revenue target business plan

Revenue Plan

Introduction.

A revenue plan is a multi-step process that helps align business strategy and operations to measurable revenue goals. When done correctly, Revenue Planning provides focus, accountability, and predictability, empowering businesses to maximize opportunities while avoiding threats.

Whether you’re a small startup or an established enterprise, revenue is the lifeblood of any business. While sales and growth are essential, having a clear strategic plan for generating sustainable revenue is key to long-term success.

In this blog post, we will explore what exactly a revenue growth plan entails, why it is so vital, and what benefits it provides. We will also outline the seven-step process for developing an effective plan for your unique business needs.

I hope that after reading this, you gain a clear understanding and framework to start developing your custom revenue plan to guide critical decisions and fuel business growth for years to come.

What is Revenue Planning?

Revenue planning refers to the process of predicting and managing a company’s expected income and is an essential aspect of any company’s growth and successful business strategy.

With an effective plan, companies can identify key areas where they can improve productivity and increase revenue, allowing them to make better-informed decisions about their future growth.

By analyzing past and current trends, companies can create revenue plans that help them reach their financial goals and maximize their profitability. With the right tools and approaches, planning can help businesses stay ahead of the curve and achieve long-term success and sustainability.

What’s the Importance of Revenue Planning?

Revenue planning is crucial to any business’s overall success and growth. It entails creating a plan that maps out how the company plans to generate revenue over a specified period.

With a revenue plan in place, businesses can make informed decisions about allocating resources, setting budgets, and identifying potential revenue streams.

By forecasting sales and identifying trends , organizations can strategize effectively and adjust their tactics based on what is working and what isn’t.

That’s why planning is vital for companies, as it allows them to navigate the unpredictable waters of the business world while remaining focused on generating consistent revenue and achieving long-term success.

Benefits of Revenue Planning

Better future plans.

Revenue planning refers to the process of forecasting and setting targets for income generation. When done correctly, it plays an integral role in shaping the future of any business.

Planning allows organizations to concrete their goals and aspirations, which helps them focus their efforts in specific areas.

Moreover, a well-crafted plan enables marketing and sales teams to have a common vision, which increases their efficiency and effectiveness in converting leads to clients.

With a well-established revenue plan, businesses can prioritize their efforts and resources toward their key objectives, achieving better profitability without sacrificing growth. Revenue planning is a critical tool for any company seeking to build a sustainable and prosperous future.

Accurately Assessing Business Needs

Revenue planning is crucial for any business that wishes to assess its commercial needs accurately.

In particular, a plan is essential as it provides sales teams with the necessary resources to drive revenue growth. An effective plan should consider market trends, competitive analysis, and customer behaviors.

By incorporating these elements into a revenue plan, businesses can accurately forecast their financial needs and tailor their sales strategies to meet their revenue goals.

The benefits of planning also extend beyond financial forecasting, as it can create a more cohesive team and improve communication across departments.

Ultimately, revenue planning is not just a means of generating more sales but a tool for broader organizational improvement.

Risk Mitigation

Creating a revenue planning strategy that includes a comprehensive plan can be incredibly beneficial for any organization.

Not only does it ensure that each member of your sales team is on the same page regarding goals and objectives, but it also serves as a powerful tool for mitigating risk. By analyzing past trends and current market conditions, businesses can make informed decisions and predict future revenue growth.

Additionally, planning helps identify potential threats or weaknesses in the sales process, allowing for proactive measures to be taken before these issues cause significant harm to the company’s bottom line.

A strong plan ensures that each team member has the resources and knowledge needed to navigate any roadblocks or challenges that may arise successfully. In summary, revenue planning and a strong plan serve as crucial risk mitigation strategies for businesses looking to safeguard their financial stability.

Lower Inventory

Revenue planning can bring a host of benefits to a business. One significant advantage of it is that it can help lower inventory.

With a plan in place, companies can better anticipate demand, avoid ordering excess stock, and improve cash flow.

This means that businesses can maintain optimal inventory levels, avoid unnecessary storage costs, and free up resources that can be invested elsewhere.

Implementing a planning strategy can help businesses operate more efficiently, reduce waste, and ultimately increase their bottom line.

Accountability

Revenue planning is an essential component of any successful business strategy and can bring a multitude of benefits, including accountability.

By developing a plan, companies can align their sales and marketing efforts, establish measurable goals, and track progress toward achieving them. This ensures that all team members are working towards a common objective and holds everyone accountable for their performance.

Clear targets and regular reporting allow for a deep understanding of how revenue is being generated, which areas of the business are performing well, and where improvements need to be made.

Ultimately, revenue planning provides a foundation for organizations to take ownership of their growth and achieve tremendous success.

Revenue Planning Process in 7 Steps

Get back to basics: review your organizational goals.

Revenue growth is an essential aspect that all organizations strive to achieve. However, with so many tools, strategies, and technologies available today, it’s often easy to get overwhelmed and lose sight of your core values.

That’s where a plan comes in – to help businesses get back to basics and achieve their financial targets smoothly. The strategy helps companies create an effective blueprint for driving revenue growth by focusing on critical organizational goals.

It also sheds light on areas that need improvement, training, or optimization to boost sales and customer satisfaction. With a well-drafted plan, businesses can align their goals with reality and ensure they stay on track to achieve long-term success.

Analyze Performance To Determine Your Revenue Drivers

Analyzing your performance is key when it comes to driving revenue growth for your business. By diving into your sales data, you can better understand what’s working and what’s not.

This information can then be used to determine your revenue drivers or the specific actions that are directly contributing to your revenue growth.

One way to do this is by creating a sales enablement plan to help your team focus on the most important activities that lead to higher revenue.

With this plan in place, you can fine-tune your approach and find new ways to boost your bottom line. So, if you’re serious about growing your business, start by analyzing your performance and identifying your revenue drivers today.

Build A Clear Timeline For Revenue Investment

Revenue growth is crucial to any business, but achieving it can be challenging. To build a clear timeline for revenue investment, businesses must implement a plan.

By creating a well-defined strategy, businesses can equip their teams with the necessary tools and resources to drive revenue growth. An effective plan involves:

• Carefully analyze your target market.
• Developing customer-centric messaging.
• Leveraging suitable channels to communicate this message.

This process takes time, but with patience and persistence, businesses can create a robust sales enablement plan that sets them up for sustained revenue growth. By investing in such a plan, companies can expect steady revenue growth, customer loyalty, and increased market share.

Look Forward To Predict and Mitigate Risk

Investing in revenue is like putting your money into a museum – you want to make sure that every penny is going towards something meaningful.

That’s why having a clear timeline for revenue investment within the revenue planning process is crucial, encompassing everything from budget allocation to sales enablement plans.

Speaking of plans, these need to be given extra focus as they tie directly into how your team will be able to generate revenue.

With a well-crafted plan in place, you’ll be able to give your team the tools and resources they need to drive more sales and increase revenue over time. By mapping out a clear timeline for revenue investment, you can ensure you’re making smart choices that will pay dividends in the long run.

Use Financial Modeling To Assess Revenue Allocation Options

The planning process can often feel like a daunting task, especially when it comes to allocating funds. However, utilizing financial modeling can make this process much smoother and more precise.

By taking into account various factors, such as market trends and customer behavior, financial modeling can help determine the best revenue allocation options. One key area to consider is a plan. This plan can play a crucial role in boosting revenue by providing your teams with the necessary resources to close deals effectively.

By incorporating sales enablement into financial modeling, businesses can improve their revenue allocation strategy and optimize their overall revenue planning process

Plan For Multiple Revenue Scenarios

When it comes to revenue growth, it’s important to have a good understanding of your options for allocating funds. One powerful tool for doing so is financial modeling. By using financial modeling software, you can create detailed projections of potential revenue outcomes under different scenarios.

This is particularly useful when considering options like a plan, which can significantly impact revenue. With a well-crafted financial model, you can analyze the potential returns from different strategies and make an informed decision about how to allocate your resources.

Whether you’re a small startup or a larger enterprise, financial modeling is invaluable for assessing revenue allocation options and driving growth.

Design A Method For Tracking Spending and Revenue Progress

As a savvy business owner, you know that growth is essential for success. However, with uncertain economic times, planning for multiple revenue scenarios is more important than ever. One of the critical factors in achieving this is developing a robust plan.

Such a plan will provide your sales team with the tools, resources, and training they need to sell effectively in any market condition.

With a well-crafted plan, your team will be better equipped to adapt and pivot as needed to achieve revenue growth, whether that growth comes from new markets, expanded offerings, or increased demand within your existing customer base.

So, take the time to establish a comprehensive plan and watch your business thrive, no matter the economic climate.

Ultimately, creating a revenue plan is essential for any business that wants to increase its sustainability and stay ahead of competitors.

Now that you understand how a revenue growth plan can help your company seize opportunities, manage risks, and maximize revenue potential, it’s time to get started crafting a plan of your own.

Be sure to consider stakeholders’ perspectives, current industry trends, internal capabilities, and long-term goals when designing your custom revenue plan.

With the right strategy in place, taking initiative, and persistence, there will be no limit to what you can accomplish.

So, let’s get oriented with the basics and create a plan of action toward success – you never know what will come next when the initiative is centered around growth potential with carefully set measures!

To learn more about building a revenue plan, and other business strategies, contact Strategy Capstone!

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How to build a revenue growth plan that works

A revenue growth plan is an intentionally designed roadmap to increasing revenue. If done well, it's a blueprint to follow, including strategic and tactical elements that can accelerate your company's growth.

To help, here are the phases that I use when advising my clients—and for my own business. These steps have worked for me, and I think they can work for you too.

1. Get clear on your goals

As with any plan, you need to start with goals. The overarching question here is: what do I want to achieve in my business and why? But you'll want to break down that question into a few distinct questions: 

How much revenue do I want to generate in the next year? Next 3 years? 5 years?

How many employees do I want to have in the next year? Next 3 years? 5 years?

The details matter. A "see how it goes" attitude won't be motivating—for you or your employees—and will also make it difficult to understand if and how you're doing against your goals.

2. Assess where your company currently stands

You need to take a good look at your current assets, liabilities, people, and systems to understand what your potential to grow really is. Otherwise, you risk creating an unrealistic growth plan—including strategies that aren't right for your business. I've found that businesses often hyper-inflate what they can do in a short period of time and underestimate what they can do in a long period of time. Really knowing where you stand can help adjust for that.

I once worked with a $48 million company that had been in business for five years, and they had never assessed their position. Not once. In the beginning, they were growing rapidly. Everything was smooth; and then suddenly, they got stuck. 

When we assessed their position, we discovered that 62 percent of their incoming leads were not contacted—and the leads that were being contacted closed 34 percent of the time. You can only imagine the shock and disbelief of the CEO when he realized the number of leads that went dormant (or were simply neglected), not to mention the unrealized value of those leads. Once the initial shock wore off, and with the benefit of the company's current position in mind, this CEO was able to grow his company from $48 million to $110 million over the next 10 years. 

Once you understand what your strengths and weaknesses are, you adjust your revenue growth plan to capitalize on the strengths and improve on the weaknesses. 

3. Decide who owns what

You can't implement a revenue growth strategy on your own, which means you need to be clear on what role everyone will play. So, who should be on your revenue growth plan's team? 

A revenue growth plan takes into account the company's entire customer journey—including marketing, prospecting, customer service, PR, sales, the list goes on. For that reason, I recommend including at least one person from each department or team; that way, nothing slips through the cracks just because of a gap in knowledge.

And while leadership should be involved, many of the best ideas for a revenue growth plan come from those not in leadership positions since those are the people more involved in the day-to-day activities of each department. Including roles like sales representatives and customer service agents can do wonders for making sure you have a realistic plan.

4. Hold weekly planning meetings

Remember the business owner I mentioned who was struggling with managing their company's responsibilities? When I came in, the first thing I did was suggest they hold a weekly planning meeting. At the end of each meeting, they would assign responsibilities to various employees—it was a transparent and consistent process that fostered accountability. And guess what? This company ended up growing by 40 percent over the next 12 months.

Here's a blueprint for a revenue growth meeting that I've found works well:

Take a facet of your proposed revenue growth plan and write it on a whiteboard (in-person or virtual).

Have everyone on the revenue growth team come up with three ideas to achieve that part of the plan. Give people a few minutes of silence to think. 

One by one, allow people to present their ideas (and capture them on the whiteboard).

Have team members vote on the top three and then discuss priority order of implementation. 

Leave time to discuss any mitigating circumstances that could potentially upend that part of the plan. 

Assign tasks based on all of the above, and distribute them in a transparent way for accountability.

5. Reassess and address any constraining factors

The business space today is exceptionally dynamic. Economic conditions are constantly changing, consumer tastes and preferences shift, and products often reach market saturation. If you want your company to excel in this environment, you need to consistently reassess and adjust.

So after you've completed the planning phases but before you launch your revenue growth plan, go back and reassess your business position, just like you did toward the beginning. This review can help you address teething problems in your plan and clear out any potential blind spots.

6. Launch your revenue growth plan

This is where the rubber meets the road. A revenue growth plan without action is simply that—a plan. It won't get you any results.  

It never ceases to amaze me that people go through the process of building a revenue growth plan only to sit on it. A client I worked with had previously completed a revenue growth plan, and it sat dormant for two years because they thought they needed to get everything 100% right. Two years later, they met me and asked me what they should do with it. I reviewed their plan and told them simply to launch it. Things will never be perfect, but they can be successful. And it was successful: in the first week after the launch, they had 36 new sales and no client complaints. 

If you choose to wait for a time when every single thing is just right before launching your plan, you'll likely end up waiting forever. So go ahead and implement your plan, even if it's not perfect. 

The bottom line

A great revenue growth plan doesn't have to be complicated. There isn't a magic hack or silver bullet that will grow your revenue exponentially overnight—or at least I haven't found it yet (let me know if you do). But you need to start somewhere, and a revenue growth plan is a great start.

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Doug C. Brown

Doug C. Brown is the CEO at Business Success Factors, where he advises companies in boosting their sales revenue and having top-performing sales teams.

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How to Set More-Realistic Growth Targets

• Rita McGrath
• Alexander van Putten

Don’t trust your spreadsheets.

Many companies eventually face a gap between their growth goals and what their base business can deliver. Filling the gap requires either innovative new offerings or acquisitions. That’s where the trouble starts — executives are easily fooled by rosy assumptions that, when analyzed in a disciplined way, turn out not to be practical. Spreadsheets, a favorite tool for projecting growth revenue, actually lead to unrealistic conclusions because they reduce the world to linear models, when in reality the growth process is non-linear, sometimes even exponential. Imposing just a bit of realistic discipline, beyond the linear spreadsheet, with respect to the likely times at which revenues will be realized leads to very different conclusions about when a growth program would show results and close the growth gap.

Many executives are fond of promising to deliver growth, but far fewer realize those ambitions. This is because many fundamentally mismanage the growth gap, which is the difference between their growth goals and what their base businesses can deliver. Filling the gap requires either innovative new offerings or acquisitions. That’s where the trouble starts — it is easy to be fooled by rosy assumptions that, when analyzed in a disciplined way, turn out not to be practical.

• Rita McGrath is a Professor at Columbia Business School and a globally recognized expert on strategy in uncertain and volatile environments. She is the author of The End of Competitive Advantage (Harvard Business Review Press), and most recently, Seeing Around Corners (Houghton Mifflin Harcourt).
• Alexander van Putten brings both entrepreneurial and corporate experience to his consulting practice and teaching at Wharton. He is a principal of Cameron & Associates LLC where he advises companies such as ADP, Seagate Technology, Royal Dutch Shell, Air Products & Chemicals, DuPont, SCG, and Boeing on issues relating to innovation and growth strategies.

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How to: build an effective revenue plan to achieve your business goals.

We got hold of ACME’s revenue plan and the step-by-step process of how they built it. Apply the framework to build your own revenue plan.

Introduction

Step 1: identify your revenue goal, step 2: analyze past performance to define benchmarks, step 3: apply benchmarks to your revenue target, step 4: allocate your resources, step 5: build a ramp-up plan, leverage ai for watertight revenue operating plans, table of contents.

Selling and marketing are harder than ever. Old-school tactics are pushing modern buyers away, leaving revenue teams frustrated, inefficient, and unable to compete. In No Forms. No Spam. No Cold Calls , Latané Conant delivers the recipe for scalable, repeatable, data-driven sales and marketing strategies that work today.

In this How-To, we provide a practical, tactical dive into some of the strategies outlined in Chapter 4. 

In her book No Forms. No Spam. No Cold Calls , 6sense CMO Latané Conant outlines her vision for a revolution in sales and marketing. But revolutions aren’t achieved without strong planning and the willingness to adapt. And few things require better planning — and a willingness to adapt — than a company’s revenue plan.

A revenue plan is a framework for how a company expects to make money. A great revenue plan starts with and responds to data.

As Conant writes, “I like to call it a revenue operating model (rather than a revenue model), because this isn’t a set-it-and-forget-it endeavor. What you’re creating is a living, breathing plan. You make assumptions and you operate against those assumptions. So as you learn more and assumptions change, your plan has to adapt accordingly.”

This process begins with a hard look at past performance. Don’t worry if you can’t immediately fill in every metric we’ll soon be discussing. You may have gaps that will need to be filled in with best guesses or industry benchmarks.

The goal is to create a starting point — and this How-To can help.

Meet ‘ACME Corp.’

To properly illustrate how you might apply these insights to your own business, we’ll periodically shine a spotlight on the activities of “ACME Corp.”, a fictitious company that’s presently creating its own revenue operating model.

Since ACME exists solely as an example for our story, it doesn’t much matter what industry ACME is in, or what industries it serves, or how many people it employs. Its purpose is to simply illustrate how choices can affect its pipeline targets and revenue growth. (Put another way: It’s all about the money, honey.)

Five Steps to Creating a Revenue Plan

Sales processes differ from company to company, as do revenue models. For our purposes, ACME’s revenue operating model is based on  an account-based sales funnel . However, the principles we’ll see ACME use can apply to any company’s plan.

We’ve divided this process into five key stages; we’ll provide how-to steps to take for each stage, They are:

• Identify your revenue goal
• Analyze past performance to define benchmarks
• Apply benchmarks to your revenue target
• Allocate your resources
• Build a ramp-up plan

Our entire process starts off with a deceptively simple question: What’s your revenue goal? It might be based on:

• A percentage increase of last year’s performance
• Hitting a revenue number you define, such as $100M in annual recurring revenue (ARR), or
• Achieving a revenue goal defined by your CEO and board

In any case, unless you’re a brand-new company, your revenue goal is your target end-of-year ARR, minus existing customer revenue and pipeline.

Example: How ACME Determines Its Revenue Goal

As we mentioned earlier, we’ll turn our attention to the fictitious ACME Corp. to highlight how a company like yours might approach its revenue operating plan.

In the case of ACME’s revenue goal, the company’s CEO wants to increase its revenue by over 50% this year … so she sets a goal of $25 million net-new ARR for the year.

With the revenue goal set, ACME’s revenue leaders must determine whether they can realistically hit it with their existing resources. (More on this later.)

This means the next step in the process is looking back at its historical sales performance.

The basis of any revenue plan is to:

• Know the revenue number you need to hit
• Determine what you need to achieve at each stage of the buying journey to get there

Thanks to Step 1, you have your organization’s revenue goal. To understand what you need to achieve at each stage of the buying journey, you need benchmarks around likely performance. This should be based on your historical data, or if you don’t have any — external benchmarking .

If you’re using historical performance, to ensure your metrics are meaningful, you should analyze data that spans your typical sales cycle. This could range from three months for transactional deals, and up to 18 months for long deals.

Your team should be interrogating the data to discover key benchmarks for sales cycles, conversion rates , and average deal sizes. To give you an idea of how to approach this task, let’s see how ACME Corp. is doing it.

How ACME Defined Its Benchmarks

As we learned above, ACME has its revenue goal of $25 million net-new ARR. However, it still needs benchmarks around each stage of the buying journey to map out how the revenue team can achieve that.

ACME assesses historical data that spans its average deal cycle of six months, looking back to analyze past sales cycles, conversion rates, and average deal sizes to create metrics for each stage of their buying journey.

Account-Based Buying Journey Stages

By looking at the typical account-based buying journey, you can define the stages where you’ll need metrics to benchmark your performance. Here are the  account-based metrics  your team can review historical data for:

• Number of accounts in the Target Account List (TAL)
• Number of accounts in TAL that are in-market
• What % of accounts reached by marketing engaged with ads or content?
• What % reached the Awareness & Consideration stage?
• What % became a SQL or 6QA (aka a  6sense-Qualified Account )
• What % accepted a meeting with a BDR?
• What % booked a meeting with an account executive?
• What % became qualified pipeline?
• What % signed a deal?
• Average deal size
• Time between each stage (and overall sales cycle)

As we’ll see in the next step, you don’t need metrics for every single stage … but the more benchmarks you have, the more accurate your revenue operating plan will be.

Knowing your sales cycle, deal size, and average conversion rate from engaged accounts enables you to start making predictions and a basic plan. Say, for example, your:

• Average deal size is $200,000
• Conversion rate from engaged account to customer is 10%
• Sales cycle is six months

Since 1-in-10 engaged accounts are expected to sign a deal, we can assume that an engaged account has an average value of $20,000 in six months.

But you can go beyond these basic benchmarks to dive deeper and look at what numbers to expect at each stage of the buying journey . Here’s how ACME did it.

How ACME Applied Its Data to Plot a Plan

Once ACME uncovered the historic data for conversion at each buying stage, it became a math exercise to determine how many accounts ACME needed at each buying stage in order to achieve its revenue goal of $25 million.

Analysis of ACME’s past data revealed:

• It had been effectively reaching 80% of its In-Market Ideal Customer Profiles  (IICP) with marketing messages
• Of those, 30% began conducting serious research
• Of those, 15% became a 6sense Qualified Account (6QA) / sales qualified lead
• Of those, 75% booked a BDR meeting
• Of those, 40% booked a meeting with an AE
• Of those, 75% began exploring the solution, validation, and negotiating
• Of those, 50% signed a deal

ACME’s Past Performance

With its IICP of 75,000 accounts, that came to 303.75 deals — or roughly $15.2 million in revenue. That’s about $10 million short of ACME’s new revenue goal.

So how could the company hit $25 million? Its leaders ran the math in reverse to see what it would take.

Calculating ACME’s New Targets

Without making any changes or improvements to its marketing and sales process, ACME needed the equivalent of roughly 123,000 in-market accounts, 4,430 6QAs, or 3,330 BDR meetings to hit its new revenue goal. 

With an understanding of these numbers, ACME’s next step was working out whether it had the resources to handle the volume.

While it’s a mistake to forget seasonality and assume a linear progression of revenue generation throughout the year, dividing planned activities by days, weeks, or months helps to generate a ballpark figure for resource allocation.

You can map your targets against your current resources to better understand how far current team sizes and budget will get you towards your revenue goal.  

Mapping ACME’s Resource Allocation

As seen in the chart above, to hit its $25 million goal, ACME must book 3,333 BDR meetings. The team mapped this against approximately 260 business days in a year (in the U.S.) to reveal a target of almost 13 meetings a day. 

ACME then examined past BDR performance and workload to assess whether its current headcount of two full-time BDRs could handle the volume, or if it was time to grow the team. ACME applied the same logic across its revenue team to estimate headcount. Could three AEs cover five initial calls a day, plus many follow-up conversations with buyers? 

Increasing the revenue target by 66% was always going to require investment. But by breaking down the numbers and understanding how quickly engaged prospects convert into qualified sales opportunities, ACME could start to map out how much of an investment it needed to make in people, and where to make it. 

Calculating Required Marketing Budget 

Alongside headcount, your marketing team should look at how much budget you used to reach your previous goals. You can then divide your budget by a key measurement metric, e.g. a 6QA or SQL, to understand your marketing spend to reach this goal. 

This is an important step to tie marketing back to revenue and helps you project future outputs in light of targets or budgetary changes. Here’s how it looked for ACME.

ACME’s Marketing Performance

With last year’s budget of $1 million, Acme’s marketing team generated 2,700 6QAs (or alternately, SQLs). To get the cost per 6QA, they divided the budget by the number of 6QAs generated, equalling $370. (6QA could be replaced by another metric of choice, using the same formula.)

So what would happen as ACME attempted to ramp up its revenue? To plan for this year’s budget, ACME multiplied the cost per 6QA by the new target of 4,432, giving a proposed budget of close to $1,640,000.  

By also examining the cost per channel from last year, ACME’s CMO then mapped out the budget by channel to assess whether they had the resources to hit the new targets.

The resource allocation exercise unsurprisingly showed ACME would need more investment to hit its higher targets, so the revenue team set about building a ramp-up plan to reach its new goals.

Before investing heavily in new headcount and huge budgets, you must ensure you’re getting the most from your current investment. Efficient growth doesn’t come solely from increased demand. It comes from increasing conversion rates, too. 

The law of diminishing returns means bettering conversion metrics at any stage in the funnel drives out-sized growth vs increasing activities. 

How ACME Plans to Ramp Up 

For example, looking at ACME’s past performance, a 1% increase in conversion between the Awareness and Consideration stage to 6QA would mean 180 more 6QAs. Following the metrics further down the funnel, that meant 20 more deals, and $1 million more revenue. Not bad at all.

So ACME’s revenue leaders went back further, to the very top of the cascade of their conversion percentages, and the total number of in-market accounts they were attempting to reach. 

The team agreed to tighten their targeting to IICPs — which means going after accounts that are ready to buy and therefore most likely to close first. 

Using this targeted approach, ACME can increase conversion at every stage of the funnel, driving efficient growth. By honing its focus on the accounts most likely to purchase, ACME has improved its chances of winning deals more efficiently.

As revenues lift and more resources free-up for growth, ACME can look to widen its Target Account List (TAL), which will add more IICP prospects to its funnel … and bring in more opportunities for additional sales reps to work. 

By combining this more targeted approach with an increase in activities, ACME expects to smash its revenue goal. 

Following this How-To guide and ACME’s lead gives you a framework for your own revenue operating plan. But it’s by no means perfect — this plan is susceptible to human error, diminishing returns, seasonality, and threats.

To build a watertight plan, companies are turning to AI to help identify the best accounts, and accounts that are in-market. The AI does the hard work for you, gathering data from across business units to get a complete picture. 

This robust data can then be effortlessly combined with past and present performance, alongside trends, seasonality, and threats to create real-time forecasts that can accurately predict future pipeline and inform your revenue operating plan. 

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Interested in learning more about taking your sales and marketing effort to the next level by uncovering and targeting the accounts most likely to buy? Visit our Resource Center to find more How-To’s like this one inspired from the pages of Conant’s book.

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Revenue Target: How to Set and Achieve Your Revenue Goals and Objectives

1. understanding the importance of revenue targets, 2. setting clear objectives, 3. identifying growth opportunities, 4. aligning sales efforts with revenue targets, 5. driving revenue generation, 6. monitoring key performance indicators, 7. adapting to changing market conditions, 8. driving performance towards revenue goals, 9. recognizing achievements and setting new targets.

1. Strategic Alignment:

- Business Strategy : Revenue targets are intrinsically tied to your overall business strategy. They encapsulate your growth aspirations, market positioning, and competitive edge. For instance, a disruptive tech startup might aim for exponential revenue growth , while a stable utility company may focus on steady, predictable income.

- Market Dynamics : Understanding market trends, customer behavior, and industry shifts informs your revenue targets. A retail business during the holiday season might set aggressive goals, whereas a B2B service provider might align targets with annual contract renewals.

2. Quantifying Ambition:

- SMART Goals : Revenue targets should be Specific, Measurable, Achievable, Relevant, and Time-bound (SMART). Vague aspirations won't cut it. Instead, consider specifics like "Increase Q4 sales by 20% compared to last year."

- Stretch vs. Realistic : Striking the balance between ambitious and attainable is crucial. Stretch targets motivate teams, but overly aggressive goals can demoralize and lead to burnout.

3. Operational Impact:

- Resource Allocation : Revenue targets drive resource allocation. Marketing budgets, sales quotas, and production capacity hinge on these numbers. allocating resources effectively ensures you're on track.

- Sales Pipeline : A robust sales pipeline—filled with leads, prospects, and deals—fuels revenue. Monitor conversion rates at each stage to fine-tune your approach.

4. customer-Centric approach :

- Lifetime Value (LTV) : Consider LTV when setting targets. Acquiring new customers costs more than retaining existing ones. Aiming for repeat business and upsells contributes to sustainable revenue growth .

- Churn Mitigation : high churn rates erode revenue. Set targets to reduce churn through exceptional customer experiences , loyalty programs, and personalized communication.

5. Examples in Action :

- E-commerce : An online retailer might set a revenue target of $1 million in the next quarter. To achieve this, they'll optimize their website, run targeted ads, and offer promotions.

- SaaS Startup : A software-as-a-service startup aims for 100 new subscribers per month. They'll focus on lead generation, product trials, and stellar customer support .

- Consulting Firm : A consulting firm with $500,000 annual revenue wants to expand. Their target: $750,000 by year-end. They'll diversify services, tap into new markets, and nurture client relationships.

Remember, revenue targets aren't static. Regular reviews, adjustments, and course corrections are essential. Whether you're a solopreneur or part of a corporate board, understanding revenue targets empowers you to steer your ship toward financial prosperity.

Understanding the Importance of Revenue Targets - Revenue Target: How to Set and Achieve Your Revenue Goals and Objectives

Why Define Revenue Goals?

Setting clear revenue goals is akin to plotting a course for your business. Without a well-defined destination, you risk drifting aimlessly. Here's why defining revenue goals matters:

- Revenue goals align your entire organization around a common purpose. When everyone understands the revenue targets, they can work collaboratively to achieve them.

- Example: A software company sets a revenue goal of $10 million for the next fiscal year. This goal informs product development , marketing, and sales strategies.

2. Motivation and Focus:

- Clear objectives motivate teams. They provide a sense of purpose and urgency.

- Example: A sales team knows that achieving 20% growth in quarterly revenue will lead to bonuses. This drives their efforts.

3. Resource Allocation:

- revenue goals guide resource allocation. You allocate budget, personnel, and time based on these targets.

- Example: A startup allocates 30% of its budget to marketing initiatives aimed at increasing customer acquisition .

4. Measuring Success:

- Goals serve as benchmarks for success. You can track progress and adjust strategies accordingly.

- Example: An e-commerce business aims for a 15% increase in monthly revenue. Regular performance reviews help them stay on track.

Steps to Set Clear Revenue Objectives:

1. Analyze Historical Data:

- Look at past revenue trends. Identify growth patterns, seasonal fluctuations, and any anomalies.

- Example: A retail store analyzes last year's holiday season sales to predict this year's performance.

2. understand Market dynamics :

- Consider external factors like market size, competition, and economic conditions.

- Example: A B2B service provider researches industry reports to understand growth projections.

3. SMART Goals:

- Make your goals Specific, Measurable, Achievable, Relevant, and Time-bound.

- Example: "Increase monthly subscription revenue by 10% within six months."

4. Break Down Goals:

- Divide annual revenue targets into quarterly or monthly milestones.

- Example: Quarterly targets help a SaaS company track progress and adjust strategies as needed.

5. Consider Customer Segments:

- Set different goals for various customer segments (e.g., new customers, existing clients).

- Example: A hotel chain aims for higher revenue from corporate clients while maintaining leisure traveler bookings.

6. align with Marketing and sales :

- Involve marketing and sales teams in goal-setting. Their insights are invaluable.

- Example: A tech startup collaborates with marketing to drive inbound leads and sales to close deals .

Remember, revenue goals aren't static. Regularly review and adapt them based on performance, market shifts, and organizational changes. By setting clear objectives , you pave the way for sustainable growth and business success.

Setting Clear Objectives - Revenue Target: How to Set and Achieve Your Revenue Goals and Objectives

Analyzing market trends and identifying growth opportunities is a crucial aspect of setting and achieving revenue goals and objectives. By understanding the current market landscape, businesses can make informed decisions and capitalize on emerging trends .

When analyzing market trends, it is important to consider various perspectives. For instance, from a consumer point of view, businesses can gather insights on changing preferences, demands, and purchasing behaviors. This information can help them tailor their products or services to meet customer needs effectively.

From a competitor standpoint, analyzing market trends allows businesses to identify their strengths, weaknesses, and strategies. By studying their competitors' actions, businesses can gain a competitive edge and differentiate themselves in the market.

Now, let's dive into the in-depth information about analyzing market trends and identifying growth opportunities:

1. conduct Market research : Start by conducting thorough market research to gather data on industry trends, customer demographics, and market size. This research will provide a solid foundation for identifying growth opportunities.

2. Monitor Consumer Behavior: Keep a close eye on consumer behavior patterns , such as purchasing habits, preferences, and feedback. This information can help businesses understand what drives their target audience and adapt their strategies accordingly.

3. Identify Emerging Technologies: Stay updated on emerging technologies that have the potential to disrupt the market. For example, advancements in artificial intelligence, blockchain, or virtual reality can open up new growth avenues for businesses.

4. Analyze Competitor Strategies: Study your competitors' strategies, including their marketing campaigns, pricing models, and product innovations. This analysis can help you identify gaps in the market and develop unique value propositions.

5. Seek Customer Feedback: Actively seek feedback from your customers through surveys, focus groups, or social media interactions . This feedback can provide valuable insights into areas for improvement and potential growth opportunities .

6. Collaborate with Industry Experts: engage with industry experts , attend conferences, and participate in networking events to gain insights from thought leaders . Their expertise and knowledge can help you identify untapped market segments and potential partnerships.

Remember, examples can be powerful tools to highlight ideas and concepts. For instance, let's say you're in the e-commerce industry. An example of identifying a growth opportunity could be leveraging the rising popularity of mobile shopping apps to develop a user-friendly and intuitive mobile app for your business .

By following these steps and leveraging insights from different perspectives, businesses can effectively analyze market trends and identify growth opportunities to achieve their revenue goals and objectives.

Identifying Growth Opportunities - Revenue Target: How to Set and Achieve Your Revenue Goals and Objectives

In this section, we will delve into the crucial topic of creating a sales strategy that aligns with revenue targets. It is essential for businesses to have a well-defined sales strategy in place to effectively drive revenue growth and achieve their financial objectives .

To begin, let's explore the different perspectives that contribute to a comprehensive sales strategy . From a sales team's point of view, it is crucial to identify target markets and customer segments that offer the highest potential for generating revenue. By understanding the needs and preferences of these target customers, sales efforts can be tailored to maximize effectiveness.

From a marketing standpoint, collaboration between the sales and marketing teams is vital. Marketing can provide valuable insights into customer behavior, market trends, and competitive analysis. This information can guide the sales strategy by identifying key messaging, positioning, and promotional activities that resonate with the target audience .

Now, let's dive into the numbered list to provide in-depth information about aligning sales efforts with revenue targets:

1. Set Clear Revenue Targets: Begin by establishing specific revenue targets that align with your overall business goals. These targets should be realistic, measurable, and time-bound. Clear targets provide a benchmark for evaluating the success of your sales strategy .

2. Define Target Customer Profiles: Identify the characteristics and demographics of your ideal customers. This includes factors such as industry, company size, geographic location, and purchasing behavior. understanding your target customers enables you to tailor your sales efforts to their specific needs and preferences.

3. Develop a Value Proposition: Clearly articulate the unique value your products or services offer to customers . highlight the benefits and advantages that set your offerings apart from competitors. A compelling value proposition helps sales teams effectively communicate the value to potential customers.

4. implement Sales training and Enablement: Invest in comprehensive sales training programs to equip your sales team with the necessary skills and knowledge. Provide ongoing coaching and enablement resources to ensure they stay up-to-date with industry trends , product updates, and effective sales techniques .

5. establish Key Performance indicators (KPIs): Define measurable KPIs that align with your revenue targets. These may include metrics such as sales revenue, conversion rates, average deal size , and customer acquisition cost . Regularly track and analyze these KPIs to assess the effectiveness of your sales strategy.

6. Foster Collaboration between Sales and Marketing: Encourage open communication and collaboration between the sales and marketing teams. Regularly share insights, feedback, and market intelligence to ensure alignment and optimize sales and marketing efforts.

7. Leverage Technology and Automation: Explore sales enablement tools , customer relationship management (CRM) systems, and automation software to streamline sales processes and enhance productivity. These technologies can help sales teams effectively manage leads, track customer interactions, and analyze sales performance.

Remember, these are just a few key points to consider when creating a sales strategy that aligns with revenue targets. Each business is unique, and it's important to tailor your approach based on your industry, target market, and specific goals.

Aligning Sales Efforts with Revenue Targets - Revenue Target: How to Set and Achieve Your Revenue Goals and Objectives

## 1. Customer-Centric Approach: Know Thy Audience

effective marketing campaigns begin with a deep understanding of the target audience . Here's how you can achieve this:

- Buyer Personas : Develop detailed buyer personas that encapsulate the demographics, psychographics, pain points, and aspirations of your ideal customers. For instance, an e-commerce company targeting fashion-conscious millennials might create personas like "Trendy Tina" and "Urban Alex."

- Segmentation : Segment your audience based on relevant criteria such as behavior, geography, or purchase history. tailor your messaging and offers accordingly. For example, a travel agency might create segments like "Adventure Seekers" and "Luxury Travelers."

- data-Driven insights : Leverage data analytics to gain insights into customer behavior. analyze website traffic , social media interactions, and email open rates . Use tools like Google analytics or customer relationship management (CRM) systems to track user journeys.

## 2. multi-Channel integration : Be Where Your Customers Are

Modern consumers engage with brands across various channels—online and offline. A cohesive multi-channel approach is essential:

- Content Marketing : Create valuable content that educates, entertains, or solves problems for your audience. Blogs, videos, podcasts, and infographics can all contribute to revenue generation indirectly by building trust and authority .

- Social Media : Engage with your audience on platforms like Facebook, Instagram, LinkedIn, and Twitter. share user-generated content , run contests, and respond promptly to inquiries.

- Email Marketing : Email remains a powerful tool. Personalize your emails, segment your lists, and use automation to nurture leads. For instance, an e-commerce store can send personalized product recommendations based on browsing history.

- Paid Advertising : Invest in targeted ads on platforms like Google Ads, Facebook Ads, or LinkedIn Ads. Optimize your ad spend by A/B testing creatives, headlines, and landing pages.

## 3. Conversion Optimization: turning Prospects into Paying customers

driving traffic to your website is only half the battle. The other half is converting those visitors into paying customers :

- Landing Pages : design high-converting landing pages for specific campaigns. Use persuasive copy, clear calls-to-action (CTAs), and minimal distractions. Test different layouts and elements.

- A/B Testing : Continuously test variations of your website elements (CTAs, forms, headlines) to identify what resonates best with your audience. Tools like Optimizely or VWO can help.

- Remarketing : Don't lose potential customers who abandon their carts or exit your site. Implement remarketing campaigns to re-engage them through display ads or personalized emails.

## 4. Metrics and Measurement: Tracking Success

To drive revenue, you need to measure the impact of your marketing efforts :

- key Performance indicators (KPIs) : Define KPIs aligned with revenue goals. Examples include conversion rate, customer lifetime value (CLV), and return on ad spend (ROAS).

- Attribution Models : Understand how different touchpoints contribute to conversions. Is it the first touch (awareness), last touch (purchase), or a combination (multi-touch)?

- Marketing Automation : Use tools like HubSpot, Marketo, or Pardot to automate repetitive tasks , track leads, and measure campaign performance.

## 5. Case Study: Airbnb's Referral Program

Airbnb's referral program is a stellar example of effective marketing. By incentivizing users to refer friends, they tapped into the power of word-of-mouth marketing . The result? Increased bookings, revenue growth, and a stronger community.

Effective marketing campaigns are a blend of creativity, data-driven decision-making , and relentless optimization. By understanding your audience, integrating channels, optimizing conversions, and measuring success, you can drive revenue and achieve your business objectives . Remember, it's not just about the buzz; it's about the bottom line.

I'm sure that the ideas being incubated at places like Startup Village today will form the core of the technologies of tomorrow. Pranav Mistry

tracking and measuring progress is a crucial aspect of achieving revenue goals and objectives. It allows businesses to assess their performance, identify areas of improvement , and make data-driven decisions . From various perspectives, tracking key performance indicators (KPIs) provides valuable insights into the effectiveness of strategies and the overall health of the business.

1. Define Relevant KPIs: To effectively track progress, it is essential to identify and define the KPIs that align with your revenue goals . These KPIs can vary depending on the nature of your business, but common examples include revenue growth rate , customer acquisition cost, customer lifetime value, and conversion rates.

2. Set Clear Targets: Once you have identified the relevant KPIs, it is important to set clear and achievable targets. These targets should be specific, measurable, attainable, relevant, and time-bound (SMART). For example, if your revenue goal is to increase by 10% in the next quarter, you can set a target of achieving a 5% increase in customer acquisition and a 2% increase in conversion rates .

3. Implement Tracking Mechanisms: To monitor progress effectively, businesses need to implement robust tracking mechanisms. This can involve using analytics tools, CRM systems, or custom-built dashboards. These mechanisms should capture relevant data points and provide real-time insights into the performance of different KPIs.

4. Regularly Analyze Data: Once the tracking mechanisms are in place, it is crucial to regularly analyze the collected data. This analysis can help identify trends , patterns, and areas of improvement. For example, if the conversion rate is consistently low, it may indicate the need to optimize the sales funnel or improve the quality of leads .

5. Take Action and Iterate: Tracking progress is not just about collecting data; it is about taking action based on the insights gained. If certain KPIs are not meeting the set targets, businesses should identify the underlying causes and take corrective actions. This can involve adjusting strategies, reallocating resources, or implementing new initiatives.

6. Communicate and Align: Tracking progress should not be limited to a few individuals or departments. It is important to communicate the findings and insights to relevant stakeholders and align everyone towards the common revenue goals. This can foster a culture of accountability and collaboration within the organization.

By tracking and measuring key performance indicators, businesses can gain valuable insights into their progress towards revenue goals. It enables them to make informed decisions, optimize strategies, and ultimately achieve their objectives. Remember, tracking progress is an ongoing process that requires continuous monitoring, analysis, and action.

Monitoring Key Performance Indicators - Revenue Target: How to Set and Achieve Your Revenue Goals and Objectives

1. market Volatility and risk Mitigation :

- Insight : Markets are inherently volatile. Factors like economic cycles, geopolitical events, technological disruptions, and consumer behavior can significantly impact your revenue trajectory.

- Action : diversify your revenue streams . Relying solely on one product or service can be risky. For instance, consider a software company that initially focused on desktop applications. As mobile usage surged, they adapted by developing mobile apps , thereby mitigating risk.

2. Customer-Centric Adaptation :

- Insight : Customer preferences evolve over time. What worked yesterday may not resonate today.

- Action : Regularly gather customer feedback . Use surveys, focus groups, and social media interactions to understand their pain points and desires . For instance, a fashion retailer noticed a shift toward sustainable fashion. They adjusted their sourcing practices and marketing messaging accordingly, attracting eco-conscious consumers.

3. competitive Landscape analysis :

- Insight : Competitors' moves directly impact your revenue. Ignoring them is perilous.

- Action : conduct a thorough competitive analysis . Identify gaps in their offerings and capitalize on them. For instance, a food delivery service noticed that competitors lacked a subscription model. They introduced a monthly subscription plan, boosting customer retention and revenue .

4. Pricing Strategies in Flux :

- Insight : Pricing dynamics change due to supply-demand fluctuations, inflation, and competitive pressures.

- Action : Implement dynamic pricing algorithms . Airlines, for example, adjust ticket prices based on demand , time of booking, and seat availability. Similarly, e-commerce platforms use personalized pricing to optimize revenue.

5. Technology-Driven Adaptation :

- Insight : Technology disrupts industries. Failing to embrace it can lead to obsolescence.

- Action : Invest in digital transformation. Consider a traditional bookstore transitioning to e-commerce. By creating an online platform, they expand their reach, offer personalized recommendations, and adapt to changing consumer behavior .

6. scenario Planning and contingency Plans :

- Insight : Unexpected events (natural disasters, pandemics, regulatory changes) can disrupt revenue streams.

- Action : Develop scenario-based models. What if your primary supplier faces a crisis? What if a new competitor enters the market? Having contingency plans ensures resilience. For instance, a pharmaceutical company maintains buffer stocks of critical raw materials to withstand supply chain disruptions .

7. human Capital agility :

- Insight : Your team's adaptability directly impacts revenue outcomes.

- Action : foster a learning culture . Encourage employees to upskill and stay informed about industry trends. When a retail chain shifted from physical stores to e-commerce, they provided training to store staff for online customer support , ensuring a smooth transition .

Remember, successful revenue achievement isn't about rigidly adhering to a predefined plan. It's about navigating the ever-changing currents with flexibility, creativity, and a keen eye on the horizon. Adaptation isn't a sign of weakness; it's a strategic superpower that propels organizations forward.

Adapting to Changing Market Conditions - Revenue Target: How to Set and Achieve Your Revenue Goals and Objectives

## Understanding the Importance of Motivation and Engagement

Sales professionals operate in a dynamic environment, where targets, quotas, and client interactions constantly shape their workdays. Here are some perspectives on why motivation and engagement matter:

1. Intrinsic vs. Extrinsic Motivation:

- Intrinsic motivation stems from an individual's internal desires, such as personal growth, achievement, and purpose. When salespeople find meaning in their work, they perform better.

- Extrinsic motivation involves external factors like bonuses, commissions, and recognition. While these incentives matter, intrinsic motivation drives sustained performance.

2. The Role of Leadership:

- Effective sales leaders understand that motivation isn't a one-size-fits-all approach. They tailor their strategies to individual team members.

- Inspirational leadership, clear communication, and empathy create a positive work environment.

3. creating a Winning culture :

- A strong sales culture fosters motivation. Celebrate wins, learn from losses, and emphasize collaboration.

- Encourage healthy competition without undermining team spirit.

## Strategies for Motivating and Engaging Sales Teams

Now, let's explore actionable strategies to boost motivation and engagement:

1. Goal Clarity and Alignment:

- Clearly define revenue targets and individual goals. When salespeople understand their purpose, they're more committed.

- Example: Instead of saying, "Increase sales," specify, "Achieve a 20% growth in Q2."

2. Recognition and Rewards:

- Regularly acknowledge achievements. Publicly praise top performers during team meetings or via company-wide emails.

- Example: "Congratulations to Sarah for closing the biggest deal this quarter!"

3. Professional Development:

- Invest in training and skill development . Salespeople appreciate opportunities to enhance their expertise.

- Example: Arrange workshops on negotiation skills or industry trends.

4. Autonomy and Trust:

- empower sales reps to make decisions. Trust their judgment and allow flexibility.

- Example: Let them choose the best approach for a client pitch.

5. Feedback and Coaching:

- provide constructive feedback . Regular coaching sessions help salespeople improve.

- Example: "Your presentation was excellent, but consider emphasizing the ROI next time."

6. Gamification:

- Turn sales targets into games. Leaderboards, badges, and friendly competitions add excitement.

- Example: "Who can close the most deals this month?"

7. celebrating Small wins :

- Don't wait for major victories. Celebrate incremental achievements—a successful cold call, a positive client review, or meeting a weekly target.

- Example: Ring a bell when someone surpasses their daily quota.

## Conclusion

Motivating and engaging sales teams isn't a one-time task; it's an ongoing process. By combining intrinsic and extrinsic motivators , fostering a positive culture , and implementing targeted strategies, you'll create a high-performing sales force that consistently drives revenue toward your organizational goals. Remember, a motivated team isn't just productive; it's also passionate about achieving success.

Feel free to adapt these insights to your specific context and watch your sales team thrive!

Driving Performance towards Revenue Goals - Revenue Target: How to Set and Achieve Your Revenue Goals and Objectives

1. The Psychological Impact of Celebration:

- Employee Morale: Recognizing achievements boosts employee morale . When team members feel appreciated, they become more engaged and motivated. Celebrations create a positive work environment, fostering loyalty and commitment.

- Leadership Perspective: Leaders must actively participate in celebrations. Their enthusiasm sets the tone for the entire organization. Publicly acknowledging accomplishments reinforces the desired behavior and encourages others to strive for excellence.

- Balancing Humility and Pride: While celebrating, strike a balance between humility and pride. Acknowledge success without becoming complacent. Use it as a stepping stone for future endeavors.

2. Methods of Celebration:

- Team Gatherings: Organize team lunches, dinners, or off-site events. These informal settings allow team members to relax, share stories, and bond.

- Awards and Recognition: Create a culture of recognition. Regularly highlight outstanding performers through awards, certificates, or shout-outs during meetings.

- Social Media Announcements: share success stories on social platforms. It not only celebrates achievements but also enhances your brand image .

- Customized Tokens of Appreciation: Personalized gifts or handwritten notes demonstrate genuine appreciation.

3. Setting New Targets:

- Reflect on Lessons Learned: After celebrating, take time to reflect. What worked well? What challenges did you overcome? Use these insights to set informed targets.

- SMART Goals: Ensure that new revenue targets are Specific, Measurable, Achievable, Relevant, and Time-bound. For example:

- Specific: Increase monthly sales by 15%.

- Measurable: track progress using key performance indicators (KPIs).

- Achievable: Consider market conditions, resources, and capabilities.

- Relevant: Align targets with overall business objectives.

- Time-bound: Set deadlines for achieving milestones.

- Break Down Goals: Divide annual targets into quarterly or monthly goals. Smaller milestones keep the team focused and motivated.

- Collaborate: Involve relevant stakeholders in goal-setting. Their insights and buy-in are essential for success.

4. Examples:

- Startup Scenario: A tech startup celebrates reaching its first 100 paying customers. They set a new target to expand into two additional markets within six months.

- Retail Chain: A retail chain achieves record sales during the holiday season. They analyze customer preferences and set a goal to launch a loyalty program by the next quarter.

- Consulting Firm: A consulting firm celebrates successful client engagements. They aim to increase client retention by 20% through personalized service offerings.

Remember, celebrating success isn't just about popping champagne; it's about acknowledging growth, learning, and resilience. As you raise a toast to your achievements, keep your eyes on the horizon—new targets await!

Recognizing Achievements and Setting New Targets - Revenue Target: How to Set and Achieve Your Revenue Goals and Objectives

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Small Business Trends

How to create a business plan: examples & free template.

This guide has been designed to help you create a winning plan that stands out in the ever-evolving marketplace. U sing real-world examples and a free downloadable template, it will walk you through each step of the process.

Table of Contents

How to Write a Business Plan

Executive summary.

The Executive Summary serves as the gateway to your business plan, offering a snapshot of your venture’s core aspects. This section should captivate and inform, succinctly summarizing the essence of your plan.

Example: EcoTech is a technology company specializing in eco-friendly and sustainable products designed to reduce energy consumption and minimize waste. Our mission is to create innovative solutions that contribute to a cleaner, greener environment.

Overview and Business Objectives

This part of the plan demonstrates to investors and stakeholders your vision for growth and the practical steps you’ll take to get there.

Company Description

Include information about the company’s founders, their expertise, and why they are suited to lead the business to success. This section should paint a vivid picture of your business, its values, and its place in the industry.

Define Your Target Market

Example: Our target market comprises environmentally conscious consumers and businesses looking for innovative solutions to reduce their carbon footprint. Our ideal customers are those who prioritize sustainability and are willing to invest in eco-friendly products.

Market Analysis

Our research indicates a gap in the market for high-quality, innovative eco-friendly technology products that cater to both individual and business clients.

SWOT Analysis

Competitive analysis.

In this section, you’ll analyze your competitors in-depth, examining their products, services, market positioning, and pricing strategies. Understanding your competition allows you to identify gaps in the market and tailor your offerings to outperform them.

Organization and Management Team

Example: EcoTech’s organizational structure comprises the following key roles: CEO, CTO, CFO, Sales Director, Marketing Director, and R&D Manager. Our management team has extensive experience in technology, sustainability, and business development, ensuring that we are well-equipped to execute our business plan successfully.

Products and Services Offered

Marketing and sales strategy.

Describe the nature of your advertising campaigns and promotional activities, explaining how they will capture the attention of your target audience and convey the value of your products or services. Outline your sales strategy, including your sales process, team structure, and sales targets.

Logistics and Operations Plan

Inventory control is another crucial aspect, where you explain strategies for inventory management to ensure efficiency and reduce wastage. The section should also describe your production processes, emphasizing scalability and adaptability to meet changing market demands.

Financial Projections Plan

In the Financial Projections Plan, lay out a clear and realistic financial future for your business. This should include detailed projections for revenue, costs, and profitability over the next three to five years.

Income Statement

The income statement , also known as the profit and loss statement, provides a summary of your company’s revenues and expenses over a specified period. It helps you track your business’s financial performance and identify trends, ensuring you stay on track to achieve your financial goals.

Cash Flow Statement

Tips on Writing a Business Plan

3. Set realistic goals: Your business plan should outline achievable objectives that are specific, measurable, attainable, relevant, and time-bound (SMART). Setting realistic goals demonstrates your understanding of the market and increases the likelihood of success.

FREE Business Plan Template

To help you get started on your business plan, we have created a template that includes all the essential components discussed in the “How to Write a Business Plan” section. This easy-to-use template will guide you through each step of the process, ensuring you don’t miss any critical details.

What is a Business Plan?

Why you should write a business plan, what are the different types of business plans.

In today’s fast-paced business world, having a well-structured roadmap is more important than ever. A traditional business plan provides a comprehensive overview of your company’s goals and strategies, helping you make informed decisions and achieve long-term success. There are various types of business plans, each designed to suit different needs and purposes. Let’s explore the main types:

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A business plan should address questions such as: What problem does the business solve? Who is the specific target market ? What is the unique selling proposition? What are the company’s objectives? How will it achieve those objectives?

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How To Set Revenue Goals

DEFINITION Revenue goals are the financial target your business sets to plan a revenue growth strategy. As they can be measured and tracked, revenue goals allow you to have a clear picture of business growth.

💡Understanding Revenue Goals

A financial target helps you lay down the action steps needed to achieve them. Say, for example, your organization’s financial turnover last year was $5 million. If your goal is to achieve a 20% growth rate, you can now design targeted strategies to reach the revenue target of $6 million. 

What’s more, a well-planned revenue goal defines the priorities and responsibilities of every team member, creating accountability. But setting revenue goals needs a rigorous planning process. This ensures revenue operations can be run smoothly and efficiently. 

Having clear revenue goals and growth strategies in place eliminates the stress of hasty emergency decisions, too. 

Moving forward without revenue goals is like sprinting through a field like a headless chicken, or a horse without blinders on a racecourse. 

Managing and motivating your team and knowing where your organization is collectively headed all rely on your revenue goals. They go a long way in helping you achieve maximum efficiency in your business operations and prevent you from making hasty decisions and the problems that come with low-quality leads and low conversion rates. 

It also promotes a healthy work environment where every member knows their role in achieving the financial targets. 

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Why Setting Revenue Goals Is Important

Revenue goals define what success looks like for your organization. As the goal changes every year, it gives you the direction to structure your organization and modify internal processes in line with the goal. 

They keep you on track with where your business is heading, be it towards hitting your annual financial target or other long-term plans. It also puts customer retention in sight and allows you to allocate sufficient time to every aspect of the business.

Setting revenue goals requires foresight along with analysis of past trends. Here are some insights to get you started:

1.  Analyze Past Data

How many active customers did you have in the last year? What was the churn rate like? What was your lead scoring structure like?

Having such data with you before you fix a number will make sure you’re setting a realistic goal. You can also choose to go by a specific year-on-year growth rate. 

2. Set Monthly And Quarterly Targets Over Annual Targets

Not every customer is going to stay with you annually. Setting monthly and quarterly targets factor in your churn rate. Your marketing and sales team can ramp up their efforts accordingly.

Having monthly recurring revenue (MRR) targets also lets you take holidays into account without overwhelming your team by a huge number.

Plus, setting quarterly goals gives you a reset button. When reviewing goals every quarter, you can analyze your strategies and tweak them based on the results.

3. Consider Your Team’s Capacity

Your team might not be able to sustain the sudden pressure if you want a jump from $10,000 MRR to $100,000 MRR. You’ll also need to hire talent at the same pace, which is a time-consuming process in itself.

When setting revenue goals, make a plan for recruitment too. Use a  job board  to expedite the hiring process. Based on how fast you’re able to attract new talent, you can scale your marketing and sales efforts.

4. Set Targets For Revenue-Driving Activities

Once you have your annual target broken down into monthly and quarterly targets, divide it further by activities and teams. 

Suppose your primary revenue-driving activities include inbound marketing strategies, identifying sales-ready MQLs, and outbound marketing based on lead scoring. Break down your ultimate goal and assign revenue goals to each of the activities and the corresponding teams. 

For example, if your goal is to generate $50,000 in MRR, assign figures like $10,000 to inbound marketing strategies, $20,000 to closing sales-ready leads, and $20,000 to outbound marketing.

5. Create Your Lead Scoring Metrics

Not all leads are equal. Even if you have a large number of sales reps , they’ll soon burn out if they’re reaching out to every person on your lead list. 

The way around this problem is to rank your leads based on how close they are to your ideal client profile (ICP). You can rank the leads based on multiple factors like budget, intent, position in an organization, page visits, downloads, and more. 

Setting your lead scoring criteria early on is important to stay on track with your revenue goals. The better your leads are, the easier conversions will be.

Once you’ve decided on the metrics, use an app like Breadcrumb s that integrates with apps like HubSpot, ActiveCampaign, and Marketo to receive the lead score directly in your data source. Book a demo to find out how.

What is a Marketing Qualified Lead (MQL)?

An MQL (or Marketing Qualified Lead) is a term used in marketing and sales to…

What is a Sales Qualified Lead (SQL)?

A Sales Qualified Lead (SQL) is a prospective customer who has been researched and vetted…

What is a RevOps agency?

A RevOps agency, or Revenue Operations agency, is a specialized business entity that focuses on…

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A Comprehensive Guide: How to Forecast Revenues for Your Business Plan

Introduction:.

Forecasting revenues is a crucial aspect of developing a business plan. Accurate revenue projections not only attract investors but also provide a roadmap for sustainable growth and financial success. This article will provide you with a step-by-step guide to help you forecast revenues effectively. By following these strategies and best practices, you can make informed decisions, set realistic goals, and build a solid foundation for your business.

I. Understand Your Market and Customers:

Before you can forecast revenues, it's essential to gain a deep understanding of your target market and customers. Conduct market research to analyze trends, demand, and competition. Identify your target audience's needs, preferences, and purchasing behavior. This information will help you estimate the potential market size and assess the revenue potential for your products or services.

II. Break Down Revenue Streams:

Next, break down your revenue streams into specific categories. For example, if you have multiple products or services, create separate revenue streams for each. Consider the pricing structure, sales volume, and average transaction value for each category. This breakdown enables you to analyze and forecast revenues with greater accuracy.

III. Utilize Historical Data:

If you have been in business for some time, historical data can serve as a valuable resource for revenue forecasting. Analyze past financial records, sales data, and customer trends. Identify patterns, seasonal variations, and growth rates. Use this information as a baseline to project future revenues, accounting for any market changes or new product launches.

IV. Determine Key Assumptions:

Forecasting revenues involves making certain assumptions about your business and the market. Identify the key factors that will impact your revenue projections, such as market growth rates, pricing changes, or shifts in consumer behavior. Document these assumptions clearly, ensuring they are realistic and supported by data and market trends.

V. Use Multiple Forecasting Methods:

To enhance the accuracy of your revenue projections, employ various forecasting methods. Here are a few commonly used techniques:

a) Top-Down Approach:

Start with the overall market size, estimate your market share, and calculate revenues based on this share.

b) Bottom-Up Approach:

Begin with individual product or service sales projections and aggregate them to obtain total revenue estimates.

c) Time-Series Analysis:

Analyze historical sales data to identify patterns, trends, and seasonality. Apply statistical methods like moving averages or exponential smoothing to project future revenues.

d) Market Research and Surveys:

Conduct market surveys or customer interviews to gather insights on demand, price sensitivity, and purchasing behavior. Use this data to estimate market size and forecast revenues.

VI. Account for External Factors:

Consider external factors that could impact your revenue forecast, such as economic conditions, industry trends, regulatory changes, or technological advancements. Conduct a thorough analysis of these factors and assess their potential influence on your business. Adjust your revenue projections accordingly to reflect any anticipated challenges or opportunities.

VII. Monitor and Review:

Once you have developed your revenue forecast, it is crucial to continuously monitor and review its accuracy. Regularly compare your projections with actual revenue performance and adjust your forecast as needed. Use key performance indicators (KPIs) to track your progress and make informed decisions to drive revenue growth.

By following the steps outlined in this guide, you can enhance the accuracy and reliability of your revenue forecast for your business plan.

Here are a few additional tips to keep in mind:

Sensitivity Analysis:

Perform a sensitivity analysis by testing your revenue projections against various scenarios. This will help you understand the potential impact of changes in key variables such as pricing, market share, or economic conditions. It provides a more comprehensive view of the range of possible outcomes.

Seek Expert Advice:

If you're unsure about certain aspects of revenue forecasting or lack expertise in financial analysis, consider consulting with us. At businessplanprovider.com , we have professionals such as accountants, financial advisors, and industry experts. Their insights and guidance can add credibility to your revenue forecast.

Regularly Update Your Forecast:

Revenue forecasting is not a one-time exercise. As your business grows and market conditions evolve, it's crucial to update your forecast regularly. Review and revise your projections quarterly or annually, taking into account any new information or changes in your business environment.

Validate with Market Feedback:

Don't rely solely on internal data or assumptions. Seek feedback from potential customers, industry experts, or mentors to validate your revenue projections. Incorporate their insights into your forecast, as they can provide valuable perspectives and highlight blind spots.

Be Realistic and Conservative:

While it's important to set ambitious goals, it's equally crucial to be realistic and conservative in your revenue forecast. Investors and stakeholders appreciate a forecast that demonstrates a clear understanding of potential challenges and uncertainties. Avoid overestimating revenues, as it may lead to unrealistic expectations and undermine your credibility.

Remember that revenue forecasting is both an art and a science. It requires a blend of data analysis, market understanding, and informed decision-making. Be prepared to adjust your forecast as new information becomes available or market dynamics change.

Conclusion:

Forecasting revenues for your business plan requires a systematic and data-driven approach. By understanding your market and customers, utilizing historical data, making key assumptions, employing multiple forecasting methods, accounting for external factors, and continuously monitoring and reviewing your forecast, you can develop realistic revenue projections. Remember, revenue forecasting is an ongoing process that should be regularly updated to align with market changes and business growth. By accurately forecasting revenues, you can make informed strategies, allocate resources effectively, and attract investors and stakeholders who are confident in the potential of your business.

A well-structured and thoughtfully prepared revenue forecast will not only guide your business planning and decision-making but also demonstrate your professionalism and strategic thinking to potential investors. By following the steps and best practices outlined in this guide, you can develop a robust revenue forecast that will support the growth and success of your business. 

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21 Revenue Strategy Examples to Kickstart Your Revenue Growth

by Elizabeth Harris , on 3/20/18 8:53 AM

Aka: Revenue Strategies - the Foundation for CRO Success  

In a recent confidential interview, a CEO shared his thoughts about the next 12 months:  "We believe we will achieve our revenue and profit goals over the next 12 months with our current resources. We have the right team, the latest software and tools, effective processes, remarkable products & services, strong branding and a unique value proposition." He went on to admit “… but we are not achieving our revenue and profit goals and we are still unsure why.”

The proper revenue strategy aligns marketing, sales, and customer experience teams around a singular goal: drive profitability. Without a strategic roadmap, healthy and sustained growth simply cannot flourish, which is why organizations put so much emphasis on the planning process. In fact, studies reveal that tightly-aligned sales and marketing functions result in an average of 36% higher customer retention rates and 38% higher sales closing rates, than their more loosely aligned counterparts.

Unraveling such a puzzle to understand what is ‘broken’ has us first visiting the revenue strategy. Choosing a revenue strategy impacts all other aspects of planning and whether goals are achieved.

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The best revenue strategy requires answers to these essential questions:

Strategy & goals.

1.   What are our overall business goals? 2.   How effective is our current strategy?

3.   Are we profitable, or as profitable as we should be?

4.   How do we define our complete sales process and sales funnel? 5.   How do we define success?

Measure Metrics

6.   How do we measure the effectiveness of our sales process? 7.   How do we measure the effectiveness of each stage of our sales process? 8.   How are sales results measured? 9.   What is our ROI on our marketing efforts? 10. What is the ROI on our sales efforts? 11. What is our current customer acquisition cost (CAC)?

Optimization

12. Are we using and maximizing the resources we have? 13. How do we improve conversion ratios during the sales process?

14. Are there opportunities to lower cost with a more effective strategy?

People Management

15. What management systems are required? 16. How much time is dedicated to sales and sales management by key leaders or managers?

Which Revenue Strategy?

Determining which revenue strategy to pursue is often the most difficult part when planning corporate objectives. The sea of empty space that stares back at executives from a blank whiteboard can deafen strategic brainstorming attempts with its silence.

Knowing which questions to ask and variables to consider is the most effective way to broach the subject of strategic revenue planning. Questions like,

Which sales and marketing opportunities are available to us immediately?”

What are our most valuable assets?”

Are the right people in place to execute our short-term and long-term goals?”

...can get the conversation started.

Once the discussion is underway, the revenue strategies below can inspire your team to find the best growth avenues that utilize your assets and opportunities effectively.

To enable you to meet your organization's revenue/profit goals and offer you starting point with a revenue strategy, here are 21 Revenue Strategies to fill your whiteboard and get you started:

(1)   increasing marketing investments.

Ideal Revenue Strategy for:

Organizations with budget allocation imbalances and those being outpaced by competitors in terms of marketing funding.

Considerations:

• Additional web creative and collateral needs
• Increased lead volume to sales teams

Scaling up marketing investments can generate more leads, which is a direct revenue driver. However, flooding the pipeline with more sales opportunities is only an effective strategy for organizations where the sales staff is prepared to handle this influx, which is why marketing cannot thrive in a vacuum. To be successful, marketing and sales teams need to communicate openly about current undertakings, upcoming plans, and overall objectives.

(2)   Changing Sales Compensation Plans

Organizations with excess sales team capacity or inefficient compensation and bonus plans.

• Added demands on account representatives
• Potential for undesirable revenue outcomes

In instances where leads are plentiful, ineffective compensation plans can stymie growth by failing to encourage sales teams to capitalize all available opportunities. Sales staff that are not motivated with financial, social, and other incentives will underperform, leaving potential revenue on the table. However, some revised compensation plans actually encourage undesirable outcomes like selling higher volumes of shorter contracts, which is why revenue implications must be considered when drafting compensation structures.

(3)   Expanding Brand Awareness

Startups and regionally successful companies.

• Sales pipeline growth implications
• Development of supporting marketing resources
• Ability to control the subsequent brand conversation

The adage that “you can only sell to consumers who know your company exists” still resonates. By focusing on overall branding, organizations can increase brand awareness throughout the market to aid in lead generation. While this is a less immediate strategy than other marketing efforts, it is still directly correlated with increasing revenue.

(4)   Repositioning the Brand

Legacy brands with declining or plateauing growth.

• Marketing channel expansion
• Increasing marketing support needs
• Market research to identify brand differentiation opportunities

In organizations where brand history has a solidified perception, there is a clear opportunity through rebranding to increase future revenue streams. This is especially salient when changes in audience demographics and psychographics necessitate a corresponding transformation by legacy brands to stay relevant.

As an example, fast food companies like Wendy’s and McDonald’s have invested millions in marketing campaigns over the last several years aimed at repositioning their brands as “healthy” and “fresh.” This rebranding tactic is aimed at appealing to modern consumers that have indicated that they value quality ingredients and more varied menu options, as well as convenience.

(5)   Adopting a Premium Pricing Strategy

Organizations with undifferentiated and value-priced offerings.

• Product research to drive innovation
• Demonstrating brand value
• Strategy for re-launching offerings

Providing additional value and raising prices is a strategic move that can positively affect the perception of both an organization and its offerings. Utilizing premium pricing and justifying the increase through supporting marketing and sales support can result in revenue lift. Furthermore, it can increase revenue by without a need to substantially vary offerings.

(6)   Incorporating Discounted Pricing Tactics

Organizations with price-sensitive target audiences.

• Effect on sales compensation plans
• Need for additional marketing collateral
• Alignment with overall revenue goals

Lowering prices can undercut the competition, resulting in a market penetration strategy that drives revenue. However, reducing prices is not the only way to discount products. Organizations can also achieve revenue growth by bundling offerings to provide more value at a discounted rate, offering product rebates, and changing shipping and handling pricing structures. Providing seasonal discounts and purchase timing discounts is another way to incentivize conversions through reduced pricing. Organizations can also pare down existing product functionality to offer more budget-friendly versions of the same products to increase sales across a wider demographic.

(7)   Expanding Distribution Channels

Organizations with consistent revenue and well-executed sales plans. 

• Legal partnership agreement considerations
• Availability of current products and future product capacity
• Need for increased staffing (especially among specialized roles)

Stepping out of existing distribution channels to embrace a new selling strategy is a way to boost revenue from existing products by getting them in front of previously unreached consumers. Selling via retailers, distributors, ecommerce sites, direct mail, and wholesalers encompasses a wide array of potential channels where consumers can shop.

For online businesses, social selling is another possible method to expand distribution channels, by allowing sales of products directly from the social platforms where consumers are already interacting with the brand.

(8)   Developing Cooperative Sales Agreements

Organizations that can leverage strong brand recognition to offer value to potential partners.

• Alignment with the overall organizational mission
• Mutually beneficial reciprocity expectations
• Additional contract and clause requirements

Reciprocal selling agreements are another way to introduce offerings to consumers through another channel. Amazon began using this strategy recently when they acquired Whole Foods as an extension of their Amazon Fresh service to provide quick delivery of groceries to Amazon Prime members in select cities. This type of reciprocity is a victory for both Amazon and Whole Foods, which can increase revenue margins for both brands through cooperation.

(9)   Diversifying Offerings

Organizations with established offerings and well-honed research and development capabilities.

• Assessment of the possibility for sales cannibalization
• Strategic marketing resources to align and promote new offerings
• Understanding of new industry competition variables
• Additional need for experienced sales personnel

Finding lucrative complementary offerings for top-selling products and services can be a shrewd way to encourage revenue growth. Identifying consumers’ needs and filling in the gaps with offerings that help sell main revenue drivers, boosts overall revenue by increasing average customer lifetime value.

(10)  Repositioning Offerings

Organizations with versatile offerings that can fulfill an array of needs or provide flexible solutions for consumers.

• Additional marketing resources
• Ongoing specialized sales training needs
• Audience research to identify product use capabilities

For products and services that can be used by consumers to fulfill multiple needs or use-case scenarios, repositioning offerings to target each of these uses and audiences is a clever way to increase revenue. By targeting specific uses individually, marketing and sales messaging can be customized to address specific needs, wants, and apprehensions. The result is a more effective and adaptable selling strategy.

(11)  Modernizing Legacy Offerings

Brands with stagnant offerings and organizations with an aversion to change.

• Preservation of existing offerings to retain existing customers, where appropriate
• Brand repositioning potential
• Increased marketing collateral demands
• Assessment of channel expansion possibilities
• Potential sales retraining requirements

Replacing or updating traditional products and services is a sound way to use legacy offerings to increase revenue. Using previously successful offerings as the basis to launch a growth strategy provides a revenue safety net to safeguard against possible failures. 

(12)  Securing Recurring Revenue

Organizations with offerings conducive to subscription-based usage.

• Increased payment system demands
• Additional accounts receivable staffing
• Increased focus on customer experience

Creating recurring subscriptions or ongoing contracts is another way to use existing offerings to drive revenue. By taking the onus away from consumers to decide when to purchase again, organizations can both secure future revenue and increase the likelihood of developing brand loyal customers.

(13)  Focusing on Product Penetration

Organizations with brand loyal customers and a breadth of offerings.

• Additional staff needed to solidify customer relationships
• Specialized marketing tactics to engage existing customers

Unlike market penetration, which focuses on selling the same offerings to more consumers, product penetration aims to get existing customers to purchase more of an organization’s offerings. This means providing complementary products and services that customers can subsequently purchase, even after buying items that are not readily consumed. For some organizations this involves expanding offerings, whereas for others it involves engaging in mutually beneficial partnerships. In other instances, it simply requires pivoting an existing marketing strategy to convince consumers that they will benefit from taking advantage of other offerings as well.

(14)  Increasing Customer Retention

Organizations with a sizeable customer base and substantial post-sales support methodology.

• Shifting marketing emphasis from customer acquisition to retention      -  Increased focus on customer experience
• Effect on sales team compensation and performance objectives

Retaining existing customers will always be more cost effective than acquiring new customers, which makes it an obvious revenue growth strategy. However, the nuances involved in achieving this objective require sales, marketing, and customer experience team buy-in. While marketing teams are typically open to changing their strategic focus towards supporting customer retention, sales teams often oppose the proposition due to concerns regarding compensation. Without a change to compensation structure to reward increases in customer lifetime value, sales teams are likely to act independently to protect their own interests. When collaborative buy-in is achieved, customer retention drives immediate revenue growth while simultaneously securing sustainable future growth by developing brand loyalty and advocacy.

(15)  Dominating the Mobile Experience

Organizations with an increasing mobile consumer base or target demographic.

• Technological upgrades needed to establish and maintain the mobile experience
• A complementary tech-savvy focus among employees

Encouraging ecommerce mobile shopping and utilizing app-based experiences are at the heart of a thriving mobile strategy. While some organizations are hesitant to enter the mobile arena due to the complexity of offerings or historically low-tech reputation of their industries, supporting mobile users is essential for growth in today’s economy. However, providing a haphazard mobile experience is often worse than not offering one at all, which means that the right technological savvy and support must comprise an effective mobile strategy.

(16)  Nurturing Brand Advocates

Organizations with brand loyal customers that are willing to engage.

• Implementation of customer rewards programs and incentives
• Engagement tactics that meet customers where they thrive

Fostering brand advocacy is both a revenue strategy and a reputation management strategy. Nurturing customer relationships encourages brand loyalty, increasing revenue figures organically from the brand advocates themselves and their personal networks. Brand advocates are more likely to defend the brand in times of turmoil or crisis, making them an indispensable asset. However, brand advocate creation is not simply achieved through offering purchase incentives and other superficial tokens. It requires the kind of strategic planning that weaves through every customer experience from sales and marketing to technical support and billing. Building brand advocates also involves meeting customers on their own terms – on the platforms and at the moments when they want to engage.

(17)  Developing New Partnerships

Organizations with a collaborative spirit that can benefit from outsourcing functions or capabilities.

• Internal staffing implications
• Availability of complementary organizations willing to engage in partnerships
• Legal considerations for partnership agreements
• Effect on future hiring

Pairing with other organizations expands an organization’s capabilities and sphere of influence without having to invest in additional in-house resources. While many business leaders may cringe at the thought of relinquishing control, the smartest executives understand the value of partnership. Refusing to enter into strategic partnerships can hamstring growth faster than any other mistake, which is why from a growth perspective, the only questions should be when to establish partnerships and with whom.

(18)  Engaging with Industry Influencers

Organizations where well-known personalities can be leveraged to encourage revenue growth.

• Adapting social media efforts
• Risk assessment of aligning with third-party individuals
• Legal considerations of social collaboration

Influencer marketing has been a hot topic in recent years due to its effectiveness in building industry authority and driving revenue. Collaborating with respected industry experts can be an effective way to build brand awareness, acquire new customers, and impress existing customers. However, working with independent third-party individuals also carries some risk, which means that legal implications should be considered before pursuing this strategy, especially in highly-regulated industries.

(19)  Expanding Geographic Reach

Brands with a limited geographic territory and demographic potential to expand.

• Supply chain and logistics considerations
• Additional staffing required at all levels of the business
• Individual market preference variations
• New market barriers to entry

Expanding geographically is one of the simplest and yet most complex ways to grow revenue. This method is easy to conceptualize and difficult to execute properly, which is why organizations undertake such long planning processes before opening additional franchises, distribution centers, warehouses, retail venues, and so on. Considering regional preferences, opportunities, and barriers is a mammoth task that requires the right strategic analysis by highly experienced professionals. The result when expansion is done successfully, however, can be a substantial windfall.

(20)  Offering Additional Payment Options and Terms

Organizations stifled by existing payment options and sales terms.

• Financial feasibility of payment expansion
• Legal considerations of extending payment terms

Opening up payment options and flexibility with payment terms can allow an organization to close additional sales that would otherwise have been unavailable. However, doing so often comes at a cost – either in the form of initial technology investments or the potential for bad debt when terms are not met as planned.

(21)  Eliminating Bad Customer Relationships

Organizations with revenue constriction due to unprofitable or toxic customer relationships.

• Social implications of eliminating customers
• Legal limitations on existing contracts

While it may be a controversial strategy, firing unprofitable customers is another way to improve revenue numbers. By pruning deadweight from the customer base, an organization can more effectively focus resources on profitable customer relationships. In 2007 Sprint famously utilized this strategy to cancel subscriptions for customers that were tying up support channels. They reasoned that they could not properly support more profitable customer contracts due to the burden that “bad customers” were placing on the system. This move came amidst a high customer turnover trend that Sprint was looking to reverse.

The proper revenue strategy aligns marketing, sales, and customer experience teams around a singular goal: drive profitability. Without a strategic roadmap, healthy and sustained growth simply cannot flourish, which is why organizations put so much emphasis on the planning process.

The right strategy will ensure you achieve your revenue and profit goals. It will be a foundation for selecting and developing the right team, the right software and tools, developing effective processes, remarkable products & services. The process begins by creating the right revenue strategies to align and leverage your sales, marketing, and customer experience teams.

If you are in a situation where you have the right people, resources and processes in place and are unsure why you are not achieving your revenue and profit goals, I welcome you to contact me here , or by phone or email.  We can talk about any of the strategies listed above or another that is of interest to you.

As you begin to formulate ideas and a plan, feel free to use our  B2B Business Growth Library .

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How To Set Revenue Goals That Can Become Real

• November 14, 2023

In life and in business, setting clear and attainable goals is important. In fact, people who set goals are 43% more likely to achieve them. 

When it comes to business, having a revenue goal is considered to be the greatest motivator and team alignment tool. 

Revenue goals are measurable and help identify gaps in team performance, output, and top-to-down management. 

It’s simple. Clear Targets = Better Business. 

In this article, we’ll tell you the importance of setting solid revenue goals and a quick 5-step way in which you can do it for your business. 

Let’s begin. 

• Setting clear and measurable revenue goals is crucial for business success.
• Revenue goals are a compass, guiding operations and ensuring team alignment.
• You can set revenue goals in five simple steps. 
• It all starts with measuring existing performance and your existing financials. 
• The next step is analyzing business data and defining specific targets.
• The third step is breaking down annual targets into quarterly and monthly goals.
• The fourth step is to align team members with their specific roles in achieving revenue goals.
• Lastly, you need to plan for customer acquisition and retention strategies.

What Are Revenue Goals? 

💡 Definition Revenue goals mean the target financial position a company aims to earn. Setting up a revenue goal helps businesses to plan their growth strategy to reach their target making plans to increase sales, attract more customers, and grow the business to hit these financial targets.

A targeted revenue goal is a financial target for a specific period of time that can be tracked and measured throughout the said period. 

For example, $7 million in gross sales for the third quarter of 2024 is a revenue goal example. 

The process for creating revenue goals differs for each business, and it comes to many factors, such as product placement, market conditions, existing KPIs, and customer demand, among others. 

Setting a revenue goal for your business can be tough, but it’s worth it. Let’s tell you why. 

Why Setting Revenue Goals is Important

A clear and pre-planned revenue goal is the compass that guides business operations. 

From ascertaining the scale of operation to thinking of customer acquisition and retention strategies, a revenue goal is the best tool for team realignment. 

Apart from keeping everyone on the same page, a revenue goal is a great definition of business success. The quantifiable and measurable nature of these goals leaves no place to hide. Your business is either growing (goals met) or it isn’t (goals not met). 

If you agree and need a clear process for setting revenue goals, then keep scrolling. 

How To Set Revenue Goals

To set revenue goals, you must have the fundamentals straightened out—your ICP , current expansion plans, business models , etc. Once you have the basics right, goal setting becomes a simple numbers game. Here’s how you can set clean and trackable revenue goals for your business. 

1. Measure Existing Performance 

Let’s assume you sell a software service in the CRM niche. Here are some of the questions you need to ask:

• How many customers do I currently have?
• What is my churn rate?
• What has been my MRR over the past year?
• What is the conversion rate at each stage of the sales funnel?

With this data, you can measure your existing growth circuit and make a reliable bet on the future with a slightly incremental revenue goal. 

2. Analyze Business Goals & Team Capacity 

The revenue goal must align with your business goal for the year. 

• Is there a new expansion plan or product launch on the horizon? 
• Are you planning to scale your services and customer touch points? 
• Are you planning to simply strengthen your bottom line?

To scale operations, your existing team might not be enough. Adding new members is a time-consuming process that might divert your attention from the business. 

When setting revenue goals, you need to account for extra hours and resources that might go into scaling your team. 

3. Define Specific Revenue Targets

An annual target, split into quarterly and monthly targets, is the best way to set your targeted revenue goal. 

Splitting revenue goals into monthly targets allows you to account for the impact of churn, giving you a more accurate picture of the revenue you need to generate to offset customer losses.

Monthly and quarterly targets provide flexibility for your sales and customer success teams to adapt to changing conditions, whether there’s an upward or downward trend in revenue.

Lastly, quarterly goals act as checkpoints that allow you to review your strategies and make necessary adjustments based on the results achieved during the previous period.

4. Set KPIs for the Team

Once you have the targets in place, it’s time to bring them down to each team member. 

Breaking down annual revenue targets into specific activities and team assignments will help set revenue goals in a structured and actionable manner. 

Once we have the bifurcation, team members have an alignment over overarching objectives and execution.

5. Plan For Customer Acquisition and Retention Strategies

You have the target in place and know what your team members and processes are tasked with bringing, but what about customer acquisition? 

The most important step in setting a revenue goal is thinking about your customer acquisition plan. You need a lead pipeline, a sales funnel, and a sales team to acquire new buyers. And you need a sophisticated lead scoring tool that collects the top-of-the-cream leads for your business. 

A PLG CRM solution like UserMotion analyzes your ICP and filters leads with the highest chance of conversion. You can Integrate your ICP from data tools like HubSpot and have high-value leads sent directly to your sales representative – without lifting a finger. 

Pro Tip: Learn How To Close More Deals With Predictive Lead Scoring

Setting your targeted revenue goals might be one of the most important tasks you need to take care of in business, regardless of its type or scale of operation. So, whether you’re a startup, a growing enterprise, or an established corporation, remember that well-defined revenue goals are the single most effective way to measure your business’ upward trajectory and make sure that your team is on the right path. 

Step into the new year with clear revenue goals. Need help in ranking and prioritizing your leads for optimum conversion and reduced CPA? Check out our premium AI-based lead scoring software today.  

Frequently Asked Questions

What is a revenue goal?

A revenue goal is a specific target that is set to be achieved over the course of a period. The target is set in the purview of how much a business wishes to earn and progress in the coming time. The revenue goal focuses on gross sales and includes operational costs, expenses, and taxes. 

How often should I review and adjust revenue goals?

To stay on track with your goals, it’s best to do reviews every month and every three months. When there are a lot of changes in a market like SaaS, it’s important to review things on a regular basis so you can change your plans and stay on track with your income goals.

How can setting revenue goals benefit my business’s growth and success?

Setting revenue goals benefits a business by providing a clear direction and motivating teams toward a common objective. These goals offer measurable progress and reveal performance gaps, which allows you to focus on strategic aspects like customer acquisition and retention. 

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Recently, we posted an article on the top reasons why companies miss their revenue targets : Not setting effective revenue targets at all; Low quality of sales pipeline; Insufficient size of sales pipeline; Low closing ratios; and slow conversion of sales to revenue.

In this article, we will explore in some depth the first of the five reasons: Not setting effective revenue targets.

It has been our experience that the degree to which CEO’s are directly involved in setting effective revenue targets and how much effort and time senior management spends on this critical issue make the difference between meeting revenue targets consistently and missing them more often than not. This becomes more apparent as we investigate the process for effectively determining and defining the:

• Ideal growth rate for your company over the next 1-2 years
• Key Market Segments
• Foundational targets for each segment
• Operational numbers and metrics
• Schedule (Timing) of these Numbers
• Right Type and Amount of investment required
• Organization-wide commitment necessary

We will discuss each of the above in some detail next.

Determine the Growth Rate to Set Your Effective Revenue Target

We believe that the first mistake many companies make is in what they choose as their benchmark revenue year. Most automatically set their previous year’s revenue as the new benchmark. Others set a rolling average of the past three or five years.

Our recommendation is that a company should always use its highest historical revenue year as the benchmark, regardless of when that occurred or what special circumstances led to that.  Such a policy re-enforces a mindset that if a company was able to achieve something once, not only can it achieve it again, but can also surpass it next time.

With the benchmark set at the highest historical revenue, the next step is to decide the rate of increase over that revenue base to discover your effective revenue target.

For discussion purposes, let’s say that a Company ABC did $50 million in its best year some years back, and the executive team decided to surpass that by 20% this year, or target $60 million in revenues.

Define Key Market Segments

Most companies sell a wide variety of products to a wide range of customer. At the same time, they tend to see these customers as  a single large market.

We can usually tell that a company sells to a number of different market segments when we tend to get ambiguous answers to simple questions. For example, when we  ask, “What is your average selling price?” and the response is, “It depends. It can vary anywhere from $10,000 to $500,000”; or “What is your average sales cycle?” and we hear responses like, ”Well that depends too. It can vary from 3 months to 24 months…” we know the customer base is made of more than one segment.

This typically happens because, initially, the company built a capability aimed at a specific group of customers, but later sees that the same capability can be sold to more customers outside of the original customer group. From the company’s point of view, it is essentially the same capability. However, customers use that capability for different purpose, have different levels of need for it (for some it is mission critical while for others it is back-up, and still others use it for convenience), and even different buyer roles. Hence the wide range of average sales price, sales cycles, and closing ratios.

A firm should to be able to confidently say, “For customer group A, we will target our average deal size to be X, and our average selling cycle to be Y, and our closing ratio to be Z”. Segmentation of its market is the key to such precision.

SOMAmetrics helps companies analyze their data and arrive at clear segmentation of their market.

Determine the Foundational Targets for Each Segment

The next task is to set the foundational targets for each market segment. Below is a sample list of foundational assumptions:

From the above chart, the company knows it will need 1,200 sales opportunities or Sales Qualified Leads (SQLs) for Segment A in order to reach its $30million effective revenue target based on a $100K average sales price and 25% closing ratio.

The question here is where will these 1,200 new SQL’s come from.

Determine Operational Numbers

For most b2b companies, revenue has long lead-time measured in months if not years. The longer the sales cycle time, the more a company must frequently track and know its operational numbers so it can make adjustments early enough to make any difference.

Revenue is the final output that results from the interactivity of number of chained input factors. Before revenues happen, many other output factors must happen—each with its own interacting chain of events.

The tough part is usually getting the right quantity and type of the input factors at the right time at each link of the chain. For example, if the company doesn’t get the right amount of SQL’s, it will not make enough sales to reach its effective revenue target. SOMAmetrics uses the Four Funnels Framework to manage these operational numbers.

Traditionally, companies try to reach their SQL numbers with the combination of leads sent from Marketing, and sales reps doing their own phone prospecting. The hope is that somehow, from these two activities, the sales reps would generate their own Sales Qualified Leads to stoke their sales pipelines.

Both of these approaches tend to have shortcomings. Marketing should and will generate leads. However, there is very little to indicate whether these leads are hot, warm, or cold. It now becomes the sales reps responsibility to first determine that before proceeding.

At the same time, most sales people we know hate making cold calls and avoid doing so. They are even reluctant to call on leads provided by Marketing because many of these are rather cold.

Contrast that with a professional Teleprospector who actually loves making 60-90 dials a day, sees it as a challenge to break into an account, find the decision maker, engage her in a two-minute conversation to get her attention and interest, schedule a call with the sales rep, and then moves on to the next call.

Now, this is very different. This is a warm or even hot lead and the sales rep will jump on it, preferably within the next 48 hours.

The ideal best practices would be for Marketing to send warm leads to the professional Teleprospector whose main job now is to qualify these warm leads and makes sure it is a Sales Qualified Lead before passing on to the sales rep. Now, sales reps have a steady, well-stocked pipeline of qualified prospects on which to call at any given time.

Assuming that only 10% of the leads that Marketing provide turn out to be Sales Qualified Leads (SQL’s) ready to be passed on to sales reps, then the company must generate five (5) Marketing qualified Leads for each SQL.

The completed operational numbers look like this:

Are you setting effective revenue targets? Download this checklist to find out

Determine the Scheduling of Operational Numbers

Now that we have determined the Operational numbers the next step is to make sure the right amount of the right type of numbers are available at the right time. This is about scheduling or timing, and probably where many companies lose control over their revenue targets.

Marketing has its own lead-time. Prospective customers will likely need to see quite a bit of a company’s message before they start doing anything about it.  Teleprospectors typically have to make several calls into a company before they reach a decision maker. These two cycles together can take up anywhere from six to twelve weeks before a Sales Qualified Lead emerges from a given campaign.

Also, personal selling is a labor-intensive process. It takes a certain time out of each day for a sales rep to make a sales call on a prospect, send out a summary letter and next step statement, arrange for demos and other proofs, prepare proposals, and take care of any other steps necessary to turn a prospect into a customer. Also, depending on the closing ratio, this must be done with many prospects in order to produce one customer.

What typically happens is that activities tend to be done in bunches rather than steady streams. Marketing spends months preparing for a large campaign, launches it, collects a ton of leads, and then sends to the reps. However, the reps can only call on so many leads at any given time. The rest get cold and hard to work with.

Scheduling the Operational numbers means that marketing campaigns go out on a regular schedule feeding Marketing Qualified Leads to the Teleprospecting team, which feeds Sales Qualified Leads to the sales team on a regular basis.

The SOMAmetrics Four Funnels Framework is designed to ensure proper operational scheduling.

Determine The Right Amount and Type of Investment Required to Reach Effective Revenue Targets

As many executives know, revenue is not free. It is typically purchased—either through acquisitions, hiring of more sales reps, increased marketing presence, or some combinations of these. To earn more revenue, a company will likely need to spend more.

But more importantly, it needs to make the right spending decisions.

One thing we come across often is that companies believe that if they hire more sales reps, then they will build more revenue. They justify this saying that they need the “presence” and that hired sales reps will also be required to prospect their own leads.

We question this line of reasoning. Our experiences tell us that most sales reps do not like to prospect and will likely not be productive unless they have a full pipeline of well-qualified leads to work on. The company has just added to its fixed cost without really looking at the return on that investment.

We believe that there is significantly better return on investment when a company reallocates its budget to Teleprospecting activities, thereby significantly increasing the productivity of its smaller sales team.

In the example below, the first column shows the cost of a single sales rep assigned to the fictional Segment A we looked at above. The rep has a base salary of $60k/year, which comes to $72k/year when fully burdened. The rep sells $900K of goods per year and earns $90K in commissions. This brings his total selling cost to $162K/year, and the net contribution to the company is now $738K for the year.

Lets assume that there are five sales reps assigned to Segment A and their totals are shown in the second column.

Next, let’s explore a different sales strategy.

Let’s say we want to determine what would happen if the company let go one of the reps and instead utilized the services of a professional Teleprospector. At this point, the company released $162K per year it would have paid to the fifth sales rep, but also lost the $900K it would have received from that rep, or net negative of $738K that year it would need to get somehow to come to par.

The new numbers are dramatically different. We paid the Teleprospector $96K and obtained about 8 Sales Qualified Leads each month, or 96 for the year, resulting in a sales pipeline of $9.6 million. Recalling that the closing ratio for Segment A was 25%, this pipeline converted into $2.4 million in sales.

The company was able to realize 267% increase in revenues by better utilizing the remaining four sales reps, since they were adequately fed quality pipeline by the single Teleprospector.

The company spent an extra $24K and increased its revenue by an additional $1.5 million ($2.4million-$900k). That is a 6300% return on that extra $24k—a smart investment.

While there is a point of diminishing return here as in all things, this example illustrates how companies can significantly increase revenue by shifting their costs to where they can get better return on the same dollars spent.

Make the Commitment to Reach Your Effective Revenue Targets

The analysis has been done, and the plan has been written and re-written.

What is left is the commitment to make the hard decisions, choices, and changes necessary to execute the plan and reach your effective revenue targets. It is always hard to make changes. People are affected by change, and many people have been with the company for a long time.

None of the steps outlined are easy or quick and dirty. They will likely take weeks of planning, sharing notes and ideas, and careful preparation to ensure that the management team has fully thought through the steps and stands confidently behind the numbers. And, in the end, act decisively and boldly.

A Sales Saybook is what Your SDRs Need.

There is a significant difference between a Sales Playbook and a Sales Saybook, as we will discuss in some detail below. But, to quickly give you the key differences… A Sales Playbook is a complete discussion of how a company plans to go to market with its various products to achieve very specific sales goals.

Two Hidden Competitors your SDRs face every day

There are two hidden competitors that stall sales pipeline development more than any other—and they are not the ones you are probably thinking of. In fact every company, every product, faces these two hidden competitors. You can’t escape them. Not only that, they are the first barrier you face—before you encounter any of the competitors

How to drive Predictable Revenue growth with a Radical Sales Pipeline Strategy

One of the first things we look at when working with a new client is their sales pipeline strategy. And, we are often surprised at how inadequate their sales pipeline strategy is. All the more surprising because these are typically highly experienced sales leaders. Don’t get me wrong—their sales strategies are detailed, well-thought-out, and comprehensive.

Building High Quality Sales Pipeline

NOTE: Read this ONLY IF your team is having difficulty consistently hitting their quotas. The number one factor that affects the ability of sales leaders to hit their numbers is high quality sales pipeline. In fact, as the sales pipeline goes, so does revenue growth. Sales leaders that focus on building high quality sales pipelines

The Impact of Average Deal Size on Sales Growth

Average Deal Size is one of the most powerful and least utilized levers for increasing overall sales without incurring any additional costs.

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Elevate your prospecting programs without increasing sales or marketing spend. That’s the new revenue math for the modern B2B seller.

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How to create a sales plan in 7 Steps

A sales plan is the first step toward defining your sales strategy , sales goals and how you’ll reach them.

A refined sales plan is a go-to resource for your reps. It helps them better understand their role, responsibilities, targets, tactics and methods. When done right, it gives your reps all the information they need to perform at their highest level.

In this article, we outline what a sales plan is and why it’s important to create one. We also offer a step-by-step guide on how to make a sales plan with examples of each step.

What is a sales plan and why create one?

Your sales plan is a roadmap that outlines how you’ll hit your revenue targets, who your target market is, the activities needed to achieve your goals and any roadblocks you may need to overcome.

Many business leaders see their sales plan as an extension of the traditional business plan. The business plan contains strategic and revenue goals across the organization, while the sales plan lays out how to achieve them.

The benefits of a sales plan

A successful sales plan will keep all your reps focused on the right activities and ensure they’re working toward the same outcome. It will also address your company's specific needs. For example, you might choose to write a 30- , 60- or 90-day sales plan depending on your current goals and the nature of your business.

Say your ultimate goal for the next quarter is $250,000 in new business. A sales plan will outline the objective, the strategies that will help you get there and how you’ll execute and measure those strategies. It will allow your whole team to collaborate and ensure you achieve it together.

Many salespeople are driven by action and sometimes long-term sales planning gets neglected in favor of short-term results.

While this may help them hit their quota, the downside is the lack of systems in place. Instead, treat sales processes as a system with steps you can improve. If reps are doing wildly different things, it’s hard to uncover what’s working and what’s not. A strategic sales plan can optimize your team’s performance and keep them on track using repeatable systems.

With this in mind, let’s explore the seven components of an effective sales plan

1. Company mission and positioning

To work toward the same company goals, everyone in your organization must understand what your organization is trying to achieve and where in the market you position yourself.

To help define your mission and positioning, involve your sales leaders in all areas of the business strategy. Collaborating and working toward the same goals is impossible if those goals are determined by only a select group of stakeholders.

Recommended reading

How to set sales goals that improve team performance (with examples)

To get a handle on the company’s mission and positioning, take the following steps:

Collaborate with marketing: Your marketing teams live and breathe the positioning of your company. Take the time to talk to each function within the department, from demand generation to performance marketing to learn what they know.

Interview customer success teams: Customer support reps speak with your existing customers every day. Interview them to find common questions and pain points.

Talk to your customers: Customer insights are a foundational part of any positioning strategy. Speak directly with existing and new customers to find out what they love about your product or service.

Read your company blog: Those in charge of content production have a strong understanding of customer needs. Check out blog articles and ebooks to familiarize yourself with customer language and common themes.

Look for mentions around the web: How are other people talking about your organization? Look for press mentions, social media posts, articles and features that mention your products and services.

These insights can provide context around how your company is currently positioned in the market.

Finally, speak with the team in charge of defining the company’s positioning. Have a list of questions and use the time to find out why they made certain decisions. Here are some examples:

What important insights from the original target audience research made you create our positioning statement?

What competitor research led us to position ourselves in this way? Does this significantly differentiate us from the crowd? How?

What core ideals and values drove us to make these promises in our positioning statement? Have they shifted in any way since we launched? If so, what motivates these promises now?

How to communicate mission and positioning

In this section of the sales plan, include the following information:

Company mission : Why your company exists and the value you’re determined to bring to the market.

Competition: Who your direct competitors (those who offer similar products and services) and indirect competitors (brands who solve the same problem in different ways) are.

Value propositions: The features, benefits and solutions your product delivers.

What is brand positioning: The ultimate guide with 4 examples

2. Goals and targets

Define your revenue goals and the other targets sales are responsible for.

As mentioned earlier, sales goals are usually aligned with business goals. Your boardroom members typically establish the company’s revenue goals and it’s your job to achieve them.

Revenue goals will shape your sales strategy. Use them to reverse engineer quotas, sales activity and the staff you need to execute them.

Break your big-picture revenue goal down further into sales targets and activity targets for your team. Activities are the specific actions you and your reps can control, while sales targets are the results provided by those activities.

9 steps to creating the perfect sales strategy (with free template)

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10 predictable revenue hacks to grow your sales

Use data on sales activity and performance from previous years to calculate sales targets. You should break this down by pipeline stage and activity conducted by reps across all functions.

For example, how many cold emails does it take to generate a deal? What is the average lifetime value (LTV) of your customer?

Breaking down these numbers allows you to accurately forecast what it will take to achieve your new revenue goal.

This part of your sales plan might include setting goals like the following:

200 total cold emails sent per day

200 total cold calls made per day

25 demos conducted per day

5 new sales appointments made a day

100 follow-up emails sent per day

Breaking down your goals into specific activities will also reveal the expertise needed for each activity and any required changes to your organizational structure, which will come into play in the next step.

How to communicate goals and targets

Within this section of the sales plan, include the following information:

Revenue goals : Reverse engineer the boardroom revenue goals to identify achievable sales goals and the number of staff needed to reach them. Sales targets : Use data on sales activity and past performance to define quotas and metrics for each stage of the sales pipeline.

Expertise needed for each activity: What qualities and attributes do your staff need to achieve these predefined activities? How much experience do they need vs. what can be learned on the job?

3. Sales organization and team structure

Identify the talent and expertise you need to achieve your goals.

For example, a marketing agency that depends on strong relationships will benefit more from a business development executive than a sales development representative (SDR) .

Use the targets established in the previous section to identify who you need to hire for your team. For example, if the average sales development rep can send 20 cold emails a day and you need to send 200 to achieve your goals, you’ll need around ten reps to hit your targets.

Include the information for each team member in a table in your sales plan. Here is an example.

Visualizing each role helps all stakeholders understand who they’re hiring and the people they’re responsible for. It allows them to collaborate on the plan and identify the critical responsibilities and qualities of their ideal candidates.

You want to avoid micromanaging , but now is a good time to ask your existing teams to report on the time spent on certain activities. Keeping a timesheet will give you an accurate forecast of how long certain activities take and the capacity of each rep.

How to communicate your sales organization and team structure

Team structure: These are the functions that make up your overall sales organization. The roles of SDR, business development and account teams must be well-defined.

Roles and responsibilities: These are the roles you need to hire, along with the tasks they’re responsible for. This will help you produce job descriptions that attract great talent.

Salary and compensation: How will the company remunerate your teams? Having competitive salaries, compensation schemes and sales incentives will attract top performers and keep them motivated.

Timeline: Attempting to hire dozens of people at once is tough. Prioritize hiring based on how critical each role is for executing your plan. Take a phased hiring approach to onboard new reps with the attention they deserve.

Building a sales team: How to set your group up for success

4. Target audience and customer segments

A sales plan is useless without knowing who to sell to. Having clearly defined customer personas and ideal customer profiles will help you tailor your selling techniques to companies and buyers.

Whether you’re looking to break into a new market or expand your reach in your current one, start by clearly defining which companies you’re looking to attract. Include the following criteria:

Industries: Which markets and niches do you serve? Are there certain sub-segments of those industries that you specialize in?

Headcount: How many employees do your best accounts have within their organization?

Funding: Have they secured one or several rounds of funding?

Find out as much as you can about their organizational challenges. This may include growth hurdles, hiring bottlenecks and even barriers created by legislation.

Learn about your buyers within those target accounts, learn about your buyers. Understanding your buyers and personalizing your sales tactics for them will help you strengthen your customer relationships.

These insights will change as your business grows. Enterprise companies may wish to revisit their personas as they move upmarket. For small businesses and startups, your target audience will evolve as you find product-market fit.

It’s important to constantly revisit this part of your sales plan. Even if your goals and methodologies are the same, always have your finger on the pulse of your customer’s priorities.

How to communicate target audience and customer segments

Profile: Include basic information about their role, what their career journey looks like and the common priorities within their personal lives.

Demographics : Add more information about their age, income and living situation. Demographic information can help tailor your message to align with the language used across different generations.

Attributes: Assess their personality. Are they calm or assertive? Do they handle direct communication themselves or have an assistant? Use these identifying attributes to communicate effectively.

Challenges: Think about the hurdles this persona is trying to overcome. How does it affect their work and what’s the impact on them personally?

Goals: Analyze how these challenges are preventing them from achieving their goals. Why are these goals important to them?

Support: Use this insight to define how your product or service will help these people overcome challenges and achieve their goals.

Behavioral segmentation: What is it and how can it drive engagement and loyalty

5. Sales strategies and methodologies

Define your sales approach. This includes the strategies, techniques and methodologies you’ll use to get your offering out to market.

This part of your sales plan may end up being the largest. It will outline every practical area of your sales strategy: your sales stages, methodologies and playbooks.

Start by mapping out each stage of your sales process. What are the steps needed to guide a prospect through your deal flow?

9 essential sales stages

Traditionally, a sales process has nine sales stages :

Prospecting and lead generation : Your marketing strategy should deliver leads, but sales reps should boost this volume with their own prospecting efforts.

Qualification: Measure those leads against your target account criteria and customer personas. Ensure they’re a good fit, prioritizing your time on high-value relationships.

Reaching out to new leads : Initiate emails to your target customers to guide new leads into the sales funnel. This outreach activity includes cold calling and direct mail.

Appointment setting: Schedule a demo, discovery call or consultation.

Defining needs: After the initial meeting, you’ll understand your prospect’s problems and how your product or service can solve them.

Presentation: Reveal the solution. This can be in the form of a proposal, custom service packages or a face-to-face sales pitch .

Negotiation: Dedicate this stage to overcoming any objections your prospect may have.

Winning the deal: Turn your prospects into customers by closing deals and signing contracts.

Referrals : Fostering loyalty is an organization-wide activity. Delight your customers and encourage them to refer their friends.

Not all of these stages will be relevant to your organization. For example, a SaaS company that relies on inbound leads may do much of the heavy lifting during the initial meeting and sales demo . On the other hand, an exclusive club whose members must meet certain criteria (say, a minimum net worth) would focus much of their sales activity on referrals.

Map out your sales process to identify the stages you use. Your sales process should look something like this:

To determine your sales methodologies, break each sales stage down into separate activities, along with the stakeholder responsible for them.

With your sales activities laid out, you can do in-depth research into the techniques and methodologies you need to execute them. For example, if you sell a complex product with lengthy sales cycles , you could adopt a SPIN selling methodology to identify pain points and craft the best solution for leads.

Finally, use these stages and methodologies to form your sales playbooks . This will help you structure your sales training plan and create playbooks your reps can go back to for guidance.

How to communicate sales strategies and methodologies

Within this section of the sales plan, include the following:

Sales stages: The different steps required to convert prospects into paying customers.

Sales methodologies: The different practices and approaches you’ll adopt to shape your sales strategy.

Sales playbooks: The tactics, techniques and sales strategy templates needed to guide contacts throughout each stage of the sales process.

6. Sales action plan

You have the “who” and the “what”. Now you must figure out “when” to execute your sales plan.

A well-structured sales action plan communicates when the team will achieve key milestones. It outlines timeframes for when they’ll complete certain projects and activities, as well as the recruitment timelines for each quarter.

The order in which you implement your sales action plan depends on your priorities. Many sales organizations prefer to front-load the activity that will make a bigger impact on the bottom line.

For example, when analyzing your current sales process and strategy, you may find your existing customers are a rich source of qualified leads . Therefore, it would make sense to nurture more of these relationships using a structured referral program.

You must also consider how recruitment will affect the workload in your team. Hire too quickly and you may end up spending more time training new reps and neglecting your existing team. However, taking too long to recruit could overload your existing team. Either can make a big impact on culture and deal flow.

To complete your sales action plan, get all stakeholders involved in deciding timelines. When applying this to your sales plan, use GANTT charts and tables to visualize projects and key milestones.

A GANTT chart shows you the main activities, their completion dates and if there are any overlaps. Here is an example:

By prioritizing each activity and goal, you can create a plan that balances short-term results with long-term investment.

How to communicate your sales action plan

Key milestones : When do you aim to complete your projects, activities and recruitment efforts? You can map them out by week, month, quarter or all of the above. Let your revenue goals and priorities lead your schedule.

Short- and long-term goal schedules: With a high-level schedule mapped out, you can see when you will achieve your goals. From here, you can shape your schedule so that it balances both short- and long-term goals.

7. Performance and results measurement

Finally, your plan must detail how you measure performance. Outline your most important sales metrics and activities, how you’ll track them and what technology you’ll need to track them.

Structure this part of your plan by breaking down each sales stage. Within these sections, list out the metrics you’ll need to ensure you’re running a healthy sales pipeline.

Performance metrics can indicate the effectiveness of your entire sales process. Your chosen metrics typically fall into two categories:

Primary metrics act as your “true north” guide. This is commonly new business revenue generated.

Secondary metrics are those that indicate how well specific areas of your sales process are performing. These include lead response time and average purchase value.

The metrics you select must closely align with your goals and sales activities. For example, at the appointment setting stage, you might measure the number of demos conducted.

Each team also needs its own sales dashboard to ensure reps are hitting their targets. Sales development reps will have different priorities from account executives, so it’s critical they have the sales tools to focus on what’s important to them.

Finally, research and evaluate the technology you’ll need to accurately measure these metrics. Good CRM software is the best system to use for bringing your data together.

How to communicate sales performance metrics

Sales stage metrics : Identify the metrics for each specific sales stage and make sure they align with your KPIs.

Chosen sales dashboard: Explain why you chose your sales dashboard technology and exactly how it works.

Performance measurement: Outline exactly how and what tech you will use to measure your team’s activities and metrics.

How to track, measure and improve your team’s sales performance

Developing a sales plan involves conducting market research, assessing current sales performance , identifying sales opportunities and challenges, setting measurable goals, creating a sales strategy, allocating resources and establishing a monitoring and evaluation framework.

To write a sales business plan, include:

An executive summary

A company overview

A market analysis

A target market description

Sales strategies and tactics

Financial projections

A budget and timeline

Make sure that you clearly articulate your value proposition, competitive advantage and growth strategies.

Final thoughts

An effective sales plan is an invaluable asset for your sales team . Although you now know how to create a sales plan, you should remember to make one that works for your team. Writing one helps with your sales strategy planning and aids you in defining targets, metrics and processes. Distributing the sales plan helps your reps understand what you expect of them and how they can reach their goals.

Providing supportive, comprehensive resources is the best way to motivate your team and inspire hard work. When you do the work to build a solid foundation, you equip your reps with everything they need to succeed.

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Target Market Examples

Elon Glucklich

7 min. read

Updated April 24, 2024

Imagine your dream is to own a diner.

You have restaurant experience and a great location in mind – you just need the bank to approve your loan to get started.

But the bank has questions. A big one it wants answered is: who is your target market?

It might be tempting just to say, “hungry diners.” But you’ll need to dig deeper to truly define your target market . 

In this article, we’ll use this diner scenario to walk through the market research process and illustrate what the final result could look like.

• Questions about your target market

Before you even set foot in the bank, you should already have asked – and taken steps to answer – several key questions about your target market.

Let’s call our example business the Bplans Diner. Where is that perfect location you’ve found for the diner? Is it in a densely populated urban area, suburban neighborhood, or rural?

What are your hours of operation? Some diners cater to a breakfast crowd, while others might offer 24-hour dining to be a favorite among night owls. When you expect your peak hours could help determine whether you should expect to sell more omelets or hamburgers.

What’s the area’s median income, and what types of businesses or institutions are nearby? This information will help you determine pricing and marketing strategies for your diner. For instance, if your diner is located in a business district, you may want to offer lunch specials. But if it’s near a college or university, you might want to offer student discounts.

This is what a thorough target market analysis looks like, providing key insights and data to pinpoint the specific groups of customers most likely to patronize your diner. Gathering all of this information may sound intimidating, but it’s really just a matter of doing research. If you need help and guidance, check out our complete guide to conducting market research for your business . 

Let’s look at an example of a target market analysis for this diner. Then, we’ll break it down and discuss each element in detail.

• Example of a target market analysis

As you can see, the target market analysis follows the basic market segmentation process of splitting out potential customers into their demographic, geographic, psychographic and behavioral traits.

Next, let’s take a look at each in more detail. Afterward, we’ll look at how you can harness your target market analysis into actual business strategies.

• Demographic

You may have noticed that the demographic analysis in our example is very broad – 18 to 65 years old, including students, workers, and some seniors.

Finding your target market isn’t always about identifying a narrow demographic to cater to. In the case of a restaurant, it makes sense to focus on the geographic location and who currently frequents the area (more on that in the next section).

A different approach may be needed for a technology product that’s sold online. In that case, narrowing the demographic focus to specific age ranges or needs would be much more important than where the business is located.

In the case of the diner, we reached our decision by conducting a demographic analysis, examining the age ranges, occupations, and other concrete data points about potential customers near the proposed location (Reminder: we didn’t do this for the Bplans Diner, we’re just providing an example). 

There are several ways to go about collecting this information for your business. The most straightforward is to get out in the neighborhood, take a look around and talk to people. Are you mostly seeing students, or families? Are there a lot of office workers in the area? 

You can also look up data from the U.S. Census Bureau , which includes population, age, income and other useful information, often down to the neighborhood level.

After conducting this research, one valuable step is to create a detailed customer persona that represents the typical customer you expect for your business (we provide an example of a customer persona for the diner further down in this article).

While the demographic analysis considers the type of people who might frequent your business, the geographic analysis considers the characteristics of the neighborhood itself. 

Our target market analysis for Bplans Diner noted that we plan to operate in an urban area near a university with heavy foot traffic and expect a fair amount of late-night diners.

A key reason for examining the geographic makeup of your businesses is to size up your competition. If there’s already a popular diner in the area you plan to target, getting customers could be a major challenge. But if there’s a lack of dining options or no one is serving diner-style food, you’re more likely to be successful. Determining the size of your market will help you create reasonable revenue projections. 

We also mentioned the plan for Bplans Diner to cater to a late-night crowd. Examining the geographic makeup of the neighborhood will help you determine if there are the kinds of businesses – bars, music venues, or businesses such as hospitals where people are working all hours – to justify targeting this group.

• Psychographic

You know the demographics and geographic characteristics of your market. Now it’s time to consider the attitudes and values of your potential customers.

The psychographic analysis helps to understand the lifestyle of potential customers and how that might affect their preferences as consumers. If many of your potential customers are health-conscious, for instance, you’ll want to ensure your diner provides options like salads or gluten-free menu items. But if most customers are families looking for a place to bring their children, it may be important to keep classic items like hamburgers and french fries on the menu.

The best way to understand your potential customers’ attitudes is to get out and talk to them. Customer interviews are among the most powerful methods of validating a business idea , since you’ll get honest, real-time feedback from the kinds of people your business would depend on.

Finally, the behavioral analysis expands on customer psychographics by examining what customers do, given their values. This is another place where it’s worth considering the broad demographics of the diner’s target market – 18 to 65 years old, split among students, workers, and seniors.

They may all want the diner’s food, but their behaviors will vary widely. College students might be looking for a late-night study spot, or a place to meet up with friends for dinner before a concert or sporting event. But workers and seniors might be more interested in breakfast or lunch specials. 

Each of these behaviors gives a business owner valuable information to target individual segments of their target audience. For instance, you might want to play popular music in the evenings to get young diners ready for a night out on the town. But you’ll want a quieter ambiance at the time of day when seniors are most likely to come in. The environment can be adjusted based on when certain customers frequent the business.

Addressing behavioral aspects like buying motivations and concerns of your potential customers will also help you effectively market your diner. For example, you could create marketing campaigns based on student discounts, late-night specials, or a family-friendly atmosphere, depending on your customers’ behaviors.

• Connecting a target market analysis to business strategy

So far, we’ve touched on each of the components of a target market analysis for a diner: customer demographics, geographics, psychographics, and behaviors. (It’s also important to conduct an industry analysis to understand competitive and macroeconomic forces affecting your planning.)

With the target market analysis complete, you’re better equipped to demonstrate a thorough understanding of your customers to a lender.

Here are a few insights a business owner could use for the Bplans Diner, developed through the above analysis.

• Bplans Diner Competitive Analysis

Market Trends: Growing demand for late-night food options, increasing preference for healthy dining options.

Competitor Strengths and Weaknesses:

Competitor A: Strong brand but limited menu options.

Competitor B: Wide variety of options but lacking in ambiance.

• Bplans Diner Marketing Strategy

Product Differentiation: Offering a diverse menu that caters to various preferences, including healthy options.

Positioning: Establishing Bplans Diner as a reliable, quality, 24-hour dining option in the region.

Promotion: Utilizing social media to announce special night-time deals and promotions.

• Get started with your business plan template

A target market analysis is a key part of any business plan. But it’s just one piece. At Bplans, we take some of the pain out of business planning. We’ve developed a free business planning template to help reduce entrepreneurs’ time to create a full, lender-ready business plan. Bplans has also collected over 550 free sample business plans across numerous industries. Find a plan in your industry to get inspiration for your plan.

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Elon is a marketing specialist at Palo Alto Software, working with consultants, accountants, business instructors and others who use LivePlan at scale. He has a bachelor's degree in journalism and an MBA from the University of Oregon.

Table of Contents

Related Articles

8 Min. Read

How to Conduct an Industry Analysis

9 Min. Read

How to Write a Customer Analysis

3 Min. Read

How to Use TAM, SAM, SOM to Determine Market Size

4 Min. Read

How to Define Your Target Market

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How to Write a Business Plan in 9 Steps (+ Template and Examples)

Every successful business has one thing in common, a good and well-executed business plan. A business plan is more than a document, it is a complete guide that outlines the goals your business wants to achieve, including its financial goals . It helps you analyze results, make strategic decisions, show your business operations and growth.

If you want to start a business or already have one and need to pitch it to investors for funding, writing a good business plan improves your chances of attracting financiers. As a startup, if you want to secure loans from financial institutions, part of the requirements involve submitting your business plan.

Writing a business plan does not have to be a complicated or time-consuming process. In this article, you will learn the step-by-step process for writing a successful business plan.

You will also learn what you need a business plan for, tips and strategies for writing a convincing business plan, business plan examples and templates that will save you tons of time, and the alternatives to the traditional business plan.

Let’s get started.

What Do You Need A Business Plan For?

Businesses create business plans for different purposes such as to secure funds, monitor business growth, measure your marketing strategies, and measure your business success.

1. Secure Funds

One of the primary reasons for writing a business plan is to secure funds, either from financial institutions/agencies or investors.

For you to effectively acquire funds, your business plan must contain the key elements of your business plan . For example, your business plan should include your growth plans, goals you want to achieve, and milestones you have recorded.

A business plan can also attract new business partners that are willing to contribute financially and intellectually. If you are writing a business plan to a bank, your project must show your traction , that is, the proof that you can pay back any loan borrowed.

Also, if you are writing to an investor, your plan must contain evidence that you can effectively utilize the funds you want them to invest in your business. Here, you are using your business plan to persuade a group or an individual that your business is a source of a good investment.

2. Monitor Business Growth

A business plan can help you track cash flows in your business. It steers your business to greater heights. A business plan capable of tracking business growth should contain:

• The business goals
• Methods to achieve the goals
• Time-frame for attaining those goals

A good business plan should guide you through every step in achieving your goals. It can also track the allocation of assets to every aspect of the business. You can tell when you are spending more than you should on a project.

You can compare a business plan to a written GPS. It helps you manage your business and hints at the right time to expand your business.

3. Measure Business Success

A business plan can help you measure your business success rate. Some small-scale businesses are thriving better than more prominent companies because of their track record of success.

Right from the onset of your business operation, set goals and work towards them. Write a plan to guide you through your procedures. Use your plan to measure how much you have achieved and how much is left to attain.

You can also weigh your success by monitoring the position of your brand relative to competitors. On the other hand, a business plan can also show you why you have not achieved a goal. It can tell if you have elapsed the time frame you set to attain a goal.

4. Document Your Marketing Strategies

You can use a business plan to document your marketing plans. Every business should have an effective marketing plan.

Competition mandates every business owner to go the extraordinary mile to remain relevant in the market. Your business plan should contain your marketing strategies that work. You can measure the success rate of your marketing plans.

In your business plan, your marketing strategy must answer the questions:

• How do you want to reach your target audience?
• How do you plan to retain your customers?
• What is/are your pricing plans?
• What is your budget for marketing?

How to Write a Business Plan Step-by-Step

1. create your executive summary.

The executive summary is a snapshot of your business or a high-level overview of your business purposes and plans . Although the executive summary is the first section in your business plan, most people write it last. The length of the executive summary is not more than two pages.

Generally, there are nine sections in a business plan, the executive summary should condense essential ideas from the other eight sections.

A good executive summary should do the following:

• A Snapshot of Growth Potential. Briefly inform the reader about your company and why it will be successful)
• Contain your Mission Statement which explains what the main objective or focus of your business is.
• Product Description and Differentiation. Brief description of your products or services and why it is different from other solutions in the market.
• The Team. Basic information about your company’s leadership team and employees
• Business Concept. A solid description of what your business does.
• Target Market. The customers you plan to sell to.
• Marketing Strategy. Your plans on reaching and selling to your customers
• Current Financial State. Brief information about what revenue your business currently generates.
• Projected Financial State. Brief information about what you foresee your business revenue to be in the future.

The executive summary is the make-or-break section of your business plan. If your summary cannot in less than two pages cannot clearly describe how your business will solve a particular problem of your target audience and make a profit, your business plan is set on a faulty foundation.

Avoid using the executive summary to hype your business, instead, focus on helping the reader understand the what and how of your plan.

View the executive summary as an opportunity to introduce your vision for your company. You know your executive summary is powerful when it can answer these key questions:

• Who is your target audience?
• What sector or industry are you in?
• What are your products and services?
• What is the future of your industry?
• Is your company scaleable?
• Who are the owners and leaders of your company? What are their backgrounds and experience levels?
• What is the motivation for starting your company?
• What are the next steps?

Writing the executive summary last although it is the most important section of your business plan is an excellent idea. The reason why is because it is a high-level overview of your business plan. It is the section that determines whether potential investors and lenders will read further or not.

The executive summary can be a stand-alone document that covers everything in your business plan. It is not uncommon for investors to request only the executive summary when evaluating your business. If the information in the executive summary impresses them, they will ask for the complete business plan.

If you are writing your business plan for your planning purposes, you do not need to write the executive summary.

2. Add Your Company Overview

The company overview or description is the next section in your business plan after the executive summary. It describes what your business does.

Adding your company overview can be tricky especially when your business is still in the planning stages. Existing businesses can easily summarize their current operations but may encounter difficulties trying to explain what they plan to become.

Your company overview should contain the following:

• What products and services you will provide
• Geographical markets and locations your company have a presence
• What you need to run your business
• Who your target audience or customers are
• Who will service your customers
• Your company’s purpose, mission, and vision
• Information about your company’s founders
• Who the founders are
• Notable achievements of your company so far

When creating a company overview, you have to focus on three basics: identifying your industry, identifying your customer, and explaining the problem you solve.

If you are stuck when creating your company overview, try to answer some of these questions that pertain to you.

• Who are you targeting? (The answer is not everyone)
• What pain point does your product or service solve for your customers that they will be willing to spend money on resolving?
• How does your product or service overcome that pain point?
• Where is the location of your business?
• What products, equipment, and services do you need to run your business?
• How is your company’s product or service different from your competition in the eyes of your customers?
• How many employees do you need and what skills do you require them to have?

After answering some or all of these questions, you will get more than enough information you need to write your company overview or description section. When writing this section, describe what your company does for your customers.

The company description or overview section contains three elements: mission statement, history, and objectives.

• Mission Statement

The mission statement refers to the reason why your business or company is existing. It goes beyond what you do or sell, it is about the ‘why’. A good mission statement should be emotional and inspirational.

Your mission statement should follow the KISS rule (Keep It Simple, Stupid). For example, Shopify’s mission statement is “Make commerce better for everyone.”

When describing your company’s history, make it simple and avoid the temptation of tying it to a defensive narrative. Write it in the manner you would a profile. Your company’s history should include the following information:

• Founding Date
• Major Milestones
• Location(s)
• Flagship Products or Services
• Number of Employees
• Executive Leadership Roles

When you fill in this information, you use it to write one or two paragraphs about your company’s history.

Business Objectives

Your business objective must be SMART (specific, measurable, achievable, realistic, and time-bound.) Failure to clearly identify your business objectives does not inspire confidence and makes it hard for your team members to work towards a common purpose.

3. Perform Market and Competitive Analyses to Proof a Big Enough Business Opportunity

The third step in writing a business plan is the market and competitive analysis section. Every business, no matter the size, needs to perform comprehensive market and competitive analyses before it enters into a market.

Performing market and competitive analyses are critical for the success of your business. It helps you avoid entering the right market with the wrong product, or vice versa. Anyone reading your business plans, especially financiers and financial institutions will want to see proof that there is a big enough business opportunity you are targeting.

This section is where you describe the market and industry you want to operate in and show the big opportunities in the market that your business can leverage to make a profit. If you noticed any unique trends when doing your research, show them in this section.

Market analysis alone is not enough, you have to add competitive analysis to strengthen this section. There are already businesses in the industry or market, how do you plan to take a share of the market from them?

You have to clearly illustrate the competitive landscape in your business plan. Are there areas your competitors are doing well? Are there areas where they are not doing so well? Show it.

Make it clear in this section why you are moving into the industry and what weaknesses are present there that you plan to explain. How are your competitors going to react to your market entry? How do you plan to get customers? Do you plan on taking your competitors' competitors, tap into other sources for customers, or both?

Illustrate the competitive landscape as well. What are your competitors doing well and not so well?

Answering these questions and thoughts will aid your market and competitive analysis of the opportunities in your space. Depending on how sophisticated your industry is, or the expectations of your financiers, you may need to carry out a more comprehensive market and competitive analysis to prove that big business opportunity.

Instead of looking at the market and competitive analyses as one entity, separating them will make the research even more comprehensive.

Market Analysis

Market analysis, boarding speaking, refers to research a business carried out on its industry, market, and competitors. It helps businesses gain a good understanding of their target market and the outlook of their industry. Before starting a company, it is vital to carry out market research to find out if the market is viable.

The market analysis section is a key part of the business plan. It is the section where you identify who your best clients or customers are. You cannot omit this section, without it your business plan is incomplete.

A good market analysis will tell your readers how you fit into the existing market and what makes you stand out. This section requires in-depth research, it will probably be the most time-consuming part of the business plan to write.

• Market Research

To create a compelling market analysis that will win over investors and financial institutions, you have to carry out thorough market research . Your market research should be targeted at your primary target market for your products or services. Here is what you want to find out about your target market.

• Your target market’s needs or pain points
• The existing solutions for their pain points
• Geographic Location
• Demographics

The purpose of carrying out a marketing analysis is to get all the information you need to show that you have a solid and thorough understanding of your target audience.

Only after you have fully understood the people you plan to sell your products or services to, can you evaluate correctly if your target market will be interested in your products or services.

You can easily convince interested parties to invest in your business if you can show them you thoroughly understand the market and show them that there is a market for your products or services.

How to Quantify Your Target Market

One of the goals of your marketing research is to understand who your ideal customers are and their purchasing power. To quantify your target market, you have to determine the following:

• Your Potential Customers: They are the people you plan to target. For example, if you sell accounting software for small businesses , then anyone who runs an enterprise or large business is unlikely to be your customers. Also, individuals who do not have a business will most likely not be interested in your product.
• Total Households: If you are selling household products such as heating and air conditioning systems, determining the number of total households is more important than finding out the total population in the area you want to sell to. The logic is simple, people buy the product but it is the household that uses it.
• Median Income: You need to know the median income of your target market. If you target a market that cannot afford to buy your products and services, your business will not last long.
• Income by Demographics: If your potential customers belong to a certain age group or gender, determining income levels by demographics is necessary. For example, if you sell men's clothes, your target audience is men.

What Does a Good Market Analysis Entail?

Your business does not exist on its own, it can only flourish within an industry and alongside competitors. Market analysis takes into consideration your industry, target market, and competitors. Understanding these three entities will drastically improve your company’s chances of success.

You can view your market analysis as an examination of the market you want to break into and an education on the emerging trends and themes in that market. Good market analyses include the following:

• Industry Description. You find out about the history of your industry, the current and future market size, and who the largest players/companies are in your industry.
• Overview of Target Market. You research your target market and its characteristics. Who are you targeting? Note, it cannot be everyone, it has to be a specific group. You also have to find out all information possible about your customers that can help you understand how and why they make buying decisions.
• Size of Target Market: You need to know the size of your target market, how frequently they buy, and the expected quantity they buy so you do not risk overproducing and having lots of bad inventory. Researching the size of your target market will help you determine if it is big enough for sustained business or not.
• Growth Potential: Before picking a target market, you want to be sure there are lots of potential for future growth. You want to avoid going for an industry that is declining slowly or rapidly with almost zero growth potential.
• Market Share Potential: Does your business stand a good chance of taking a good share of the market?
• Market Pricing and Promotional Strategies: Your market analysis should give you an idea of the price point you can expect to charge for your products and services. Researching your target market will also give you ideas of pricing strategies you can implement to break into the market or to enjoy maximum profits.
• Potential Barriers to Entry: One of the biggest benefits of conducting market analysis is that it shows you every potential barrier to entry your business will likely encounter. It is a good idea to discuss potential barriers to entry such as changing technology. It informs readers of your business plan that you understand the market.
• Research on Competitors: You need to know the strengths and weaknesses of your competitors and how you can exploit them for the benefit of your business. Find patterns and trends among your competitors that make them successful, discover what works and what doesn’t, and see what you can do better.

The market analysis section is not just for talking about your target market, industry, and competitors. You also have to explain how your company can fill the hole you have identified in the market.

Here are some questions you can answer that can help you position your product or service in a positive light to your readers.

• Is your product or service of superior quality?
• What additional features do you offer that your competitors do not offer?
• Are you targeting a ‘new’ market?

Basically, your market analysis should include an analysis of what already exists in the market and an explanation of how your company fits into the market.

Competitive Analysis

In the competitive analysis section, y ou have to understand who your direct and indirect competitions are, and how successful they are in the marketplace. It is the section where you assess the strengths and weaknesses of your competitors, the advantage(s) they possess in the market and show the unique features or qualities that make you different from your competitors.

Many businesses do market analysis and competitive analysis together. However, to fully understand what the competitive analysis entails, it is essential to separate it from the market analysis.

Competitive analysis for your business can also include analysis on how to overcome barriers to entry in your target market.

The primary goal of conducting a competitive analysis is to distinguish your business from your competitors. A strong competitive analysis is essential if you want to convince potential funding sources to invest in your business. You have to show potential investors and lenders that your business has what it takes to compete in the marketplace successfully.

Competitive analysis will s how you what the strengths of your competition are and what they are doing to maintain that advantage.

When doing your competitive research, you first have to identify your competitor and then get all the information you can about them. The idea of spending time to identify your competitor and learn everything about them may seem daunting but it is well worth it.

Find answers to the following questions after you have identified who your competitors are.

• What are your successful competitors doing?
• Why is what they are doing working?
• Can your business do it better?
• What are the weaknesses of your successful competitors?
• What are they not doing well?
• Can your business turn its weaknesses into strengths?
• How good is your competitors’ customer service?
• Where do your competitors invest in advertising?
• What sales and pricing strategies are they using?
• What marketing strategies are they using?
• What kind of press coverage do they get?
• What are their customers saying about your competitors (both the positive and negative)?

If your competitors have a website, it is a good idea to visit their websites for more competitors’ research. Check their “About Us” page for more information.

If you are presenting your business plan to investors, you need to clearly distinguish yourself from your competitors. Investors can easily tell when you have not properly researched your competitors.

Take time to think about what unique qualities or features set you apart from your competitors. If you do not have any direct competition offering your product to the market, it does not mean you leave out the competitor analysis section blank. Instead research on other companies that are providing a similar product, or whose product is solving the problem your product solves.

The next step is to create a table listing the top competitors you want to include in your business plan. Ensure you list your business as the last and on the right. What you just created is known as the competitor analysis table.

Direct vs Indirect Competition

You cannot know if your product or service will be a fit for your target market if you have not understood your business and the competitive landscape.

There is no market you want to target where you will not encounter competition, even if your product is innovative. Including competitive analysis in your business plan is essential.

If you are entering an established market, you need to explain how you plan to differentiate your products from the available options in the market. Also, include a list of few companies that you view as your direct competitors The competition you face in an established market is your direct competition.

In situations where you are entering a market with no direct competition, it does not mean there is no competition there. Consider your indirect competition that offers substitutes for the products or services you offer.

For example, if you sell an innovative SaaS product, let us say a project management software , a company offering time management software is your indirect competition.

There is an easy way to find out who your indirect competitors are in the absence of no direct competitors. You simply have to research how your potential customers are solving the problems that your product or service seeks to solve. That is your direct competition.

Factors that Differentiate Your Business from the Competition

There are three main factors that any business can use to differentiate itself from its competition. They are cost leadership, product differentiation, and market segmentation.

1. Cost Leadership

A strategy you can impose to maximize your profits and gain an edge over your competitors. It involves offering lower prices than what the majority of your competitors are offering.

A common practice among businesses looking to enter into a market where there are dominant players is to use free trials or pricing to attract as many customers as possible to their offer.

2. Product Differentiation

Your product or service should have a unique selling proposition (USP) that your competitors do not have or do not stress in their marketing.

Part of the marketing strategy should involve making your products unique and different from your competitors. It does not have to be different from your competitors, it can be the addition to a feature or benefit that your competitors do not currently have.

3. Market Segmentation

As a new business seeking to break into an industry, you will gain more success from focusing on a specific niche or target market, and not the whole industry.

If your competitors are focused on a general need or target market, you can differentiate yourself from them by having a small and hyper-targeted audience. For example, if your competitors are selling men’s clothes in their online stores , you can sell hoodies for men.

4. Define Your Business and Management Structure

The next step in your business plan is your business and management structure. It is the section where you describe the legal structure of your business and the team running it.

Your business is only as good as the management team that runs it, while the management team can only strive when there is a proper business and management structure in place.

If your company is a sole proprietor or a limited liability company (LLC), a general or limited partnership, or a C or an S corporation, state it clearly in this section.

Use an organizational chart to show the management structure in your business. Clearly show who is in charge of what area in your company. It is where you show how each key manager or team leader’s unique experience can contribute immensely to the success of your company. You can also opt to add the resumes and CVs of the key players in your company.

The business and management structure section should show who the owner is, and other owners of the businesses (if the business has other owners). For businesses or companies with multiple owners, include the percent ownership of the various owners and clearly show the extent of each others’ involvement in the company.

Investors want to know who is behind the company and the team running it to determine if it has the right management to achieve its set goals.

Management Team

The management team section is where you show that you have the right team in place to successfully execute the business operations and ideas. Take time to create the management structure for your business. Think about all the important roles and responsibilities that you need managers for to grow your business.

Include brief bios of each key team member and ensure you highlight only the relevant information that is needed. If your team members have background industry experience or have held top positions for other companies and achieved success while filling that role, highlight it in this section.

A common mistake that many startups make is assigning C-level titles such as (CMO and CEO) to everyone on their team. It is unrealistic for a small business to have those titles. While it may look good on paper for the ego of your team members, it can prevent investors from investing in your business.

Instead of building an unrealistic management structure that does not fit your business reality, it is best to allow business titles to grow as the business grows. Starting everyone at the top leaves no room for future change or growth, which is bad for productivity.

Your management team does not have to be complete before you start writing your business plan. You can have a complete business plan even when there are managerial positions that are empty and need filling.

If you have management gaps in your team, simply show the gaps and indicate you are searching for the right candidates for the role(s). Investors do not expect you to have a full management team when you are just starting your business.

Key Questions to Answer When Structuring Your Management Team

• Who are the key leaders?
• What experiences, skills, and educational backgrounds do you expect your key leaders to have?
• Do your key leaders have industry experience?
• What positions will they fill and what duties will they perform in those positions?
• What level of authority do the key leaders have and what are their responsibilities?
• What is the salary for the various management positions that will attract the ideal candidates?

Additional Tips for Writing the Management Structure Section

1. Avoid Adding ‘Ghost’ Names to Your Management Team

There is always that temptation to include a ‘ghost’ name to your management team to attract and influence investors to invest in your business. Although the presence of these celebrity management team members may attract the attention of investors, it can cause your business to lose any credibility if you get found out.

Seasoned investors will investigate further the members of your management team before committing fully to your business If they find out that the celebrity name used does not play any actual role in your business, they will not invest and may write you off as dishonest.

2. Focus on Credentials But Pay Extra Attention to the Roles

Investors want to know the experience that your key team members have to determine if they can successfully reach the company’s growth and financial goals.

While it is an excellent boost for your key management team to have the right credentials, you also want to pay extra attention to the roles they will play in your company.

Organizational Chart

Adding an organizational chart in this section of your business plan is not necessary, you can do it in your business plan’s appendix.

If you are exploring funding options, it is not uncommon to get asked for your organizational chart. The function of an organizational chart goes beyond raising money, you can also use it as a useful planning tool for your business.

An organizational chart can help you identify how best to structure your management team for maximum productivity and point you towards key roles you need to fill in the future.

You can use the organizational chart to show your company’s internal management structure such as the roles and responsibilities of your management team, and relationships that exist between them.

5. Describe Your Product and Service Offering

In your business plan, you have to describe what you sell or the service you plan to offer. It is the next step after defining your business and management structure. The products and services section is where you sell the benefits of your business.

Here you have to explain how your product or service will benefit your customers and describe your product lifecycle. It is also the section where you write down your plans for intellectual property like patent filings and copyrighting.

The research and development that you are undertaking for your product or service need to be explained in detail in this section. However, do not get too technical, sell the general idea and its benefits.

If you have any diagrams or intricate designs of your product or service, do not include them in the products and services section. Instead, leave them for the addendum page. Also, if you are leaving out diagrams or designs for the addendum, ensure you add this phrase “For more detail, visit the addendum Page #.”

Your product and service section in your business plan should include the following:

• A detailed explanation that clearly shows how your product or service works.
• The pricing model for your product or service.
• Your business’ sales and distribution strategy.
• The ideal customers that want your product or service.
• The benefits of your products and services.
• Reason(s) why your product or service is a better alternative to what your competitors are currently offering in the market.
• Plans for filling the orders you receive
• If you have current or pending patents, copyrights, and trademarks for your product or service, you can also discuss them in this section.

What to Focus On When Describing the Benefits, Lifecycle, and Production Process of Your Products or Services

In the products and services section, you have to distill the benefits, lifecycle, and production process of your products and services.

When describing the benefits of your products or services, here are some key factors to focus on.

• Unique features
• Translating the unique features into benefits
• The emotional, psychological, and practical payoffs to attract customers
• Intellectual property rights or any patents

When describing the product life cycle of your products or services, here are some key factors to focus on.

• Upsells, cross-sells, and down-sells
• Time between purchases
• Plans for research and development.

When describing the production process for your products or services, you need to think about the following:

• The creation of new or existing products and services.
• The sources for the raw materials or components you need for production.
• Assembling the products
• Maintaining quality control
• Supply-chain logistics (receiving the raw materials and delivering the finished products)
• The day-to-day management of the production processes, bookkeeping, and inventory.

Tips for Writing the Products or Services Section of Your Business Plan

1. Avoid Technical Descriptions and Industry Buzzwords

The products and services section of your business plan should clearly describe the products and services that your company provides. However, it is not a section to include technical jargons that anyone outside your industry will not understand.

A good practice is to remove highly detailed or technical descriptions in favor of simple terms. Industry buzzwords are not necessary, if there are simpler terms you can use, then use them. If you plan to use your business plan to source funds, making the product or service section so technical will do you no favors.

2. Describe How Your Products or Services Differ from Your Competitors

When potential investors look at your business plan, they want to know how the products and services you are offering differ from that of your competition. Differentiating your products or services from your competition in a way that makes your solution more attractive is critical.

If you are going the innovative path and there is no market currently for your product or service, you need to describe in this section why the market needs your product or service.

For example, overnight delivery was a niche business that only a few companies were participating in. Federal Express (FedEx) had to show in its business plan that there was a large opportunity for that service and they justified why the market needed that service.

3. Long or Short Products or Services Section

Should your products or services section be short? Does the long products or services section attract more investors?

There are no straightforward answers to these questions. Whether your products or services section should be long or relatively short depends on the nature of your business.

If your business is product-focused, then automatically you need to use more space to describe the details of your products. However, if the product your business sells is a commodity item that relies on competitive pricing or other pricing strategies, you do not have to use up so much space to provide significant details about the product.

Likewise, if you are selling a commodity that is available in numerous outlets, then you do not have to spend time on writing a long products or services section.

The key to the success of your business is most likely the effectiveness of your marketing strategies compared to your competitors. Use more space to address that section.

If you are creating a new product or service that the market does not know about, your products or services section can be lengthy. The reason why is because you need to explain everything about the product or service such as the nature of the product, its use case, and values.

A short products or services section for an innovative product or service will not give the readers enough information to properly evaluate your business.

4. Describe Your Relationships with Vendors or Suppliers

Your business will rely on vendors or suppliers to supply raw materials or the components needed to make your products. In your products and services section, describe your relationships with your vendors and suppliers fully.

Avoid the mistake of relying on only one supplier or vendor. If that supplier or vendor fails to supply or goes out of business, you can easily face supply problems and struggle to meet your demands. Plan to set up multiple vendor or supplier relationships for better business stability.

5. Your Primary Goal Is to Convince Your Readers

The primary goal of your business plan is to convince your readers that your business is viable and to create a guide for your business to follow. It applies to the products and services section.

When drafting this section, think like the reader. See your reader as someone who has no idea about your products and services. You are using the products and services section to provide the needed information to help your reader understand your products and services. As a result, you have to be clear and to the point.

While you want to educate your readers about your products or services, you also do not want to bore them with lots of technical details. Show your products and services and not your fancy choice of words.

Your products and services section should provide the answer to the “what” question for your business. You and your management team may run the business, but it is your products and services that are the lifeblood of the business.

Key Questions to Answer When Writing your Products and Services Section

Answering these questions can help you write your products and services section quickly and in a way that will appeal to your readers.

• Are your products existing on the market or are they still in the development stage?
• What is your timeline for adding new products and services to the market?
• What are the positives that make your products and services different from your competitors?
• Do your products and services have any competitive advantage that your competitors’ products and services do not currently have?
• Do your products or services have any competitive disadvantages that you need to overcome to compete with your competitors? If your answer is yes, state how you plan to overcome them,
• How much does it cost to produce your products or services? How much do you plan to sell it for?
• What is the price for your products and services compared to your competitors? Is pricing an issue?
• What are your operating costs and will it be low enough for you to compete with your competitors and still take home a reasonable profit margin?
• What is your plan for acquiring your products? Are you involved in the production of your products or services?
• Are you the manufacturer and produce all the components you need to create your products? Do you assemble your products by using components supplied by other manufacturers? Do you purchase your products directly from suppliers or wholesalers?
• Do you have a steady supply of products that you need to start your business? (If your business is yet to kick-off)
• How do you plan to distribute your products or services to the market?

You can also hint at the marketing or promotion plans you have for your products or services such as how you plan to build awareness or retain customers. The next section is where you can go fully into details about your business’s marketing and sales plan.

6. Show and Explain Your Marketing and Sales Plan

Providing great products and services is wonderful, but it means nothing if you do not have a marketing and sales plan to inform your customers about them. Your marketing and sales plan is critical to the success of your business.

The sales and marketing section is where you show and offer a detailed explanation of your marketing and sales plan and how you plan to execute it. It covers your pricing plan, proposed advertising and promotion activities, activities and partnerships you need to make your business a success, and the benefits of your products and services.

There are several ways you can approach your marketing and sales strategy. Ideally, your marketing and sales strategy has to fit the unique needs of your business.

In this section, you describe how the plans your business has for attracting and retaining customers, and the exact process for making a sale happen. It is essential to thoroughly describe your complete marketing and sales plans because you are still going to reference this section when you are making financial projections for your business.

Outline Your Business’ Unique Selling Proposition (USP)

The sales and marketing section is where you outline your business’s unique selling proposition (USP). When you are developing your unique selling proposition, think about the strongest reasons why people should buy from you over your competition. That reason(s) is most likely a good fit to serve as your unique selling proposition (USP).

Target Market and Target Audience

Plans on how to get your products or services to your target market and how to get your target audience to buy them go into this section. You also highlight the strengths of your business here, particularly what sets them apart from your competition.

Before you start writing your marketing and sales plan, you need to have properly defined your target audience and fleshed out your buyer persona. If you do not first understand the individual you are marketing to, your marketing and sales plan will lack any substance and easily fall.

Creating a Smart Marketing and Sales Plan

Marketing your products and services is an investment that requires you to spend money. Like any other investment, you have to generate a good return on investment (ROI) to justify using that marketing and sales plan. Good marketing and sales plans bring in high sales and profits to your company.

Avoid spending money on unproductive marketing channels. Do your research and find out the best marketing and sales plan that works best for your company.

Your marketing and sales plan can be broken into different parts: your positioning statement, pricing, promotion, packaging, advertising, public relations, content marketing, social media, and strategic alliances.

Your Positioning Statement

Your positioning statement is the first part of your marketing and sales plan. It refers to the way you present your company to your customers.

Are you the premium solution, the low-price solution, or are you the intermediary between the two extremes in the market? What do you offer that your competitors do not that can give you leverage in the market?

Before you start writing your positioning statement, you need to spend some time evaluating the current market conditions. Here are some questions that can help you to evaluate the market

• What are the unique features or benefits that you offer that your competitors lack?
• What are your customers’ primary needs and wants?
• Why should a customer choose you over your competition? How do you plan to differentiate yourself from the competition?
• How does your company’s solution compare with other solutions in the market?

After answering these questions, then you can start writing your positioning statement. Your positioning statement does not have to be in-depth or too long.

All you need to explain with your positioning statement are two focus areas. The first is the position of your company within the competitive landscape. The other focus area is the core value proposition that sets your company apart from other alternatives that your ideal customer might consider.

Here is a simple template you can use to develop a positioning statement.

For [description of target market] who [need of target market], [product or service] [how it meets the need]. Unlike [top competition], it [most essential distinguishing feature].

For example, let’s create the positioning statement for fictional accounting software and QuickBooks alternative , TBooks.

“For small business owners who need accounting services, TBooks is an accounting software that helps small businesses handle their small business bookkeeping basics quickly and easily. Unlike Wave, TBooks gives small businesses access to live sessions with top accountants.”

You can edit this positioning statement sample and fill it with your business details.

After writing your positioning statement, the next step is the pricing of your offerings. The overall positioning strategy you set in your positioning statement will often determine how you price your products or services.

Pricing is a powerful tool that sends a strong message to your customers. Failure to get your pricing strategy right can make or mar your business. If you are targeting a low-income audience, setting a premium price can result in low sales.

You can use pricing to communicate your positioning to your customers. For example, if you are offering a product at a premium price, you are sending a message to your customers that the product belongs to the premium category.

Basic Rules to Follow When Pricing Your Offering

Setting a price for your offering involves more than just putting a price tag on it. Deciding on the right pricing for your offering requires following some basic rules. They include covering your costs, primary and secondary profit center pricing, and matching the market rate.

• Covering Your Costs: The price you set for your products or service should be more than it costs you to produce and deliver them. Every business has the same goal, to make a profit. Depending on the strategy you want to use, there are exceptions to this rule. However, the vast majority of businesses follow this rule.
• Primary and Secondary Profit Center Pricing: When a company sets its price above the cost of production, it is making that product its primary profit center. A company can also decide not to make its initial price its primary profit center by selling below or at even with its production cost. It rather depends on the support product or even maintenance that is associated with the initial purchase to make its profit. The initial price thus became its secondary profit center.
• Matching the Market Rate: A good rule to follow when pricing your products or services is to match your pricing with consumer demand and expectations. If you price your products or services beyond the price your customer perceives as the ideal price range, you may end up with no customers. Pricing your products too low below what your customer perceives as the ideal price range may lead to them undervaluing your offering.

Pricing Strategy

Your pricing strategy influences the price of your offering. There are several pricing strategies available for you to choose from when examining the right pricing strategy for your business. They include cost-plus pricing, market-based pricing, value pricing, and more.

• Cost-plus Pricing: This strategy is one of the simplest and oldest pricing strategies. Here you consider the cost of producing a unit of your product and then add a profit to it to arrive at your market price. It is an effective pricing strategy for manufacturers because it helps them cover their initial costs. Another name for the cost-plus pricing strategy is the markup pricing strategy.
• Market-based Pricing: This pricing strategy analyses the market including competitors’ pricing and then sets a price based on what the market is expecting. With this pricing strategy, you can either set your price at the low-end or high-end of the market.
• Value Pricing: This pricing strategy involves setting a price based on the value you are providing to your customer. When adopting a value-based pricing strategy, you have to set a price that your customers are willing to pay. Service-based businesses such as small business insurance providers , luxury goods sellers, and the fashion industry use this pricing strategy.

After carefully sorting out your positioning statement and pricing, the next item to look at is your promotional strategy. Your promotional strategy explains how you plan on communicating with your customers and prospects.

As a business, you must measure all your costs, including the cost of your promotions. You also want to measure how much sales your promotions bring for your business to determine its usefulness. Promotional strategies or programs that do not lead to profit need to be removed.

There are different types of promotional strategies you can adopt for your business, they include advertising, public relations, and content marketing.

Advertising

Your business plan should include your advertising plan which can be found in the marketing and sales plan section. You need to include an overview of your advertising plans such as the areas you plan to spend money on to advertise your business and offers.

Ensure that you make it clear in this section if your business will be advertising online or using the more traditional offline media, or the combination of both online and offline media. You can also include the advertising medium you want to use to raise awareness about your business and offers.

Some common online advertising mediums you can use include social media ads, landing pages, sales pages, SEO, Pay-Per-Click, emails, Google Ads, and others. Some common traditional and offline advertising mediums include word of mouth, radios, direct mail, televisions, flyers, billboards, posters, and others.

A key component of your advertising strategy is how you plan to measure the effectiveness and success of your advertising campaign. There is no point in sticking with an advertising plan or medium that does not produce results for your business in the long run.

Public Relations

A great way to reach your customers is to get the media to cover your business or product. Publicity, especially good ones, should be a part of your marketing and sales plan. In this section, show your plans for getting prominent reviews of your product from reputable publications and sources.

Your business needs that exposure to grow. If public relations is a crucial part of your promotional strategy, provide details about your public relations plan here.

Content Marketing

Content marketing is a popular promotional strategy used by businesses to inform and attract their customers. It is about teaching and educating your prospects on various topics of interest in your niche, it does not just involve informing them about the benefits and features of the products and services you have,

Businesses publish content usually for free where they provide useful information, tips, and advice so that their target market can be made aware of the importance of their products and services. Content marketing strategies seek to nurture prospects into buyers over time by simply providing value.

Your company can create a blog where it will be publishing content for its target market. You will need to use the best website builder such as Wix and Squarespace and the best web hosting services such as Bluehost, Hostinger, and other Bluehost alternatives to create a functional blog or website.

If content marketing is a crucial part of your promotional strategy (as it should be), detail your plans under promotions.

Including high-quality images of the packaging of your product in your business plan is a lovely idea. You can add the images of the packaging of that product in the marketing and sales plan section. If you are not selling a product, then you do not need to include any worry about the physical packaging of your product.

When organizing the packaging section of your business plan, you can answer the following questions to make maximum use of this section.

• Is your choice of packaging consistent with your positioning strategy?
• What key value proposition does your packaging communicate? (It should reflect the key value proposition of your business)
• How does your packaging compare to that of your competitors?

Social Media

Your 21st-century business needs to have a good social media presence. Not having one is leaving out opportunities for growth and reaching out to your prospect.

You do not have to join the thousands of social media platforms out there. What you need to do is join the ones that your customers are active on and be active there.

Businesses use social media to provide information about their products such as promotions, discounts, the benefits of their products, and content on their blogs.

Social media is also a platform for engaging with your customers and getting feedback about your products or services. Make no mistake, more and more of your prospects are using social media channels to find more information about companies.

You need to consider the social media channels you want to prioritize your business (prioritize the ones your customers are active in) and your branding plans in this section.

Strategic Alliances

If your company plans to work closely with other companies as part of your sales and marketing plan, include it in this section. Prove details about those partnerships in your business plan if you have already established them.

Strategic alliances can be beneficial for all parties involved including your company. Working closely with another company in the form of a partnership can provide access to a different target market segment for your company.

The company you are partnering with may also gain access to your target market or simply offer a new product or service (that of your company) to its customers.

Mutually beneficial partnerships can cover the weaknesses of one company with the strength of another. You should consider strategic alliances with companies that sell complimentary products to yours. For example, if you provide printers, you can partner with a company that produces ink since the customers that buy printers from you will also need inks for printing.

Steps Involved in Creating a Marketing and Sales Plan

1. Focus on Your Target Market

Identify who your customers are, the market you want to target. Then determine the best ways to get your products or services to your potential customers.

2. Evaluate Your Competition

One of the goals of having a marketing plan is to distinguish yourself from your competition. You cannot stand out from them without first knowing them in and out.

You can know your competitors by gathering information about their products, pricing, service, and advertising campaigns.

These questions can help you know your competition.

• What makes your competition successful?
• What are their weaknesses?
• What are customers saying about your competition?

3. Consider Your Brand

Customers' perception of your brand has a strong impact on your sales. Your marketing and sales plan should seek to bolster the image of your brand. Before you start marketing your business, think about the message you want to pass across about your business and your products and services.

4. Focus on Benefits

The majority of your customers do not view your product in terms of features, what they want to know is the benefits and solutions your product offers. Think about the problems your product solves and the benefits it delivers, and use it to create the right sales and marketing message.

Your marketing plan should focus on what you want your customer to get instead of what you provide. Identify those benefits in your marketing and sales plan.

5. Focus on Differentiation

Your marketing and sales plan should look for a unique angle they can take that differentiates your business from the competition, even if the products offered are similar. Some good areas of differentiation you can use are your benefits, pricing, and features.

Key Questions to Answer When Writing Your Marketing and Sales Plan

• What is your company’s budget for sales and marketing campaigns?
• What key metrics will you use to determine if your marketing plans are successful?
• What are your alternatives if your initial marketing efforts do not succeed?
• Who are the sales representatives you need to promote your products or services?
• What are the marketing and sales channels you plan to use? How do you plan to get your products in front of your ideal customers?
• Where will you sell your products?

You may want to include samples of marketing materials you plan to use such as print ads, website descriptions, and social media ads. While it is not compulsory to include these samples, it can help you better communicate your marketing and sales plan and objectives.

The purpose of the marketing and sales section is to answer this question “How will you reach your customers?” If you cannot convincingly provide an answer to this question, you need to rework your marketing and sales section.

7. Clearly Show Your Funding Request

If you are writing your business plan to ask for funding from investors or financial institutions, the funding request section is where you will outline your funding requirements. The funding request section should answer the question ‘How much money will your business need in the near future (3 to 5 years)?’

A good funding request section will clearly outline and explain the amount of funding your business needs over the next five years. You need to know the amount of money your business needs to make an accurate funding request.

Also, when writing your funding request, provide details of how the funds will be used over the period. Specify if you want to use the funds to buy raw materials or machinery, pay salaries, pay for advertisements, and cover specific bills such as rent and electricity.

In addition to explaining what you want to use the funds requested for, you need to clearly state the projected return on investment (ROI) . Investors and creditors want to know if your business can generate profit for them if they put funds into it.

Ensure you do not inflate the figures and stay as realistic as possible. Investors and financial institutions you are seeking funds from will do their research before investing money in your business.

If you are not sure of an exact number to request from, you can use some range of numbers as rough estimates. Add a best-case scenario and a work-case scenario to your funding request. Also, include a description of your strategic future financial plans such as selling your business or paying off debts.

Funding Request: Debt or Equity?

When making your funding request, specify the type of funding you want. Do you want debt or equity? Draw out the terms that will be applicable for the funding, and the length of time the funding request will cover.

Case for Equity

If your new business has not yet started generating profits, you are most likely preparing to sell equity in your business to raise capital at the early stage. Equity here refers to ownership. In this case, you are selling a portion of your company to raise capital.

Although this method of raising capital for your business does not put your business in debt, keep in mind that an equity owner may expect to play a key role in company decisions even if he does not hold a major stake in the company.

Most equity sales for startups are usually private transactions . If you are making a funding request by offering equity in exchange for funding, let the investor know that they will be paid a dividend (a share of the company’s profit). Also, let the investor know the process for selling their equity in your business.

Case for Debt

You may decide not to offer equity in exchange for funds, instead, you make a funding request with the promise to pay back the money borrowed at the agreed time frame.

When making a funding request with an agreement to pay back, note that you will have to repay your creditors both the principal amount borrowed and the interest on it. Financial institutions offer this type of funding for businesses.

Large companies combine both equity and debt in their capital structure. When drafting your business plan, decide if you want to offer both or one over the other.

Before you sell equity in exchange for funding in your business, consider if you are willing to accept not being in total control of your business. Also, before you seek loans in your funding request section, ensure that the terms of repayment are favorable.

You should set a clear timeline in your funding request so that potential investors and creditors can know what you are expecting. Some investors and creditors may agree to your funding request and then delay payment for longer than 30 days, meanwhile, your business needs an immediate cash injection to operate efficiently.

Additional Tips for Writing the Funding Request Section of your Business Plan

The funding request section is not necessary for every business, it is only needed by businesses who plan to use their business plan to secure funding.

If you are adding the funding request section to your business plan, provide an itemized summary of how you plan to use the funds requested. Hiring a lawyer, accountant, or other professionals may be necessary for the proper development of this section.

You should also gather and use financial statements that add credibility and support to your funding requests. Ensure that the financial statements you use should include your projected financial data such as projected cash flows, forecast statements, and expenditure budgets.

If you are an existing business, include all historical financial statements such as cash flow statements, balance sheets and income statements .

Provide monthly and quarterly financial statements for a year. If your business has records that date back beyond the one-year mark, add the yearly statements of those years. These documents are for the appendix section of your business plan.

8. Detail Your Financial Plan, Metrics, and Projections

If you used the funding request section in your business plan, supplement it with a financial plan, metrics, and projections. This section paints a picture of the past performance of your business and then goes ahead to make an informed projection about its future.

The goal of this section is to convince readers that your business is going to be a financial success. It outlines your business plan to generate enough profit to repay the loan (with interest if applicable) and to generate a decent return on investment for investors.

If you have an existing business already in operation, use this section to demonstrate stability through finance. This section should include your cash flow statements, balance sheets, and income statements covering the last three to five years. If your business has some acceptable collateral that you can use to acquire loans, list it in the financial plan, metrics, and projection section.

Apart from current financial statements, this section should also contain a prospective financial outlook that spans the next five years. Include forecasted income statements, cash flow statements, balance sheets, and capital expenditure budget.

If your business is new and is not yet generating profit, use clear and realistic projections to show the potentials of your business.

When drafting this section, research industry norms and the performance of comparable businesses. Your financial projections should cover at least five years. State the logic behind your financial projections. Remember you can always make adjustments to this section as the variables change.

The financial plan, metrics, and projection section create a baseline which your business can either exceed or fail to reach. If your business fails to reach your projections in this section, you need to understand why it failed.

Investors and loan managers spend a lot of time going through the financial plan, metrics, and projection section compared to other parts of the business plan. Ensure you spend time creating credible financial analyses for your business in this section.

Many entrepreneurs find this section daunting to write. You do not need a business degree to create a solid financial forecast for your business. Business finances, especially for startups, are not as complicated as they seem. There are several online tools and templates that make writing this section so much easier.

Use Graphs and Charts

The financial plan, metrics, and projection section is a great place to use graphs and charts to tell the financial story of your business. Charts and images make it easier to communicate your finances.

Accuracy in this section is key, ensure you carefully analyze your past financial statements properly before making financial projects.

Address the Risk Factors and Show Realistic Financial Projections

Keep your financial plan, metrics, and projection realistic. It is okay to be optimistic in your financial projection, however, you have to justify it.

You should also address the various risk factors associated with your business in this section. Investors want to know the potential risks involved, show them. You should also show your plans for mitigating those risks.

What You Should In The Financial Plan, Metrics, and Projection Section of Your Business Plan

The financial plan, metrics, and projection section of your business plan should have monthly sales and revenue forecasts for the first year. It should also include annual projections that cover 3 to 5 years.

A three-year projection is a basic requirement to have in your business plan. However, some investors may request a five-year forecast.

Your business plan should include the following financial statements: sales forecast, personnel plan, income statement, income statement, cash flow statement, balance sheet, and an exit strategy.

1. Sales Forecast

Sales forecast refers to your projections about the number of sales your business is going to record over the next few years. It is typically broken into several rows, with each row assigned to a core product or service that your business is offering.

One common mistake people make in their business plan is to break down the sales forecast section into long details. A sales forecast should forecast the high-level details.

For example, if you are forecasting sales for a payroll software provider, you could break down your forecast into target market segments or subscription categories.

Your sales forecast section should also have a corresponding row for each sales row to cover the direct cost or Cost of Goods Sold (COGS). The objective of these rows is to show the expenses that your business incurs in making and delivering your product or service.

Note that your Cost of Goods Sold (COGS) should only cover those direct costs incurred when making your products. Other indirect expenses such as insurance, salaries, payroll tax, and rent should not be included.

For example, the Cost of Goods Sold (COGS) for a restaurant is the cost of ingredients while for a consulting company it will be the cost of paper and other presentation materials.

2. Personnel Plan

The personnel plan section is where you provide details about the payment plan for your employees. For a small business, you can easily list every position in your company and how much you plan to pay in the personnel plan.

However, for larger businesses, you have to break the personnel plan into functional groups such as sales and marketing.

The personnel plan will also include the cost of an employee beyond salary, commonly referred to as the employee burden. These costs include insurance, payroll taxes , and other essential costs incurred monthly as a result of having employees on your payroll.

3. Income Statement

The income statement section shows if your business is making a profit or taking a loss. Another name for the income statement is the profit and loss (P&L). It takes data from your sales forecast and personnel plan and adds other ongoing expenses you incur while running your business.

Every business plan should have an income statement. It subtracts your business expenses from its earnings to show if your business is generating profit or incurring losses.

The income statement has the following items: sales, Cost of Goods Sold (COGS), gross margin, operating expenses, total operating expenses, operating income , total expenses, and net profit.

• Sales refer to the revenue your business generates from selling its products or services. Other names for sales are income or revenue.
• Cost of Goods Sold (COGS) refers to the total cost of selling your products. Other names for COGS are direct costs or cost of sales. Manufacturing businesses use the Costs of Goods Manufactured (COGM) .
• Gross Margin is the figure you get when you subtract your COGS from your sales. In your income statement, you can express it as a percentage of total sales (Gross margin / Sales = Gross Margin Percent).
• Operating Expenses refer to all the expenses you incur from running your business. It exempts the COGS because it stands alone as a core part of your income statement. You also have to exclude taxes, depreciation, and amortization. Your operating expenses include salaries, marketing expenses, research and development (R&D) expenses, and other expenses.
• Total Operating Expenses refers to the sum of all your operating expenses including those exemptions named above under operating expenses.
• Operating Income refers to earnings before interest, taxes, depreciation, and amortization. It is simply known as the acronym EBITDA (earnings before interest, taxes, depreciation, and amortization). Calculating your operating income is simple, all you need to do is to subtract your COGS and total operating expenses from your sales.
• Total Expenses refer to the sum of your operating expenses and your business’ interest, taxes, depreciation, and amortization.
• Net profit shows whether your business has made a profit or taken a loss during a given timeframe.

4. Cash Flow Statement

The cash flow statement tracks the money you have in the bank at any given point. It is often confused with the income statement or the profit and loss statement. They are both different types of financial statements. The income statement calculates your profits and losses while the cash flow statement shows you how much you have in the bank.

5. Balance Sheet

The balance sheet is a financial statement that provides an overview of the financial health of your business. It contains information about the assets and liabilities of your company, and owner’s or shareholders’ equity.

You can get the net worth of your company by subtracting your company’s liabilities from its assets.

6. Exit Strategy

The exit strategy refers to a probable plan for selling your business either to the public in an IPO or to another company. It is the last thing you include in the financial plan, metrics, and projection section.

You can choose to omit the exit strategy from your business plan if you plan to maintain full ownership of your business and do not plan on seeking angel investment or virtual capitalist (VC) funding.

Investors may want to know what your exit plan is. They invest in your business to get a good return on investment.

Your exit strategy does not have to include long and boring details. Ensure you identify some interested parties who may be interested in buying the company if it becomes a success.

Key Questions to Answer with Your Financial Plan, Metrics, and Projection

Your financial plan, metrics, and projection section helps investors, creditors, or your internal managers to understand what your expenses are, the amount of cash you need, and what it takes to make your company profitable. It also shows what you will be doing with any funding.

You do not need to show actual financial data if you do not have one. Adding forecasts and projections to your financial statements is added proof that your strategy is feasible and shows investors you have planned properly.

Here are some key questions to answer to help you develop this section.

• What is your sales forecast for the next year?
• When will your company achieve a positive cash flow?
• What are the core expenses you need to operate?
• How much money do you need upfront to operate or grow your company?
• How will you use the loans or investments?

9. Add an Appendix to Your Business Plan

Adding an appendix to your business plan is optional. It is a useful place to put any charts, tables, legal notes, definitions, permits, résumés, and other critical information that do not fit into other sections of your business plan.

The appendix section is where you would want to include details of a patent or patent-pending if you have one. You can always add illustrations or images of your products here. It is the last section of your business plan.

When writing your business plan, there are details you cut short or remove to prevent the entire section from becoming too lengthy. There are also details you want to include in the business plan but are not a good fit for any of the previous sections. You can add that additional information to the appendix section.

Businesses also use the appendix section to include supporting documents or other materials specially requested by investors or lenders.

You can include just about any information that supports the assumptions and statements you made in the business plan under the appendix. It is the one place in the business plan where unrelated data and information can coexist amicably.

If your appendix section is lengthy, try organizing it by adding a table of contents at the beginning of the appendix section. It is also advisable to group similar information to make it easier for the reader to access them.

A well-organized appendix section makes it easier to share your information clearly and concisely. Add footnotes throughout the rest of the business plan or make references in the plan to the documents in the appendix.

The appendix section is usually only necessary if you are seeking funding from investors or lenders, or hoping to attract partners.

People reading business plans do not want to spend time going through a heap of backup information, numbers, and charts. Keep these documents or information in the Appendix section in case the reader wants to dig deeper.

Common Items to Include in the Appendix Section of Your Business Plan

The appendix section includes documents that supplement or support the information or claims given in other sections of the business plans. Common items you can include in the appendix section include:

• Additional data about the process of manufacturing or creation
• Additional description of products or services such as product schematics
• Additional financial documents or projections
• Articles of incorporation and status
• Backup for market research or competitive analysis
• Bank statements
• Business registries
• Client testimonials (if your business is already running)
• Copies of insurances
• Credit histories (personal or/and business)
• Deeds and permits
• Equipment leases
• Examples of marketing and advertising collateral
• Industry associations and memberships
• Images of product
• Intellectual property
• Key customer contracts
• Legal documents and other contracts
• Letters of reference
• Links to references
• Market research data
• Organizational charts
• Photographs of potential facilities
• Professional licenses pertaining to your legal structure or type of business
• Purchase orders
• Resumes of the founder(s) and key managers
• State and federal identification numbers or codes
• Trademarks or patents’ registrations

Avoid using the appendix section as a place to dump any document or information you feel like adding. Only add documents or information that you support or increase the credibility of your business plan.

Tips and Strategies for Writing a Convincing Business Plan

To achieve a perfect business plan, you need to consider some key tips and strategies. These tips will raise the efficiency of your business plan above average.

1. Know Your Audience

When writing a business plan, you need to know your audience . Business owners write business plans for different reasons. Your business plan has to be specific. For example, you can write business plans to potential investors, banks, and even fellow board members of the company.

The audience you are writing to determines the structure of the business plan. As a business owner, you have to know your audience. Not everyone will be your audience. Knowing your audience will help you to narrow the scope of your business plan.

Consider what your audience wants to see in your projects, the likely questions they might ask, and what interests them.

• A business plan used to address a company's board members will center on its employment schemes, internal affairs, projects, stakeholders, etc.
• A business plan for financial institutions will talk about the size of your market and the chances for you to pay back any loans you demand.
• A business plan for investors will show proof that you can return the investment capital within a specific time. In addition, it discusses your financial projections, tractions, and market size.

2. Get Inspiration from People

Writing a business plan from scratch as an entrepreneur can be daunting. That is why you need the right inspiration to push you to write one. You can gain inspiration from the successful business plans of other businesses. Look at their business plans, the style they use, the structure of the project, etc.

To make your business plan easier to create, search companies related to your business to get an exact copy of what you need to create an effective business plan. You can also make references while citing examples in your business plans.

When drafting your business plan, get as much help from others as you possibly can. By getting inspiration from people, you can create something better than what they have.

3. Avoid Being Over Optimistic

Many business owners make use of strong adjectives to qualify their content. One of the big mistakes entrepreneurs make when preparing a business plan is promising too much.

The use of superlatives and over-optimistic claims can prepare the audience for more than you can offer. In the end, you disappoint the confidence they have in you.

In most cases, the best option is to be realistic with your claims and statistics. Most of the investors can sense a bit of incompetency from the overuse of superlatives. As a new entrepreneur, do not be tempted to over-promise to get the interests of investors.

The concept of entrepreneurship centers on risks, nothing is certain when you make future analyses. What separates the best is the ability to do careful research and work towards achieving that, not promising more than you can achieve.

To make an excellent first impression as an entrepreneur, replace superlatives with compelling data-driven content. In this way, you are more specific than someone promising a huge ROI from an investment.

4. Keep it Simple and Short

When writing business plans, ensure you keep them simple throughout. Irrespective of the purpose of the business plan, your goal is to convince the audience.

One way to achieve this goal is to make them understand your proposal. Therefore, it would be best if you avoid the use of complex grammar to express yourself. It would be a huge turn-off if the people you want to convince are not familiar with your use of words.

Another thing to note is the length of your business plan. It would be best if you made it as brief as possible.

You hardly see investors or agencies that read through an extremely long document. In that case, if your first few pages can’t convince them, then you have lost it. The more pages you write, the higher the chances of you derailing from the essential contents.

To ensure your business plan has a high conversion rate, you need to dispose of every unnecessary information. For example, if you have a strategy that you are not sure of, it would be best to leave it out of the plan.

5. Make an Outline and Follow Through

A perfect business plan must have touched every part needed to convince the audience. Business owners get easily tempted to concentrate more on their products than on other sections. Doing this can be detrimental to the efficiency of the business plan.

For example, imagine you talking about a product but omitting or providing very little information about the target audience. You will leave your clients confused.

To ensure that your business plan communicates your full business model to readers, you have to input all the necessary information in it. One of the best ways to achieve this is to design a structure and stick to it.

This structure is what guides you throughout the writing. To make your work easier, you can assign an estimated word count or page limit to every section to avoid making it too bulky for easy reading. As a guide, the necessary things your business plan must contain are:

• Table of contents
• Introduction
• Product or service description
• Target audience
• Market size
• Competition analysis
• Financial projections

Some specific businesses can include some other essential sections, but these are the key sections that must be in every business plan.

6. Ask a Professional to Proofread

When writing a business plan, you must tie all loose ends to get a perfect result. When you are done with writing, call a professional to go through the document for you. You are bound to make mistakes, and the way to correct them is to get external help.

You should get a professional in your field who can relate to every section of your business plan. It would be easier for the professional to notice the inner flaws in the document than an editor with no knowledge of your business.

In addition to getting a professional to proofread, get an editor to proofread and edit your document. The editor will help you identify grammatical errors, spelling mistakes, and inappropriate writing styles.

Writing a business plan can be daunting, but you can surmount that obstacle and get the best out of it with these tips.

Business Plan Examples and Templates That’ll Save You Tons of Time

1. hubspot's one-page business plan.

The one-page business plan template by HubSpot is the perfect guide for businesses of any size, irrespective of their business strategy. Although the template is condensed into a page, your final business plan should not be a page long! The template is designed to ask helpful questions that can help you develop your business plan.

Hubspot’s one-page business plan template is divided into nine fields:

• Business opportunity
• Company description
• Industry analysis
• Target market
• Implementation timeline
• Marketing plan
• Financial summary
• Funding required

2. Bplan’s Free Business Plan Template

Bplans' free business plan template is investor-approved. It is a rich template used by prestigious educational institutions such as Babson College and Princeton University to teach entrepreneurs how to create a business plan.

The template has six sections: the executive summary, opportunity, execution, company, financial plan, and appendix. There is a step-by-step guide for writing every little detail in the business plan. Follow the instructions each step of the way and you will create a business plan that impresses investors or lenders easily.

3. HubSpot's Downloadable Business Plan Template

HubSpot’s downloadable business plan template is a more comprehensive option compared to the one-page business template by HubSpot. This free and downloadable business plan template is designed for entrepreneurs.

The template is a comprehensive guide and checklist for business owners just starting their businesses. It tells you everything you need to fill in each section of the business plan and how to do it.

There are nine sections in this business plan template: an executive summary, company and business description, product and services line, market analysis, marketing plan, sales plan, legal notes, financial considerations, and appendix.

4. Business Plan by My Own Business Institute

My Own Business Institute (MOBI) which is a part of Santa Clara University's Center for Innovation and Entrepreneurship offers a free business plan template. You can either copy the free business template from the link provided above or download it as a Word document.

The comprehensive template consists of a whopping 15 sections.

• The Business Profile
• The Vision and the People
• Home-Based Business and Freelance Business Opportunities
• Organization
• Licenses and Permits
• Business Insurance
• Communication Tools
• Acquisitions
• Location and Leasing
• Accounting and Cash Flow
• Opening and Marketing
• Managing Employees
• Expanding and Handling Problems

There are lots of helpful tips on how to fill each section in the free business plan template by MOBI.

5. Score's Business Plan Template for Startups

Score is an American nonprofit organization that helps entrepreneurs build successful companies. This business plan template for startups by Score is available for free download. The business plan template asks a whooping 150 generic questions that help entrepreneurs from different fields to set up the perfect business plan.

The business plan template for startups contains clear instructions and worksheets, all you have to do is answer the questions and fill the worksheets.

There are nine sections in the business plan template: executive summary, company description, products and services, marketing plan, operational plan, management and organization, startup expenses and capitalization, financial plan, and appendices.

The ‘refining the plan’ resource contains instructions that help you modify your business plan to suit your specific needs, industry, and target audience. After you have completed Score’s business plan template, you can work with a SCORE mentor for expert advice in business planning.

6. Minimalist Architecture Business Plan Template by Venngage

The minimalist architecture business plan template is a simple template by Venngage that you can customize to suit your business needs .

There are five sections in the template: an executive summary, statement of problem, approach and methodology, qualifications, and schedule and benchmark. The business plan template has instructions that guide users on what to fill in each section.

7. Small Business Administration Free Business Plan Template

The Small Business Administration (SBA) offers two free business plan templates, filled with practical real-life examples that you can model to create your business plan. Both free business plan templates are written by fictional business owners: Rebecca who owns a consulting firm, and Andrew who owns a toy company.

There are five sections in the two SBA’s free business plan templates.

• Executive Summary
• Company Description
• Service Line
• Marketing and Sales

8. The $100 Startup's One-Page Business Plan

The one-page business plan by the $100 startup is a simple business plan template for entrepreneurs who do not want to create a long and complicated plan . You can include more details in the appendices for funders who want more information beyond what you can put in the one-page business plan.

There are five sections in the one-page business plan such as overview, ka-ching, hustling, success, and obstacles or challenges or open questions. You can answer all the questions using one or two sentences.

9. PandaDoc’s Free Business Plan Template

The free business plan template by PandaDoc is a comprehensive 15-page document that describes the information you should include in every section.

There are 11 sections in PandaDoc’s free business plan template.

• Executive summary
• Business description
• Products and services
• Operations plan
• Management organization
• Financial plan
• Conclusion / Call to action
• Confidentiality statement

You have to sign up for its 14-day free trial to access the template. You will find different business plan templates on PandaDoc once you sign up (including templates for general businesses and specific businesses such as bakeries, startups, restaurants, salons, hotels, and coffee shops)

PandaDoc allows you to customize its business plan templates to fit the needs of your business. After editing the template, you can send it to interested parties and track opens and views through PandaDoc.

10. Invoiceberry Templates for Word, Open Office, Excel, or PPT

InvoiceBerry is a U.K based online invoicing and tracking platform that offers free business plan templates in .docx, .odt, .xlsx, and .pptx formats for freelancers and small businesses.

Before you can download the free business plan template, it will ask you to give it your email address. After you complete the little task, it will send the download link to your inbox for you to download. It also provides a business plan checklist in .xlsx file format that ensures you add the right information to the business plan.

Alternatives to the Traditional Business Plan

A business plan is very important in mapping out how one expects their business to grow over a set number of years, particularly when they need external investment in their business. However, many investors do not have the time to watch you present your business plan. It is a long and boring read.

Luckily, there are three alternatives to the traditional business plan (the Business Model Canvas, Lean Canvas, and Startup Pitch Deck). These alternatives are less laborious and easier and quicker to present to investors.

Business Model Canvas (BMC)

The business model canvas is a business tool used to present all the important components of setting up a business, such as customers, route to market, value proposition, and finance in a single sheet. It provides a very focused blueprint that defines your business initially which you can later expand on if needed.

The sheet is divided mainly into company, industry, and consumer models that are interconnected in how they find problems and proffer solutions.

Segments of the Business Model Canvas

The business model canvas was developed by founder Alexander Osterwalder to answer important business questions. It contains nine segments.

• Key Partners: Who will be occupying important executive positions in your business? What do they bring to the table? Will there be a third party involved with the company?
• Key Activities: What important activities will production entail? What activities will be carried out to ensure the smooth running of the company?
• The Product’s Value Propositions: What does your product do? How will it be different from other products?
• Customer Segments: What demography of consumers are you targeting? What are the habits of these consumers? Who are the MVPs of your target consumers?
• Customer Relationships: How will the team support and work with its customer base? How do you intend to build and maintain trust with the customer?
• Key Resources: What type of personnel and tools will be needed? What size of the budget will they need access to?
• Channels: How do you plan to create awareness of your products? How do you intend to transport your product to the customer?
• Cost Structure: What is the estimated cost of production? How much will distribution cost?
• Revenue Streams: For what value are customers willing to pay? How do they prefer to pay for the product? Are there any external revenues attached apart from the main source? How do the revenue streams contribute to the overall revenue?

Lean Canvas

The lean canvas is a problem-oriented alternative to the standard business model canvas. It was proposed by Ash Maurya, creator of Lean Stack as a development of the business model generation. It uses a more problem-focused approach and it majorly targets entrepreneurs and startup businesses.

Lean Canvas uses the same 9 blocks concept as the business model canvas, however, they have been modified slightly to suit the needs and purpose of a small startup. The key partners, key activities, customer relationships, and key resources are replaced by new segments which are:

• Problem: Simple and straightforward number of problems you have identified, ideally three.
• Solution: The solutions to each problem.
• Unfair Advantage: Something you possess that can't be easily bought or replicated.
• Key Metrics: Important numbers that will tell how your business is doing.

Startup Pitch Deck

While the business model canvas compresses into a factual sheet, startup pitch decks expand flamboyantly.

Pitch decks, through slides, convey your business plan, often through graphs and images used to emphasize estimations and observations in your presentation. Entrepreneurs often use pitch decks to fully convince their target audience of their plans before discussing funding arrangements.

Considering the likelihood of it being used in a small time frame, a good startup pitch deck should ideally contain 20 slides or less to have enough time to answer questions from the audience.

Unlike the standard and lean business model canvases, a pitch deck doesn't have a set template on how to present your business plan but there are still important components to it. These components often mirror those of the business model canvas except that they are in slide form and contain more details.

Using Airbnb (one of the most successful start-ups in recent history) for reference, the important components of a good slide are listed below.

• Cover/Introduction Slide: Here, you should include your company's name and mission statement. Your mission statement should be a very catchy tagline. Also, include personal information and contact details to provide an easy link for potential investors.
• Problem Slide: This slide requires you to create a connection with the audience or the investor that you are pitching. For example in their pitch, Airbnb summarized the most important problems it would solve in three brief points – pricing of hotels, disconnection from city culture, and connection problems for local bookings.
• Solution Slide: This slide includes your core value proposition. List simple and direct solutions to the problems you have mentioned
• Customer Analysis: Here you will provide information on the customers you will be offering your service to. The identity of your customers plays an important part in fundraising as well as the long-run viability of the business.
• Market Validation: Use competitive analysis to show numbers that prove the presence of a market for your product, industry behavior in the present and the long run, as well as the percentage of the market you aim to attract. It shows that you understand your competitors and customers and convinces investors of the opportunities presented in the market.
• Business Model: Your business model is the hook of your presentation. It may vary in complexity but it should generally include a pricing system informed by your market analysis. The goal of the slide is to confirm your business model is easy to implement.
• Marketing Strategy: This slide should summarize a few customer acquisition methods that you plan to use to grow the business.
• Competitive Advantage: What this slide will do is provide information on what will set you apart and make you a more attractive option to customers. It could be the possession of technology that is not widely known in the market.
• Team Slide: Here you will give a brief description of your team. Include your key management personnel here and their specific roles in the company. Include their educational background, job history, and skillsets. Also, talk about their accomplishments in their careers so far to build investors' confidence in members of your team.
• Traction Slide: This validates the company’s business model by showing growth through early sales and support. The slide aims to reduce any lingering fears in potential investors by showing realistic periodic milestones and profit margins. It can include current sales, growth, valuable customers, pre-orders, or data from surveys outlining current consumer interest.
• Funding Slide: This slide is popularly referred to as ‘the ask'. Here you will include important details like how much is needed to get your business off the ground and how the funding will be spent to help the company reach its goals.
• Appendix Slides: Your pitch deck appendix should always be included alongside a standard pitch presentation. It consists of additional slides you could not show in the pitch deck but you need to complement your presentation.

It is important to support your calculations with pictorial renditions. Infographics, such as pie charts or bar graphs, will be more effective in presenting the information than just listing numbers. For example, a six-month graph that shows rising profit margins will easily look more impressive than merely writing it.

Lastly, since a pitch deck is primarily used to secure meetings and you may be sharing your pitch with several investors, it is advisable to keep a separate public version that doesn't include financials. Only disclose the one with projections once you have secured a link with an investor.

Advantages of the Business Model Canvas, Lean Canvas, and Startup Pitch Deck over the Traditional Business Plan

• Time-Saving: Writing a detailed traditional business plan could take weeks or months. On the other hand, all three alternatives can be done in a few days or even one night of brainstorming if you have a comprehensive understanding of your business.
• Easier to Understand: Since the information presented is almost entirely factual, it puts focus on what is most important in running the business. They cut away the excess pages of fillers in a traditional business plan and allow investors to see what is driving the business and what is getting in the way.
• Easy to Update: Businesses typically present their business plans to many potential investors before they secure funding. What this means is that you may regularly have to amend your presentation to update statistics or adjust to audience-specific needs. For a traditional business plan, this could mean rewriting a whole section of your plan. For the three alternatives, updating is much easier because they are not voluminous.
• Guide for a More In-depth Business Plan: All three alternatives have the added benefit of being able to double as a sketch of your business plan if the need to create one arises in the future.

Business Plan FAQ

Business plans are important for any entrepreneur who is looking for a framework to run their company over some time or seeking external support. Although they are essential for new businesses, every company should ideally have a business plan to track their growth from time to time.  They can be used by startups seeking investments or loans to convey their business ideas or an employee to convince his boss of the feasibility of starting a new project. They can also be used by companies seeking to recruit high-profile employee targets into key positions or trying to secure partnerships with other firms.

Business plans often vary depending on your target audience, the scope, and the goals for the plan. Startup plans are the most common among the different types of business plans.  A start-up plan is used by a new business to present all the necessary information to help get the business up and running. They are usually used by entrepreneurs who are seeking funding from investors or bank loans. The established company alternative to a start-up plan is a feasibility plan. A feasibility plan is often used by an established company looking for new business opportunities. They are used to show the upsides of creating a new product for a consumer base. Because the audience is usually company people, it requires less company analysis. The third type of business plan is the lean business plan. A lean business plan is a brief, straight-to-the-point breakdown of your ideas and analysis for your business. It does not contain details of your proposal and can be written on one page. Finally, you have the what-if plan. As it implies, a what-if plan is a preparation for the worst-case scenario. You must always be prepared for the possibility of your original plan being rejected. A good what-if plan will serve as a good plan B to the original.

A good business plan has 10 key components. They include an executive plan, product analysis, desired customer base, company analysis, industry analysis, marketing strategy, sales strategy, financial projection, funding, and appendix. Executive Plan Your business should begin with your executive plan. An executive plan will provide early insight into what you are planning to achieve with your business. It should include your mission statement and highlight some of the important points which you will explain later. Product Analysis The next component of your business plan is your product analysis. A key part of this section is explaining the type of item or service you are going to offer as well as the market problems your product will solve. Desired Consumer Base Your product analysis should be supplemented with a detailed breakdown of your desired consumer base. Investors are always interested in knowing the economic power of your market as well as potential MVP customers. Company Analysis The next component of your business plan is your company analysis. Here, you explain how you want to run your business. It will include your operational strategy, an insight into the workforce needed to keep the company running, and important executive positions. It will also provide a calculation of expected operational costs.  Industry Analysis A good business plan should also contain well laid out industry analysis. It is important to convince potential investors you know the companies you will be competing with, as well as your plans to gain an edge on the competition. Marketing Strategy Your business plan should also include your marketing strategy. This is how you intend to spread awareness of your product. It should include a detailed explanation of the company brand as well as your advertising methods. Sales Strategy Your sales strategy comes after the market strategy. Here you give an overview of your company's pricing strategy and how you aim to maximize profits. You can also explain how your prices will adapt to market behaviors. Financial Projection The financial projection is the next component of your business plan. It explains your company's expected running cost and revenue earned during the tenure of the business plan. Financial projection gives a clear idea of how your company will develop in the future. Funding The next component of your business plan is funding. You have to detail how much external investment you need to get your business idea off the ground here. Appendix The last component of your plan is the appendix. This is where you put licenses, graphs, or key information that does not fit in any of the other components.

The business model canvas is a business management tool used to quickly define your business idea and model. It is often used when investors need you to pitch your business idea during a brief window.

A pitch deck is similar to a business model canvas except that it makes use of slides in its presentation. A pitch is not primarily used to secure funding, rather its main purpose is to entice potential investors by selling a very optimistic outlook on the business.

Business plan competitions help you evaluate the strength of your business plan. By participating in business plan competitions, you are improving your experience. The experience provides you with a degree of validation while practicing important skills. The main motivation for entering into the competitions is often to secure funding by finishing in podium positions. There is also the chance that you may catch the eye of a casual observer outside of the competition. These competitions also provide good networking opportunities. You could meet mentors who will take a keen interest in guiding you in your business journey. You also have the opportunity to meet other entrepreneurs whose ideas can complement yours.

Exlore Further

• 12 Key Elements of a Business Plan (Top Components Explained)
• 13 Sources of Business Finance For Companies & Sole Traders
• 5 Common Types of Business Structures (+ Pros & Cons)
• How to Buy a Business in 8 Steps (+ Due Diligence Checklist)

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Martin luenendonk.

Martin loves entrepreneurship and has helped dozens of entrepreneurs by validating the business idea, finding scalable customer acquisition channels, and building a data-driven organization. During his time working in investment banking, tech startups, and industry-leading companies he gained extensive knowledge in using different software tools to optimize business processes.

This insights and his love for researching SaaS products enables him to provide in-depth, fact-based software reviews to enable software buyers make better decisions.

Revenue Growth Plan Template

What is a Revenue Growth Plan?

A revenue growth plan is a strategic plan designed to identify and increase the revenue generated by an organization. It allows teams to create a structured plan that outlines goals and objectives, as well as projects and tactics to achieve them. By assessing current revenue trends and analyzing the competitive landscape, teams can build a plan that outlines the focus areas, objectives, and measurable targets (KPIs) to tackle the objectives. The plan then includes projects and initiatives to achieve the KPIs and increase revenue.

What's included in this Revenue Growth Plan template?

• 3 focus areas
• 6 objectives

Each focus area has its own objectives, projects, and KPIs to ensure that the strategy is comprehensive and effective.

Who is the Revenue Growth Plan template for?

This revenue growth plan template is designed to help organizations of any size and industry create a detailed plan to identify and increase their revenue. By using this template, teams are able to identify their focus areas and set measurable targets (KPIs) that can be tracked and measured to ensure that the objectives of the plan are met.

1. Define clear examples of your focus areas

Focus areas are the broad areas of activity that an organization wants to achieve. Examples of focus areas could include increasing revenues, increasing efficiency, and improving customer retention. Each focus area will have its own set of objectives and measurable targets (KPIs) that need to be identified.

2. Think about the objectives that could fall under that focus area

Objectives are the goals that need to be achieved within each focus area. These should be specific, measurable, and achievable. Examples of objectives could include increasing customer base, reducing costs, and increasing customer engagement.

3. Set measurable targets (KPIs) to tackle the objective

KPIs are measurable targets that need to be achieved within each objective. They should be specific, measurable, and achievable. Examples of KPIs could include increasing the number of customers by 10%, reducing cost by 10%, and increasing customer engagement rate by 10%.

4. Implement related projects to achieve the KPIs

Projects (or actions) are the initiatives that need to be implemented in order to achieve the KPIs. These should be specific, measurable, and achievable. Examples of projects could include increasing advertising campaigns, introducing premium products, and implementing loyalty programs.

5. Utilize Cascade Strategy Execution Platform to see faster results from your strategy

The Cascade Strategy Execution Platform allows teams to track progress and measure the success of their revenue growth plan. By utilizing the platform, teams are able to gain insights into their progress and take action to improve their performance. With Cascade, teams can create, track, and manage their revenue growth plan, resulting in faster and more effective results.

[Part 2 of 4] Five ways to SET revenue targets at your agency for next year

As I shared in Part 1 , you’ll enjoy many benefits  —including stress reduction—when you create annual revenue goals. But…  how do you actually set  revenue targets for next year?

That’s what I’ll cover here today in Part 2. We’ll review five options, and how to pick the right one(s) for you.

In Part 3 , we look at how to translate your annual revenue target into a revenue  plan . In Part 4 , we look at how to improve your chances at actually hitting your revenue targets .

The target-setting process works best if you have a few years of revenue history, and you’re not planning to execute a major shift in services and/or target market between this year and next. (Otherwise, you’ll want to use the “Zero-based” option below.)

Let’s dive in! [Last updated: September 2023]

Your 5 Options to Set Revenue Targets

At a high level, there are five approaches:

• Last Year+  (add a growth percentage to last year’s revenue)
• Capacity  (billables based on “units sold” at projected employee capacity)
• Sales Quotas (sum the sales team’s quotas)
• Zero-Based (start from scratch; useful when making major strategy shifts)
• Hybrid Approach (combine two or more options)

Let’s take a closer look at each!

Option #1: Based on “Last Year+”

What: Take last year and add a percentage on top of that. For instance, if you want to grow 40%, take last year and add 40%—that’s your next-year target.

• Pros: Helpful when you’ve been growing steadily, and when you’re seeking to grow 30% or less in the coming year.
• Cons: Less helpful when your past growth has fluctuated, when you’re seeking to grow 50% or more, or when you’re planning a major shift in business strategy (e.g., entirely new services, new target market, or both).

Good Choice When: You’ve been growing steadily, and next year’s growth will likely to be similar—or slower—than recent years.

Option #2: Based on Capacity

What: Estimate revenue based on your current—or planned—capacity, in terms of billables per employee. Includes adjustments for raising prices and/or adding new services.

• Pros: Helps you identify whether to hire people or grow with the team you already have.
• Cons: You can’t guarantee that employees won’t leave during the year. This approach may also create a disincentive to grow your per-capita revenue.

Good Choice When: You want to match revenue to team capacity, especially if you’ve over-hired in the past.

Option #3: Based on Sales Quota

What: Sum-up the sales quotas across your sales team.

• Pros: If everyone hits their sales targets (and your delivery team can fulfill the work), you can grow revenue substantially.
• Cons: Just because the quotas exist… doesn’t mean that they’ll hit the quotas. And you still need to deliver on it. Plus, some of your growth comes from renewals—and “accretion” (account growth).

Good Choice When: You have multiple salespeople and can risk-manage things if one or more salespeople slip… or leave mid-year.

Option #4: Zero-Based

What: Start completely from scratch—particularly for any revenues based on brand new services. For more, see this McKinsey article on the resurgence of zero-based budgeting (ZBB).

• Pros: Helpful when you’re adding new services, if you aren’t sure how successful you’ll be in selling to a new target market, or when you have high growth goals in the coming year.
• Cons:  Significantly more time-consuming than “last year+” approach. Inherently low-fidelity—you’ll never be sure how accurate this approach will be until you’ve seen the results.

Good Choice When: You’re adding new services, shifting target markets, or seeking to grow 80% or more.

Option #5: Hybrid Approach

What: Combine two or more approaches above.

• Pros: Several factors are high-impact for your agency.
• Cons: There’s not a single “right” hybrid approach; you’ll need to customize to your agency.

Good Choice When: You need to juggle factors. For instance, you might start with “Year Before+” and compare that to what capacity-based would indicate, and review how that compares to this year’s sales quotas.

OK—so which is the right approach for you? Let’s evaluate the options!

Picking the Right Approach(es) for Your Agency

The right approach depends on your goals and situation. Which sounds like you?

• You want to consider all angles: Hybrid Approach
• Sales have grown steadily:  “Year Before+”
• You’re radically shifting your business strategy: Zero-Based
• You’ve over-hired in the past: Capacity-Based
• Your sales team is outstanding: Quota-Based

This is an important topic—now’s the time to try a few options, before you dig into creating a revenue plan in Part 3.

But then… sorry, you’re not done yet.

Budgeting for Plans A, B, and C

Looking ahead to when you translate the revenue plan to your budget , I recommend evaluating three different scenarios:

• Plan A: You successfully grow to hit next year’s revenue target.
• Plan B: Instead of growing, you’re flat compared to the current year.
• Plan C: You shrink after losing your largest client or two.

I hope you don’t need to use Plan B and Plan C—but you’ll be glad you created them before things become an emergency!

Next Up: Turning Your Target into a Plan

In Part 3 , I share how to convert your revenue target into a revenue plan for next year. In Part 4 , I share how to maximize your chances at hitting your revenue target .

Question: How do you set revenue targets at your agency?

Need to make a tough decision at your agency?

Tough decisions are easier when you talk to an expert first.

I’ve advised owners of 600+ agencies in 36 countries—and you can get a bite of that knowledge at a fraction of the cost.

I can’t make the hard decisions for you—but I’ll help you find clarity to make better choices, so you can move closer to your best possible outcome.

Simple Business Plan Template (2024)

Updated: May 4, 2024, 4:37pm

Table of Contents

Why business plans are vital, get your free simple business plan template, how to write an effective business plan in 6 steps, frequently asked questions.

While taking many forms and serving many purposes, they all have one thing in common: business plans help you establish your goals and define the means for achieving them. Our simple business plan template covers everything you need to consider when launching a side gig, solo operation or small business. By following this step-by-step process, you might even uncover a few alternate routes to success.

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Whether you’re a first-time solopreneur or a seasoned business owner, the planning process challenges you to examine the costs and tasks involved in bringing a product or service to market. The process can also help you spot new income opportunities and hone in on the most profitable business models.

Though vital, business planning doesn’t have to be a chore. Business plans for lean startups and solopreneurs can simply outline the business concept, sales proposition, target customers and sketch out a plan of action to bring the product or service to market. However, if you’re seeking startup funding or partnership opportunities, you’ll need a write a business plan that details market research, operating costs and revenue forecasting. Whichever startup category you fall into, if you’re at square one, our simple business plan template will point you down the right path.

Copy our free simple business plan template so you can fill in the blanks as we explore each element of your business plan. Need help getting your ideas flowing? You’ll also find several startup scenario examples below.

Download free template as .docx

Whether you need a quick-launch overview or an in-depth plan for investors, any business plan should cover the six key elements outlined in our free template and explained below. The main difference in starting a small business versus an investor-funded business is the market research and operational and financial details needed to support the concept.

1. Your Mission or Vision

Start by declaring a “dream statement” for your business. You can call this your executive summary, vision statement or mission. Whatever the name, the first part of your business plan summarizes your idea by answering five questions. Keep it brief, such as an elevator pitch. You’ll expand these answers in the following sections of the simple business plan template.

• What does your business do? Are you selling products, services, information or a combination?
• Where does this happen? Will you conduct business online, in-store, via mobile means or in a specific location or environment?
• Who does your business benefit? Who is your target market and ideal customer for your concept?
• Why would potential customers care? What would make your ideal customers take notice of your business?
• How do your products and/or services outshine the competition? What would make your ideal customers choose you over a competitor?

These answers come easily if you have a solid concept for your business, but don’t worry if you get stuck. Use the rest of your plan template to brainstorm ideas and tactics. You’ll quickly find these answers and possibly new directions as you explore your ideas and options.

2. Offer and Value Proposition

This is where you detail your offer, such as selling products, providing services or both, and why anyone would care. That’s the value proposition. Specifically, you’ll expand on your answers to the first and fourth bullets from your mission/vision.

As you complete this section, you might find that exploring value propositions uncovers marketable business opportunities that you hadn’t yet considered. So spend some time brainstorming the possibilities in this section.

For example, a cottage baker startup specializing in gluten-free or keto-friendly products might be a value proposition that certain audiences care deeply about. Plus, you could expand on that value proposition by offering wedding and other special-occasion cakes that incorporate gluten-free, keto-friendly and traditional cake elements that all guests can enjoy.

3. Audience and Ideal Customer

Here is where you explore bullet point number three, who your business will benefit. Identifying your ideal customer and exploring a broader audience for your goods or services is essential in defining your sales and marketing strategies, plus it helps fine-tune what you offer.

There are many ways to research potential audiences, but a shortcut is to simply identify a problem that people have that your product or service can solve. If you start from the position of being a problem solver, it’s easy to define your audience and describe the wants and needs of your ideal customer for marketing efforts.

Using the cottage baker startup example, a problem people might have is finding fresh-baked gluten-free or keto-friendly sweets. Examining the wants and needs of these people might reveal a target audience that is health-conscious or possibly dealing with health issues and willing to spend more for hard-to-find items.

However, it’s essential to have a customer base that can support your business. You can be too specialized. For example, our baker startup can attract a broader audience and boost revenue by offering a wider selection of traditional baked goods alongside its gluten-free and keto-focused specialties.

4. Revenue Streams, Sales Channels and Marketing

Thanks to our internet-driven economy, startups have many revenue opportunities and can connect with target audiences through various channels. Revenue streams and sales channels also serve as marketing vehicles, so you can cover all three in this section.

Revenue Streams

Revenue streams are the many ways you can make money in your business. In your plan template, list how you’ll make money upon launch, plus include ideas for future expansion. The income possibilities just might surprise you.

For example, our cottage baker startup might consider these revenue streams:

• Product sales : Online, pop-up shops , wholesale and (future) in-store sales
• Affiliate income : Monetize blog and social media posts with affiliate links
• Advertising income : Reserve website space for advertising
• E-book sales : (future) Publish recipe e-books targeting gluten-free and keto-friendly dessert niches
• Video income : (future) Monetize a YouTube channel featuring how-to videos for the gluten-free and keto-friendly dessert niches
• Webinars and online classes : (future) Monetize coaching-style webinars and online classes covering specialty baking tips and techniques
• Members-only content : (future) Monetize a members-only section of the website for specialty content to complement webinars and online classes
• Franchise : (future) Monetize a specialty cottage bakery concept and sell to franchise entrepreneurs

Sales Channels

Sales channels put your revenue streams into action. This section also answers the “where will this happen” question in the second bullet of your vision.

The product sales channels for our cottage bakery example can include:

• Mobile point-of-sale (POS) : A mobile platform such as Shopify or Square POS for managing in-person sales at local farmers’ markets, fairs and festivals
• E-commerce platform : An online store such as Shopify, Square or WooCommerce for online retail sales and wholesale sales orders
• Social media channels : Facebook, Instagram and Pinterest shoppable posts and pins for online sales via social media channels
• Brick-and-mortar location : For in-store sales , once the business has grown to a point that it can support a physical location

Channels that support other income streams might include:

• Affiliate income : Blog section on the e-commerce website and affiliate partner accounts
• Advertising income : Reserved advertising spaces on the e-commerce website
• E-book sales : Amazon e-book sales via Amazon Kindle Direct Publishing
• Video income : YouTube channel with ad monetization
• Webinars and online classes : Online class and webinar platforms that support member accounts, recordings and playback
• Members-only content : Password-protected website content using membership apps such as MemberPress

Nowadays, the line between marketing and sales channels is blurred. Social media outlets, e-books, websites, blogs and videos serve as both marketing tools and income opportunities. Since most are free and those with advertising options are extremely economical, these are ideal marketing outlets for lean startups.

However, many businesses still find value in traditional advertising such as local radio, television, direct mail, newspapers and magazines. You can include these advertising costs in your simple business plan template to help build a marketing plan and budget.

5. Structure, Suppliers and Operations

This section of your simple business plan template explores how to structure and operate your business. Details include the type of business organization your startup will take, roles and responsibilities, supplier logistics and day-to-day operations. Also, include any certifications or permits needed to launch your enterprise in this section.

Our cottage baker example might use a structure and startup plan such as this:

• Business structure : Sole proprietorship with a “doing business as” (DBA) .
• Permits and certifications : County-issued food handling permit and state cottage food certification for home-based food production. Option, check into certified commercial kitchen rentals.
• Roles and responsibilities : Solopreneur, all roles and responsibilities with the owner.
• Supply chain : Bulk ingredients and food packaging via Sam’s Club, Costco, Amazon Prime with annual membership costs. Uline for shipping supplies; no membership needed.
• Day-to-day operations : Source ingredients and bake three days per week to fulfill local and online orders. Reserve time for specialty sales, wholesale partner orders and market events as needed. Ship online orders on alternating days. Update website and create marketing and affiliate blog posts on non-shipping days.

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6. Financial Forecasts

Your final task is to list forecasted business startup and ongoing costs and profit projections in your simple business plan template. Thanks to free business tools such as Square and free marketing on social media, lean startups can launch with few upfront costs. In many cases, cost of goods, shipping and packaging, business permits and printing for business cards are your only out-of-pocket expenses.

Cost Forecast

Our cottage baker’s forecasted lean startup costs might include:

Gross Profit Projections

This helps you determine the retail prices and sales volume required to keep your business running and, hopefully, earn income for yourself. Use product research to spot target retail prices for your goods, then subtract your cost of goods, such as hourly rate, raw goods and supplier costs. The total amount is your gross profit per item or service.

Here are some examples of projected gross profits for our cottage baker:

Bottom Line

Putting careful thought and detail in a business plan is always beneficial, but don’t get so bogged down in planning that you never hit the start button to launch your business . Also, remember that business plans aren’t set in stone. Markets, audiences and technologies change, and so will your goals and means of achieving them. Think of your business plan as a living document and regularly revisit, expand and restructure it as market opportunities and business growth demand.

Is there a template for a business plan?

You can copy our free business plan template and fill in the blanks or customize it in Google Docs, Microsoft Word or another word processing app. This free business plan template includes the six key elements that any entrepreneur needs to consider when launching a new business.

What does a simple business plan include?

A simple business plan is a one- to two-page overview covering six key elements that any budding entrepreneur needs to consider when launching a startup. These include your vision or mission, product or service offering, target audience, revenue streams and sales channels, structure and operations, and financial forecasts.

How can I create a free business plan template?

Start with our free business plan template that covers the six essential elements of a startup. Once downloaded, you can edit this document in Google Docs or another word processing app and add new sections or subsections to your plan template to meet your specific business plan needs.

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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Krista Fabregas is a seasoned eCommerce and online content pro sharing more than 20 years of hands-on know-how with those looking to launch and grow tech-forward businesses. Her expertise includes eCommerce startups and growth, SMB operations and logistics, website platforms, payment systems, side-gig and affiliate income, and multichannel marketing. Krista holds a bachelor's degree in English from The University of Texas at Austin and held senior positions at NASA, a Fortune 100 company, and several online startups.

Small business financial planning: setting yourself up for growth

Michael Henson Content Writer

Jun 19, 2024

You’re a small business owner, but you have big dreams. You want to see your business grow to become robust and profitable, but you aren’t sure how best to go about it. That’s why you need to take a serious approach to planning for business growth. 

Planning for growth means creating a successful small business financial plan, one which considers business goals, financial goals, and risk management . Working with a financial advisor is the best way to create a plan that includes retirement planning, funding options, and preparing for worst case scenarios. This article gives you financial planning tips to get you started to make informed decisions. 

Creating a financial plan for your small business

To set your small business up for success, you need a solid financial plan that includes both short-term and long-term business and financial goals, as well as strategies to achieve them. Then you can make informed decisions, access funding, and prepare for risks. Here are some tips to get you started:

Assess your financial situation

Every effective financial plan is built on accurate and reliable financial information. If you don’t already have a small business budget that charts your revenue, outgoings, and profit margins, now is the time to create one. You can download our small business budget planning template to simplify the process. 

Determine your goals

Next, figure out your key business and personal goals. Do you want to increase revenue by 20% this year? Expand into a new market? Be able to retire by the age of 50? Your financial plan should cover both short-term goals for stability and growth as well as long-term goals to build wealth. 

Manage risks and expenses

Now it’s time to evaluate potential risks and expenses. Speak to a financial advisor to determine appropriate risk management strategies for possibilities like economic downturns, loss of key customers, or expensive equipment failures. Your balance sheet shows your financial health, so look for ways to cut excess spending and budget for unexpected costs. Successful small businesses plan for worst-case scenarios to avoid crises.

Explore funding options

Think about how you will fund expanding your goals and operations. Options include business loans, lines of credit, crowdfunding, and personal investment. Meet with a financial advisor to evaluate what makes sense for your needs and risk tolerance. They can help you find good options and negotiate the best rates.

Setting business goals and assessing risks

As a small business owner, you need to define your business goals and plan for risks to set yourself up for growth. These should include personal and business goals, and both short-term aims and long-term plans. You can then assess potential risks that could hold you back from achieving your goals, and work out ways to avoid or mitigate them.

Determine your personal financial goals 

As a small business owner, your personal and business finances are closely linked. Think about your own financial goals, like saving for retirement, college funds for your kids, or paying off debt. A financial advisor can help you create a comprehensive plan that includes both business and personal financial goals. 

Set business goals

Think about why you started your business and what you want to achieve in the next 1-3 years. Do you want to increase revenue or profits? Open a new location? Setting specific, measurable goals will help guide your financial planning. Work with a financial advisor to determine how much money you need to achieve your goals and the funding options available, like small business loans, crowd-funding, or business credit cards. 

Manage risks

Identify potential risks to your cash flow and profits, like economic downturns, loss of key customers, or supply chain issues. Come up with a worst-case scenario plan that includes cutting costs, alternative funding sources, and ways to increase revenue. Planning for risks will help you make better informed decisions if problems arise. You’ll want to revisit your risk assessments regularly as your business grows and evolves.

Managing finances and cash flow

To set your small business up for growth, you need to get a handle on your finances. As a small business owner, this means developing realistic business and financial goals, managing risks, and planning how to fund future growth.

Successful small businesses monitor their financial health regularly and make changes to support growth and stability. That’s why you need to look at your balance sheet, income statement, cash flow statement, and key ratios to determine your company’s financial health. 

The balance sheet shows your assets, liabilities, and equity at a given point in time. The income statement shows your revenue, expenses, and profits over a period of time. Analyzing these financial statements will tell you if you have enough cash on hand, if expenses are too high, if you’re overleveraged with debt, or if profits are growing. 

Retirement planning options for small business owners

Saving for retirement is crucial for your long term financial health, and requires balancing your business’s financial health today with your own financial goals for the future. Speaking to a financial advisor who specializes in small business planning can help determine the right mix based on your business goals and risk tolerance. There are several options tailored to small businesses that provide tax benefits and flexibility.

Simplified Employee Pension (SEP) IRA

A SEP IRA allows you to contribute up to 25% of your salary, or $66,000 for 2023 , whichever is less. Contributions are tax-deductible and the plan is easy to set up and administer. A SEP IRA provides flexibility, since you can vary contributions from year to year based on your business’s financial performance.

Individual 401(k)

An individual 401(k), or solo 401(k), operates similar to a traditional 401(k) but is designed for self-employed individuals and small business owners. For 2024, you can contribute up to $23,000 as an employee , plus up to 25% of your compensation as an employer, for a total of $69,000. A solo 401(k) allows for loans and hardship withdrawals, and contributions can be made up until your tax filing deadline.

Profit-sharing plan

A profit-sharing plan allows you to contribute a percentage of your business’s profits to a retirement plan. Contributions are discretionary and the plan provides flexibility in how profits are distributed to employees. The contribution limit is 25% of compensation or $69,000 for 2024 , and contributions are tax deductible. Profit sharing plans require non-discrimination testing to ensure benefits are fairly distributed among employees.

Effective financial planning is the key to successful business growth

By following these tips and taking advantage of resources for planning for small business, you can develop a successful small business financial plan to guide your company to growth and prosperity. Keep refining and revising your plan as your business evolves. With the right plan in place, you can make informed decisions to ensure the financial health and success of your business for years to come.

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Broadcom is the next stock that could enter the trillion-dollar club, according to Bank of America

• Broadcom could be the next stock to reach a trillion-dollar market cap, Bank of America said.
• The chipmaker's stock is surging after its quarterly earnings beat estimates. 
• Strong sales, a debt paydown, and lucrative acquisitions should keep up the firm's momentum, BofA said. 

Chip maker Broadcom looks like a contender to be the next member of the stock market's trillion-dollar club, Bank of America said Thursday.

Investors cheered the semiconductor manufacturer in Thursday trades after it posted estimate-beating earnings and announced a 10-to-1 stock split. Shares soared, hitting an all-time high of $1,696 around 11 a.m. ET.

Bank of America thinks Broadcom has even greater potential even after its big quarterly report. In a note published Thursday, analysts upgraded the firm's price target to $2,000, indicating about 18% upside from current levels.

"We reiterate Buy, consider it a top AI pick (with NVDA) as AVGO appears uniquely positioned to grow in: 1) custom AI chips (complement to NVDA merchant accelerators), 2) Ethernet networking (levered to exponentially growing AI clusters), and 3) VMware upsell (enables enterprise to deploy on-premise AI)," the bank said.

Broadcom is among a cohort of semiconductor manufacturers that have been buoyed up by the artificial intelligence frenzy, as their chips are used to power the underlying software. $3.1 billion in sales during the fiscal year's second quarter were tied to AI products, it said.

Strong sales outlooks also helped Broadcom surge on Thursday, as it forecast $51 billion in sales this fiscal year, slightly above consensus.

Bank of America sees this momentum continuing. For fiscal year 2025, it raised its sales forecasts to $59.9 billion, or a 16% increase year-over-year. Upside drivers will be semiconductor sales and Broadcom's VMWare, a software firm it acquired last year.

"Second, we note AVGO's debt paydown ($8bn+ annual) that could create more room for further M&A next year. Third, the double digit FCF growth in FY24 could enable another 10% dividend raise towards the end of the FY," analysts wrote.

If Bank of America's price target pans out, that would place Broadcom among an exclusive group of stocks with trillion-dollar market capitalization. The club's latest member is Nvidia, the semiconductor leader that was catapulted into sky-high valuations, thanks to its central role in the AI wave.

Nvidia has broken out to soar even higher in recent months, joining Microsoft and Apple at the $3 trillion mark .

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Equipment rental company Ashtead has no immediate plan for US listing

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• Flags slower growth for Fiscal 2025
• Media reports had said listing was being considered
• Shares fell by as much as 5%

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Reporting by Echha Jain and Yamini Kalia in Bengaluru; Editing by Subhranshu Sahu and Barbara Lewis

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UK's SIG warns on profit as Britons cut back home upgrades

Britain's SIG Plc expects underlying profit for the year to be below market forecast hurt by subdued demand in the construction sector, the building materials supplier said on Monday.

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Trump's plan to hike tariffs instead of raising taxes could cause the 'mother of all stagflations,' policymakers warn

• Trump's idea to replace the US income tax with tariffs notched criticism from two Treasury secretaries.
• "This is a prescription for the mother of all stagflations," Larry Summers told Bloomberg TV.
• The current secretary, Janet Yellen, said it would make life unaffordable for Americans.

Janet Yellen and Larry Summers haven't always agreed on everything, but a new tax proposal from the Trump campaign earned a strong rebuttal from both the current secretary of the Treasury and the former one.

The idea, floated by former President Donald Trump to Republicans last week, would slash income taxes by raising tariffs on imports . While the proposal is said to have gained quick support from those present at the meeting, it has since been blasted as a surefire way to worsen inflation and dent US competitiveness.

"This is a prescription for the mother of all stagflations," Summers told Bloomberg TV on Friday, calling it the worst policy proposed in US history.

The chief concern is that tariff revenue provides nowhere near as much income to the government as taxes do, with income tax responsible for close to half of US revenue last year. To eliminate individual taxes, tariffs would need to climb well over 100%, Yellen, the current Treasury secretary, told ABC News .

When import levies rise, that typically causes foreign traders to raise prices or pull their products. When that happens, supply falls, and domestic products appreciate , according to the nonpartisan think tank Tax Foundation.

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"The impact would be to make life unaffordable for working-class Americans," Yellen said. "That would harm American businesses."

But to Summers, that's the least of it. He compared the moment to the Smoot-Hawley Tariff Act, an infamous 1930s bill that's blamed for worsening the Great Depression .

"If you replaced half of income-tax revenues with tariffs, those would be tariffs six times Smoot-Hawley levels," he said, adding that Trump had proposed replacing the entire system.

This could cause enormous damage to US exporters and consumers and send the world spiraling into "economic warfare" as countries responded, Summers added.

But to the GOP donor and billionaire investor Kyle Bass, Trump's idea is probably hyperbole, as it's just not feasible. Talking on CNBC, he pointed out that last year's import volume amounted to $3.8 trillion, while tax revenue is estimated to reach $5.4 trillion this year.

"There is just no way to run an import-tariff scheme to get you to $5.4 trillion," the Hayman Capital chief investment officer said.

Still, chances are high that a Trump White House would unleash tariffs in one form or another. The former president has made import duties a fundamental component of his trade policy, and not only to relieve income tax.

He's additionally discussed applying a universal 10% tariff rate on all US imports and raising it up to 60% for Chinese goods. Trump has argued that this will end the exploitation of US trade and give domestic producers an edge.

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