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How to write a business plan in under an hour
![how to write a business plan in under an hour](https://workinc.com/wp-content/uploads/2019/02/Macbook.jpg)
Posted by wpengine in Business
You’ve had an idea for a new business. Your friends think you’re a genius. Your family think you’re crazy. How do you know it will work? You don’t. The only way to validate your idea is to write a business plan. But who has time for that? You already work full-time, and a traditional business plan can take weeks to write and research. Luckily for you, there is hope. It’s never been easier to start a new business. Unless you’re seeking mega outside investment, you can write a business plan in under an hour. Here’s how.
Enter the lean business plan
A lean business plan is exactly how it sounds. A simple, tangible plan that outlines your business and brings your idea to life.
It’s less about creating an official document, and more about an ongoing journey of discovery as you develop a strategy for success.
Split into easily digestible sections and no longer than two pages (initially), the plan gives you a platform to learn more about the validity of your idea, the people you’re targeting, and indeed yourself.
Benefits of a lean business plan
A lean business plan is better than a traditional business plan because:
It saves you time – People find it difficult to commit time to something that doesn’t exist. You can create a lean business in less than an hour. And it might just be your ticket out of the 9 to 5 grind.
It gives you clarity – Before it’s clear to other people, it has to be clear to you. Creating a plan gives you the opportunity to develop your idea in real-time without fear of judgement.
It’s more useful – Forget the formalities and walls of text nobody will ever read. Lean planning is about the stuff that matters. Everything you need to know to build a successful business, and not much else.
What to include in your lean business plan
Value proposition – This is the one thing that sets you apart from anyone else, and the main reason anyone should consider doing business with you. Your entire idea boiled down into a one-line pitch. And arguably the most important part of your business plan.
Problem & solution – What is the problem facing your customers? And how does your idea solve it? Now is a good time to go out and gather some primary research. In other words, ask people whether they’d choose your product or not.
Target audience – Who is your ideal customer? And how do you know they demand your product? Think beyond age, gender, and interests. Create real personas, give them names and a descriptive bio. This will help you create targeted, more meaningful marketing campaigns.
Competitors – Unless your idea is truly revolutionary, you have competition. Learn about who they are and how they position themselves in your market. Then plot them on a perceptual map. This visual aid will make it easier to find your place and carve out an advantage.
Funding requirements – Will you be self-funded or seek a bank loan? The latter will require a more detailed plan, but either way, you need to understand how much it will cost to create your brand, and where the cash is coming from.
Sales channels – Where will you sell your products or service? If it’s an online business, what channels will you use to get people to your website? Pay-per-click, affiliate marketing, and paid social media are all routes worth exploring.
Marketing – Turning an idea into a customer-facing brand is no mean feat. You’ll need a website and all digitally designed assets, including graphics, video or animation, copywriting, and campaign strategy. These things aren’t set in stone but it’s useful to anticipate them.
Financial projections – Taking into account all overheads, what is the total cost to get your product or service to market? And what will your daily running costs be? Once you have a rough idea, work out what you’d have to sell to turn a profit.
Human resources – Aka your team. Are you a lone wolf or are you recruiting a small team? Highlight the roles you need to fill now and in the near future and what skills they might need.
Partners – What other companies do you need to work with to make all of the above happen? This might be marketing agencies, publishers, manufacturers, suppliers, freelancers, or co-working spaces.
When you’re ready to take the plunge, you’re in good company. workinc is a co-working space for freelancers, start-ups, and corporates who reject the 9 to 5 grind. With feel at home perks and no lengthy contracts to worry about.
Check out our membership package to find out how workinc can work for your new business.
Remember, this plan is designed to serve only as a guide. Keep it handy, share it with friends, family, and co-workers, and continue to revise it as you gather feedback.
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Enter the lean business plan A lean business plan is exactly how it sounds. A simple, tangible plan that outlines your business and brings your idea to life. It’s less about creating an official document, and more about an ongoing journey of discovery as you develop a strategy for success. Split into easily digestible sections […]
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How to Write a Business Plan in 30-Minutes
Posted may 15, 2024 by noah parsons.
![how to write a business plan in under an hour A hero image for the blog post 'How to Write a Business Plan in 30 Minutes' showing a hand holding a stopwatch. Background features green shapes and stars.](https://web-cdn.liveplan.com/liveplan/content/uploads/2024/05/15124035/How_to_Write_a_Business_Plan_Hero-1024x342.png?format=auto)
Writing a traditional business plan can take hours, days, or even weeks.
We recommend a simpler plan—a one-page plan—that you can complete in under an hour.
Sounds too good to be true?
We successfully used this easy business plan format to build LivePlan , and it’s a major reason why the product is so successful.
With a one-page business plan, we:
- Quickly documented our business idea
- Made fast changes as we refined our idea
- Optimized our business strategy
- Figured out what it would take to be profitable
You can do this, even if you’ve never written a business plan. The key is to stick to the structure I will teach you and not worry about perfection.
What is a one-page business plan?
A one-page business plan is a short and simple document that explains the main parts of a business idea. It fits on a single page and covers:
- What the business will sell
- Who it will sell to
- How it will make money,
- What makes it special compared to other businesses
A one-page plan helps entrepreneurs like you quickly share your business idea and get feedback without spending too much time writing a long, detailed plan.
By focusing on a single page, you get to skip all the formatting, complete sentences, and paragraphs of text that most people don’t read.
Instead, you’ll prioritize outlining your business strategy, the business model you’ll use to make money, and the marketing and sales strategies you’ll use to grow.
![how to write a business plan in under an hour how to write a business plan in under an hour](https://no-cache.hubspot.com/cta/default/467363/interactive-177095163930.png?format=auto)
What are the benefits of a one-page business plan?
A one-page business plan is a great tool because it:
- Saves time by focusing on the most important parts of the business idea
- Makes it easy to quickly share and explain the idea to others
- Helps you spot potential problems or missing pieces early on
- Acts as a clear roadmap to guide the business as it grows
- Can be updated easily as things change and you learn more about your business and your customers
By keeping things simple and focused, a one-page plan will help you move forward without getting bogged down in too many details too soon.
The one-page plan format is also part of the growth planning process —an iterative process that helps you refine your business idea and quickly adapt as you build your business.
How to make your one-page business plan
![how to write a business plan in under an hour YouTube video](https://i.ytimg.com/vi/PMheZkVrYMk/hqdefault.jpg)
Start by downloading our free one-page plan template and fill it in as you follow this guide.
When putting together your one-page business plan, the goal is to keep each section as short as possible. So, try to stick with bullet points and short sentences.
Here is what you need to include, along with an example of a bike shop business plan I put together (using LivePlan) in just 27 minutes.
1. Value proposition
This section answers the question, “What does your business do?”
Your goal is to communicate the value you provide to your customers in as few words as possible. Think of it like this—if you’re at a party and someone asks you what your business does, can you describe it in a single sentence?
If you’re struggling to create your value proposition , you can always try using a simple formula like this:
We help [Target Customer] who want to [Customer Need] by [Unique Benefit/Solution] unlike [Competitors or Current Solutions].
Use what will work best for your business—just make sure you describe:
- What you are selling
- Who you are selling it to
- Either how you are different or what the customer needs are
For my bike shop example, I used an even simpler formula to create my value proposition. Here’s what that looked like::
We offer [Unique Benefit/Solution] for [Target Customer], unlike [Competitors or Current Solutions]
![how to write a business plan in under an hour Garrett’s Bike Shop value proposition: Offering high-quality bike gear for families & everyday people. Includes Garrett’s Bike Shop logo with an orange bicycle icon.](https://web-cdn.liveplan.com/liveplan/content/uploads/2024/05/15124111/Value_Proposition_One_Page_Business_Plan-1024x423.png?format=auto)
2. Problem worth solving
The next section of your plan expands a bit on the customer need from your value proposition. Customer need and “problem worth solving” are really the same thing and explain:
- What’s the problem you solve for your customers?
- Why would they go out shopping for a solution?
- Why does your business need to exist?
- Why would they choose you over other alternatives?
If you can’t answer these questions, try talking to your potential customers so you can get a strong understanding of the problems they are trying to solve and how your business can solve them.
When you interview potential customers, you’ll discover what their real pain points are and how your products or services might fit into their lives.
Describing the problem your business solves is one of the most important sections of our business plan. Your business has to fill a real need for your customers or it will be very difficult to find success.
In the bike shop example below, I explain that there aren’t good local bike shops focused on serving families.
![how to write a business plan in under an hour A list of problems your business solves: 1. Families don’t have a place to shop; 2. Lack of quality bike shops in area.](https://web-cdn.liveplan.com/liveplan/content/uploads/2024/05/15124245/Problem_One_Page_Business_Plan-1024x312.png?format=auto)
3. Your solution
Next, describe your product or service and why it’s better than the alternatives.
Essentially, what would your answer be if someone asked you what you sell? Your solution should address the market need that you described in the previous section.
In our bike shop example, I highlight that this shop is different from bike shops that focus mostly on serving serious cyclists.
![how to write a business plan in under an hour A statement describing the solution: Garrett’s is a snob-free zone where regular people can get top notch gear and expert advice.](https://web-cdn.liveplan.com/liveplan/content/uploads/2024/05/15124319/Solution_One_Page_Business_Plan-1024x251.png?format=auto)
4. Target market
Describe your ideal customer . Who are they?
Be as specific as possible—age, gender, shopping habits, etc.
If you target different types of people, create market segments for each group. List each segment and its approximate size, if you know it.
If you don’t know the size, don’t worry about it—you can come back and do that research later.
For our bike shop example, I listed the following target market segments.
![how to write a business plan in under an hour A target market graphic showing 41K prospects with a market size of $36.6M. Target market segments: Young Families (49%, $6M), Trail enthusiasts (17%, $3.5M), Parents 35-55 (15%, $3.5M), College students (12%, $3.5M), City contracts (6%, $3.5M).](https://web-cdn.liveplan.com/liveplan/content/uploads/2024/05/15124356/Target_Market_One_Page_Business_Plan-1024x467.png?format=auto)
Initially, I just listed the types of people I thought would shop at this kind of bike shop. Later, I figured out how many of each type lived in the city where the bike shop was located and added that information.
5. Competition
Every business has competition .
Who do your customers buy from if they aren’t going to buy from you? What makes your business and products better than the alternatives out there?
You can either list specific businesses as competitors or just groups of businesses to cover the different types of competition.
For the bike shop, I decided to use groups of businesses instead of listing out every bike shop in town.
![how to write a business plan in under an hour A table comparing competitors and how our bike shop solution is better. Competitors: Local bike shops, Big-box retailers, Online retailers. Solutions: Welcoming, family-friendly space; Higher quality gear & expert advice; Ability to test drive and local repair.](https://web-cdn.liveplan.com/liveplan/content/uploads/2024/05/15124430/Competition_One_Page_Business_Plan-1024x425.png?format=auto)
6. Sales channels
These are the places where you will sell your products.
If you’re selling online, your online store is a sales channel. If you also have a physical store, that’s another sales channel.
Many businesses are fairly simple and only have a single sales channel – that’s normal and fine. Don’t add more sales channels than you’ll actually have.
![how to write a business plan in under an hour A list of sales channels: 1. Store Front; 2. Website; 3. Repairs; 4. University Contract.](https://web-cdn.liveplan.com/liveplan/content/uploads/2024/05/15124503/Sales_One_Page_Business_Plan-1024x444.png?format=auto)
7. Marketing activities
What will you do to market your business ?
If you plan on buying advertising, list the types of advertising you plan on doing here. Remember, different target markets might need different marketing activities to get your product in front of them.
Tip: If you’re unsure what marketing and sales channels are right for your business, use the LivePlan Assistant to generate recommendations and incorporate them into your plan.
![how to write a business plan in under an hour how to write a business plan in under an hour](https://web-cdn.liveplan.com/liveplan/content/uploads/2024/05/15124605/Marketing_One_Page_Business_Plan-1024x512.png?format=auto)
8. Budget and sales goals
How much will it cost to run your business? What sales goals do you need to reach for your business to be a success?
Don’t sweat the details to start; just think in broad strokes to get a rough idea of how your business will work financially .
You can start by just listing your primary revenue streams and your major expenses. As you learn more about the details, you can start to add estimates for how much sales you’ll bring in and what your actual expenses will be.
Eventually, you’ll expand these broad estimates into a more detailed forecast , but initially just stick to high-level estimates.
For the bike shop, I started with simple lists of revenue streams and major expenses.
![how to write a business plan in under an hour A forecast table showing revenue streams and major costs. Revenue streams: Bike, parts, and accessory sales; Service and repairs; Bike rentals; Classes and workshops. Major costs: Equipment and parts inventory; Rent and utilities; Salaries.](https://web-cdn.liveplan.com/liveplan/content/uploads/2024/05/15124742/Financial_Forecast_List_One_Page_Business_Plan-1024x514.png?format=auto)
I later came back and added in details so I could calculate potential profits. With that information, I changed the list into a few simple charts to show my revenue, expenses, and profitability at a glance.
![how to write a business plan in under an hour A financial projections chart showing revenue, expenses & costs, and profit for 2023 to 2025. Revenue: $724K (2023), $718K (2024), $736K (2025). Expenses & Costs: $724K (2023), $718K (2024), $736K (2025). Profit: $42K (2023), $40K (2024), $40K (2025).](https://web-cdn.liveplan.com/liveplan/content/uploads/2024/05/15124818/Financial_Forecast_One_Page_Business_Plan-1024x473.png?format=auto)
9. Milestones
What are the major tasks you need to accomplish to get your business up and running?
Defining what to do and when will help you stay on track and meet your goals.
For most businesses, you should focus on the near term and highlight what you want to accomplish in the next few months. Shorter-term milestones might include signing a lease on an office or designing your first prototype.
Other businesses may have very long research and development cycles and should map out key milestones for the next 12-24 months. These businesses might have milestones for getting regulatory approval or entering clinical trials.
Regardless of the timeframe, assign a date and specific people to each milestone, so you have real responsibility and accountability.
![how to write a business plan in under an hour The milestones section of the business plan with three milestones: May 2, 2024 - Review forecast; June 21, 2024 - Hire new technician; August 16, 2024 - Create new inventory plan.](https://web-cdn.liveplan.com/liveplan/content/uploads/2024/05/15124851/Milestones_One_Page_Business_Plan-1024x323.png?format=auto)
Even if you’re starting out with just yourself as the only employee of your business, write a few quick bullets about why you’re the right person to run this business.
If you need to hire key people in the future, list those positions as well, even if you don’t know who specifically will fill those positions right now.
You also don’t need to include headshots, but there may be some value in putting a face to the name depending on your audience.
![how to write a business plan in under an hour Team and key roles section of the business plan with headshots and names of team members. From left to right: Garrett McKenzie, Founder / Owner; Jill Bloom, Shop Manager; Tom McKey, Advisor; Heather Gibson, Investor.](https://web-cdn.liveplan.com/liveplan/content/uploads/2024/05/15124927/Team_One_Page_Business_Plan-1024x463.png?format=auto)
11. Funding needs
Nearly every business needs some money to get off the ground. Think about how much money you’ll need and how you plan on using it.
Even if you’re starting your business with your own savings or using credit card debt, it’s a good idea to plan how you will use the funds until you start making sales.
If you don’t know how much money you need, just skip this section for now.
Remember, the goal is to get your initial plan done quickly. You can always come back to this section once you’ve had a chance to figure out what it will take to start and run your business.
![how to write a business plan in under an hour The funding needs section of the business plan showing $125K needed to expand store footprint by 25% to include more new bikes and increase sales by mid 2025.](https://web-cdn.liveplan.com/liveplan/content/uploads/2024/05/15125009/Funding_Needs_One_Page_Business_Plan-1024x140.png?format=auto)
Example of a complete one-page business plan
Let’s put all of those sections together to get a look at our full one-page plan.
![how to write a business plan in under an hour Example of a one-page business plan for Garrett’s Bike Shop. Sections include: Value proposition, Problems worth solving, Our solutions, Target market, Competitors, How our solution is better, Sales channels, Marketing activities, Financial projections (Revenue, Expenses & Costs, Profit), Funding needed, Milestones, Team and key roles.](https://web-cdn.liveplan.com/liveplan/content/uploads/2024/05/15125042/One_Page_Business_Plan_Example-308x1024.png?format=auto)
See how easily you can understand my business without having to read a 40-page document?
While I used LivePlan to create this plan, you can start by downloading this free one page business plan template .
4 tips to quick-start your business plan writing
To put together your business plan in 30 minutes, you’ll need focus and a willingness to let go of perfection.
Here are a few tips to get you started:
- Don’t worry about the details—you can come back and fill those in later.
- Write what you know and skip what you don’t know. Don’t let a single section prevent you from getting to the rest of your plan.
- Know who your customer is—knowing who you are building your business for makes the rest of the process much easier.
- Skip the numbers at first, but don’t ignore them. Afterall, your business has to be sustainable eventually.
Remember, you likely won’t get your idea right the first time—you have to adapt and adjust to find the right formula. A one-page plan will make this process easier, but only if you commit to making it short and imperfect on your first attempt.
What to do after completing your simple business plan
Now that you’ve saved all that time writing your business plan, what should you do next?
With an initial plan in place, you’re primed to use a process known as growth planning that helps both startups and existing businesses grow more quickly and nimbly than their competitors.
Here are the initial steps you can take to put your new plan into action and start growth planning:
Test your idea and revise your plan
It’s rare to get a business idea right the first time. Almost every business owner makes changes to their initial idea to become a successful, growing company.
That’s why it’s important to test your idea early and make adjustments before you sink too much money into your business.
There are plenty of ideas in the article linked above, but the core concept of validating your business idea is to go out and talk to potential customers and gather feedback.
It doesn’t matter if you’re starting a tech company or a cookie business. Get your app design or your cookie samples into potential customers’ hands and hear what they have to say.
Once you have feedback, revise your plan.
Your marketing or sales strategy might change, or perhaps you decide to change your overall value proposition. Either way, revise your plan and test again until you have a business model that works.
Expand into a more detailed business plan
The one-page plan is simple and effective, but there may be a time when you need to expand your plan.
Lenders and potential investors may want to see a more detailed business plan or financial projections if only to prove that you’ve taken time to think through all the details of getting your business up and running.
Or, maybe you just want to expand beyond the single page to make the plan more useful. This may include more robust market research, expanded financial forecasts, etc.
Luckily, by starting with a simple business plan format, you can easily expand on the necessary sections without having to start over.
The real value in detailed planning is the process that you go through to create the plan.
You’ll be forced to answer questions about your business that you might have been tempted to gloss over or ignore completely if you skip the planning process.
If a detailed format sounds like the type of business plan you need, check out our step-by-step guide , and download a free template to fill out as you read.
Review your performance and adjust
Once your business is up and running, it’s important to set aside time to review your business performance.
You’ll want to hold a monthly “plan review” meeting to go over your sales, expenses, and cash flow. The goal of the meeting will be to compare your actual performance to your plan and see if you’re on track financially.
Based on your performance, your sales goals might need to be adjusted or you might need to adjust your expense budget. During this process, you might change your business strategy, use different marking and sales tactics, or pivot to try and sell to a different type of customer.
Your one-page plan is a great place to document those changes and will help you track your progress toward your goals .
When you update your plan, you set new goals to strive for. You also ensure that your business strategy is documented and ready to share with new business partners, investors, and employees.
I’ve found that sharing my company’s plan with employees improves transparency and gives everyone the big picture of what we’re trying to do. It ensures that everyone is moving in the same direction.
Free template and one-page planning tool
Ready to write your one-page plan? Download our free one-page plan template . With that, you will be well on your way to a better business strategy, without all the time and hassle of drafting a lengthy business plan.
To elevate your ability to build a healthy, growing business, you should consider using LivePlan . It includes a one-page plan builder with a built-in AI Assistant to help generate ideas and draft sections of your plan.
Plus, you get access to all the tools you need to build a complete financial forecast.
When your business is up and running, you can keep using LivePlan to automatically track your actual results compared to your sales forecast, expense budget, and cash flow.
Try LivePlan today risk-free and start creating a business plan that is more than a simple document.
How long does it take to write a business plan?
You can write a simple, one-page business plan in as little as 30 minutes. A detailed business plan may take a few days to complete, depending on how much research you need to do.
Some of the most time-consuming parts of business planning are doing market research and gathering the information required to define your target market, revenue streams, and expenses. Using a good business planning tool will automatically create the financial reports you need, saving you time and effort.
How do I start a business plan?
The simplest way to start a business plan is to fill in what you know first—you can start anywhere that you’re comfortable. If you know the most about your product or service, start by describing it first. Then move on to describing your target customer. From there, working on your financial forecasts is a good place to focus on next.
How do I write a simple business plan?
To write a simple business plan your best option is to use the one-page plan format. It covers the essentials of a business plan in the most basic way possible while not excluding critical details.
If you’re writing a detailed business plan, you can keep it simple by using bullet points instead of long paragraphs of text. Be sure to also write your plan for your audience and exclude sections of the plan that your audience doesn’t need.
For example, if you’re writing an internal plan, your audience probably doesn’t need a section discussing company history and location.
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Noah Parsons
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How To Write A Business Plan (2024 Guide)
![how to write a business plan in under an hour Julia Rittenberg](https://thumbor.forbes.com/thumbor/fit-in/x/https://www.forbes.com/advisor/wp-content/uploads/2021/05/juliaheadshot_2020-016-88x88.jpeg)
Updated: Apr 17, 2024, 11:59am
![how to write a business plan in under an hour How To Write A Business Plan (2024 Guide)](https://thumbor.forbes.com/thumbor/fit-in/900x510/https://www.forbes.com/advisor/wp-content/uploads/2022/06/Image_-_Busines_plan_.jpeg.jpg)
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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How to Write a Business Plan in 9 Steps (+ Template and Examples)
Every successful business has one thing in common, a good and well-executed business plan. A business plan is more than a document, it is a complete guide that outlines the goals your business wants to achieve, including its financial goals . It helps you analyze results, make strategic decisions, show your business operations and growth.
If you want to start a business or already have one and need to pitch it to investors for funding, writing a good business plan improves your chances of attracting financiers. As a startup, if you want to secure loans from financial institutions, part of the requirements involve submitting your business plan.
Writing a business plan does not have to be a complicated or time-consuming process. In this article, you will learn the step-by-step process for writing a successful business plan.
You will also learn what you need a business plan for, tips and strategies for writing a convincing business plan, business plan examples and templates that will save you tons of time, and the alternatives to the traditional business plan.
Let’s get started.
What Do You Need A Business Plan For?
Businesses create business plans for different purposes such as to secure funds, monitor business growth, measure your marketing strategies, and measure your business success.
1. Secure Funds
One of the primary reasons for writing a business plan is to secure funds, either from financial institutions/agencies or investors.
For you to effectively acquire funds, your business plan must contain the key elements of your business plan . For example, your business plan should include your growth plans, goals you want to achieve, and milestones you have recorded.
A business plan can also attract new business partners that are willing to contribute financially and intellectually. If you are writing a business plan to a bank, your project must show your traction , that is, the proof that you can pay back any loan borrowed.
Also, if you are writing to an investor, your plan must contain evidence that you can effectively utilize the funds you want them to invest in your business. Here, you are using your business plan to persuade a group or an individual that your business is a source of a good investment.
2. Monitor Business Growth
A business plan can help you track cash flows in your business. It steers your business to greater heights. A business plan capable of tracking business growth should contain:
- The business goals
- Methods to achieve the goals
- Time-frame for attaining those goals
A good business plan should guide you through every step in achieving your goals. It can also track the allocation of assets to every aspect of the business. You can tell when you are spending more than you should on a project.
You can compare a business plan to a written GPS. It helps you manage your business and hints at the right time to expand your business.
3. Measure Business Success
A business plan can help you measure your business success rate. Some small-scale businesses are thriving better than more prominent companies because of their track record of success.
Right from the onset of your business operation, set goals and work towards them. Write a plan to guide you through your procedures. Use your plan to measure how much you have achieved and how much is left to attain.
You can also weigh your success by monitoring the position of your brand relative to competitors. On the other hand, a business plan can also show you why you have not achieved a goal. It can tell if you have elapsed the time frame you set to attain a goal.
4. Document Your Marketing Strategies
You can use a business plan to document your marketing plans. Every business should have an effective marketing plan.
Competition mandates every business owner to go the extraordinary mile to remain relevant in the market. Your business plan should contain your marketing strategies that work. You can measure the success rate of your marketing plans.
In your business plan, your marketing strategy must answer the questions:
- How do you want to reach your target audience?
- How do you plan to retain your customers?
- What is/are your pricing plans?
- What is your budget for marketing?
![how to write a business plan in under an hour 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.
![how to write a business plan in under an hour 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.
![how to write a business plan in under an hour 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.
![how to write a business plan in under an hour 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.
![how to write a business plan in under an hour 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.
![how to write a business plan in under an hour 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.
![how to write a business plan in under an hour 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.
![how to write a business plan in under an hour 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
![how to write a business plan in under an hour Organizational chart Infographic](https://www.founderjar.com/wp-content/uploads/2021/07/An-organizational-chart-helps-to-identify-how-best-to-structure-your-management-team.jpg)
Adding an organizational chart in this section of your business plan is not necessary, you can do it in your business plan’s appendix.
If you are exploring funding options, it is not uncommon to get asked for your organizational chart. The function of an organizational chart goes beyond raising money, you can also use it as a useful planning tool for your business.
An organizational chart can help you identify how best to structure your management team for maximum productivity and point you towards key roles you need to fill in the future.
You can use the organizational chart to show your company’s internal management structure such as the roles and responsibilities of your management team, and relationships that exist between them.
5. Describe Your Product and Service Offering
In your business plan, you have to describe what you sell or the service you plan to offer. It is the next step after defining your business and management structure. The products and services section is where you sell the benefits of your business.
Here you have to explain how your product or service will benefit your customers and describe your product lifecycle. It is also the section where you write down your plans for intellectual property like patent filings and copyrighting.
The research and development that you are undertaking for your product or service need to be explained in detail in this section. However, do not get too technical, sell the general idea and its benefits.
If you have any diagrams or intricate designs of your product or service, do not include them in the products and services section. Instead, leave them for the addendum page. Also, if you are leaving out diagrams or designs for the addendum, ensure you add this phrase “For more detail, visit the addendum Page #.”
Your product and service section in your business plan should include the following:
- A detailed explanation that clearly shows how your product or service works.
- The pricing model for your product or service.
- Your business’ sales and distribution strategy.
- The ideal customers that want your product or service.
- The benefits of your products and services.
- Reason(s) why your product or service is a better alternative to what your competitors are currently offering in the market.
- Plans for filling the orders you receive
- If you have current or pending patents, copyrights, and trademarks for your product or service, you can also discuss them in this section.
What to Focus On When Describing the Benefits, Lifecycle, and Production Process of Your Products or Services
In the products and services section, you have to distill the benefits, lifecycle, and production process of your products and services.
When describing the benefits of your products or services, here are some key factors to focus on.
- Unique features
- Translating the unique features into benefits
- The emotional, psychological, and practical payoffs to attract customers
- Intellectual property rights or any patents
When describing the product life cycle of your products or services, here are some key factors to focus on.
- Upsells, cross-sells, and down-sells
- Time between purchases
- Plans for research and development.
When describing the production process for your products or services, you need to think about the following:
- The creation of new or existing products and services.
- The sources for the raw materials or components you need for production.
- Assembling the products
- Maintaining quality control
- Supply-chain logistics (receiving the raw materials and delivering the finished products)
- The day-to-day management of the production processes, bookkeeping, and inventory.
Tips for Writing the Products or Services Section of Your Business Plan
1. Avoid Technical Descriptions and Industry Buzzwords
The products and services section of your business plan should clearly describe the products and services that your company provides. However, it is not a section to include technical jargons that anyone outside your industry will not understand.
A good practice is to remove highly detailed or technical descriptions in favor of simple terms. Industry buzzwords are not necessary, if there are simpler terms you can use, then use them. If you plan to use your business plan to source funds, making the product or service section so technical will do you no favors.
2. Describe How Your Products or Services Differ from Your Competitors
When potential investors look at your business plan, they want to know how the products and services you are offering differ from that of your competition. Differentiating your products or services from your competition in a way that makes your solution more attractive is critical.
If you are going the innovative path and there is no market currently for your product or service, you need to describe in this section why the market needs your product or service.
For example, overnight delivery was a niche business that only a few companies were participating in. Federal Express (FedEx) had to show in its business plan that there was a large opportunity for that service and they justified why the market needed that service.
3. Long or Short Products or Services Section
Should your products or services section be short? Does the long products or services section attract more investors?
There are no straightforward answers to these questions. Whether your products or services section should be long or relatively short depends on the nature of your business.
If your business is product-focused, then automatically you need to use more space to describe the details of your products. However, if the product your business sells is a commodity item that relies on competitive pricing or other pricing strategies, you do not have to use up so much space to provide significant details about the product.
Likewise, if you are selling a commodity that is available in numerous outlets, then you do not have to spend time on writing a long products or services section.
The key to the success of your business is most likely the effectiveness of your marketing strategies compared to your competitors. Use more space to address that section.
If you are creating a new product or service that the market does not know about, your products or services section can be lengthy. The reason why is because you need to explain everything about the product or service such as the nature of the product, its use case, and values.
A short products or services section for an innovative product or service will not give the readers enough information to properly evaluate your business.
4. Describe Your Relationships with Vendors or Suppliers
Your business will rely on vendors or suppliers to supply raw materials or the components needed to make your products. In your products and services section, describe your relationships with your vendors and suppliers fully.
Avoid the mistake of relying on only one supplier or vendor. If that supplier or vendor fails to supply or goes out of business, you can easily face supply problems and struggle to meet your demands. Plan to set up multiple vendor or supplier relationships for better business stability.
5. Your Primary Goal Is to Convince Your Readers
The primary goal of your business plan is to convince your readers that your business is viable and to create a guide for your business to follow. It applies to the products and services section.
When drafting this section, think like the reader. See your reader as someone who has no idea about your products and services. You are using the products and services section to provide the needed information to help your reader understand your products and services. As a result, you have to be clear and to the point.
While you want to educate your readers about your products or services, you also do not want to bore them with lots of technical details. Show your products and services and not your fancy choice of words.
Your products and services section should provide the answer to the “what” question for your business. You and your management team may run the business, but it is your products and services that are the lifeblood of the business.
Key Questions to Answer When Writing your Products and Services Section
Answering these questions can help you write your products and services section quickly and in a way that will appeal to your readers.
- Are your products existing on the market or are they still in the development stage?
- What is your timeline for adding new products and services to the market?
- What are the positives that make your products and services different from your competitors?
- Do your products and services have any competitive advantage that your competitors’ products and services do not currently have?
- Do your products or services have any competitive disadvantages that you need to overcome to compete with your competitors? If your answer is yes, state how you plan to overcome them,
- How much does it cost to produce your products or services? How much do you plan to sell it for?
- What is the price for your products and services compared to your competitors? Is pricing an issue?
- What are your operating costs and will it be low enough for you to compete with your competitors and still take home a reasonable profit margin?
- What is your plan for acquiring your products? Are you involved in the production of your products or services?
- Are you the manufacturer and produce all the components you need to create your products? Do you assemble your products by using components supplied by other manufacturers? Do you purchase your products directly from suppliers or wholesalers?
- Do you have a steady supply of products that you need to start your business? (If your business is yet to kick-off)
- How do you plan to distribute your products or services to the market?
You can also hint at the marketing or promotion plans you have for your products or services such as how you plan to build awareness or retain customers. The next section is where you can go fully into details about your business’s marketing and sales plan.
6. Show and Explain Your Marketing and Sales Plan
Providing great products and services is wonderful, but it means nothing if you do not have a marketing and sales plan to inform your customers about them. Your marketing and sales plan is critical to the success of your business.
The sales and marketing section is where you show and offer a detailed explanation of your marketing and sales plan and how you plan to execute it. It covers your pricing plan, proposed advertising and promotion activities, activities and partnerships you need to make your business a success, and the benefits of your products and services.
There are several ways you can approach your marketing and sales strategy. Ideally, your marketing and sales strategy has to fit the unique needs of your business.
In this section, you describe how the plans your business has for attracting and retaining customers, and the exact process for making a sale happen. It is essential to thoroughly describe your complete marketing and sales plans because you are still going to reference this section when you are making financial projections for your business.
Outline Your Business’ Unique Selling Proposition (USP)
![how to write a business plan in under an hour 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.
![how to write a business plan in under an hour 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.
![how to write a business plan in under an hour 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,
![how to write a business plan in under an hour 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.
![how to write a business plan in under an hour 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.
![how to write a business plan in under an hour 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.
![how to write a business plan in under an hour 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.
![how to write a business plan in under an hour 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.
![how to write a business plan in under an hour 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.
![how to write a business plan in under an hour 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.
![how to write a business plan in under an hour 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.
![how to write a business plan in under an hour 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.
![how to write a business plan in under an hour 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.
![how to write a business plan in under an hour 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
![how to write a business plan in under an hour 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
![how to write a business plan in under an hour 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
![how to write a business plan in under an hour 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
![how to write a business plan in under an hour 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
![how to write a business plan in under an hour 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
![how to write a business plan in under an hour 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
![how to write a business plan in under an hour 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
![how to write a business plan in under an hour 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
![how to write a business plan in under an hour 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.
![how to write a business plan in under an hour 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.
![how to write a business plan in under an hour 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.
![how to write a business plan in under an hour 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.
![how to write a business plan in under an hour 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.
![how to write a business plan in under an hour 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.
- Foundations
The Definitive Guide to Writing a Business Plan
| Written by
![how to write a business plan in under an hour](https://startupsavant.com/images/startup-culture/articles/the-definitive-guise-to-writing-a-business-plan.jpg)
This free step-by-step guide to writing a business plan was built just for you, if you aren’t really sure what planning a business is all about. To save time, stress and energy we’ll walk you through everything you need to know without fluff or heavy brain work.
Instead, we’re focusing on the basics. If you’re looking to create a super-dense collegiate 40-page plan, then you should probably take a business planning course at the nearest college.
This guide just covers what your average startup needs to dramatically increase chances of follow-through and success. Enjoy!
Note: Business planning software can help you write a professional business plan that will lead you to success.
Step 1) Create A Business Plan Shortcut
For the sake of argument, let’s say you’re the most gifted cat burglar on earth– a real savvy savant of the steal. Put yourself in the mindset where strategy and planning are time-erasing pleasures, delicious treats that reward you with immense prosperity– not complex tasks that can be skipped or shelved.
Too many entrepreneurs perceive putting a business plan together as some kind of chore. It’s not. When the product or service is something you believe in, it’s as awesome as it is for those cat burglars in the movies, except you’re plotting honest work.
Fact : It’s possible to create your initial business plan in less than an hour!
Let’s build a “lean plan” that’s simple to create and helps you identify core assets. You start with a pitch, a single page overview which can become your executive summary later on. It’s your business strategy all on one page that’s easy to update as you evolve.
You may be thinking,
“ Wait a minute. If I’m not raising money from investors, why do I need a pitch? ”
Well, after years working with entrepreneurs we’ve found a pitch is really the ideal format to document your business idea , share it with others, and quickly adjust as you learn more about/analyze how you’re going to build your brand.
Furthermore, once you have your pitch done you can easily convert it into a presentation-ready business plan with massive clarity. To begin, follow the simple outline below or allow tools like LivePlan (what we used for Startup Savant) to walk you through the entire process with examples and video tutorials.
What To Include in Your Pitch
As you tackle your one-pager, mentally channel Twitter and try to keep each section as short/concise as possible– the size of a solid tweet.
- Mini-Pitch : Typically a refined sentence summarizing your USP (unique selling proposition).
- Market Need : The problem your business solves for your customers.
- Your Solution : How you’re solving the problem through your products and services.
- Primary Competition : The products and services your customers choose today instead of yours.
- Target Market : This is where you detail your ideal client and niche.
- Sales & Marketing : How you plan on marketing.
- Budget & Sales Goals : How much do you project/calculate you’ll sell and how much is it going to cost to make your product or deliver your service? Also, show other key expenses when your business is up and running.
- Milestones : What you’ve achieved so far and your major goals for the next few months and years.
- Team : Why you and your team are the right people to make your company successful.
- Partners & Resources : List primary companies/organizations needed to go the distance.
- Funding Needs : If you need to raise money, how much and where will this capital be going (channels)?
That might seem like a fair amount of work if you’ve never put together a real pitch before, but remember, that’s just one page of content. Another way to look at it is a one page resume for your business.
A Couple Writing Tips
First, you start with the putty. Don’t try to self-edit or curate, just barf everything out on paper as it flows from your brilliant mind. Format each section out and just let it go. That’s putting the basic shape together.
Now you need to let it dry, so walk away for a day (week) or two. After that, begin chipping away and condensing. Cut the fat and keep tightening the ideas until you’re down to one page. Be brutal! Stick to the facts. Numbers are easier, but when you’re tackling words remember the average person these days has a shorter attention span (if not compelled by your ideas) than a goldfish.
Taking Action on This Step
Create a pitch outline from the points mentioned above and refine down to one or two sentences. If you need help, check out LivePlan. It’s a solid tool that walks you through the entire process. Plus, they offer a 50% Discount .
Step 2) What To Include in Your Plan
Now that you have a running outline, it’s time to go deeper into the framework of your platform.
Perhaps you’re thinking the one-page pitch is all you’ll need? That would be like going on a road trip in unfamiliar territory with a map that only shows destinations– no routes, no roads, no other icons whatsoever. Even if you never plan on showing this to anyone, the process of creating a solid plan optimizes everything about you and your business! Here’s a quick overview of what you need to include in your business plan:
- Cover Page/Pitch
- Executive Summary
- Products & Services
- Target Market
- Marketing & Sales Plan
- Milestones & Metrics
- Company & Management Team
- Financial Plan
If you need extra space for product images, detailed financial forecasts, or general additional info, use the appendix. There are three layers of complexity here. First, your pitch with a very brief summary. Then, your Executive Summary that adds details and context. Then into the finer points of the overall business plan.
Not too shabby, right?
Taking Action on The Step
Please revisit your pitch and find a good way to optimize it just a smidgen. The better your pitch, the better the overall plan.
As you fill in the structure, first focus on providing “mental barf” data you can go through and optimize later. Remember, if you need help, LivePlan will walk you through the entire process with video tutorials and examples.
Step 3) Create a Unique Selling Proposition
When copywriters are given a business idea to optimize, they often begin by defining the USP (unique selling proposition) and mini-pitch. A USP can be just a couple words or an incomplete sentence, while the mini-pitch is usually one or two concise sentences.
Just in case you’re fuzzy on the whole copywriter thing, these folks are paid big bucks to write sales and marketing copy which often includes core slogans.
As an example, here’s what the USP and Pitch for Startup Savant sound like:
USP : “ Entrepreneurship Simplified “
Pitch : “ Startup Savant is a free website that shows you how to start a business and own your future .” Now let’s get past the “How to Write Your USP 101” stuff and dive straight into three core truths.
USPs & Pitches Evolve
The first thing a copywriter will tell you if you’re struggling with this is to relax. They know sales and branding copy optimizes (matures) over time, especially in the first 2-5 years in business.
If possible, avoid thinking your USP is set in stone, never to be altered. It’s more like a sculpture that the market chips away at. Your pitch evolves as you and your platform do. What matters is whether your USP & Pitch are as refined as they can be based on where you are now.
- USPs can be creative & full of personality, but they also need to make sense.
- Is your pitch wordy and confusing? Hazy or unclear?
- Sometimes you have the right words, they just need to be in an optimized order.
Always be ready to “kill your darlings” as copywriters would say. Meaning, get rid of any and all words,
“ That aren’t necessary for the idea or concept you’re conveying to make perfect sense within the context it’s delivered, and to whom it’s being written to. ”
You can begin with half a page, but systematically chisel down to a core concept like, Entrepreneurship Simplified.
Your Ideal Customers Will Do It For You
Copywriters care what you have to say as a business owner or marketing manager, but they know you’re not the ultimate authority in terms of advertising copy.
They’re writing for buyers. In any and all ways your business can optimize over the years, your customers, clients and users should steer the course as much as possible. Be on the lookout for their valuable signals and indications!
Hop at 20 Questions
Copywriters ask TONS of questions. They’re a bit like copy-detectives in how they search high and low for very precise data from their clients. Never fear giving your users, clients or customers a megaphone with which to bark their concerns.
We all love sharing our opinions, right? Yes we do. Let us. Prompt us. Ask us. Bribe us with incentives and discounts… then listen… carefully. Easily 9 out of 10 entrepreneurs are given the ultimate USPs on silver platters by their customers but fail to recognize when they see, read, or hear them.
- If you’ve been stressing on your USP, relax. If it doesn’t feel perfect right now, or 100% distilled, let it happen naturally.
- Your audience can and will steer the course if you choose to notice their cues. Ask three people you haven’t spoken to before how they feel about your product or service.
- Are there any indications out there waiting to be plucked? Blog or social media comments and reviews are primary starting points. It only takes one solid indicator for the magic “pivots” to cause your business or brand to see huge boosts.
Step 4) Crafting the Executive Summary
In brief, what exactly is an executive summary? An executive summary (ES) is an overview of your business and your vision. It comes first in formal/informal business plans and is ideally 1-2 pages.
The ES introduces your business to your reader. If you don’t nail it, no one’s going to read any further. And if an ES sucks, despite it being professionally crafted, then the business model itself needs work or isn’t worth your time. Every ES should include a brief overview of the following:
- The problem your business addresses.
- Your solution.
- Your target market.
- Why the timing’s right for your brand.
- Financial forecast highlights, along with initial/current customer acquisition costs (CAC) and lifetime customer value (LCV).
If you’re raising money or presenting to investors, you’ll also want to cover:
- Your existing team and partners.
- How much money you’re looking to raise and the type of exit strategies in place.
Ideally your ES should fit on one or two pages and be able to stand alone, apart from your business plan. A common strategy is to send your ES out to investors/family/friends and then the complete plan if more detail is requested.
Remember to try and position your writing for people who don’t know anything about your business before they start reading. Explain things simply so that anyone can understand your opportunity, whether they be an in-tune player, an 8th grader, or a grandma.
- Over the next couple weeks, refresh your ES!
- Who is the first person you’re going to send your ES to that has no real previous knowledge of what your business is? It helps having someone in mind when writing.
- Find one amazing ES to read over and see what you can learn from it. Here and here are two great examples.
Well done, in the next step we’ll help you explain your product or service and how it makes an impact on customers.
Step 5) Understanding Customers
Once upon a time there was this lovely, vibrant and ambitious entrepreneur who decided to sell organic breast enlargement cream. It sold well for a while, but then her numbers plateaued, and eventually began to decline.
She knew her business needed a makeover after years in the trenches. So, she created an automated incentive program, a 25% discount coupon code offer sent with every order in exchange for an anonymous review with a photograph. Just a simple before/after image showing the front of their body from neckline to belly button (to confirm usage).
They started rolling in and here are the gems she unearthed :
- A small portion of her customers were husbands buying a discreet gift for their wives/girlfriends, but most (85%) were transgender folks in transition.
- For the vast majority of her cis-female customers, larger breasts had more to do with enhancing self-esteem/identity and filling out clothes than attracting mates.
- Almost 100% really hammered down on the fact her cream was all-natural, organic and didn’t cause irritation or allergic reactions.
She went back and dusted off her original copy she put together years before.
From: “ A certified organic breast enlargement cream. ”
To something more along the lines of: “ Increase confidence and femininity through an organic non-allergenic breast enlargement cream. ”
When stuck in a rut, and we all get there as entrepreneurs, the quickest and most effective way out is to look at your predicament from different perspectives.
Begin with the fundamental question, “What problem does my product/service solve for customers?” then look deeper and from unique angles. Who are your buyers? They have the answer. And remember, actions speak louder than words.
Oftentimes we rationalize buying things for one reason, but in reality have a more potent ulterior motive. Sure, her customers want larger breasts, that’s what prompt initial sales. But the needs her product solves in their day-to-day lives are more interesting. It actually made her customers feel more confident, happy, and healthy.
Find one deeper way your product or service materializes in everyday life for your customers. Pay close attention to the simple verbiage you and others use to describe it, e.g. “Your earphones really get rid of all the noise on the bus.”
If possible, get hold of one fresh buyer perspective. Who and where are they? That woman in our example had spent years excluding nearly half her customer base in her advertorial copy. Do you use your own product or service? If so, find a way to record yourself explaining it in the most natural language possible. Use a smartphone or leave yourself a voicemail. Then, just listen.
But wait, what if you’re just starting out and don’t have much to draw on in terms of direct customer or user feedback? Glad you asked! In the next section we’re going to talk about competition, which is another valuable source of indicators.
Step 6) Leveraging Competition
What products and/or services are people choosing instead of yours?
Whether you’re new to the market or not, these so-called “competitors” are really the ideal source of optimization for your brand. And it’s not about being better per se. All things equal, it’s more about uniqueness.
Would you rather be a prettier, more flashy brand trying desperately to stand out, or develop intense brand-character that the right people notice? Once you’ve narrowed down your competitors, look at them from new angles to discover what makes you distinctive.
- Can they help you better define your target market/sub-markets?
- How effective are their social media marketing methods and website copy?
- What do you know about their buyers’ needs?
- What do they make “stand out” when shoulder to shoulder with your brand?
A common practice entrepreneurs use in pitch presentations to venture capitalists or investors is the Comparison Matrix.
![Comparison Matrix Comparison Matrix](https://startupsavant.com/wp-content/uploads/2017/02/Comparison-Matrix.png)
You’ve seen these a zillion times. In short, list your competitors across the top of the page and your features and benefits along the side, then check the boxes for which company offers each. Don’t forget you can be creative here. You may even already use one of these on your website, or within some other marketing media.
- Could these features and benefits be communicated in different, more compelling ways?
- What real need-based copy is being left out?
- How can you simplify it? An easy way is to reduce the number of competitors, so shoot for less players with more interesting copy.
Got time to put something simple together? In reality what we’re looking for are the things about your competitors that help you stand out.
- Think about your biggest competitor: what do they make obvious about your brand?
- What are you doing with more personality from the perspective of ideal clients or customers?
- Could you take your primary competitor’s copy and make it clearer, or more optimized?
All in all, understanding your competition is an important part of the planning process. This is where you find your true competitive advantage.
For a more in-depth look at how you stand up to the competition, check out LivePlan’s Benchmark feature. You can see at-a-glance how you compare to companies just like yours. Tell LivePlan your industry and location, and it shows if/how you’re doing better or worse than your competition.
Now let’s talk about your unique marketing approach. This will help you stand out and connect with your customers on multiple levels.
Step 7) Create a Marketing Plan
Fred is a brand spanking new entrepreneur with a neat new fitness product he believes is going to make a big splash.
He knows exactly who his ideal customers are and his niche is carved out like a Renaissance marble sculpture. Fred’s also managed to get his hands on $100k in debt-free funding (don’t ask us how, this is hypothetical)…
- His product costs exactly $32 to source, make and package.
- To be competitive, and account for shipping/processing, he’s going live at $55.
- Initial margin is about $13 per sale.
Admittedly, that would be pretty amazing, but that’s because we’re coming from a standpoint of experience. Fred’s just showing up to the 21st-Century party. He’s never built, owned, or managed a business before, let alone an ecommerce platform.
He’s never outsourced a graphic artist or content writer before; never had to choose which analytic dashboard to use; never designed a conversion model or tangled with paid advertising platforms. Let’s say Fred called and begged us to lunch. We accepted. And so there we are, the three amigos with Fred sitting on a huge meal ticket drooling for answers.
“ How Do I Market My Product? ”
Once the table conch gets passed to us, we’re going to hit him hard with massive bombshells:
- Tight responsive funnels can be constructed in a couple months with the right designer, or design agency (website, landing pages, ecommerce setup, branding packages, etc.).
- Initial market testing and adjustment can be bootstrapped.
- There are a variety of intuitive and relatively simple software tools, apps, plugins, add-ons, and cloud-based solutions that range from free to expensive.
- It takes a savvy mix of highly-focused content, social exposure and paid advertising.
- It takes a team.
Question is, what advice would you give Fred? That’s what we’d like you to consider. And it needs to be marketing-based. The money’s there, the production system’s in place, it’s just a matter of reaching his fitness-based audience and selling.
Let’s imagine Fred’s offered you a lifetime, no questions asked, 5% share of his company from now till doomsday. All you have to do is provide valuable direction in these three areas:
- Content : What kind of content should he invest in? Blogs, video, infographics, imagery, etc.
- Social : How to handle social media if he a) doesn’t have the time, b) has no clue what works?
- Paid Advertising : AdWords? Facebook? TV? Magazine ads? How does he get to buyers?
Just let your mind wander, and don’t worry, in the next section we’ll talk about setting milestones for your business.
Step 8) Set Milestones
If there’s one specific part of the entrepreneurial journey that we get really nerdy about, it’s the way people verbally describe their trials and successes. We’re listening intently for clues as to how they set milestones and metrics and then track them.
Let’s spend some time pondering the way(s) you’re measuring your journey and how you approach KPIs (key performance indicators) in relation to both your marketing and your competition. Or, if you’re trying to figure out how viable a product idea is, how you’re calculating acceptable setbacks and struggle.
What have you achieved so far and what are your major goals for the next few months or years?
Sure, it’s cliché to talk about tracking milestones in an era of big data, but truth be told too many aspiring entrepreneurs either skip this part until much further down the road when it can’t be ignored anymore, or they only take it seriously in the beginning then fail to stick to the plan.
Avoid Drowning Out Customer Journey!
Of course there are folks who obsess on this part and try to manage a small army of analytic dashboards and amazing software solutions like FreshBooks or Xero.
Once it becomes too much they end up transforming their perspective of the customer journey from something organic into a mesh of math and graphs. Most of their day is spent pouring over dense numbers or marketing data and trying to figure out how to alter this metric or that.
- How many of your milestones are focused entirely on your customers instead of you and your business?
- Instead of views, likes, and shares, what about the amount of service calls you’re getting? How many people are actually reaching out with questions and concerns?
- How well do your metrics allow you to understand each part of their trek from initially discovering your business to making a purchase?
Find ways to do more with less data. It’s always within reach these days, especially when you’re tuned in to your customers!
- Find one way to streamline how you’re dealing with milestones/metrics, or how you intend to.
- Also, look for one single way to be more holistic in your approach to setting goals.
- Find a part of your customer journey/behavior and decide if current metrics help or hinder it.
Need help in this area? LivePlan has a really impressive dashboard to help you set goals and stay accountable over the lifetime of your business. This dramatically increases your chances of success.
Step 9) Refine Aquisition Costs
Without question, failure to clearly know the cost of acquiring customers is a mighty new business demolisher. It’s crushed more entrepreneurial dreams than every economic collapse combined since the creation of fiat currency. To come to grips, or optimize your Customer Acquisition Costs (CAC), begin by figuring out exactly how you’re reaching customers.
Or, if you’re building an initial business plan, how much will it cost to reach buyers on the platforms where they spend their time? Your financials should easily allow you to calculate CAC.
Now, in the simplest terms here’s how:
- Take (estimate) the entire cost of sales and marketing over whatever period of time you’re dealing with, for example when forecasting sales and financials. Make sure to include salaries and any other headcount-related costs.
- Divide that number by the amount of buying customers/clients/users that were acquired within this time.
If you happen to run a purely web-based business, headcount likely doesn’t need to grow as you scale customer acquisition, but it’s a useful metric to include nonetheless.
The second part of this is your Lifetime Customer Value, or LCV, because in most cases 80% of your revenue will come from 20% of overall customers and happen AFTER the initial sale. Never shortchange the follow-through!
If your CAC is too high, it must be able to come down through optimization. If LCV is horrid, then in the long run it’s an unsustainable business model. Or in other words, once CAC exceeds LCV, something needs to change or you’ll have to close shop.
- Begin looking at one stream of cost per lead. So for example, maybe a Google AdWords or Facebook advertising campaign.
- What’s one single way you could get more in touch with a hot-spot within your customers’ buyer experience?
- Let your mind stew a little on the level of ‘touch’ required to increase LCV. How can you up-sell or generate more revenue from each customer long term?
After you make these calculations three or four times, it starts becoming second nature. LivePlan’s forecasting handles this pretty well. It walks you through creating expenses that are a certain percentage of sales.
Step 10) Forecast Sales
Smart entrepreneurs start forecasting sales early on.
And while ‘the numbers’ part of business planning can be intimidating, this exercise is definitely a small mountain worth karate chopping down.
Keep in mind that if you get stuck at any point, LivePlan’s Forecasting and Budgeting feature is extremely helpful. Whether you’re starting a bakery, a subscription software business, or a manufacturing company, LivePlan walks you through the entire forecasting process within a few clicks.
How Detailed Does it Need to Be?
Don’t be too generic and just forecast sales for your entire business. But on the other hand, don’t go nuts and create a forecast for everything you sell if you’ve got a large assortment.
For example, if you’re starting a restaurant you don’t want to create forecasts for each item on the menu.
Instead, focus on broader categories like lunch, dinner, and drinks. Or if you’re starting a clothing brand, forecast key categories like outerwear, casual wear, and so on.
Top-Down or Bottom-up?
In our humble opinion, forecasting “from the top down” can be costly. What that means is figuring out the total size of the market you’re in and trying to capture a small percentage.
For example, in 2015, more than $1.4 billion smartphones were sold worldwide. It’s pretty tempting for a startup to say they’re going to get 1% of that total market. After all, 1% is such a tiny little sliver it’s got to be believable, right?
The problem is this kind of guessing isn’t based on reality. Sure, it looks like it might be credible on the surface, but you have to dig deeper.
- What’s driving those sales?
- How are people finding your new smartphone company?
- Of the people that find out, how many will buy?
Instead of “from the top down,” do a “bottom-up” forecast. Just like the name suggests, bottom-up starts at the bottom and works its way up to a forecast. Start by thinking about how many potential customers you might be able to make contact with.
This could be through advertising, sales calls, or other marketing methods. Of the people you can reach, how many do you think you’ll be able to bring in the door or get onto your website?
And finally, of the people that come in the door, get on the phone, or visit your site, how many will buy?
Here’s an example:
- 10,000 people see my company’s ad online,
- 1,000 people click from the ad to my website,
- 100 people end up making a purchase.
Obviously, these are all nice round numbers, but it should give you an idea of how bottom-up forecasting works. The last step of the bottom-up forecasting method is to think about the average amount that each of those 100 people in our example ends up spending (remember LCV).
On average, do they spend $20? $100? It’s fine to guess here, and the best way to refine your guess is to go out and talk to potential customers. You’ll be surprised how accurate a number you can get with a few simple interviews.
How Far to Forecast
Try forecasting monthly for a year into the future and then just annually for another three to five years.
The further your forecast into the future, the less you’re going to know and the less benefit it’s going to have for your company. After all, the world’s going to change, your business is going to change, and you’ll be updating your forecast to reflect them.
And don’t forget, all forecasts are wrong—that’s fine. Your forecast is just your best guess at what’s going to happen. As you learn more about your business and your customers, you’ll adjust. It’s not set in stone.
- First, remind yourself that ALL forecasts are wrong. Forecasting is more about learning and evolving.
- Without adding too much to your plate, take a look at your monthly sales chart and see what kinds of optimizations forecasting might bring to light. If you aren’t already charting sales, start today or begin planning how.
- Try two easy bottom-up projections with nice round numbers to get the feel for it.
Just remember that sales forecasting doesn’t have to be hard. Anyone can do it and you, as an entrepreneur, are the most qualified to do it for your business. You know your customers and you know your market, so you can forecast your sales.
But if you decide you’d appreciate help, we highly recommend forecasting your sales with LivePlan. LivePlan automatically generates all the charts and graphs you need and automatically includes them in your plan.
Wrapping Up: Formatting Your Plan
The format of your business plan is critical. It goes a long way toward refining and achieving your goals: raising money, setting the strategy for your team and growing your platform. That being the case, let’s breeze through seven tips that can help you create, refine, and optimize your brilliant business plan.
1. Always Start with Your Executive Summary
An ES should be written for ideal readers, customers, potential investors or team members, or even just to help you ‘goal-map’ your way to where you need to be. Regardless, nailing the Executive Summary is critical in terms of understanding the potential behind your business idea.
2. End with Supporting Documents
The appendix is composed of key numbers and other details that support your plan. At a minimum, your appendix should include financial forecasts and budgets. Typically, it’s wise to include a Profit & Loss statement, Cash Flow forecast, and a Balance Sheet. With practice and a smidgen of savvy software like LivePlan these pages can take a couple hours or so.
You might also use your appendix to include product diagrams or detailed research findings, depending on your business, your industry, and how deep your business plan needs to go given the reader/purpose.
Quick Recap of the Lineup Pitch Executive Summary Products & Services Target Market Marketing & Sales Plan Milestones & Metrics Company & Management Team Financial Plan & Appendix
3. Keep it Short
Let’s face it: no one has time to read a 40-page business plan. If you’ve nailed your ES, you’ll want to follow up with 8 to 12 additional pages at most in support. Instead of trying to cram everything in using small fonts and tiny margins, focus on trimming down your writing (‘kill your darlings’). Use direct, simple language that gets to the point.
4. Get Visual
As the old adage goes, “ A picture is worth a thousand words. ” This is especially true when you’re formatting a business plan. Use charts and graphs to explain forecasts. Add pictures of your product(s). Again, there are plenty of software solutions that make it easy to do more showing and less telling. That said…
5. Don’t Obsess on Looks
It’s your ideas that matter. A beautiful plan that talks about an ill-conceived business with incomplete financial forecasts is never going to beat a plan that’s formatted poorly but discusses a great, clearly explained vision. Spending days making a beautiful plan isn’t going to make your business ideas better. Instead, focus on polishing the words. Trim extra content you don’t need, and make sure ideas are well-presented.
6. Keep Formatting Simple
- For general formatting use single spacing with an extra space between paragraphs.
- If you’re printing your plan, use a nice serif font like Garamond or Baskerville.
- If your plan will mostly be read on a computer screen, go with a sans serif font like Verdana or Arial.
Why choose different fonts for on-screen versus off-screen? Well, research shows readers have higher comprehension when they read a document with a serif font on paper, and higher comprehension reading with a sans serif font on a screen.
Don’t stress too much about this, though. Choose any one of the four fonts mentioned above and move forward.
- For font size, 10 to 12 point is usually ideal and readable for most people. If you need to reduce the font size to make your plan shorter, then you should be cutting content, not adjusting the font size.
- The same rule goes for margins: use typical one-inch margins to make the plan readable.
Cover pages are always a good idea, too. Use the cover page to show off your logo, tagline, and pitch.
Finally, make sure your plan document flows well and doesn’t have any “widows” or “orphans” when it prints out. A “widow” is when the last line of a paragraph appears alone at the top of a page, and an “orphan” is a single word that gets left behind at the bottom of a paragraph.
7. Get a Second Pair of Eyes
The last piece of advice is to get a second pair of eyes. When you’re the only one working on your plan, you can become blind to common errors. Recruit a friend or family member, or even hire a copy-editing professional to give it that last bit of polish. There’s nothing worse than a plan with grammatical or spelling errors. A second pair of eyes will go a long way toward catching the majority of those potential problems or holes.
- Who’s your second, third, and possibly fourth pair of eyes going to be?
- What’s one part of your business plan you could optimize today?
- What’s one piece of visual content you could add to your appendix?
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Further Reading
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- What Is an LLC? August 2, 2024
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- Startup Ideas
- Startup Basics
- Startup Leadership
- Startup Marketing
- Startup Funding
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The One-Hour Business Plan: The Simple and Practical Way to Start Anything New
ISBN: 978-1-118-72622-8
September 2013
Digital Evaluation Copy
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John McAdam
A strong business plan greatly increases a business chance of success, especially in an economic environment in which more than 50 percent of businesses fail within three years. Your business plan can serve as a foundation for your successful business. The One-Hour Business Plan , written by seasoned entrepreneur and business instructor John McAdam, helps you lay that foundation. With the help of this book, aspiring entrepreneurs can write a viable business plan in just one hour.
- Offers step-by-step guidance on the process of writing a business plan, with field-tested instructional techniques that are simple, strong, and easy to implement
- Written by John McAdam , a "been there, done that" hired CEO and serial entrepreneur with decades of real-world experience, who helps ordinary people become entrepreneurs and helps entrepreneurs become successful
The One-Hour Business Plan outlines a process and a framework for creating a business plan that sets you up for success. Give your business the best odds for success, in just one hour of your time.
JOHN McADAM has decades of businessexperience as a hired CEO, serial entrepreneur, and instructor. He holds an MBA from the Wharton School and has taught strategic business planning at the Wharton Small Business Development Center for years. Quoted in business publications such as Inc., Success, Crain's New York Business, Business News Daily, and Wharton Alumni Magazine, John McAdam also speaks for organizations, having been a frequent radio guest and guest speaker on NBC10 Philadelphia Small Business Week and Money Matters TV. To book John McAdam, visit http://planfoundations.com.
How to Create a Business Plan (in under 1 Hour)
Margo Ovsiienko
If you are starting a new business and looking to pitch your product to investors or aiming to get a grant, the first thing on your to-do list would most likely be writing a business plan. A business plan is a great way to build your company’s strategy, set targets, and monitor the progress. But does it really work?
90% of startups fail. So is it all about having a great plan in place? Is it really worth spending weeks on building predictions, setting hypothetical goals to later confront it with the market and see that… most of the plans fail?
It’s not always a business plan to blame – startups fail, because they don’t achieve product-market fit, face a red ocean of competition or, surprisingly, are launched too early as the market for the solution has not appeared yet.
However, a big chunk of new business fails, because they have a good product idea and a weak plan (or worse – no plan) to move forward with it. To help you reduce the risk of ending up in the 90% of startups that fail, we have prepared some easy to follow, yet effective steps-by-step plan for creating a business plan.
Let's start with a quick overview of what elements we are going to cover:
- Executive summary
- Company description
- Mission statement
Company history
- Market research
- Competitive analysis
- Marketing and sales
- SWOT analysis
- Financial plan
- Execution plan
1. Create an executive summary
How can you describe your business and its target market with just a few sentences – ideally in less than a minute? That’s what executive summary helps you achieve!
As Albert Einstein once said, “The definition of genius is taking the complex and making it simple.”
Executive summary - Template
A good executive summary is the one your grandma can understand. So how can you pass the test?
You can start with this template of an executive summary to describe your product or service – simply fill in the gaps:
- For [target customers]
- Who are dissatisfied with [current solutions]
- Our [product or service] solves [key customer problems]
- Unlike [competing product], we have [differentiating key features]
Remember that your executive summary should be no longer than one page in a Word document, so try to focus only on the core elements of your business you want to cover.
2. Write a company description
This section of the business plan should include the explanation of who you are and what you are planning to do. After reading your company description, an angel investor or a VC fund should understand why you are different from your competitors and how your product or service stands out.
There are three things you have to nail when writing your company description and building a good business plan.
- Mission statement;
- Objectives (short- and long-term).
You can also consider including the following –
- Business structure (e.g sole proprietorship, general partnership)
- Business model (SaaS, marketplace)
- Your industry
- Your team and salaries
Mission statement – what is it?
A good mission statement is a declaration of the goal of your business, explaining the why behind your business existence. When writing a mission statement, include the information about why you have decided to found your business in the first place and what drives you to push the business idea forward.
Start with jotting down the following information, before you work out a more structured version of this section of the business plan.
- Date when the business was founded
- 2-5 core achievements
- Where it is based
- C-line roles/positions in the company
- Core products & offering
Check out how Tesla is covering this part of the business plan on the “About” page.
3. Mention market research
There are at least three core things you have to cover in the market research section:
- Target persona
- Market size
Your target persona represents a hypothetical customer and includes the information about the age, gender, education, profession, hobbies, and other features of your idea customer, both demographic and behavioral.
To define the market size for your product, you have to be quite specific about what qualifies customers for using it. Keeping the definition of your market as rather broad is risky – you may end up in the situation of not aligning your product well enough with diverse needs of a bigger audience.
Instead, choose a niche market. By entering a niche market, you can make it easier to get traction with your product as you won't face that much of competition when starting out. For example, you could decide to target your product at owners of bull dogs by offering tailor-made straps with unique designs, instead of offering the straps to all dog owners.
4. Do competitive analysis
Competitive analysis is a key element of your business plan. Understanding your competitors, their business and marketing strategy could bring up insights that are invaluable in tailoring your strategy for market domination.
You can approach competitive analysis by examining the value proposition of your direct and indirect competitors and describe how you can leverage what you have learnt for your business. Check out this easy to follow template of a competitive analysis and read more on how to fill in one in this post .
![how to write a business plan in under an hour Competitive analysis](https://fs.siteor.com/radgost/files/InvoiceOcean.com%20%28blog/pages%20images%29/Competitive_analysis_framework.png)
5. Describe your marketing strategy
This section of the business plan should describe the ways of attracting new customers and growing your business – your marketing and sales strategy. Make sure you identify the right marketing channels which will help you reach your clients. Here are just some to give you an idea.
![how to write a business plan in under an hour](https://fs.siteor.com/radgost/files/InvoiceOcean.com%20%28blog/pages%20images%29/SWOT_analysis.png)
Examples of marketing channels
- Email outreach
- Direct mail
- Adwords campaigns
- Running a blog
- Word of mouth
- Customer testimonials on Google
- Display campaigns
Once you have evaluated the potential of these channels, mark those with the highest potential for your business and mention the rest of the channels as supplementary or secondary.
There are also other elements of marketing strategy such as brand messaging, timeline, and budget that you should also describe in detail.
Don't forget about adding a SWOT analysis.
What is a SWOT analysis?
With a marketing SWOT analysis, you can better understand strengths, weaknesses, opportunities, and threats for your new marketing strategy. SWOT analysis is built on grids with bullet points for each section – Strengths (S), Weaknesses (W), Opportunities (O), and Threats (T). Check out this template of SWOT analysis you can copy for your business plan. When filling out the gaps, make sure you don't write full sentences, but rather briefly discuss the main points.
6. Build financial projections
When pitching your startup to an investor you have to build financial projections of how much money your business requires to achieve growth milestones. You should also think of the timeline for when your business will break even and when it will finally starting earning a profit. You have to make sure all numbers are accurate and your expenses are detailed and well-structured. When building a projection refer to reports or market benchmarks to back up your assumptions about expenses and earnings. For example, if you add a digital marketing expenses, you can research how much it costs to hire a digital marketing strategist in your city using some open-source reports on salaries.
Also include cash flow statement to give an idea of what your current cash flow is.
In your financial plan, consider including the following chapters.
12-month income statement (P&L)
This document should include projected sales, cost of goods sold and gross profit. Remember to list your expenses, net profit before taxes, estimated taxes and net operating income.
3-year profit & loss projection
This document is optional – you need only if you are expecting a major change in the company's financials after the first year of operations. Also, sometimes investors require it.
Cash flow projection
Cash flow projection is a plan, not a current state of cash at hand. The projection helps you budget for the upcoming expenses and helps avoid running out of money.
Balance sheet
This sheet shows a projected total assets and liabilities of any business. Here is an example of such a document.
![how to write a business plan in under an hour balance sheet example](https://fs.siteor.com/radgost/files/InvoiceOcean.com%20%28blog/pages%20images%29/balance_sheet_example.jpg)
7. Execution plan
Include the information about how you are going to execute the plan and who is going to do it (roles). This section of the business plan should explain who is the management team and the employees as well as their responsibilities. You also have to describe the management teams and core employees – their strengths and the reasons why you chose them to join your startup, especially what skills they bring to the table. In addition, you can mention the ways of hiring new team members and the plans for expansion on the new markets.
Business plan - template
There are various templates of a business plan online. However, we find this one you can download as one of the most comprehensive business plan template you can find online.
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How To Write A Business Plan: A Comprehensive Guide
The Startups Team
How To Write A Business Plan: A Comprehensive Guide
A comprehensive, step-by-step guide - complete with real examples - on writing business plans with just the right amount of panache to catch an investor's attention and serve as a guiding star for your business.
Introduction to Business Plans
So you've got a killer startup idea. Now you need to write a business plan that is equally killer.
You fire up your computer, open a Google doc, and stare at the blank page for several minutes before it suddenly dawns on you that, Hm…maybe I have no idea how to write a business plan from scratch after all.
Don't let it get you down. After all, why would you know anything about business planning? For that very reason we have 4 amazing business plan samples to share with you as inspiration.
![how to write a business plan in under an hour How to write a business plan](https://d3o1wlpkmt4nt9.cloudfront.net/wp-content/uploads/2018/06/30151704/how-to-write-business-plan-1a-min.jpg)
For most founders, writing a business plan feels like the startup equivalent of homework. It's the thing you know you have to do, but nobody actually wants to do.
Here's the good news: writing a business plan doesn't have to be this daunting, cumbersome chore.
Once you understand the fundamental questions that your business plan should answer for your readers and how to position everything in a way that compels your them to take action, writing a business plan becomes way more approachable.
Before you set fingers to the keyboard to turn your business idea into written documentation of your organizational structure and business goals, we're going to walk you through the most important things to keep in mind (like company description, financials, and market analysis, etc.) and to help you tackle the writing process confidently — with plenty of real life business plan examples along the way to get you writing a business plan to be proud of!
![](http://writinghelp.online/777/templates/cheerup/res/banner1.gif)
Keep It Short and Simple.
There's this old-school idea that business plans need to be ultra-dense, complex documents the size of a doorstop because that's how you convey how serious you are about your company.
Not so much.
Complexity and length for complexity and length's sake is almost never a good idea, especially when it comes to writing a business plan. There are a couple of reasons for this.
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.
Investors wade through hundreds of business plans a year. There's no version of you presenting an 80-page business plan to an investor and they enthusiastically dive in and take hours out of their day to pour over the thing front to back.
Instead, they're looking for you to get your point across as quickly and clearly as possible so they can skim your business plan and get to the most salient parts to determine whether or not they think your opportunity is worth pursuing (or at the very least initiating further discussions).
You should be able to refine all of the key value points that investors look for to 15-20 pages (not including appendices where you will detail your financials). If you find yourself writing beyond that, then it's probably a case of either over explaining, repeating information, or including irrelevant details in your business plan (you don't need to devote 10 pages to how you're going to set up your website, for example).
Bottom line: always be on the lookout for opportunities to “trim the fat" while writing a business plan (and pay special attention to the executive summary section below), and you'll be more likely to secure funding.
2. Know Your Audience
If you fill your business plan with buzzwords, industry-specific jargon or acronyms, and long complicated sentences, it might make sense to a handful of people familiar with your niche and those with superhuman attention spans (not many), but it alienates the vast majority of readers who aren't experts in your particular industry. And if no one can understand so much as your company overview, they won't make it through the rest of your business plan.
Your best bet here is to use simple, straightforward language that's easily understood by anyone — from the most savvy of investor to your Great Aunt Bertha who still uses a landline.
How To Format Your Business Plan
You might be a prodigy in quantum mechanics, but if you show up to your interview rocking cargo shorts and lime green Crocs, you can probably guess what the hiring manager is going to notice first.
In the same way, how you present your business plan to your readers equally as important as what you present to them. So don't go over the top with an extensive executive summary, or get lazy with endless bullet points on your marketing strategy.
If your business plan is laden with inconsistent margins, multiple font types and sizes, missing headings and page numbers, and lacks a table of contents, it's going to create a far less digestible reading experience (and totally take away from your amazing idea and hours of work writing a business plan!)
While there's no one right way to format your business plan, the idea here is to ensure that it presents professionally. Here's some easy formatting tips to help you do just that.
If your margins are too narrow, it makes the page look super cluttered and more difficult to read.
A good rule of thumb is sticking to standard one-inch margins all around.
Your business plan is made up of several key sections, like chapters in a book.
Whenever you begin a section (“Traction” for example) you'll want to signify it using a header so that your reader immediately knows what to expect from the content that follows.
This also helps break up your content and keep everything nice and organized in your business plan.
Subheadings
Subheadings are mini versions of headings meant to break up content within each individual section and capture the attention of your readers to keep them moving down the page.
In fact, we're using sub-headers right now in this section for that very purpose!
Limit your business plan to two typefaces (one for headings and one for body copy and subheadings, for example) that you can find in a standard text editor like Microsoft Word or Google Docs.
Only pick fonts that are easy to read and contain both capital and lowercase letters.
Avoid script-style or jarring fonts that distract from the actual content. Modern, sans-serif fonts like Helvetica, Arial, and Proxima Nova are a good way to go.
Keep your body copy between 11 and 12-point font size to ensure readability (some fonts are more squint-inducing than others).
You can offset your headings from your body copy by simply upping the font size and by bolding your subheadings.
Sometimes it's better to show instead of just tell.
Assume that your readers are going to skim your plan rather than read it word-for-word and treat it as an opportunity to grab their attention with color graphics, tables, and charts (especially with financial forecasts), as well as product images, if applicable.
This will also help your reader better visualize what your business model is all about.
Need some help with this?
Our business planning wizard comes pre-loaded with a modular business plan template that you can complete in any order and makes it ridiculously easy to generate everything you need from your value proposition, mission statement, financial projections, competitive advantage, sales strategy, market research, target market, financial statements, marketing strategy, in a way that clearly communicates your business idea.
Refine Your Business Plans. Then Refine Them Some More.
Your business isn't static, so why should your business plan be?
Your business strategy is always evolving, and so are good business plans. This means that the early versions of your business plans probably won't (and shouldn't be) your last. The details of even even the best business plans are only as good as their last update.
As your business progresses and your ideas about it shift, it's important revisit your business plan from time to time to make sure it reflects those changes, keeping everything as accurate and up-to-date as possible. What good is market analysis if the market has shifted and you have an entirely different set of potential customers? And what good would the business model be if you've recently pivoted? A revised business plan is a solid business plan. It doesn't ensure business success, but it certainly helps to support it.
This rule especially holds true when you go about your market research and learn something that goes against your initial assumptions, impacting everything from your sales strategy to your financial projections.
At the same time, before you begin shopping your business plan around to potential investors or bankers, it's imperative to get a second pair of eyes on it after you've put the final period on your first draft.
After you run your spell check, have someone with strong “English teacher skills” run a fine-tooth comb over your plan for any spelling, punctuation, and grammatical errors you may have glossed over. An updated, detailed business plan (without errors!) should be constantly in your business goals.
More than that, your trusty business plan critic can also give you valuable feedback on how it reads from a stylistic perspective. While different investors prefer different styles, the key here is to remain consistent with your audience and business.
Writing Your Business Plan: A Section-By-Section Breakdown
We devoted an entire article carefully breaking down the key components of a business plan which takes a comprehensive look of what each section entails and why.
If you haven't already, you should check that out, as it will act as the perfect companion piece to what we're about to dive into in a moment.
For our purposes here, we're going to look at a few real world business plan examples (as well as one of our own self-penned “dummy” plans) to give you an inside look at how to position key information on a section-by-section basis.
1. Executive Summary
Quick overview.
After your Title Page — which includes your company name, slogan (if applicable), and contact information — and your Table of Contents, the Executive Summary will be the first section of actual content about your business.
The primary goal of your Executive Summary is to provide your readers with a high level overview of your business plan as a whole by summarizing the most important aspects in a few short sentences. Think of your Executive Summary as a kind of “teaser” for your business concept and the information to follow — information which you will explain in greater detail throughout your plan. This isn't the place for your a deep dive on your competitive advantages, or cash flow statement. It is an appropriate place to share your mission statement and value proposition.
Executive Summary Example
Here's an example of an Executive Summary taken from a sample business plan written by the Startups.com team for a fictional company called Culina. Here, we'll see how the Executive Summary offers brief overviews of the Product , Market Opportunity , Traction , and Next Steps .
Culina Tech specializes in home automation and IoT technology products designed to create the ultimate smart kitchen for modern homeowners.
Our flagship product, the Culina Smart Plug, enables users to make any kitchen appliance or cooking device intelligent. Compatible with all existing brands that plug into standard two or three-prong wall outlets, Culina creates an entire network of Wi-Fi-connected kitchen devices that can be controlled and monitored remotely right from your smartphone.
The majority of US households now spend roughly 35% of their energy consumption on appliances, electronics, and lighting. With the ability to set energy usage caps on a daily, weekly or monthly basis, Culina helps homeowners stay within their monthly utility budget through more efficient use of the dishwasher, refrigerator, freezer, stove, and other common kitchen appliances.
Additionally, 50.8% of house fires are caused in the kitchen — more than any other room in the home — translating to over $5 billion in property damage costs per year. Culina provides the preventative intelligence necessary to dramatically reduce kitchen-related disasters and their associated costs and risk of personal harm.
Our team has already completed the product development and design phase, and we are now ready to begin mass manufacturing. We've also gained a major foothold among consumers and investors alike, with 10,000 pre-ordered units sold and $5 million in investment capital secured to date.
We're currently seeking a $15M Series B capital investment that will give us the financial flexibility to ramp up hardware manufacturing, improve software UX and UI, expand our sales and marketing efforts, and fulfill pre-orders in time for the 2018 holiday season.
2. Company Synopsis
Your Company Synopsis section answers two critically important questions for your readers: What painful PROBLEM are you solving for your customers? And what is your elegant SOLUTION to that problem? The combination of these two components form your value proposition.
Company Synopsis Example
Let's look at a real-life company description example from HolliBlu * — a mobile app that connects healthcare facilities with local skilled nurses — to see how they successfully address both of these key aspects. *Note: Full disclosure; Our team worked directly with this company on their business plan via Fundable.
![how to write a business plan in under an hour Business plan: Company synopsis example](https://d3o1wlpkmt4nt9.cloudfront.net/wp-content/uploads/2018/06/05163929/business-plan-company-synopsis-v2-min.jpg)
Notice how we get a crystal clear understanding of why the company exists to begin with when they set up the problem — that traditional nurse recruitment methods are costly, inconvenient, and time-consuming, creating significant barriers to providing quality nursing to patients in need.
Once we understand the painful problem that HolliBlu's customers face, we're then directly told how their solution links back directly to that problem — by creating an entire community of qualified nurses and directly connecting them with local employers more cost-effectively and more efficiently than traditional methods.
3. Market Overview
Your Market Overview provides color around the industry that you will be competing in as it relates to your product/service.
This will include statistics about industry size, [growth](https://www.startups.com/library/expert-advice/the-case-for-growing-slowly) rate, trends, and overall outlook. If this part of your business plan can be summed up in one word, it's research .
The idea is to gather as much raw data as you can to make the case for your readers that:
This is a market big enough to get excited about.
You can capture a big enough share of this market to get excited about.
Target Market Overview Example
Here's an example from HolliBlu's business plan:
![how to write a business plan in under an hour Business plan: Market overview example](https://d3o1wlpkmt4nt9.cloudfront.net/wp-content/uploads/2018/06/05164012/business-plan-market-overview-v2-min.jpg)
HolliBlu's Market Overview hits all of the marks — clearly laying out the industry size ($74.8 billion), the Total Addressable Market or TAM (3 million registered nurses), industry growth rate (581,500 new RN jobs through 2018; $355 billion by 2020), and industry trends (movement toward federally-mandated compliance with nurse/patient ratios, companies offering sign-on bonuses to secure qualified nurses, increasing popularity of home-based healthcare).
4. Product (How it Works)
Where your Company Synopsis is meant to shed light on why the company exists by demonstrating the problem you're setting out to solve and then bolstering that with an impactful solution, your Product or How it Works section allows you to get into the nitty gritty of how it actually delivers that value, and any competitive advantage it provides you.
Product (How it Works) Example
In the below example from our team's Culina sample plan, we've divided the section up using subheadings to call attention to product's key features and how it actually works from a user perspective.
This approach is particularly effective if your product or service has several unique features that you want to highlight.
![how to write a business plan in under an hour Business plan: Product overview](https://d3o1wlpkmt4nt9.cloudfront.net/wp-content/uploads/2018/06/30141328/business-plan-product-overview-min.jpg)
5. Revenue Model
Quite simply, your Revenue Model gives your readers a framework for how you plan on making money. It identifies which revenue channels you're leveraging, how you're pricing your product or service, and why.
Revenue Model Example
Let's take a look at another real world business plan example with brewpub startup Magic Waters Brewpub .*
It can be easy to get hung up on the financial aspect here, especially if you haven't fully developed your product yet. And that's okay. *Note: Full disclosure; Our team worked directly with this company on their business plan via Fundable.
The thing to remember is that investors will want to see that you've at least made some basic assumptions about your monetization strategy.
![how to write a business plan in under an hour Business plan: Revenue model](https://d3o1wlpkmt4nt9.cloudfront.net/wp-content/uploads/2018/06/30141332/business-plan-revenue-model-min.jpg)
6. Operating Model
Your Operating Model quite simply refers to how your company actually runs itself. It's the detailed breakdown of the processes, technologies, and physical requirements (assets) that allow you to deliver the value to your customers that your product or service promises.
Operating Model Example
Let's say you were opening up a local coffee shop, for example. Your Operating Model might detail the following:
Information about your facility (location, indoor and outdoor space features, lease amount, utility costs, etc.)
The equipment you need to purchase (coffee and espresso machines, appliances, shelving and storage, etc.) and their respective costs.
The inventory you plan to order regularly (product, supplies, etc.), how you plan to order it (an online supplier) and how often it gets delivered (Mon-Fri).
Your staffing requirements (including how many part or full time employees you'll need, at what wages, their job descriptions, etc.)
In addition, you can also use your Operating Model to lay out the ways you intend to manage the costs and efficiencies associated with your business, including:
The Critical Costs that make or break your business. In the case of our coffee shop example, you might say something like,
“We're estimating the marketing cost to acquire a customer is going to be $25. Our average sale is $45. So long as we can keep our customer acquisition costs below $25 we will have enough margin to grow with.”
Cost Maturation & Milestones that show how your Critical Costs might fluctuate over time.
“If we sell 50 coffees a day, our average unit cost will be $8 on a sale of $10. At that point we're barely breaking even. However as we scale up to 200 coffees a day, our unit costs drop significantly to $4, creating a 100% increase in net income.”
Investment Costs that highlight strategic uses of capital that will have a big Return on Investment (ROI) later.
“We're investing $100,000 into a revolutionary new coffee brewing system that will allow us to brew twice the amount our current output with the same amount of space and staff.”
Operating Efficiencies explaining your capability of delivering your product or service in the most cost effective manner possible while maintaining the highest standards of quality.
“By using energy efficient Ecoboilers, we're able to keep our water hot while minimizing the amount of energy required. Our machines also feature an energy saving mode. Both of these allow us to dramatically cut energy costs.”
7. Competitive Analysis
Like the Market Overview section, you want to show your readers that you've done your homework and have a crazy high level of awareness about your current competitors or any potential competitors that may crop up down the line for your given business model.
When writing your Competitive Analysis, your overview should cover who your closest competitors are, the chief strengths they bring to the table, and their biggest weaknesses .
You'll want to identify at least 3 competitors — either direct, indirect, or a combination of the two. It's an extremely important aspect of the business planning process.
Competition Analysis Example
Here's an example of how HolliBlu lays out their Competitive Analysis section for just one of their competitors, implementing each of the criteria noted above:
![how to write a business plan in under an hour Business plan: Competion analysis example](https://d3o1wlpkmt4nt9.cloudfront.net/wp-content/uploads/2018/06/05164106/business-plan-competitive-analysis-v2-min.jpg)
8. Customer Definition
Your Customer Definition section allows you to note which customer segment(s) you're going after, what characteristics and habits each customer segment embodies, how each segment uniquely benefits from your product or service, and how all of this ties together to create the ideal portrait of an actual paying customer, and how you'll cultivate and manage customer relationships.
Customer Definition Example
![how to write a business plan in under an hour Business plan: Customer definition](https://d3o1wlpkmt4nt9.cloudfront.net/wp-content/uploads/2018/06/30141303/business-plan-customer-definition-min.jpg)
HolliBlu's Customer Definition section is effective for several reasons. Let's deconstruct their first target market segment, hospitals.
What's particularly successful here is that we are explained why hospitals are optimal buyers.
They accomplish this by harkening back to the central problem at the core of the opportunity (when hospitals can't supply enough staff to meet patient demands, they have to resort on costly staffing agencies).
On top of that, we are also told how big of an opportunity going after this customer segment represents (5,534 hospitals in the US).
This template is followed for each of the company's 3 core customer segments. This provides consistency, but more than that, it emphasizes how diligent research reinforces their assumptions about who their customers are and why they'd open their wallets. Keep all of this in mind when you are write your own business plan.
9. Customer Acquisition
Now that you've defined who your customers are for your readers, your Customer Acquisition section will tell them what marketing and sales strategy and tactics you plan to leverage to actually reach the target market (or target markets) and ultimately convert them into paying customers.
marketing Strategy Example
![how to write a business plan in under an hour Business plan: Customer acquisition](https://d3o1wlpkmt4nt9.cloudfront.net/wp-content/uploads/2018/06/30141259/business-plan-customer-acquisition-min.jpg)
Similar to the exercise you will go through with your Revenue Model, in addition to identifying which channels you're pursuing, you'll also want to detail all of relevant costs associated with your customer acquisition channels.
Let's say you spent $100 on your marketing plan to acquire 100 customers during 2018. To get your CAC, you simply divide the number of customers acquired by your spend, giving you a $1.00 CAC.
10. Traction
This one's huge. Traction tells investors one important thing: that you're business has momentum. It's evidence that you're making forward progress and hitting milestones. That things are happening. It's one of the most critical components of a successful business plan.
Why is this so important? Financial projections are great and all, but if you can prove to investors that your company's got legs before they've even put a dime into it, then it will get them thinking about all the great things you'll be able to accomplish when they do bankroll you.
Traction Example
![how to write a business plan in under an hour Business plan: Traction](https://d3o1wlpkmt4nt9.cloudfront.net/wp-content/uploads/2018/06/30141311/business-plan-traction-min.jpg)
In our Culina Traction section, we've called attention to several forms of traction, touching on some of the biggest ones that you'll want to consider when writing your own plan.
Have I built or launched my product or service yet?
Have I reached any customers yet?
Have I generated any revenue yet?
Have I forged any strategic industry relationships that will be instrumental in driving growth?
The key takeaway here: the more traction you can show, the more credibility you build with investors. After all, you can't leave it all on market analysis alone.
11. Management Team
Here's what your Management Team section isn't: it's not an exhaustive rundown of each and every position your team members have held over the course of their lives.
Instead, you should tell investors which aspects of your team's experience and expertise directly translates to the success of this company and this industry.
In other words, what applicable, relevant background do they bring to the table?
Management Team Example
![how to write a business plan in under an hour Business plan: The Team](https://d3o1wlpkmt4nt9.cloudfront.net/wp-content/uploads/2018/06/30141320/business-plan-management-team-min.jpg)
Let's be real. The vast majority of startup teams probably aren't stacked with Harvard and Stanford grads. But the thing to home in on is how the prior experience listed speaks directly to how it qualifies that team member's current position.
The word of the day here is relevancy. If it's not relevant, you probably don't need to include it in your typical business plan.
12. Funding
Funding overview.
The ask! This is where you come out and, you guessed it, ask your investors point blank how much money you need to move your business forward, what specific milestones their investment will allow you to reach, how you'll allocate the capital you secure, and what the investor will get in exchange for their investment.
You can also include information about your exit strategy (IPO, acquisition, merger?).
Funding Example
![how to write a business plan in under an hour Business plan: Funding](https://d3o1wlpkmt4nt9.cloudfront.net/wp-content/uploads/2018/06/30141315/business-plan-funding-min.jpg)
While we've preached against redundancy in your business plan, an exception to the rule is using the Funding section to offer up a very brief recap that essentially says, “here are the biggest reasons you should invest in my company and why it will ultimately benefit you.”
13. Financials
Spreadsheets and numbers and charts, oh my! Yes, it's everybody's “favorite” business plan section: Financials.
Your Financials section will come last and contain all of the forecasted numbers that say to investors that this is a sound investment. This will include things like your sales forecast, expense budget, and break-even analysis. A lot of this will be assumptions, or estimates.
The key here is keeping those estimates as realistic as humanly possible by breaking your figures into components and looking at each one individually.
Financials Example
![how to write a business plan in under an hour Business Financials](https://d3o1wlpkmt4nt9.cloudfront.net/wp-content/uploads/2018/06/30141307/business-plan-financials-min.jpg)
The balance sheet above illustrates the business' estimated net worth over a three-year period by summarizing its assets (tangible objects owned by the company), liabilities (debt owed to a creditor of the company), and shareholders' equity (source of financing used to fund the assets).
In plain words, the balance sheet is basically a snapshot of your business' financial status by laying out what you own and owe, helping investors determine the level of risk involved and giving them a good understanding of the financial health of the business.
If you're looking to up your game from those outdated Excel-style spreadsheets, our business planning software will help you create clean, sleek, modern financial reports the modern way. Plus, it's as easy to use as it is attractive to look at. You might even find yourself enjoying financial projections, building a cash flow statement, and business planning overall.
You've Got This!
You've committed to writing your business plan and now you've got some tricks of the trade to help you out along the way. Whether you're applying for a business loan or seeking investors, your well-crafted business plan will act as your Holy Grail in helping take your business goals to the next plateau.
This is a ton of work. It's not a few hours and a free business plan template. It's not just a business plan software. We've been there before. Writing your [business plan](https://www.startups.com/library/expert-advice/top-4-business-plan-examples) is just one small step in startup journey. There's a whole long road ahead of you filled with a marketing plan, investor outreach, chasing venture capitalists, actually getting funded, and growing your business into a successful company.
And guess what? We've got helpful information on all of it — and all at your disposal! We hope this guides you confidently on how to write a business plan worth bragging about.
Ronald Calderon
Great info for feedback my current business plan!
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How to Write a Business Plan (Plus Examples & Templates)
![how to write a business plan in under an hour how to write a business plan in under an hour](https://www.upflip.com/wp-content/uploads/2024/06/1554309957717-150x150.jpeg)
Have you ever wondered how to write a business plan step by step? Mike Andes, told us:
This guide will help you write a business plan to impress investors.
Throughout this process, we’ll get information from Mike Andes, who started Augusta Lawn Care Services when he was 12 and turned it into a franchise with over 90 locations. He has gone on to help others learn how to write business plans and start businesses. He knows a thing or two about writing business plans!
We’ll start by discussing the definition of a business plan. Then we’ll discuss how to come up with the idea, how to do the market research, and then the important elements in the business plan format. Keep reading to start your journey!
What Is a Business Plan?
A business plan is simply a road map of what you are trying to achieve with your business and how you will go about achieving it. It should cover all elements of your business including:
- Finding customers
- Plans for developing a team
- Competition
- Legal structures
- Key milestones you are pursuing
If you aren’t quite ready to create a business plan, consider starting by reading our business startup guide .
Get a Business Idea
Before you can write a business plan, you have to have a business idea. You may see a problem that needs to be solved and have an idea how to solve it, or you might start by evaluating your interests and skills.
Mike told us, “The three things I suggest asking yourself when thinking about starting a business are:
- What am I good at?
- What would I enjoy doing?
- What can I get paid for?”
![How to Write a Business Plan (Plus Examples & Templates) 1 Three adjoining circles about business opportunity](https://www.upflip.com/wp-content/uploads/2021/05/business-opportunity-for-business-plan-writing.jpg)
If all three of these questions don’t lead to at least one common answer, it will probably be a much harder road to success. Either there is not much market for it, you won’t be good at it, or you won’t enjoy doing it.
As Mike told us, “There’s enough stress starting and running a business that if you don’t like it or aren’t good at it, it’s hard to succeed.”
If you’d like to hear more about Mike’s approach to starting a business, check out our YouTube video
Conduct Market Analysis
Market analysis is focused on establishing if there is a target market for your products and services, how large the target market is, and identifying the demographics of people or businesses that would be interested in the product or service. The goal here is to establish how much money your business concept can make.
Product and Service Demand
![How to Write a Business Plan (Plus Examples & Templates) 2 An image showing product service and demand](https://www.upflip.com/wp-content/uploads/2021/05/product-service-and-demand.jpg)
A search engine is your best friend when trying to figure out if there is demand for your products and services. Personally, I love using presearch.org because it lets you directly search on a ton of different platforms including Google, Youtube, Twitter, and more. Check out the screenshot for the full list of search options.
With quick web searches, you can find out how many competitors you have, look through their reviews, and see if there are common complaints about the competitors. Bad reviews are a great place to find opportunities to offer better products or services.
If there are no similar products or services, you may have stumbled upon something new, or there may just be no demand for it. To find out, go talk to your most honest friend about the idea and see what they think. If they tell you it’s dumb or stare at you vacantly, there’s probably no market for it.
You can also conduct a survey through social media to get public opinion on your idea. Using Facebook Business Manager , you could get a feel for who would be interested in your product or service.
I ran a quick test of how many people between 18-65 you could reach in the U.S. during a week. It returned an estimated 700-2,000 for the total number of leads, which is enough to do a fairly accurate statistical analysis.
Identify Demographics of Target Market
Depending on what type of business you want to run, your target market will be different. The narrower the demographic, the fewer potential customers you’ll have. If you did a survey, you’ll be able to use that data to help define your target audience. Some considerations you’ll want to consider are:
- Other Interests
- Marital Status
- Do they have kids?
Once you have this information, it can help you narrow down your options for location and help define your marketing further. One resource that Mike recommended using is the Census Bureau’s Quick Facts Map . He told us,
“It helps you quickly evaluate what the best areas are for your business to be located.”
How to Write a Business Plan
![How to Write a Business Plan (Plus Examples & Templates) 3 Business plan development](https://www.upflip.com/wp-content/uploads/2021/04/business-plan-development.jpg)
Now that you’ve developed your idea a little and established there is a market for it, you can begin writing a business plan. Getting started is easier with the business plan template we created for you to download. I strongly recommend using it as it is updated to make it easier to create an action plan.
Each of the following should be a section of your business plan:
- Business Plan Cover Page
- Table of Contents
- Executive Summary
- Company Description
- Description of Products and Services
SWOT Analysis
- Competitor Data
- Competitive Analysis
- Marketing Expenses Strategy
Pricing Strategy
- Distribution Channel Assessment
- Operational Plan
- Management and Organizational Strategy
- Financial Statements and/or Financial Projections
We’ll look into each of these. Don’t forget to download our free business plan template (mentioned just above) so you can follow along as we go.
How to Write a Business Plan Step 1. Create a Cover Page
The first thing investors will see is the cover page for your business plan. Make sure it looks professional. A great cover page shows that you think about first impressions.
A good business plan should have the following elements on a cover page:
- Professionally designed logo
- Company name
- Mission or Vision Statement
- Contact Info
Basically, think of a cover page for your business plan like a giant business card. It is meant to capture people’s attention but be quickly processed.
How to Write a Business Plan Step 2. Create a Table of Contents
Most people are busy enough that they don’t have a lot of time. Providing a table of contents makes it easy for them to find the pages of your plan that are meaningful to them.
A table of contents will be immediately after the cover page, but you can include it after the executive summary. Including the table of contents immediately after the executive summary will help investors know what section of your business plan they want to review more thoroughly.
Check out Canva’s article about creating a table of contents . It has a ton of great information about creating easy access to each section of your business plan. Just remember that you’ll want to use different strategies for digital and hard copy business plans.
How to Write a Business Plan Step 3. Write an Executive Summary
![How to Write a Business Plan (Plus Examples & Templates) 4 A notepad with a written executive summary for business plan writing](https://www.upflip.com/wp-content/uploads/2021/05/executive-summary-for-business-plan-writing.jpg)
An executive summary is where your business plan should catch the readers interest. It doesn’t need to be long, but should be quick and easy to read.
Mike told us,
How long should an executive summary bein an informal business plan?
For casual use, an executive summary should be similar to an elevator pitch, no more than 150-160 words, just enough to get them interested and wanting more. Indeed has a great article on elevator pitches . This can also be used for the content of emails to get readers’ attention.
It consists of three basic parts:
- An introduction to you and your business.
- What your business is about.
- A call to action
Example of an informal executive summary
One of the best elevator pitches I’ve used is:
So far that pitch has achieved a 100% success rate in getting partnerships for the business.
What should I include in an executive summary for investors?
Investors are going to need a more detailed executive summary if you want to secure financing or sell equity. The executive summary should be a brief overview of your entire business plan and include:
- Introduction of yourself and company.
- An origin story (Recognition of a problem and how you came to solution)
- An introduction to your products or services.
- Your unique value proposition. Make sure to include intellectual property.
- Where you are in the business life cycle
- Request and why you need it.
Successful business plan examples
The owner of Urbanity told us he spent 2 months writing a 75-page business plan and received a $250,000 loan from the bank when he was 23. Make your business plan as detailed as possible when looking for financing. We’ve provided a template to help you prepare the portions of a business plan that banks expect.
Here’s the interview with the owner of Urbanity:
When to write an executive summary?
Even though the summary is near the beginning of a business plan, you should write it after you complete the rest of a business plan. You can’t talk about revenue, profits, and expected expenditures if you haven’t done the market research and created a financial plan.
What mistakes do people make when writing an executive summary?
Business owners commonly go into too much detail about the following items in an executive summary:
- Marketing and sales processes
- Financial statements
- Organizational structure
- Market analysis
These are things that people will want to know later, but they don’t hook the reader. They won’t spark interest in your small business, but they’ll close the deal.
How to Write a Business Plan Step 4. Company Description
Every business plan should include a company description. A great business plan will include the following elements while describing the company:
- Mission statement
- Philosophy and vision
- Company goals
Target market
- Legal structure
Let’s take a look at what each section includes in a good business plan.
Mission Statement
A mission statement is a brief explanation of why you started the company and what the company’s main focus is. It should be no more than one or two sentences. Check out HubSpot’s article 27 Inspiring Mission Statement for a great read on informative and inspiring mission and vision statements.
Company Philosophy and Vision
![How to Write a Business Plan (Plus Examples & Templates) 5 Writing the company philosophy and vision](https://www.upflip.com/wp-content/uploads/2021/05/company-vision-for-business-plan-writing.jpg)
The company philosophy is what drives your company. You’ll normally hear them called core values. These are the building blocks that make your company different. You want to communicate your values to customers, business owners, and investors as often as possible to build a company culture, but make sure to back them up.
What makes your company different?
Each company is different. Your new business should rise above the standard company lines of honesty, integrity, fun, innovation, and community when communicating your business values. The standard answers are corporate jargon and lack authenticity.
Examples of core values
One of my clients decided to add a core values page to their website. As a tech company they emphasized the values:
- Prioritize communication.
- Never stop learning.
- Be transparent.
- Start small and grow incrementally.
These values communicate how the owner and the rest of the company operate. They also show a value proposition and competitive advantage because they specifically focus on delivering business value from the start. These values also genuinely show what the company is about and customers recognize the sincerity. Indeed has a great blog about how to identify your core values .
What is a vision statement?
A vision statement communicate the long lasting change a business pursues. The vision helps investors and customers understand what your company is trying to accomplish. The vision statement goes beyond a mission statement to provide something meaningful to the community, customer’s lives, or even the world.
Example vision statements
The Alzheimer’s Association is a great example of a vision statement:
A world without Alzheimer’s Disease and other dementia.
It clearly tells how they want to change the world. A world without Alzheimers might be unachievable, but that means they always have room for improvement.
Business Goals
You have to measure success against goals for a business plan to be meaningful. A business plan helps guide a company similar to how your GPS provides a road map to your favorite travel destination. A goal to make as much money as possible is not inspirational and sounds greedy.
Sure, business owners want to increase their profits and improve customer service, but they need to present an overview of what they consider success. The goals should help everyone prioritize their work.
How far in advance should a business plan?
Business planning should be done at least one year in advance, but many banks and investors prefer three to five year business plans. Longer plans show investors that the management team understands the market and knows the business is operating in a constantly shifting market. In addition, a plan helps businesses to adjust to changes because they have already considered how to handle them.
Example of great business goals
My all time-favorite long-term company goals are included in Tesla’s Master Plan, Part Deux . These goals were written in 2016 and drive the company’s decisions through 2026. They are the reason that investors are so forgiving when Elon Musk continually fails to meet his quarterly and annual goals.
If the progress aligns with the business plan investors are likely to continue to believe in the company. Just make sure the goals are reasonable or you’ll be discredited (unless you’re Elon Musk).
![How to Write a Business Plan (Plus Examples & Templates) 6 A man holding an iPad with a cup of coffee on his desk](https://www.upflip.com/wp-content/uploads/2021/04/target-market-for-charter-boat-business.jpg)
You did target market research before creating a business plan. Now it’s time to add it to the plan so others understand what your ideal customer looks like. As a new business owner, you may not be considered an expert in your field yet, so document everything. Make sure the references you use are from respectable sources.
Use information from the specific lender when you are applying for lending. Most lenders provide industry research reports and using their data can strengthen the position of your business plan.
A small business plan should include a section on the external environment. Understanding the industry is crucial because we don’t plan a business in a vacuum. Make sure to research the industry trends, competitors, and forecasts. I personally prefer IBIS World for my business research. Make sure to answer questions like:
- What is the industry outlook long-term and short-term?
- How will your business take advantage of projected industry changes and trends?
- What might happen to your competitors and how will your business successfully compete?
Industry resources
Some helpful resources to help you establish more about your industry are:
- Trade Associations
- Federal Reserve
- Bureau of Labor Statistics
Legal Structure
There are five basic types of legal structures that most people will utilize:
- Sole proprietorships
- Limited Liability Companies (LLC)
Partnerships
Corporations.
- Franchises.
Each business structure has their pros and cons. An LLC is the most common legal structure due to its protection of personal assets and ease of setting up. Make sure to specify how ownership is divided and what roles each owner plays when you have more than one business owner.
You’ll have to decide which structure is best for you, but we’ve gathered information on each to make it easier.
Sole Proprietorship
A sole proprietorship is the easiest legal structure to set up but doesn’t protect the owner’s personal assets from legal issues. That means if something goes wrong, you could lose both your company and your home.
To start a sole proprietorship, fill out a special tax form called a Schedule C . Sole proprietors can also join the American Independent Business Alliance .
Limited Liability Company (LLC)
An LLC is the most common business structure used in the United States because an LLC protects the owner’s personal assets. It’s similar to partnerships and corporations, but can be a single-member LLC in most states. An LLC requires a document called an operating agreement.
Each state has different requirements. Here’s a link to find your state’s requirements . Delaware and Nevada are common states to file an LLC because they are really business-friendly. Here’s a blog on the top 10 states to get an LLC.
Partnerships are typically for legal firms. If you choose to use a partnership choose a Limited Liability Partnership. Alternatively, you can just use an LLC.
Corporations are typically for massive organizations. Corporations have taxes on both corporate and income tax so unless you plan on selling stock, you are better off considering an LLC with S-Corp status . Investopedia has good information corporations here .
![How to Write a Business Plan (Plus Examples & Templates) 7 An iPad with colored pens on a desk](https://www.upflip.com/wp-content/uploads/2020/12/franchise-for-car-rental-business.jpg)
There are several opportunities to purchase successful franchises. TopFranchise.com has a list of companies in a variety of industries that offer franchise opportunities. This makes it where an entrepreneur can benefit from the reputation of an established business that has already worked out many of the kinks of starting from scratch.
How to Write a Business Plan Step 5. Products and Services
This section of the business plan should focus on what you sell, how you source it, and how you sell it. You should include:
- Unique features that differentiate your business products from competitors
- Intellectual property
- Your supply chain
- Cost and pricing structure
Questions to answer about your products and services
Mike gave us a list of the most important questions to answer about your product and services:
- How will you be selling the product? (in person, ecommerce, wholesale, direct to consumer)?
- How do you let them know they need a product?
- How do you communicate the message?
- How will you do transactions?
- How much will you be selling it for?
- How many do you think you’ll sell and why?
Make sure to use the worksheet on our business plan template .
How to Write a Business Plan Step 6. Sales and Marketing Plan
The marketing and sales plan is focused on the strategy to bring awareness to your company and guides how you will get the product to the consumer. It should contain the following sections:
SWOT Analysis stands for strengths, weaknesses, opportunities, and threats. Not only do you want to identify them, but you also want to document how the business plans to deal with them.
Business owners need to do a thorough job documenting how their service or product stacks up against the competition.
If proper research isn’t done, investors will be able to tell that the owner hasn’t researched the competition and is less likely to believe that the team can protect its service from threats by the more well-established competition. This is one of the most common parts of a presentation that trips up business owners presenting on Shark Tank .
SWOT Examples
![How to Write a Business Plan (Plus Examples & Templates) 8 Business plan SWOT analysis](https://www.upflip.com/wp-content/uploads/2021/05/SWOT-analysis-for-writing-a-business-plan-1.jpg)
Examples of strengths and weaknesses could be things like the lack of cash flow, intellectual property ownership, high costs of suppliers, and customers’ expectations on shipping times.
Opportunities could be ways to capitalize on your strengths or improve your weaknesses, but may also be gaps in the industry. This includes:
- Adding offerings that fit with your current small business
- Increase sales to current customers
- Reducing costs through bulk ordering
- Finding ways to reduce inventory
- And other areas you can improve
Threats will normally come from outside of the company but could also be things like losing a key member of the team. Threats normally come from competition, regulations, taxes, and unforeseen events.
The management team should use the SWOT analysis to guide other areas of business planning, but it absolutely has to be done before a business owner starts marketing.
Include Competitor Data in Your Business Plan
When you plan a business, taking into consideration the strengths and weaknesses of the competition is key to navigating the field. Providing an overview of your competition and where they are headed shows that you are invested in understanding the industry.
For smaller businesses, you’ll want to search both the company and the owners names to see what they are working on. For publicly held corporations, you can find their quarterly and annual reports on the SEC website .
What another business plans to do can impact your business. Make sure to include things that might make it attractive for bigger companies to outsource to a small business.
Marketing Strategy
The marketing and sales part of business plans should be focused on how you are going to make potential customers aware of your business and then sell to them.
If you haven’t already included it, Mike recommends:
“They’ll want to know about Demographics, ages, and wealth of your target market.”
Make sure to include the Total addressable market . The term refers to the value if you captured 100% of the market.
Advertising Strategy
You’ll explain what formats of advertising you’ll be using. Some possibilities are:
- Online: Facebook and Google are the big names to work with here.
- Print : Print can be used to reach broad groups or targeted markets. Check out this for tips .
- Radio : iHeartMedia is one of the best ways to advertise on the radio
- Cable television : High priced, hard to measure ROI, but here’s an explanation of the process
- Billboards: Attracting customers with billboards can be beneficial in high traffic areas.
You’ll want to define how you’ll be using each including frequency, duration, and cost. If you have the materials already created, including pictures or links to the marketing to show creative assets.
Mike told us “Most businesses are marketing digitally now due to Covid, but that’s not always the right answer.”
Make sure the marketing strategy will help team members or external marketing agencies stay within the brand guidelines .
![How to Write a Business Plan (Plus Examples & Templates) 9 An iPad with graph about pricing strategy](https://www.upflip.com/wp-content/uploads/2021/05/pricing-strategy-for-business-plan-writing-1.jpg)
This section of a business plan should be focused on pricing. There are a ton of pricing strategies that may work for different business plans. Which one will work for you depends on what kind of a business you run.
Some common pricing strategies are:
- Value-based pricing – Commonly used with home buying and selling or other products that are status symbols.
- Skimming pricing – Commonly seen in video game consoles, price starts off high to recoup expenses quickly, then reduces over time.
- Competition-based pricing – Pricing based on competitors’ pricing is commonly seen at gas stations.
- Freemium services – Commonly used for software, where there is a free plan, then purchase options for more functionality.
HubSpot has a great calculator and blog on pricing strategies.
Beyond explaining what strategy your business plans to use, you should include references for how you came to this pricing strategy and how it will impact your cash flow.
Distribution Plan
This part of a business plan is focused on how the product or service is going to go through the supply chain. These may include multiple divisions or multiple companies. Make sure to include any parts of the workflow that are automated so investors can see where cost savings are expected and when.
Supply Chain Examples
For instance, lawn care companies would need to cover aspects such as:
- Suppliers for lawn care equipment and tools
- Any chemicals or treatments needed
- Repair parts for sprinkler systems
- Vehicles to transport equipment and employees
- Insurance to protect the company vehicles and people.
Examples of Supply Chains
These are fairly flat supply chains compared to something like a clothing designer where the clothes would go through multiple vendors. A clothing company might have the following supply chain:
- Raw materials
- Shipping of raw materials
- Converting of raw materials to thread
- Shipping thread to produce garments
- Garment producer
- Shipping to company
- Company storage
- Shipping to retail stores
There have been advances such as print on demand that eliminate many of these steps. If you are designing completely custom clothing, all of this would need to be planned to keep from having business disruptions.
The main thing to include in the business plan is the list of suppliers, the path the supply chain follows, the time from order to the customer’s home, and the costs associated with each step of the process.
According to BizPlanReview , a business plan without this information is likely to get rejected because they have failed to research the key elements necessary to make sales to the customer.
How to Write a Business Plan Step 7. Company Organization and Operational Plan
This part of the business plan is focused on how the business model will function while serving customers. The business plan should provide an overview of how the team will manage the following aspects:
Quality Control
- Legal environment
Let’s look at each for some insight.
Production has already been discussed in previous sections so I won’t go into it much. When writing a business plan for investors, try to avoid repetition as it creates a more simple business plan.
If the organizational plan will be used by the team as an overview of how to perform the best services for the customer, then redundancy makes more sense as it communicates what is important to the business.
![How to Write a Business Plan (Plus Examples & Templates) 10 A wooden stamp with the words "quality control"](https://www.upflip.com/wp-content/uploads/2021/05/quality-control-for-business-plan-writing-1.jpg)
Quality control policies help to keep the team focused on how to verify that the company adheres to the business plan and meets or exceeds customer expectations.
Quality control can be anything from a standard that says “all labels on shirts can be no more than 1/16″ off center” to a defined checklist of steps that should be performed and filled out for every customer.
There are a variety of organizations that help define quality control including:
- International Organization for Standardization – Quality standards for energy, technology, food, production environments, and cybersecurity
- AICPA – Standard defined for accounting.
- The Joint Commission – Healthcare
- ASHRAE – HVAC best practices
You can find lists of the organizations that contribute most to the government regulation of industries on Open Secrets . Research what the leaders in your field are doing. Follow their example and implement it in your quality control plan.
For location, you should use information from the market research to establish where the location will be. Make sure to include the following in the location documentation.
- The size of your location
- The type of building (retail, industrial, commercial, etc.)
- Zoning restrictions – Urban Wire has a good map on how zoning works in each state
- Accessibility – Does it meet ADA requirements?
- Costs including rent, maintenance, utilities, insurance and any buildout or remodeling costs
- Utilities – b.e.f. has a good energy calculator .
Legal Environment
The legal requirement section is focused on defining how to meet the legal requirements for your industry. A good business plan should include all of the following:
- Any licenses and/or permits that are needed and whether you’ve obtained them
- Any trademarks, copyrights, or patents that you have or are in the process of applying for
- The insurance coverage your business requires and how much it costs
- Any environmental, health, or workplace regulations affecting your business
- Any special regulations affecting your industry
- Bonding requirements, if applicable
Your local SBA office can help you establish requirements in your area. I strongly recommend using them. They are a great resource.
Your business plan should include a plan for company organization and hiring. While you may be the only person with the company right now, down the road you’ll need more people. Make sure to consider and document the answers to the following questions:
- What is the current leadership structure and what will it look like in the future?
- What types of employees will you have? Are there any licensing or educational requirements?
- How many employees will you need?
- Will you ever hire freelancers or independent contractors?
- What is each position’s job description?
- What is the pay structure (hourly, salaried, base plus commission, etc.)?
- How do you plan to find qualified employees and contractors?
One of the most crucial parts of a business plan is the organizational chart. This simply shows the positions the company will need, who is in charge of them and the relationship of each of them. It will look similar to this:
![How to Write a Business Plan (Plus Examples & Templates) 11 Organization chart](https://www.upflip.com/wp-content/uploads/2021/05/the-organization-chart.jpg)
Our small business plan template has a much more in-depth organizational chart you can edit to include when you include the organizational chart in your business plan.
How to Write a Business Plan Step 8. Financial Statements
No business plan is complete without financial statements or financial projections. The business plan format will be different based on whether you are writing a business plan to expand a business or a startup business plan. Let’s dig deeper into each.
Provide All Financial Income from an Existing Business
An existing business should use their past financial documents including the income statement, balance sheet, and cash flow statement to find trends to estimate the next 3-5 years.
You can create easy trendlines in excel to predict future revenue, profit and loss, cash flow, and other changes in year-over-year performance. This will show your expected performance assuming business continues as normal.
If you are seeking an investment, then the business is probably not going to continue as normal. Depending on the financial plan and the purpose of getting financing, adjustments may be needed to the following:
- Higher Revenue if expanding business
- Lower Cost of Goods Sold if purchasing inventory with bulk discounts
- Adding interest if utilizing financing (not equity deal)
- Changes in expenses
- Addition of financing information to the cash flow statement
- Changes in Earnings per Share on the balance sheet
Financial modeling is a challenging subject, but there are plenty of low-cost courses on the subject. If you need help planning your business financial documentation take some time to watch some of them.
Make it a point to document how you calculated all the changes to the income statement, balance sheet, and cash flow statement in your business plan so that key team members or investors can verify your research.
Financial Projections For A Startup Business Plan
Unlike an existing business, a startup doesn’t have previous success to model its future performance. In this scenario, you need to focus on how to make a business plan realistic through the use of industry research and averages.
Mike gave the following advice in his interview:
Financial Forecasting Mistakes
One of the things a lot of inexperienced people use is the argument, “If I get one percent of the market, it is worth $100 million.” If you use this, investors are likely to file the document under bad business plan examples.
Let’s use custom t-shirts as an example.
Credence Research estimated in 2018 there were 11,334,800,000 custom t-shirts sold for a total of $206.12 Billion, with a 6% compound annual growth rate.
With that data, you can calculate that the industry will grow to $270 Billion in 2023 and that the average shirt sold creates $18.18 in revenue.
Combine that with an IBIS World estimate of 11,094 custom screen printers and that means even if you become an average seller, you’ll get .009% of the market.
Here’s a table for easier viewing of that information.
![How to Write a Business Plan (Plus Examples & Templates) 12 A table showing yearly revenue of a business](https://www.upflip.com/wp-content/uploads/2021/05/projection-of-revenue-for-business-plan-writing.jpg)
The point here is to make sure your business proposal examples make sense.
You’ll need to know industry averages such as cost of customer acquisition, revenue per customer, the average cost of goods sold, and admin costs to be able to create accurate estimates.
Our simple business plan templates walk you through most of these processes. If you follow them you’ll have a good idea of how to write a business proposal.
How to Write a Business Plan Step 9. Business Plan Example of Funding Requests
What is a business plan without a plan on how to obtain funding?
The Small Business Administration has an example for a pizza restaurant that theoretically needed nearly $20k to make it through their first month.
In our video, How to Start a $500K/Year T-Shirt Business (Pt. 1 ), Sanford Booth told us he needed about $200,000 to start his franchise and broke even after 4 months.
Freshbooks estimates it takes on average 2-3 years for a business to be profitable, which means the fictitious pizza company from the SBA could need up to $330k to make it through that time and still pay their bills for their home and pizza shop.
Not every business needs that much to start, but realistically it’s a good idea to assume that you need a fairly large cushion.
Ways to get funding for a small business
There are a variety of ways to cover this. the most common are:
- Bootstrapping – Using your savings without external funding.
- Taking out debt – loans, credit cards
- Equity, Seed Funding – Ownership of a percentage of the company in exchange for current funds
- Crowdsourcing – Promising a good for funding to create the product
Keep reading for more tips on how to write a business plan.
How funding will be used
When asking for business financing make sure to include:
- How much to get started?
- What is the minimum viable product and how soon can you make money?
- How will the money be spent?
Mike emphasized two aspects that should be included in every plan,
How to Write a Business Plan Resources
Here are some links to a business plan sample and business plan outline.
- Sample plan
It’s also helpful to follow some of the leading influencers in the business plan writing community. Here’s a list:
- Wise Plans – Shares a lot of information on starting businesses and is a business plan writing company.
- Optimus Business Plans – Another business plan writing company.
- Venture Capital – A venture capital thread that can help give you ideas.
How to Write a Business Plan: What’s Next?
We hope this guide about how to write a simple business plan step by step has been helpful. We’ve covered:
- The definition of a business plan
- Coming up with a business idea
- Performing market research
- The critical components of a business plan
- An example business plan
In addition, we provided you with a simple business plan template to assist you in the process of writing your startup business plan. The startup business plan template also includes a business model template that will be the key to your success.
Don’t forget to check out the rest of our business hub .
Have you written a business plan before? How did it impact your ability to achieve your goals?
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7 tips to make writing a business plan easier.
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Writing a business plan is one of the most valuable things you can do as a business owner. But it can also be one of the most challenging if you’re doing it for the first time.
To help you get right to the value of having a complete business plan, here are seven simple tips that will make business plan writing easier.
1. Understand What to Include in Your Business Plan
Take the time to understand the broad structure of a business plan and what information should be included in each section. This helps you avoid writing aimlessly and gives you a checklist to mark off as you go.
To get started, here is a brief overview of the most common sections of a business plan :
- Executive Summary : Summary of the full business plan, typically covering the problem, solution, target market, team, and financial highlights.
- Products and Services : Description of what you offer, the problem it solves, and any progress or traction.
- Market Analysis : Research on your target market, its size, segments, and trends.
- Competition : Analysis of competitors and how your business compares.
- Marketing and Sales : Strategies for reaching and selling to customers.
- Operations : Overview of your operations including technology, equipment, and facilities.
- Milestones and Metrics : Key goals and performance indicators.
- Company Overview and Team : Organizational structure, company history, and team bios.
- Financial Plan : Sales, expense, and cash flow forecasts along with standard financial statements like your profit and loss, cash flow statement, and balance sheet.
- Appendix : Additional information, such as detailed financial statements, resumes, and other supporting documents.
This list is not exhaustive, so, if you need additional details, look into lengthier business plan outlines or just go on to step two and three in this guide.
2. Consider Starting With a One-Page Business Plan
You don’t necessarily need to write a traditional business plan. If you’re exploring an idea or planning to use it as an internal tool—then a one-page business plan may be a better option.
A one-page business plan is basically a condensed version of a traditional business plan that outlines your business’s key points in a single page. It’s faster and easier to create, simpler to edit and adjust as your business evolves, and it can always be expanded into a more detailed plan later on.
And even though it’s on one page, it still works as a fully functioning business plan. You just get the benefit of starting small, focusing on the essentials.
3. Download a Business Plan Template
Using a business plan template can provide additional guidance and structure to the planning process. With the right template, you’ll get step-by-step instruction, simple fill-in-the-blank sections, and potentially even tips from entrepreneurs or planning experts.
There are plenty of free business plan templates out there, but the best will be written by experts, recently updated, and available in a format that will meet the expectations of lenders and investors. Additionally, just be sure it’s available on software like Microsoft Word or Google Docs so you can get right into using it.
4. Review Business Plan Examples
Sometimes the best thing you can do is to see what the end result can look like. So, when writing a business plan you should explore and review a handful of business plans examples. Ideally, business plan examples are created by professionals or are real-world samples from existing businesses like yoga studios .
If you can, find a sample business plan that’s from the same industry as your own business. Pay attention to the structure, how the plan is written, and what information is unique to your specific industry. You should also take time to flag anything that you don’t think is done well as something to avoid in your own plan.
Keep in mind, you should not copy and paste these examples. Use them to inspire your plan and don’t replicate it.
5. Prioritize the Sections You Already Know
There may be a preferred order for structuring your business plan, but that doesn’t mean you have to write it that way. Instead of going from beginning to end, start with the sections that you already have ideas for and know best.
This will help you avoid just staring at a blank page and actually get information down. You may even find that it makes writing other sections easier as you start thinking more and more specifically about your business.
6. Set a Time Limit
Do not spend hours at a time writing your business plan. You’ll get burnt out, make mistakes, and likely end up seriously disliking the whole process.
To avoid this, set a time limit for your writing to be between 30-minutes and an hour. This is just enough time to actually write and work through sections while making it an easy time investment to fit around your busy schedule.
Keep in mind, this may mean you don’t finish your business plan. That’s totally fine and potentially beneficial. Step away, schedule a follow up writing session, and get back to it. It may end up taking two, three, maybe even four times but you’ll still end up with a complete business plan.
7. Have Someone Review Your Business Plan
Lastly, don’t do this writing process solo. Get someone you trust, like a friend, family member, or mentor, to review your plan as you go. Have them read it and provide feedback like:
- Do you understand how my business works?
- Is the business plan clear and easy to read?
- Are there areas that are confusing, make jumps in logic, or need more explanation?
Take their feedback and apply it to your plan. If you do this before completing the plan, you may end up saving time and catch any issues before they’re prevalent throughout the entire document. If you’re concerned about the quality or not getting enough feedback, consider hiring a professional plan writer or reviewer to take a look instead.
Writing a Business Plan Doesn’t Have to Be Difficult
The hardest part about writing a business plan is getting started. But by developing a framework, knowing what you’re getting into, and finding the right support it can be a lean and effective process.
So, take one or all of these tips and start writing your business plan. You’ll be happy you did.
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When Should You Write a Business Plan?
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Noah Parsons
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Updated May 10, 2024
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When’s the right time to write a business plan? My favorite answer is from this proverb:
The best time to plant a tree was 20 years ago. The second best time is now.
Things are changing for business owners at a much faster rate. There’s an increasing level of uncertainty about the future and in order to survive and grow you need to plan now and plan often. The right kind of business planning is something that happens regularly and continues forever.
That’s because business planning is not just about producing a document. Instead, planning is an ongoing, repeating process that helps your business grow healthily. You create a strategy, build budgets, and set goals so that you can measure your progress and make changes when you need to.
Much like the proverb about the tree would imply, planning can be hard to get started. But if you understand the basics of the planning process it can be much easier than you’d think.
- When should you write a business plan?
As I said in the introduction, there’s really no wrong time to write a business plan. Whether you have a new business idea or your business has been up and running for years, putting together a plan is beneficial and necessary .
The real question is, what kind of planning should you do for the stage your business is in? Should a five-year-old business use the same business plan template as a new startup?
The answer is no. Planning isn’t one-size-fits-all. It’s about finding the right size plan for your business stage and needs.
Here are some common times when you should create a plan for your business along with recommendations on the right kind of plan for each specific situation:
When you have a new idea for a business
Figuring out if you can turn an idea into a business can be challenging.
Are your potential customers going to want what you are selling? Will you be able to make a profit? How much money will you need to get off the ground? What do you need to turn your side hustle into a full-time gig? At this stage, the most important thing you can do is write down a quick summary of your business idea using a one-page business plan . This will help you think about who your customers will be and create a rough sketch of what your business numbers look like. You can use a one-page plan to test your assumptions.
Are your customers who you think they are? Will they be willing to pay what you want to charge?
As you gather information, you can quickly revise your plan until you have a business plan and business model that works for turning your idea into a business. This kind of planning will help reduce your risk and get you started the right way, without investing too much time in the planning process.
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When you’re starting a business
If you’ve found product-market fit for your business idea, you’re ready to turn it into a business. You have evidence that your business fills a real need for customers and they’re willing to pay for your solution. This is when a more detailed business plan is useful. You’ll focus on building out revenue forecasts and more detailed expense budgets. This will help you understand what it’s going to take to get your business off the ground and sustain it through the early days. You’ll also expand your business plan to define your target market, detail your marketing and sales strategies, and solidify your operational plans.
When you’re seeking funding
If you need funding to get your business off the ground, you’ll need a thorough business plan with complete financial forecasts . Whether you’re seeking a loan or looking for investors—you’ll need to understand exactly how much money to ask for and how long that money will last as your business grows.
This is where having a cash flow forecast in place pays off. With this forecast, you can predict how much money you’ll need and when you’ll need it. Investors may never ask to see your actual business plan. But, they’ll definitely ask questions that you’ll only be able to answer if you’ve put one together.
They’ll want to know about your target market and market size, details about your competition, your sales and marketing plans, and more. This is all in addition to your financial forecasts. If you’re looking for a loan, many lenders require a business plan as part of the loan application process. Having a polished and impressive plan can even help with the loan process, even though loans are most often made based on the collateral you have rather than the quality of your business idea.
When business conditions are changing
We live in a world of uncertainty. Supply chains get disrupted , the labor market changes, and the price of materials is always shifting. If you think your industry or your market is headed for a significant shift, it’s a good idea to make sure you have a plan in place. This kind of planning focuses on a shift in strategy. Will your marketing and sales strategies change? What expenses will you shift around? How will potential changes in future revenue impact your business and do you have the cash on hand that you need to weather the changes? Planning for change often involves running different financial scenarios and documenting different strategic directions your business may take. Having an initial business plan to base these adjustments on will make the process easier.
When you’re growing your business
Growth should certainly be celebrated, but it often comes with its own significant challenges. For businesses that make and sell products, managing inventory and handling rapidly increasing orders can create a cash crunch. That’s where planning for growth comes in, specifically focused on cash flow . The right kind of planning will help you ensure that you can handle fast growth and give you the time to line up any additional funding you need— before you need it.
When you want to run a healthy business
Most people think of business planning only when they’re starting a business or seeking funding. The reality is that it’s a crucial component of running a business. Just like with personal finance, it’s important to have a budget and revenue goals and then track how things are going on a regular basis. This kind of ongoing planning —where you build a financial forecast and budget and then track your progress as you go—helps you spot problems before they happen and find opportunities for growth that you might have missed. This planning is called growth planning and helps you run your business better.
When you’re buying or selling a business
If you’re buying a business, you’ll want to get a good look at the books before you make a purchase decision. You can use the business’s accounting data and historical performance to create forecasts for future profits and cash. And, if you plan on investing more into the business, you’ll need a plan to know when you’ll be able to recoup your investment. If you’re selling a business, a strong business plan is a valuable sales tool. The business plan explains to prospective buyers how the business works and what the buyer can expect regarding revenue, profits, and cash flow. The more clearly laid out your business operations and performance are for the buyer, the smoother your exit will be.
- Is there a best time to write a business plan?
As an entrepreneur, you have a vision for your business and the drive to turn that vision into a reality. A business plan can certainly help with that. But when is the best time to write one? The answer, like so many things in business, is that it depends.
A recent Harvard Business Review study found that business planning had the most positive impact on businesses when the business plan was written between 6 and 12 months after deciding to start a business. In fact, planning at this stage increased the chances of success by 8%.
I’ll add a caveat to this study, though. The study did not look at the types of business plans that were written at the different stages of business.
If all of the business plans were in-depth, comprehensive, and detailed, they certainly wouldn’t have as much impact at the idea stage as they have later on in the startup process. Doing detailed planning a bit later in the game makes sense. Detailed planning early on is really a waste of time.
That’s why we recommend a different approach: start with a simple one-page business plan in the beginning, and then expand to a more detailed plan only as you need it.
After you’ve validated your business idea and are in startup mode, a more detailed plan makes sense. You need to explore and understand your operational plan , detailed marketing plan, budgets, and financial forecast.
When you’re fully up and running with a business model that works and a few years of experience under your belt, your planning may simplify again . Planning for established businesses tends to focus mostly on financial management and less on documenting target markets and operations.
This type of flexible and right-sized planning is most likely to have a positive impact throughout the lifecycle of your business. So, instead of waiting for the exact right time to start planning, start with the right kind of planning based on your business stage.
- When can you skip writing a business plan?
There are some situations where writing a business plan may be unnecessary. For example, if you’re starting a very small, simple business that doesn’t require any kind of significant investment, you might be able to get by without a formal plan.
However, even in these cases, it’s still a good idea to take the time to think through your business and write down your goals and strategies. A one-page plan is perfect for these situations and won’t take long to write.
- How long should you spend writing your plan?
The amount of time you should spend writing a business plan depends on several factors—including the size and complexity of your business, and how much detail you need in your plan. On average, it can take anywhere from several weeks to several months to write a comprehensive business plan.
That said, planning doesn’t have to take that long and shouldn’t for most businesses. In fact, a useful one-page plan can be put together in under an hour . You can then add more detail in as little as a day. Then plan to expand your plan as you go, based on what you’ve learned from actually building your business.
Just don’t get too bogged down in the details of planning. The goal of a business plan is to help you focus on what’s important and give you a roadmap for success, not to create a document that will sit on a shelf and collect dust.
So, spend enough time to create a useful plan. Don’t get so caught up in the process that you lose sight of your ultimate goal: building a successful business.
A final word of warning: don’t fall into the trap of letting planning go on for months.
Any time spent planning beyond 3 months is generally a waste of time because your information gets stale. You also miss out on building your business and learning what does and doesn’t work. You’re just stuck in a planning cycle without any results to review and build upon.
- The ideal time to write a business plan is now
Writing a business plan can be a valuable tool for entrepreneurs at any stage of their journey. The key is to write the kind of plan that your business needs for the stage your business is in.
Planning should always start small: What problem are you solving ? Who are you solving it for? Can you make money doing it?
If you can start to answer these questions, you have a business that can work. From there, flesh out the details as needed. If you’re raising money, you’ll need a more detailed plan. If not, focus on a plan that has the details you need to help you achieve your goals.
Whether you write your plan before opening your doors or after you’ve been in business for a while, the important thing is to have a plan that you use to guide your business to success. A good business plan is all about good management—and that’s what all long-lasting businesses need.
If you need additional guidance, check out our roundup of the best free business plan templates .
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Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.
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How to use a Business Plan?
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Business Plan Template
- Vinay Kevadia
- September 6, 2024
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If you’re entering the entrepreneurial world, you’ve likely been told to start with a business plan.
However, simply creating a business plan isn’t enough. The true powers of a business plan unravel when you use it actively to drive your business forward.
Whether you’re launching a business, securing funding, evaluating growth opportunities, or guiding your team— a business plan is more than just a document. It’s a versatile tool that can support almost every aspect of your business when used consistently.
Want to learn how?
Well, in this blog post, we’ll dive into more details about how to use a business plan . But before that.
Why is a business plan important?
A business plan is an important document, whether you use it for formal or internal use.
Here are a few reasons why this document is important:
- Gives you a roadmap to achieve your business goals.
- Offers a framework for making strategic decisions.
- Outlines the business goals and sets benchmarks for tracking business performance.
- Secures funding for your business by demonstrating financial sustainability.
- Helps overcome the challenges by developing mitigation strategies.
- Aligns the team members and stakeholders by facilitating clear communication.
Now, let’s understand the different use cases of a business plan to launch, grow, and fund your business.
How to use a business plan to start a business
A business plan is a quintessential document that can help you plan and launch your business. Whether you need to validate a business idea, establish your goals, or equip yourself with the understanding of a target market—a business plan helps with it all.
Here’s a more detailed overview of how a business plan can help start a business.
1. Validate your business idea
Before investing money in a business venture, you need to test the viability of your business idea.
You need answers to questions such as:
- Should I pursue this business venture?
- Who will be the target audience for my solution?
- How much sales will it make?
- What is the scope of scaling my business idea?
- How is my idea different from that of existing competitors?
A business plan can help you find answers to these critical questions.
Whether it’s the market, competitors, product offerings, expected sales, business objectives, or your finances—a business plan helps you assess each aspect of your business idea to test its overall feasibility.
Evaluating your business idea using a business plan forces you to address the gaps in your business idea.
This validation step ensures you don’t invest time and resources in an idea that may not succeed.
2. Establish business goals and mission
A business plan offers a strategic framework to transform vague business aspirations into concrete goals. It makes it easier for you to communicate what your business stands for and what it aims to achieve with a clearly defined mission statement.
A business plan helps you align the short-term goals of your business with its ultimate mission. It guides you in setting clear KPIs to help you track the progress and success of your goals.
With a well-defined mission, objectives, and value proposition, businesses tend to stay on their path.
3. Navigate market entry
Writing a business plan nudges you to understand the market space in which you will operate. It helps you determine your unique brand position and guides you to target the right set of people for your business.
A business plan details the exact steps of how you will introduce your business to the market. Whether it’s the position of your product, identifying your go-to-market strategy, strategizing the pricing, or securing the distribution channels—a business plan guides you to perfect your market launch.
To summarize, a business plan minimizes the risks associated with a new market by strategizing your market entry.
4. Plan the operations
A business plan turns your vision into an operational roadmap to help you optimize your business operations.
It helps you find answers to questions like these.
- What will be the SOP (standard operating procedure) of a business function, i.e., manufacturing, marketing, and hiring?
- Who would look after particular processes?
- How many people will you require to fulfill a task?
- Where will you perform the business activity?
- How will you ensure the quality of your services?
An operational plan outlines everything, helping you allocate the resources and establish clear workflows.
A business plan is further used to identify the gaps and bottlenecks in your operations. A regularly reviewed business plan accommodates the changing market conditions by introducing timely changes to your operations.
In short, an operational plan ensures that the business runs smoothly and is prepared to scale optimally.
5. Identify professional gaps
Even if you’re starting a business as a solopreneur, you will require the expertise of professionals to fulfill your business objectives. This is where a business plan can be of help.
Writing a business plan helps you identify the gaps in your current capacity. With this knowledge, you can determine the skills and people essential to execute your business strategy.
This can be an accountant, product developer, marketing specialist, legal head, or financial expert.
Once you identify a professional gap, a business plan can assist in onboarding the right type of people for your business. It offers you a detailed hiring and training plan to ensure everyone on the team remains aligned to a common goal.
6. Build strategic a. alliances
Entrepreneurs need to build relationships with suppliers, vendors, and other strategic partners early on to accelerate their market growth.
A business plan can help identify potential partners for your business. Besides, it can help you build valuable relationships with your potential partners by outlining the benefits and goals of the partnership for them.
When you approach someone for a partnership, they will have questions about growth, finances, business goals, and your outlook. Having a business plan handy will help you answer them confidently.
Moreover, a business plan will help evaluate the favorable terms of a strategic alliance. This knowledge can be used to guide the negotiations and get a contract that favors your business.
This excerpt by Jonathan Goldberg , the CEO of Kimberfire , demonstrates how they used a business plan to get a significant partner on board.
“ Kimberfire acquired a partnership with the World’s largest diamond manufacturer using a business plan. By clearly outlining our market strategy and growth projections we were able to demonstrate the value of a partnership that offered direct access to high-quality diamonds at competitive prices. This partnership not only bolstered our inventory but also allowed us to pass on significant savings to our customers, thereby enhancing our competitive edge.”
7. Forecast the capital requirement
Lastly, a business plan can help you understand capital requirements for your company. It helps determine the costs to start and run your business.
Such information guides you in evaluating your funding options.
By referring to your startup costs , you would know whether bootstrapping would be enough or if you would need loans and funding from investors.
These are just a few ways in which one can use a business plan to start a business. However, the use cases can be exhaustive depending on the details put into your plan.
How to use a business plan to secure funding
Most businesses may require funding from external sources to launch or grow their business.
Now, it doesn’t matter whether they secure funding through investors, banks, or grants. What’s important is that they have a business plan to prove the financial sustainability of their business.
Here’s how one can use a business plan to secure funding and convince investors:
8. Define funding needs
A business plan can help you determine the funding essential for your business. Moreover, it can also help evaluate the funding source that’s better suited for your business.
By building detailed projections for costs, expenses, sales, and cash flow, your plan helps determine the capital essential to launch or grow your business.
Additionally, a business plan can be used to justify your funding demands. A clear funding plan explains how you intend to use the investor’s money, i.e., buy new machinery, hire new staff, or expand the business operations.
This clarity demonstrates careful financial planning and builds investors’ confidence in your venture.
9. Manage fundings
Your funding plan already includes details about where you intend to use the money. However, you can now use it to create a detailed roadmap.
A well-planned business plan demonstrates how you should delegate the funding to different business departments. Additionally, it guides you in managing the secured funds efficiently by helping you set budgets, financial controls, and performance trackers.
This detailed approach assures investors that their funding is used responsibly and efficiently.
Further, as you update the plan, identify if your execution strategy requires change. If so, you can make the necessary changes and update the investors, keeping them in the loop. This will help them trust you more.
10. Support the loan application
A business plan is compulsory for everyone submitting an SBA loan application. Even private lending firms would require a business plan to make their funding decision.
A well-detailed business plan is sufficient to support your loan application. It demonstrates that you have conducted essential planning to make your business idea viable and sustainable.
A business plan answers all the questions that a lender might have to assess your creditworthiness and repayment capacity.
Questions such as:
- What will be the profitability of your business?
- What are the major cost drivers of your business?
- What will the debt-to-equity ratio be if you approach investors?
- How stable is your cash flow?
- What will the ROI and the payback period be?
Lenders can trust you more when they get essential answers backed with data.
That said, let’s understand how a business plan can drive enterprise growth.
How to use a business plan to grow your business
A business plan can be instrumental in testing different scenarios, evaluating growth opportunities, and making strategic decisions. All these help you grow your business and face the challenges efficiently.
Here’s how:
11. Guide strategic decisions
A business plan can help you make strategic decisions that align with your ultimate growth objectives.
Whether you want to launch a business at a new location, invest in new machinery, introduce a new product line, hire new employees, or onboard new technology—a business plan can help.
A business plan provides a framework to assess the risks, opportunities, and financial impact of a strategic decision on your business. It helps determine the right time to launch your growth initiative and demonstrates whether making a particular decision will be fruitful or not.
This way you won’t make a decision that can put you off your long-term goals.
12. Monitor business performance
Once you make a strategic decision, use your business plan to clarify the strategy and outline your execution plan.
A business plan can additionally assist in measuring business performance against set KPIs and performance benchmarks. Regularly evaluating these metrics allows you to identify areas that may need improvement or adjustments.
By using the business plan as a performance management tool, you can make data-driven adjustments to your approach and grow your business sustainability.
13. Adapt to market changes
A business plan isn’t set in stone. It’s a living document that adapts to changing market conditions.
It can be used to adapt your strategies based on new market data and shifts in customer preferences. Such regular updates help you remain competitive and agile in the face of changing market conditions.
Additionally, a business plan can help you develop a response to an emergency crisis.
A business plan accommodates all your strategies, milestones, metrics, tactics, and projections in one place. By using the plan as a performance dashboard, you can anticipate the changes and adjust the priorities to deal with the crisis.
Mark McShane offers a practical example of how he used a business plan to meet contingencies in his company, Cupid PR .
“When we hit cash flow problems, we followed the financial contingency section of our plan to manage expenses and short-term funding. We were able to quickly implement the cost-saving strategies and secure a bridge loan to stabilize our finances without sacrificing growth. Business plan made it possible to respond to this challenge efficiently which gave us a 40% revenue increase the next year.”
14. Test different scenarios
A business plan can be used as a tool for scenario analysis.
As the regulatory, economic, and competitive landscape of a business evolves, you need to test and plan for different scenarios, like:
- Entry of a new competitor
- Regulatory changes
- Technological advancement
- Market demand shifts
- Natural disaster
Businesses can evaluate the financial and operational impact of these scenarios using a business plan. By using business plan forecasts as a base, they can prepare for various worst- and best-case scenarios.
Preparing for different scenarios helps you leverage the opportunities and mitigate the risks whenever they arise.
Those are quite a few ways in which a business plan can assist or facilitate growth. Entrepreneurs can find more ways to use a business plan depending on the depth that their plan covers.
How to use a business plan internally
One of the most essential uses of business plans is to guide your operations, management, and team toward the goal.
Here’s how.
15. Align team and stakeholders
A business plan is an excellent tool for aligning your team and stakeholders toward a common mission.
A well-crafted business plan documents the company’s goals, mission, KPIs, and milestones. With the basics clearly articulated, it gets easier to bring your internal team and stakeholders on the same page.
Now, you don’t need a detailed plan to convey your goals. A simple list of goals and how they contribute to your ultimate objectives is enough for internal use.
This quote from our conversation with Shawn Plummer , the CEO at the Annuity Expert , shows how he used a business plan to drive a 50% revenue increase in 2 years:
“By breaking down our growth strategy into clear, measurable goals, the business plan became more than just a document; it was a tool for uniting our team. Everyone, from marketing to operations, understood how their efforts related to our overall goals. This connection was critical to our success, resulting in a 50% revenue rise in just two years.”
16. Streamline business operations
A business plan can streamline business operations by outlining the standard operating procedures (SOPs) for different business processes. It’s further used to define the responsibilities, resource allocation, and hiring plans for your organization.
Remember, a well-crafted operations plan acts as a guidebook for your business. It details every process, responsibility, and resource essential for running a smooth operation. Referring to it can help increase efficiency, reduce waste, and enhance productivity.
Now if you’re writing a traditional plan, you’ll have a detailed section on business operations. However, if you’re writing a lean plan, we recommend building a separate internal operations plan to guide your business operations.
Simply list the business processes, create an outline, and use ChatGPT to write a business plan . Your internal use operations plan doesn’t need to follow a specific format or structure. It should just distill clarity.
17. Efficient performance reviews
A business plan outlines the KPIs and goals, offering you a benchmark to evaluate the individual performance of team members. These metrics can be used to track actual results and take appropriate actions.
A business plan helps foster the environment for continuous development by linking performance to strategic goals.
That’s a few definite ways to use business plans for internal growth and management. Internal business plans can follow any structure or format, as long as they get the task done.
How to keep your business plan relevant
As we discussed, a business plan is a living document that requires frequent updates and changes to maintain relevancy.
Ideally, one should update their business plan at least once a year to keep it useful. However, businesses in highly volatile or competitive markets should consider reviewing it quarterly.
A business plan must represent accurate market conditions. If that’s not the case, a review should incorporate new market trends into the strategy, adjust the operational realities, and revise the financials. This ensures that your plan remains relevant and realistic to help you achieve your business objectives.
Include your team members in the review process to ensure the strategies address their key concerns and align with the entire organization.
All in all, adopt a flexible planning approach to keep your plan relevant to the dynamic world.
By now, you have a thorough understanding of the different uses of a business plan. However, these use cases are only relevant if you have a realistic and actionable business plan offering a true overview of your business. Only then can you use a business plan to launch, grow, and fund your business.
Now, draft a quick business plan using the Upmetrics business planning app . Its AI planning features, business plan templates, financial forecasting assistance, and detailed guides will help you prepare a reliable business plan in no time.
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Frequently Asked Questions
What is the most common use of a business plan.
A business plan is most commonly used to secure investments from investors. Additionally, organizations use it to define strategic goals, guide business operations, and evaluate the company’s performance.
How do you use a business plan for a small business?
A business plan offers crucial help to small businesses in the following ways:
- Idea validation
- Navigating market entry
- Planning business operations
- Building strategic alliances
- Forecasting the capital requirements
How do I use a business plan to attract investors?
A business plan can be used to prove the financial sustainability of a business idea. Investors can evaluate whether their investment would offer enough ROI, profitability, and growth by referring to your in-depth business plan. When they see that you’re well-prepared to face real market situations, they feel convinced of your ability to run a business.
How often should a business plan be updated?
Ideally, you should update a business plan at least once a year. However, businesses operating in dynamic, competitive markets need more frequent reviews. This can be monthly or quarterly.
Why is it important to review a business plan over time?
A business plan offers a roadmap to achieve your business objectives. But, if not updated often, your plan won’t reflect the current market. This will make your plan irrelevant and distant from your goals. To avoid such situations, it’s important to review your plan regularly.
About the Author
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Vinay Kevadiya
Vinay Kevadiya is the founder and CEO of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He enjoys sharing his insights on business planning and other relevant topics through his articles and blog posts. Read more
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Most people think that writing a business plan has to be hard.I'm here to tell you that it doesn't have to be. In fact, it's possible to write your initial business plan in less than an hour. After all, you're always thinking about your business and the strategies you're going to use to grow, so getting those ideas down on paper shouldn't be hard—it can even be an enjoyable ...
How to write a business plan in under an hour by Bplans.com.You're starting a business. You need a business plan. But it sounds so overwhelming. It's a huge ...
Benefits of a lean business plan . A lean business plan is better than a traditional business plan because: It saves you time - People find it difficult to commit time to something that doesn't exist. You can create a lean business in less than an hour. And it might just be your ticket out of the 9 to 5 grind. It gives you clarity ...
When putting together your one-page business plan, the goal is to keep each section as short as possible. So, try to stick with bullet points and short sentences. Here is what you need to include, along with an example of a bike shop business plan I put together (using LivePlan) in just 27 minutes. 1.
Business Glossary. Definitions for common terminology and acronyms that every small business owner should know. Bplans offers free business plan samples and templates, business planning resources, how-to articles, financial calculators, industry reports and entrepreneurship webinars.
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 ...
Products and services description. When writing a business plan, the produces and services section 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.
1. Create Your Executive Summary. The executive summary is a snapshot of your business or a high-level overview of your business purposes and plans. Although the executive summary is the first section in your business plan, most people write it last. The length of the executive summary is not more than two pages.
Step 7: Financial Analysis and Projections. It doesn't matter if you include a request for funding in your plan, you will want to include a financial analysis here. You'll want to do two things here: Paint a picture of your business's performance in the past and show it will grow in the future.
Finally, make sure your plan document flows well and doesn't have any "widows" or "orphans" when it prints out. A "widow" is when the last line of a paragraph appears alone at the top of a page, and an "orphan" is a single word that gets left behind at the bottom of a paragraph. 7. Get a Second Pair of Eyes.
A guide to writing a successful business plan—in just one hour A strong business plan greatly increases a business chance of success, especially in an economic environment in which more than 50 percent of businesses fail within three years. Your business plan can serve as a foundation for your successful business. The One-Hour Business Plan</i>, written by seasoned entrepreneur and business ...
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.
5. Describe your marketing strategy. This section of the business plan should describe the ways of attracting new customers and growing your business - your marketing and sales strategy. Make sure you identify the right marketing channels which will help you reach your clients. Here are just some to give you an idea.
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.
You're starting a business. You need a business plan. But it sounds so overwhelming. It's a huge document, it's going to take months to finish—stop right...
How to Write a Business Plan Step 1. Create a Cover Page. The first thing investors will see is the cover page for your business plan. Make sure it looks professional. A great cover page shows that you think about first impressions. A good business plan should have the following elements on a cover page:
This will help you stay on track. Examples: Buy supplies, hire a bookkeeper, create a pitch, etc. Management Team: Don't be afraid to brag about yourself and your team if you have one. Share why you're the right person to be leading your venture. Also note the roles that are missing on your team.
And How to Create One. 1. Executive summary. This is a short section that introduces the business plan as a whole to the people who will be reading it, including investors, lenders, or other members of your team. Start with a sentence or two about your business, your goals for developing it, and why it will be successful.
3. Understand what makes a great plan. There are certain factors that make a great business plan. This includes the plan fitting your business needs, being realistic, and addressing assumptions. Here are a few other traits that can truly elevate your plan. Read More. 4. Focus on crafting a compelling message.
Do not spend hours at a time writing your business plan. You'll get burnt out, make mistakes, and likely end up seriously disliking the whole process. To avoid this, set a time limit for your writing to be between 30-minutes and an hour. This is just enough time to actually write and work through sections while making it an easy time ...
A recent Harvard Business Review study found that business planning had the most positive impact on businesses when the business plan was written between 6 and 12 months after deciding to start a business. In fact, planning at this stage increased the chances of success by 8%. I'll add a caveat to this study, though.
Business plan made it possible to respond to this challenge efficiently which gave us a 40% revenue increase the next year." 14. Test different scenarios. A business plan can be used as a tool for scenario analysis. As the regulatory, economic, and competitive landscape of a business evolves, you need to test and plan for different scenarios ...
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This will help you stay on track. Examples: Buy supplies, hire a bookkeeper, create a pitch, etc. Management Team: Don't be afraid to brag about yourself and your team if you have one. Share why you're the right person to be leading your venture. Also note the roles that are missing on your team.