where a tenant is evicted after complaining about an issue with the property.
Research by Shelter shows tenants who complain about their properties are 2.5 times more likely to be served a Section 21 notice than those who don't.
"I'd go so far as to say there can be no genuine redress for tenants, especially for conditions of damp and disrepair, while Section 21 exists because that threat hanging over your head of a no-fault eviction is too risky," says Jenny.
She says engaging a local authority can leave renters "vulnerable" to a revenge eviction - especially in a market where demand is so high that "there's probably a long line of people who are desperate for housing so would put up and shut up".
The new Labour government has committed to reintroducing a ban on Section 21 notices that was shelved by the last government.
Should you withhold rent or try to fix the issue yourself?
If you're not getting anywhere, you might be tempted to withhold rent as a solution - but Jenny says this "isn't a way to negotiate".
"You have an obligation to pay your rent regardless of what kind of service you're receiving," she says.
"I would want to warn tenants, however tempting it might be, however unfair it might feel, do continue to pay your rent because you'll just make the situation worse otherwise."
Some tenants might try undertaking work themselves and then charging their landlord for it, but Jenny says you'll need to go through a "proper process" for this.
The landlord must accept the tenant is going to do the work, and the tenant will then need to provide quotes and keep track of costs.
However, Jenny warns it's "not set in stone" the tenants will get their money back in this situation.
A Debenhams advert offering "up to 60% off" has been banned for misleading customers.
The advert on social media, which was published in March, told customers they could get the large discount on fashion, home and beauty products.
It featured a caption that read: "Step into spring with up to 60% off fashion, home and beauty at Debenhams."
However, the online advert has been banned by the Advertising Standards Authority (ASA).
An ASA spokesperson told Sky News: "In this case, Debenhams weren't able to back up the sales claims made in their ads. Because we weren't able to see evidence that the products in the ad were available at the advertised promotional discount, we considered the use of the claim alongside the product images to be misleading, and we banned the ad."
Debenhams said the products featured were from third-party suppliers, who controlled their own pricing.
Sky News is keen to hear from people who are due to refix their mortgages, are on variable rates or are trying to get on the housing ladder.
Email us your stories at [email protected] or use the box at the top of this page.
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Business Restructuring Review Vol. 23 No. 4 | July–August 2024
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In This Issue:
U.S. Supreme Court Bankruptcy Update
The U.S. Supreme Court handed down three bankruptcy rulings to finish the current Term. The decisions address the validity of nonconsensual third-party releases in chapter 11 plans, the standing of insurance companies to object to "insurance neutral" chapter 11 plans, and the remedy for overpayment of administrative fees in chapter 11 cases to the Office of the U.S. Trustee. [ Read more … ]
Ohio Bankruptcy Court Offers Guidance on (the Amended) Ordinary Course Payment Preference Defense
In In re ASPC Corp. , 658 B.R. 455 (Bankr. S.D. Ohio 2024), the U.S. Bankruptcy Court for the Southern District of Ohio addressed a preference defendant's burden of proof under the amended section of the Bankruptcy Code shielding from avoidance transfers made to pay debts incurred in the ordinary course of business of the debtor and the transferee. The court granted summary judgment to a creditor in avoidance litigation, ruling that the defendant need only demonstrate that the payment satisfied one—but not both—of the tests stated in section 547(c)(2). According to the bankruptcy court, "[t]his case illustrates the importance of [the 2005 amendment's] replacement of the conjunctive 'and' with the disjunctive 'or' between the subjective and objective tests for the ordinary course of business defense." [ Read more … ]
First Impressions: Seventh Circuit Rules that the Bankruptcy Code's "Safe Harbor" for Securities Contracts Transfers Applies to Non-Public Securities
Section 546(e) of the Bankruptcy Code's "safe harbor" preventing avoidance in bankruptcy of certain securities, commodity, or forward-contract payments has long been a magnet for controversy. Several noteworthy court rulings have been issued in bankruptcy cases addressing the scope of the provision. One of the latest chapters in the ongoing debate was written by the U.S. Court of Appeals for the Seventh Circuit in Petr v. BMO Harris Bank N.A. , 95 F.4th 1090 (7th Cir. 2024). The Seventh Circuit affirmed a district court ruling broadly construing the section 546(e) safe harbor to bar a chapter 7 trustee from suing under state law and section 544 of the Bankruptcy Code to avoid an alleged constructively fraudulent transfer made by the debtor shortly after it had been acquired in a leveraged buy-out. Among other things, the Seventh Circuit agreed with the district court's conclusions that: (i) the safe harbor is not limited to transfers involving publicly traded securities; and (ii) section 546(e) preempted the trustee's claim to recover the value of the transfer under section 544 and state law. [ Read more … ]
Third Circuit: Unsecured Claim for Royalties from Intellectual Property Purchased by Debtor Discharged Under Chapter 11 Plan
Mitigating risk of loss associated with a bankruptcy filing should be an element of any commercial transaction, especially if it involves a sale or license of intellectual property rights. A ruling recently handed down by the U.S. Court of Appeals for the Third Circuit provides a stark reminder of the consequences of when it is not. In In re Mallinckrodt PLC , 99 F.4th 617 (3d Cir. 2024), the Third Circuit ruled that, in the absence of any security, a claim asserted by the seller of intellectual property rights for royalties payable under the sale agreement was a prepetition unsecured claim that was discharged when the bankruptcy court confirmed the debtor-buyer's chapter 11 plan. [ Read more … ]
Circuit Split: Eleventh Circuit and Second Circuit Disagree on Eligibility Requirements for Chapter 15 Debtors
Courts disagree over whether a foreign bankruptcy case can be recognized under chapter 15 of the Bankruptcy Code if the foreign debtor does not reside or have assets or a place of business in the United States. In 2013, the U.S. Court of Appeals for the Second Circuit staked out its position on this issue in Drawbridge Special Opportunities Fund LP v. Barnet (In re Barnet) , 737 F.3d 238 (2d Cir. 2013), ruling that the provision of the Bankruptcy Code requiring U.S. residency, assets, or a place of business applies in chapter 15 cases as well as cases filed under other chapters. The U.S. Court of Appeals for the Eleventh Circuit split with the Second Circuit on this controversial issue in In re Al Zawawi , 97 F.4th 1244 (11th Cir. 2024). Distancing itself from Barnet , the Eleventh Circuit affirmed a district court ruling that chapter 15 has its own eligibility requirements, and that the eligibility requirements for debtors in cases under other chapters of the Bankruptcy Code do not apply in chapter 15 cases. [ Read more … ]
New York Bankruptcy Court: Lockup Provision in Proposed Settlement Agreement Violated Bankruptcy Code's Disclosure and Solicitation Requirements
The U.S. Bankruptcy Court for the Southern District of New York addressed the propriety of restructuring support, plan support, or lockup agreements in In re GOL Linhas Aéreas Inteligentes S.A. , 2024 WL 1716490 (Bankr. S.D.N.Y. Apr. 22, 2024). The court approved a global settlement among the chapter 11 debtors and various aircraft lessors, but denied approval of an impermissible "lockup" provision in the settlement agreements, obligating the counterparties to support any chapter 11 plan later filed by the debtors provided the plan embodied the terms of the settlement. Although the bankruptcy court declined to adopt a "bright-line" prohibition of such agreements in all cases, it emphasized that the Bankruptcy Code's disclosure and vote solicitation requirements are paramount. The court also concluded that the lockup provision before it failed to pass muster because, unlike most typical lockup or "plan support agreements" or "restructuring support agreements," the provision did not specify the terms of a proposed chapter 11 plan, but merely the terms of the proposed settlement, together with a requirement that any plan could not be inconsistent with those settlement terms. [ Read more … ]
Newsworthy:
Heather Lennox (Cleveland/New York) , Bruce Bennett (Los Angeles) , Kevyn D. Orr (Washington) , Gregory M. Gordon (Dallas) , Carl E. Black (Cleveland) , Daniel J. Merrett (Atlanta) , Robert W. Hamilton (Columbus) , Corinne Ball (New York) , Gary L. Kaplan (Miami) , Thomas M. Wearsch (New York/Cleveland) , Brad B. Erens (Chicago) , Jeffrey B. Ellman (Atlanta) , and Dan T. Moss (Washington/New York) were recognized as leading lawyers in the area of Bankruptcy/Restructuring in the 2024 edition of Chambers USA . Bruce Bennett and Gregory M. Gordon received a "Band 1" designation. Heather Lennox was ranked as a "Star Individual." Corinne Ball was designated a "Senior Statesperson."
Thomas M. Wearsch (New York/Cleveland) spoke on a panel discussing "International Restructuring in the Automotive Sector" on June 4, 2024, at the International Bar Association Annual Meeting in Zurich, Switzerland.
Dr. Olaf Benning (Frankfurt) , Markus Ledwina (Frankfurt) , and Alexander Ballmann (Munich) were recognized as leading lawyers by The Best Lawyers in Germany ™ 2025 in the practice area Restructuring and Insolvency Law.
On June 10, 2024, Dan T. Moss (Washington/New York) was on a panel discussing "Insolvency Proceedings Without Solvency?" at the 24th Annual International Insolvency Conference in Singapore.
An article written by Daniel J. Merrett (Atlanta) titled "New York Bankruptcy Court: Setoff and Unjust Enrichment Cannot Be Asserted as Affirmative Defenses in Bankruptcy Avoidance Litigation" was posted on June 11, 2024, on the Harvard Law School Bankruptcy Roundtable .
On May 17, 2024, the U.S. Bankruptcy Court for the District of Delaware recognized and enforced a restructuring plan for Spark Networks SE ("Spark") under chapter 15 of the Bankruptcy Code, marking the first such order for a plan formulated under Germany's Corporate Stabilization and Restructuring Act ("StaRUG"). Dating platformer provider Spark received approval for its StaRUG plan from a German court in January and successfully defended an appeal by certain shareholders in April. Introduced in January 2021, StaRUG allows companies to impose a compromise or arrangement, including a restructuring of liabilities, upon all or a subset of the creditors. The plan waives more than $30 million of secured debt and $13 million of unsecured debt, and provides approximately $24 million in liquidity support. The Jones Day professionals advising Spark included Dan T. Moss (Washington/New York) , Olaf Benning (Frankfurt) , David S. Torborg (Washington) , Colleen E. Laduzinski (Boston/New York) , Ryan Sims (Washington) , S. Christopher Cundra IV (Washington) , Nick Buchta (Cleveland) , Richard H. Howell (Washington) , Elizabeth A. Dengler (Boston) , and Alexandra Levay (Boston) .
An article written by T. Daniel Reynolds (Cleveland) titled "Fifth Circuit: Recent U.S. Supreme Court Ruling Did Not Alter Mootness Requirements for Unstayed Bankruptcy Sale Orders" was published on June 4, 2024, by Lexis Practical Guidance .
An article written by Dan T. Moss (Washington/New York) , Heather Lennox (Cleveland/New York) , David S. Torborg (Washington) , and Vinay Kurien (Singapore) titled "Third Circuit Updates Its Standard for Granting Comity to Foreign Bankruptcy Proceedings" was published on June 9, 2024, by Lexis Practical Guidance .
An article written by Corinne Ball (New York) , David S. Torborg (Washington) , and Dan T. Moss (Washington/New York) titled "Delaware Bankruptcy Court: 'Center of Main Interests' for Purposes of Chapter 15 Recognition Must Be Determined on Debtor-by-Debtor Rather than Enterprise Group Basis was published on June 9, 2024, by Lexis Practical Guidance .
An article written by T. Daniel Reynolds (Cleveland) titled "Ability of Creditors' Committees to Prosecute Estate Claims Given a Boost in Delaware Bankruptcy Courts" was published on June 4, 2024, by Lexis Practical Guidance .
Lawyer Spotlight: Fabienne Beuzit
Fabienne Beuzit is a partner in the Paris Office, where she leads the Business Restructuring & Reorganization team. Fabienne focuses on bankruptcy proceedings, court and out-of-court restructurings, distressed M&A matters, and insolvency-related litigation. She guides clients through complex restructuring situations and has represented debtors, lenders, shareholders, and investors in numerous restructurings in France and internationally. She regularly interacts with the dedicated departments of the French Ministry of Economy and Finance Affairs, particularly the Comité Interministériel de Restructuration Industrielle in charge of assisting distressed companies, and liaising with all relevant public bodies dedicated to the companies.
Fabienne's experience also includes setting up strategic carve-out, reorganization, or restructurings of groups and assisting turnaround distressed funds in the sale, acquisition, or investment of distressed equity interests.
According to Chambers Europe , Fabienne has "strong technical expertise coupled with business sense, and dedication at odd hours when the situation commands." France Legal 500 EMEA , which named her among the "Leading Individuals" in France, described Fabienne as a tough negotiator, creative in mastering all aspects of a restructuring case, and "totally dedicated to her clients."
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Corinne Ball
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David S. Torborg
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Jane Rue Wittstein
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Oliver S. Zeltner
July 2024 Reprint
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What vice president kamala harris’s election bid might look and sound like..
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Over the past 48 hours, as the nomination of Vice President Kamala Harris went from theoretical to inevitable, she has delivered the first glimpses of how her campaign will run.
Reid J. Epstein, who covers politics for The Times, discusses what we’ve learned from her debut.
On today’s episode
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Reid J. Epstein , who covers politics for The New York Times.
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Ms. Harris gave her first speech as the de facto Democratic nominee to a deafening crowd.
Her presidential bid is getting a pop music rollout online .
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Business Plan: A business plan is a written document that describes in detail how a business, usually a new one, is going to achieve its goals. A business plan lays out a written plan from a ...
2. Feasibility Business Plan. This type of business plan focuses on a single essential aspect of the business — the product or service. It may be part of a startup business plan or a standalone plan for an existing organization. This comprehensive plan may include: A detailed product description. Market analysis. Technology needs. Production ...
A good business plan guides you through each stage of starting and managing your business. You'll use your business plan as a roadmap for how to structure, run, and grow your new business. It's a way to think through the key elements of your business. Business plans can help you get funding or bring on new business partners.
Business plan vs. business model. If a business plan describes the tactics an entrepreneur will use to succeed in the market, then the business model represents how they will make money. ... Now that you understand what a business plan is, the next step is to start writing your business plan. The best way to start is by reviewing examples and ...
Learn about the best business plan software. 1. Write an executive summary. This is your elevator pitch. It should include a mission statement, a brief description of the products or services your ...
It's the roadmap for your business. The outline of your goals, objectives, and the steps you'll take to get there. It describes the structure of your organization, how it operates, as well as the financial expectations and actual performance. A business plan can help you explore ideas, successfully start a business, manage operations, and ...
Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow. A good business plan is much more than just a document that you write once and forget about. It's also a guide that helps you outline and achieve your goals. After completing your plan, you can ...
Describe Your Services or Products. The business plan should have a section that explains the services or products that you're offering. This is the part where you can also describe how they fit ...
A business plan is a document that contains the operational and financial plan of a business, and details how its objectives will be achieved. It serves as a road map for the business and can be used when pitching investors or financial institutions for debt or equity financing. A business plan should follow a standard format and contain all ...
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.
6. Financials. The financial section of your business plan is critical, especially if you want to circulate the plan to investors or lenders. The purpose of this section is threefold: to 1) outline your business's financial plan, 2) demonstrate your profit potential, and 3) share your financing needs.
Definition. A business plan is a detailed written document that describes your business's activities, goals, and strategy. A strong plan outlines everything from the products a company sells to the executive summary to the overall management. In essence, a business plan should guide a founder's actions through each stage of growth.
1. Investors Are Short On Time. If your chief goal is using your business plan to secure funding, then it means you intend on getting it in front of an investor. And if there's one thing investors are, it's busy. So keep this in mind throughout writing a business plan.
A business plan acts as a unifying document that aligns the team with the company's goals and strategies. It ensures that everyone is on the same page, working towards common objectives. This alignment fosters collaboration and efficiency, driving the business towards its targets. 3. Validating the Business Concept.
In developing and writing your business plan, you must make strategic decisions in the areas of management, operations, marketing, accounting, and finance—in short, in all the functional areas of business that we described in Chapter 1 "The Foundations of Business". Granted, preparing a business plan takes a lot of time and work, but it ...
1. Create Your Executive Summary. The executive summary is a snapshot of your business or a high-level overview of your business purposes and plans. Although the executive summary is the first section in your business plan, most people write it last. The length of the executive summary is not more than two pages.
1. Executive Summary. While your executive summary is the first page of your business plan, it's the section you'll write last. That's because it summarizes your entire business plan into a succinct one-pager. Begin with an executive summary that introduces the reader to your business and gives them an overview of what's inside the ...
Determine how you can best reach potential customers. Evaluate your competition. Your marketing plan must set you apart from your competition, and you can't stand out unless you know your ...
1. Startups. Startup business plans are for proposing new business ideas. If you're planning to start a small business, preparing a business plan is crucial. The plan should include all the major factors of your business. You can check out this guide for more detailed business plan inspiration. 2.
Creating a Business Plan - Basics: Business Final Examination. A business plan is best described as: a) A 30-second pitch given to investors. b) The historical record of what's been done with the business so far. c) A blueprint for the business. d) A projection of all possible future scenarios. Click the card to flip 👆.
A business plan is best described as a. game plan. A business plan should generally project financial and operational aspects of the proposed business for the first. three to seven years. Writing a business plan should be thought of as. an ongoing process. The primary outside users of business plans are.
Study with Quizlet and memorize flashcards containing terms like The facilities and equipment that a business needs should be described in the ________ section of its business plan., According to the textbook, a business plan is best described as a(n) ________., The ________ section of a business plan breaks the industry into segments and zeroes in on the specific segment (or target market) to ...
NEW YORK (AP) — JetBlue Airways reported a $25 million profit for the second quarter, and executives on Tuesday described a strategy of cutting costs to rebuild the business, sending the company ...
The Jerusalem Post Customer Service Center can be contacted with any questions or requests: Telephone: *2421 * Extension 4 Jerusalem Post or 03-7619056 Fax: 03-5613699 E-mail: [email protected]
The government has announced plans to remove age bands from the minimum wage. Ministers said the Low Pay Commission has been instructed to narrow the gap between the rate for 18 to 20-year-olds ...
In This Issue: U.S. Supreme Court Bankruptcy Update. The U.S. Supreme Court handed down three bankruptcy rulings to finish the current Term. The decisions address the validity of nonconsensual third-party releases in chapter 11 plans, the standing of insurance companies to object to "insurance neutral" chapter 11 plans, and the remedy for overpayment of administrative fees in chapter 11 cases ...
Over the past 48 hours, as the nomination of Vice President Kamala Harris went from theoretical to inevitable, she has delivered the first glimpses of how her campaign will run.