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What Is a Business Plan?

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

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

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

Key Takeaways

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

Investopedia / Ryan Oakley

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

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

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

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

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

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

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

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

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

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

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

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

2 Types of Business Plans

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

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

Why Do Business Plans Fail?

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

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

What Does a Lean Startup Business Plan Include?

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

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

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

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

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

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How to Write a Business Plan, Step by Step

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What is a business plan?

1. write an executive summary, 2. describe your company, 3. state your business goals, 4. describe your products and services, 5. do your market research, 6. outline your marketing and sales plan, 7. perform a business financial analysis, 8. make financial projections, 9. summarize how your company operates, 10. add any additional information to an appendix, business plan tips and resources.

A business plan outlines your business’s financial goals and explains how you’ll achieve them over the next three to five years. Here’s a step-by-step guide to writing a business plan that will offer a strong, detailed road map for your business.

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A business plan is a document that explains what your business does, how it makes money and who its customers are. Internally, writing a business plan should help you clarify your vision and organize your operations. Externally, you can share it with potential lenders and investors to show them you’re on the right track.

Business plans are living documents; it’s OK for them to change over time. Startups may update their business plans often as they figure out who their customers are and what products and services fit them best. Mature companies might only revisit their business plan every few years. Regardless of your business’s age, brush up this document before you apply for a business loan .

» Need help writing? Learn about the best business plan software .

This is your elevator pitch. It should include a mission statement, a brief description of the products or services your business offers and a broad summary of your financial growth plans.

Though the executive summary is the first thing your investors will read, it can be easier to write it last. That way, you can highlight information you’ve identified while writing other sections that go into more detail.

» MORE: How to write an executive summary in 6 steps

Next up is your company description. This should contain basic information like:

Your business’s registered name.

Address of your business location .

Names of key people in the business. Make sure to highlight unique skills or technical expertise among members of your team.

Your company description should also define your business structure — such as a sole proprietorship, partnership or corporation — and include the percent ownership that each owner has and the extent of each owner’s involvement in the company.

Lastly, write a little about the history of your company and the nature of your business now. This prepares the reader to learn about your goals in the next section.

» MORE: How to write a company overview for a business plan

The third part of a business plan is an objective statement. This section spells out what you’d like to accomplish, both in the near term and over the coming years.

If you’re looking for a business loan or outside investment, you can use this section to explain how the financing will help your business grow and how you plan to achieve those growth targets. The key is to provide a clear explanation of the opportunity your business presents to the lender.

For example, if your business is launching a second product line, you might explain how the loan will help your company launch that new product and how much you think sales will increase over the next three years as a result.

» MORE: How to write a successful business plan for a loan

In this section, go into detail about the products or services you offer or plan to offer.

You should include the following:

An explanation of how your product or service works.

The pricing model for your product or service.

The typical customers you serve.

Your supply chain and order fulfillment strategy.

You can also discuss current or pending trademarks and patents associated with your product or service.

Lenders and investors will want to know what sets your product apart from your competition. In your market analysis section , explain who your competitors are. Discuss what they do well, and point out what you can do better. If you’re serving a different or underserved market, explain that.

Here, you can address how you plan to persuade customers to buy your products or services, or how you will develop customer loyalty that will lead to repeat business.

Include details about your sales and distribution strategies, including the costs involved in selling each product .

» MORE: R e a d our complete guide to small business marketing

If you’re a startup, you may not have much information on your business financials yet. However, if you’re an existing business, you’ll want to include income or profit-and-loss statements, a balance sheet that lists your assets and debts, and a cash flow statement that shows how cash comes into and goes out of the company.

Accounting software may be able to generate these reports for you. It may also help you calculate metrics such as:

Net profit margin: the percentage of revenue you keep as net income.

Current ratio: the measurement of your liquidity and ability to repay debts.

Accounts receivable turnover ratio: a measurement of how frequently you collect on receivables per year.

This is a great place to include charts and graphs that make it easy for those reading your plan to understand the financial health of your business.

This is a critical part of your business plan if you’re seeking financing or investors. It outlines how your business will generate enough profit to repay the loan or how you will earn a decent return for investors.

Here, you’ll provide your business’s monthly or quarterly sales, expenses and profit estimates over at least a three-year period — with the future numbers assuming you’ve obtained a new loan.

Accuracy is key, so carefully analyze your past financial statements before giving projections. Your goals may be aggressive, but they should also be realistic.

NerdWallet’s picks for setting up your business finances:

The best business checking accounts .

The best business credit cards .

The best accounting software .

Before the end of your business plan, summarize how your business is structured and outline each team’s responsibilities. This will help your readers understand who performs each of the functions you’ve described above — making and selling your products or services — and how much each of those functions cost.

If any of your employees have exceptional skills, you may want to include their resumes to help explain the competitive advantage they give you.

Finally, attach any supporting information or additional materials that you couldn’t fit in elsewhere. That might include:

Licenses and permits.

Equipment leases.

Bank statements.

Details of your personal and business credit history, if you’re seeking financing.

If the appendix is long, you may want to consider adding a table of contents at the beginning of this section.

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We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

Here are some tips to write a detailed, convincing business plan:

Avoid over-optimism: If you’re applying for a business bank loan or professional investment, someone will be reading your business plan closely. Providing unreasonable sales estimates can hurt your chances of approval.

Proofread: Spelling, punctuation and grammatical errors can jump off the page and turn off lenders and prospective investors. If writing and editing aren't your strong suit, you may want to hire a professional business plan writer, copy editor or proofreader.

Use free resources: SCORE is a nonprofit association that offers a large network of volunteer business mentors and experts who can help you write or edit your business plan. The U.S. Small Business Administration’s Small Business Development Centers , which provide free business consulting and help with business plan development, can also be a resource.

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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 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.

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How To Write a Business Plan

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Starting a business is a wild ride, and a solid business plan can be the key to keeping you on track. A business plan is essentially a roadmap for your business — outlining your goals, strategies, market analysis and financial projections. Not only will it guide your decision-making, a business plan can help you secure funding with a loan or from investors .

Writing a business plan can seem like a huge task, but taking it one step at a time can break the plan down into manageable milestones. Here is our step-by-step guide on how to write a business plan.

Table of contents

• Write your executive summary
• Do your market research homework
• Set your business goals and objectives
• Plan your business strategy
• Describe your product or service
• Crunch the numbers
• Finalize your business plan

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Step 1: Write your executive summary

Though this will be the first page of your business plan , we recommend you actually write the executive summary last. That’s because an executive summary highlights what’s to come in the business plan but in a more condensed fashion.

An executive summary gives stakeholders who are reading your business plan the key points quickly without having to comb through pages and pages. Be sure to cover each successive point in a concise manner, and include as much data as necessary to support your claims.

You’ll cover other things too, but answer these basic questions in your executive summary:

• Idea: What’s your business concept? What problem does your business solve? What are your business goals?
• Product: What’s your product/service and how is it different?
• Market: Who’s your audience? How will you reach customers?
• Finance: How much will your idea cost? And if you’re seeking funding, how much money do you need? How much do you expect to earn? If you’ve already started, where is your revenue at now?

Step 2: Do your market research homework

The next step in writing a business plan is to conduct market research . This involves gathering information about your target market (or customer persona), your competition, and the industry as a whole. You can use a variety of research methods such as surveys, focus groups, and online research to gather this information. Your method may be formal or more casual, just make sure that you’re getting good data back.

This research will help you to understand the needs of your target market and the potential demand for your product or service—essential aspects of starting and growing a successful business.

Step 3: Set your business goals and objectives

Once you’ve completed your market research, you can begin to define your business goals and objectives. What is the problem you want to solve? What’s your vision for the future? Where do you want to be in a year from now?

Use this step to decide what you want to achieve with your business, both in the short and long term. Try to set SMART goals—specific, measurable, achievable, relevant, and time-bound benchmarks—that will help you to stay focused and motivated as you build your business.

Step 4: Plan your business strategy

Your business strategy is how you plan to reach your goals and objectives. This includes details on positioning your product or service, marketing and sales strategies, operational plans, and the organizational structure of your small business.

Make sure to include key roles and responsibilities for each team member if you’re in a business entity with multiple people.

Step 5: Describe your product or service

In this section, get into the nitty-gritty of your product or service. Go into depth regarding the features, benefits, target market, and any patents or proprietary tech you have. Make sure to paint a clear picture of what sets your product apart from the competition—and don’t forget to highlight any customer benefits.

Step 6: Crunch the numbers

Financial analysis is an essential part of your business plan. If you’re already in business that includes your profit and loss statement , cash flow statement and balance sheet .

These financial projections will give investors and lenders an understanding of the financial health of your business and the potential return on investment.

You may want to work with a financial professional to ensure your financial projections are realistic and accurate.

Step 7: Finalize your business plan

Once you’ve completed everything, it's time to finalize your business plan. This involves reviewing and editing your plan to ensure that it is clear, concise, and easy to understand.

You should also have someone else review your plan to get a fresh perspective and identify any areas that may need improvement. You could even work with a free SCORE mentor on your business plan or use a SCORE business plan template for more detailed guidance.

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The takeaway

Writing a business plan is an essential process for any forward-thinking entrepreneur or business owner. A business plan requires a lot of up-front research, planning, and attention to detail, but it’s worthwhile. Creating a comprehensive business plan can help you achieve your business goals and secure the funding you need.

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

By Joe Weller | October 11, 2021

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

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

What Is a Business Plan?

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

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

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

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

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

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

Business Plan Steps

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

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

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

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

Do I Need a Simple or Detailed Plan?

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

How to Choose the Right Plan for Your Business

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

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

Is the Order of Your Business Plan Important?

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

The Difference Between Traditional and Lean Business Plans

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

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

How to Write a Business Plan Step by Step

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

Step 1: Executive Summary

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

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

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

Step 2: Description of Business

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

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

Step 3: Market Analysis

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

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

Step 4: Competitive Analysis

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

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

Step 5: Description of Organizational Management

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

Step 6: Description of Products or Services

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

Questions to answer in this section are as follows:

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

Step 7: Marketing Plan

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

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

Step 8: Sales Plan

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

Start by answering the following questions:

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

Step 9: Funding Details (or Request for Funding)

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

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

Step 10: Financial Projections

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

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

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

Business Plan Template

Download Business Plan Template

Microsoft Excel | Smartsheet

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

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

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

How to Write a Simple Business Plan

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

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

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

Simple Business Plan Template

Download Simple Business Plan Template

Microsoft Excel |  Microsoft Word | Adobe PDF  | Smartsheet

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

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

How to Write a Business Plan for a Lean Startup

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

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

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

Lean Business Plan Template for Startups

Download Lean Business Plan Template for Startups

Microsoft Word | Adobe PDF

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

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

How to Write a Business Plan for a Loan

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

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

Download free financial templates to support your business plan.

Tips for Writing a Business Plan

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

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

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

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

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

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

Resources for Writing a Business Plan

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

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

How a Business Plan Helps to Grow Your Business

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

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

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

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

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Business plans might seem like an old-school stiff-collared practice, but they deserve a place in the startup realm, too. It’s probably not going to be the frame-worthy document you hang in the office—yet, it may one day be deserving of the privilege.

Whether you’re looking to win the heart of an angel investor or convince a bank to lend you money, you’ll need a business plan. And not just any ol’ notes and scribble on the back of a pizza box or napkin—you’ll need a professional, standardized report.

Bah. Sounds like homework, right?

Yes. Yes, it does.

However, just like bookkeeping, loan applications, and 404 redirects, business plans are an essential step in cementing your business foundation.

Don’t worry. We’ll show you how to write a business plan without boring you to tears. We’ve jam-packed this article with all the business plan examples, templates, and tips you need to take your non-existent proposal from concept to completion.

Table of Contents

What Is a Business Plan?

Tips to Make Your Small Business Plan Ironclad

How to Write a Business Plan in 6 Steps

Startup Business Plan Template

Business Plan Examples

Work on Making Your Business Plan

How to Write a Business Plan FAQs

What is a business plan why do you desperately need one.

A business plan is a roadmap that outlines:

• Who your business is, what it does, and who it serves
• Where your business is now
• Where you want it to go
• How you’re going to make it happen
• What might stop you from taking your business from Point A to Point B
• How you’ll overcome the predicted obstacles

While it’s not required when starting a business, having a business plan is helpful for a few reasons:

• Secure a Bank Loan: Before approving you for a business loan, banks will want to see that your business is legitimate and can repay the loan. They want to know how you’re going to use the loan and how you’ll make monthly payments on your debt. Lenders want to see a sound business strategy that doesn’t end in loan default.
• Win Over Investors: Like lenders, investors want to know they’re going to make a return on their investment. They need to see your business plan to have the confidence to hand you money.
• Stay Focused: It’s easy to get lost chasing the next big thing. Your business plan keeps you on track and focused on the big picture. Your business plan can prevent you from wasting time and resources on something that isn’t aligned with your business goals.

Beyond the reasoning, let’s look at what the data says:

• Simply writing a business plan can boost your average annual growth by 30%
• Entrepreneurs who create a formal business plan are 16% more likely to succeed than those who don’t
• A study looking at 65 fast-growth companies found that 71% had small business plans
• The process and output of creating a business plan have shown to improve business performance

Convinced yet? If those numbers and reasons don’t have you scrambling for pen and paper, who knows what will.

Don’t Skip: Business Startup Costs Checklist

Before we get into the nitty-gritty steps of how to write a business plan, let’s look at some high-level tips to get you started in the right direction:

Be Professional and Legit

You might be tempted to get cutesy or revolutionary with your business plan—resist the urge. While you should let your brand and creativity shine with everything you produce, business plans fall more into the realm of professional documents.

Think of your business plan the same way as your terms and conditions, employee contracts, or financial statements. You want your plan to be as uniform as possible so investors, lenders, partners, and prospective employees can find the information they need to make important decisions.

If you want to create a fun summary business plan for internal consumption, then, by all means, go right ahead. However, for the purpose of writing this external-facing document, keep it legit.

Know Your Audience

Your official business plan document is for lenders, investors, partners, and big-time prospective employees. Keep these names and faces in your mind as you draft your plan.

Think about what they might be interested in seeing, what questions they’ll ask, and what might convince (or scare) them. Cut the jargon and tailor your language so these individuals can understand.

Remember, these are busy people. They’re likely looking at hundreds of applicants and startup investments every month. Keep your business plan succinct and to the point. Include the most pertinent information and omit the sections that won’t impact their decision-making.

Invest Time Researching

You might not have answers to all the sections you should include in your business plan. Don’t skip over these!

Your audience will want:

• Detailed information about your customers
• Numbers and solid math to back up your financial claims and estimates
• Deep insights about your competitors and potential threats
• Data to support market opportunities and strategy

Your answers can’t be hypothetical or opinionated. You need research to back up your claims. If you don’t have that data yet, then invest time and money in collecting it. That information isn’t just critical for your business plan—it’s essential for owning, operating, and growing your company.

Stay Realistic

Your business may be ambitious, but reign in the enthusiasm just a teeny-tiny bit. The last thing you want to do is have an angel investor call BS and say “I’m out” before even giving you a chance.

The folks looking at your business and evaluating your plan have been around the block—they know a thing or two about fact and fiction. Your plan should be a blueprint for success. It should be the step-by-step roadmap for how you’re going from Point A to Point B.

How to Write a Business Plan—6 Essential Elements

Not every business plan looks the same, but most share a few common elements. Here’s what they typically include:

• Executive Summary
• Business Overview
• Products and Services
• Market Analysis
• Competitive Analysis
• Financial Strategy

Below, we’ll break down each of these sections in more detail.

1. Executive Summary

While your executive summary is the first page of your business plan, it’s the section you’ll write last. That’s because it summarizes your entire business plan into a succinct one-pager.

Begin with an executive summary that introduces the reader to your business and gives them an overview of what’s inside the business plan.

Your executive summary highlights key points of your plan. Consider this your elevator pitch. You want to put all your juiciest strengths and opportunities strategically in this section.

2. Business Overview

In this section, you can dive deeper into the elements of your business, including answering:

• What’s your business structure? Sole proprietorship, LLC, corporation, etc.
• Where is it located?
• Who owns the business? Does it have employees?
• What problem does it solve, and how?
• What’s your mission statement? Your mission statement briefly describes why you are in business. To write a proper mission statement, brainstorm your business’s core values and who you serve.

Don’t overlook your mission statement. This powerful sentence or paragraph could be the inspiration that drives an investor to take an interest in your business. Here are a few examples of powerful mission statements that just might give you the goosebumps:

• Patagonia: Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.
• Tesla: To accelerate the world’s transition to sustainable energy.
• InvisionApp : Question Assumptions. Think Deeply. Iterate as a Lifestyle. Details, Details. Design is Everywhere. Integrity.
• TED : Spread ideas.
• Warby Parker : To offer designer eyewear at a revolutionary price while leading the way for socially conscious businesses.

3. Products and Services

As the owner, you know your business and the industry inside and out. However, whoever’s reading your document might not. You’re going to need to break down your products and services in minute detail.

For example, if you own a SaaS business, you’re going to need to explain how this business model works and what you’re selling.

You’ll need to include:

• What services you sell: Describe the services you provide and how these will help your target audience.
• What products you sell: Describe your products (and types if applicable) and how they will solve a need for your target and provide value.
• How much you charge: If you’re selling services, will you charge hourly, per project, retainer, or a mixture of all of these? If you’re selling products, what are the price ranges?

4. Market Analysis

Your market analysis essentially explains how your products and services address customer concerns and pain points. This section will include research and data on the state and direction of your industry and target market.

This research should reveal lucrative opportunities and how your business is uniquely positioned to seize the advantage. You’ll also want to touch on your marketing strategy and how it will (or does) work for your audience.

Include a detailed analysis of your target customers. This describes the people you serve and sell your product to. Be careful not to go too broad here—you don’t want to fall into the common entrepreneurial trap of trying to sell to everyone and thereby not differentiating yourself enough to survive the competition.

The market analysis section will include your unique value proposition. Your unique value proposition (UVP) is the thing that makes you stand out from your competitors. This is your key to success.

If you don’t have a UVP, you don’t have a way to take on competitors who are already in this space. Here’s an example of an ecommerce internet business plan outlining their competitive edge:

FireStarters’ competitive advantage is offering product lines that make a statement but won’t leave you broke. The major brands are expensive and not distinctive enough to satisfy the changing taste of our target customers. FireStarters offers products that are just ahead of the curve and so affordable that our customers will return to the website often to check out what’s new.

5. Competitive Analysis

Your competitive analysis examines the strengths and weaknesses of competing businesses in your market or industry. This will include direct and indirect competitors. It can also include threats and opportunities, like economic concerns or legal restraints.

The best way to sum up this section is with a classic SWOT analysis. This will explain your company’s position in relation to your competitors.

6. Financial Strategy

Your financial strategy will sum up your revenue, expenses, profit (or loss), and financial plan for the future. It’ll explain how you make money, where your cash flow goes, and how you’ll become profitable or stay profitable.

This is one of the most important sections for lenders and investors. Have you ever watched Shark Tank? They always ask about the company’s financial situation. How has it performed in the past? What’s the ongoing outlook moving forward? How does the business plan to make it happen?

Answer all of these questions in your financial strategy so that your audience doesn’t have to ask. Go ahead and include forecasts and graphs in your plan, too:

• Balance sheet: This includes your assets, liabilities, and equity.
• Profit & Loss (P&L) statement: This details your income and expenses over a given period.
• Cash flow statement: Similar to the P&L, this one will show all cash flowing into and out of the business each month.

It takes cash to change the world—lenders and investors get it. If you’re short on funding, explain how much money you’ll need and how you’ll use the capital. Where are you looking for financing? Are you looking to take out a business loan, or would you rather trade equity for capital instead?

Read More: 16 Financial Concepts Every Entrepreneur Needs to Know

Startup Business Plan Template (Copy/Paste Outline)

Ready to write your own business plan? Copy/paste the startup business plan template below and fill in the blanks.

Executive Summary Remember, do this last. Summarize who you are and your business plan in one page.

Business Overview Describe your business. What’s it do? Who owns it? How’s it structured? What’s the mission statement?

Products and Services Detail the products and services you offer. How do they work? What do you charge?

Market Analysis Write about the state of the market and opportunities. Use date. Describe your customers. Include your UVP.

Competitive Analysis Outline the competitors in your market and industry. Include threats and opportunities. Add a SWOT analysis of your business.

Financial Strategy Sum up your revenue, expenses, profit (or loss), and financial plan for the future. If you’re applying for a loan, include how you’ll use the funding to progress the business.

5 Frame-Worthy Business Plan Examples

Want to explore other templates and examples? We got you covered. Check out these 5 business plan examples you can use as inspiration when writing your plan:

• SBA Wooden Grain Toy Company
• SBA We Can Do It Consulting
• OrcaSmart Business Plan Sample
• Plum Business Plan Template
• PandaDoc Free Business Plan Templates

Get to Work on Making Your Business Plan

If you find you’re getting stuck on perfecting your document, opt for a simple one-page business plan —and then get to work. You can always polish up your official plan later as you learn more about your business and the industry.

Remember, business plans are not a requirement for starting a business—they’re only truly essential if a bank or investor is asking for it.

Ask others to review your business plan. Get feedback from other startups and successful business owners. They’ll likely be able to see holes in your planning or undetected opportunities—just make sure these individuals aren’t your competitors (or potential competitors).

Your business plan isn’t a one-and-done report—it’s a living, breathing document. You’ll make changes to it as you grow and evolve. When the market or your customers change, your plan will need to change to adapt.

That means when you’re finished with this exercise, it’s not time to print your plan out and stuff it in a file cabinet somewhere. No, it should sit on your desk as a day-to-day reference. Use it (and update it) as you make decisions about your product, customers, and financial plan.

Review your business plan frequently, update it routinely, and follow the path you’ve developed to the future you’re building.

Keep Learning: New Product Development Process in 8 Easy Steps

What financial information should be included in a business plan?

Be as detailed as you can without assuming too much. For example, include your expected revenue, expenses, profit, and growth for the future.

What are some common mistakes to avoid when writing a business plan?

The most common mistake is turning your business plan into a textbook. A business plan is an internal guide and an external pitching tool. Cut the fat and only include the most relevant information to start and run your business.

Who should review my business plan before I submit it?

Co-founders, investors, or a board of advisors. Otherwise, reach out to a trusted mentor, your local chamber of commerce, or someone you know that runs a business.

Ready to Write Your Business Plan?

Don’t let creating a business plan hold you back from starting your business. Writing documents might not be your thing—that doesn’t mean your business is a bad idea.

Let us help you get started.

Join our free training to learn how to start an online side hustle in 30 days or less. We’ll provide you with a proven roadmap for how to find, validate, and pursue a profitable business idea (even if you have zero entrepreneurial experience).

Stuck on the ideas part? No problem. When you attend the masterclass, we’ll send you a free ebook with 100 of the hottest side hustle trends right now. It’s chock full of brilliant business ideas to get you up and running in the right direction.

About Jesse Sumrak

Jesse Sumrak is a writing zealot focused on creating killer content. He’s spent almost a decade writing about startup, marketing, and entrepreneurship topics, having built and sold his own post-apocalyptic fitness bootstrapped business. A writer by day and a peak bagger by night (and early early morning), you can usually find Jesse preparing for the apocalypse on a precipitous peak somewhere in the Rocky Mountains of Colorado.

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How to Write a Business Plan (Plus Examples & Templates)

May 24, 2021

Have you ever wondered how to write a business plan step by step? Mike Andes, told us: 

This guide will help you write a business plan to impress investors.

Throughout this process, we’ll get information from Mike Andes, who started Augusta Lawn Care Services when he was 12 and turned it into a franchise with over 90 locations. He has gone on to help others learn how to write business plans and start businesses.  He knows a thing or two about writing  business plans!

We’ll start by discussing the definition of a business plan. Then we’ll discuss how to come up with the idea, how to do the market research, and then the important elements in the business plan format. Keep reading to start your journey!

What Is a Business Plan?

A business plan is simply a road map of what you are trying to achieve with your business and how you will go about achieving it. It should cover all elements of your business including: 

• Finding customers
• Plans for developing a team
•  Competition
• Legal structures
• Key milestones you are pursuing

If you aren’t quite ready to create a business plan, consider starting by reading our business startup guide .

Get a Business Idea

Before you can write a business plan, you have to have a business idea. You may see a problem that needs to be solved and have an idea how to solve it, or you might start by evaluating your interests and skills. 

Mike told us, “The three things I suggest asking yourself when thinking about starting a business are:

• What am I good at?
• What would I enjoy doing?
• What can I get paid for?”

If all three of these questions don’t lead to at least one common answer, it will probably be a much harder road to success. Either there is not much market for it, you won’t be good at it, or you won’t enjoy doing it. 

As Mike told us, “There’s enough stress starting and running a business that if you don’t like it or aren’t good at it, it’s hard to succeed.”

If you’d like to hear more about Mike’s approach to starting a business, check out our YouTube video

Conduct Market Analysis

Market analysis is focused on establishing if there is a target market for your products and services, how large the target market is, and identifying the demographics of people or businesses that would be interested in the product or service. The goal here is to establish how much money your business concept can make.

Product and Service Demand

A search engine is your best friend when trying to figure out if there is demand for your products and services. Personally, I love using presearch.org because it lets you directly search on a ton of different platforms including Google, Youtube, Twitter, and more. Check out the screenshot for the full list of search options.

With quick web searches, you can find out how many competitors you have, look through their reviews, and see if there are common complaints about the competitors. Bad reviews are a great place to find opportunities to offer better products or services. 

If there are no similar products or services, you may have stumbled upon something new, or there may just be no demand for it. To find out, go talk to your most honest friend about the idea and see what they think. If they tell you it’s dumb or stare at you vacantly, there’s probably no market for it.

You can also conduct a survey through social media to get public opinion on your idea. Using Facebook Business Manager , you could get a feel for who would be interested in your product or service.

 I ran a quick test of how many people between 18-65  you could reach in the U.S. during a week. It returned an estimated 700-2,000 for the total number of leads, which is enough to do a fairly accurate statistical analysis.

Identify Demographics of Target Market

Depending on what type of business you want to run, your target market will be different. The narrower the demographic, the fewer potential customers you’ll have. If you did a survey, you’ll be able to use that data to help define your target audience. Some considerations you’ll want to consider are:

• Other Interests
• Marital Status
• Do they have kids?

Once you have this information, it can help you narrow down your options for location and help define your marketing further. One resource that Mike recommended using is the Census Bureau’s Quick Facts Map . He told us,  

“It helps you quickly evaluate what the best areas are for your business to be located.”

How to Write a Business Plan

Now that you’ve developed your idea a little and established there is a market for it, you can begin writing a business plan. Getting started is easier with the business plan template we created for you to download. I strongly recommend using it as it is updated to make it easier to create an action plan. 

Each of the following should be a section of your business plan:

• Business Plan Cover Page
• Table of Contents
• Executive Summary
• Company Description
• Description of Products and Services

SWOT Analysis

• Competitor Data
• Competitive Analysis
• Marketing Expenses Strategy 

Pricing Strategy

• Distribution Channel Assessment
• Operational Plan
• Management and Organizational Strategy
• Financial Statements and/or Financial Projections

We’ll look into each of these. Don’t forget to download our free business plan template (mentioned just above) so you can follow along as we go. 

How to Write a Business Plan Step 1. Create a Cover Page

The first thing investors will see is the cover page for your business plan. Make sure it looks professional. A great cover page shows that you think about first impressions.

A good business plan should have the following elements on a cover page:

• Professionally designed logo
• Company name
• Mission or Vision Statement
• Contact Info

Basically, think of a cover page for your business plan like a giant business card. It is meant to capture people’s attention but be quickly processed.

How to Write a Business Plan Step 2. Create a Table of Contents

Most people are busy enough that they don’t have a lot of time. Providing a table of contents makes it easy for them to find the pages of your plan that are meaningful to them.

A table of contents will be immediately after the cover page, but you can include it after the executive summary. Including the table of contents immediately after the executive summary will help investors know what section of your business plan they want to review more thoroughly.

Check out Canva’s article about creating a  table of contents . It has a ton of great information about creating easy access to each section of your business plan. Just remember that you’ll want to use different strategies for digital and hard copy business plans.

How to Write a Business Plan Step 3. Write an Executive Summary

An executive summary is where your business plan should catch the readers interest.  It doesn’t need to be long, but should be quick and easy to read.

Mike told us,

How long should an executive summary bein an informal business plan?

For casual use, an executive summary should be similar to an elevator pitch, no more than 150-160 words, just enough to get them interested and wanting more. Indeed has a great article on elevator pitches .  This can also be used for the content of emails to get readers’ attention.

It consists of three basic parts:

• An introduction to you and your business.
• What your business is about.
• A call to action

Example of an informal executive summary 

One of the best elevator pitches I’ve used is:

So far that pitch has achieved a 100% success rate in getting partnerships for the business.

What should I include in an executive summary for investors?

Investors are going to need a more detailed executive summary if you want to secure financing or sell equity. The executive summary should be a brief overview of your entire business plan and include:

• Introduction of yourself and company.
• An origin story (Recognition of a problem and how you came to solution)
• An introduction to your products or services.
• Your unique value proposition. Make sure to include intellectual property.
• Where you are in the business life cycle
• Request and why you need it.

Successful business plan examples

The owner of Urbanity told us he spent 2 months writing a 75-page business plan and received a $250,000 loan from the bank when he was 23. Make your business plan as detailed as possible when looking for financing. We’ve provided a template to help you prepare the portions of a business plan that banks expect.

Here’s the interview with the owner of Urbanity:

When to write an executive summary?

Even though the summary is near the beginning of a business plan, you should write it after you complete the rest of a business plan. You can’t talk about revenue, profits, and expected expenditures if you haven’t done the market research and created a financial plan.

What mistakes do people make when writing an executive summary?

Business owners commonly go into too much detail about the following items in an executive summary:

• Marketing and sales processes
• Financial statements
• Organizational structure
• Market analysis

These are things that people will want to know later, but they don’t hook the reader. They won’t spark interest in your small business, but they’ll close the deal.

How to Write a Business Plan Step 4. Company Description

Every business plan should include a company description. A great business plan will include the following elements while describing the company:

• Mission statement
• Philosophy and vision
• Company goals

Target market

• Legal structure

Let’s take a look at what each section includes in a good business plan.

Mission Statement

A mission statement is a brief explanation of why you started the company and what the company’s main focus is. It should be no more than one or two sentences. Check out HubSpot’s article 27 Inspiring Mission Statement for a great read on informative and inspiring mission and vision statements. 

Company Philosophy and Vision

The company philosophy is what drives your company. You’ll normally hear them called core values.  These are the building blocks that make your company different. You want to communicate your values to customers, business owners, and investors as often as possible to build a company culture, but make sure to back them up.

What makes your company different?

Each company is different. Your new business should rise above the standard company lines of honesty, integrity, fun, innovation, and community when communicating your business values. The standard answers are corporate jargon and lack authenticity. 

Examples of core values

One of my clients decided to add a core values page to their website. As a tech company they emphasized the values:

•  Prioritize communication.
•  Never stop learning.
•  Be transparent.
•  Start small and grow incrementally.

These values communicate how the owner and the rest of the company operate. They also show a value proposition and competitive advantage because they specifically focus on delivering business value from the start. These values also genuinely show what the company is about and customers recognize the sincerity. Indeed has a great blog about how to identify your core values .

What is a vision statement?

A vision statement communicate the long lasting change a business pursues. The vision helps investors and customers understand what your company is trying to accomplish. The vision statement goes beyond a mission statement to provide something meaningful to the community, customer’s lives, or even the world.

Example vision statements

The Alzheimer’s Association is a great example of a vision statement:

A world without Alzheimer’s Disease and other dementia.

It clearly tells how they want to change the world. A world without Alzheimers might be unachievable, but that means they always have room for improvement.

Business Goals

You have to measure success against goals for a business plan to be meaningful. A business plan helps guide a company similar to how your GPS provides a road map to your favorite travel destination. A goal to make as much money as possible is not inspirational and sounds greedy.

Sure, business owners want to increase their profits and improve customer service, but they need to present an overview of what they consider success. The goals should help everyone prioritize their work.

How far in advance should a business plan?

Business planning should be done at least one year in advance, but many banks and investors prefer three to five year business plans. Longer plans show investors that the management team  understands the market and knows the business is operating in a constantly shifting market. In addition, a plan helps businesses to adjust to changes because they have already considered how to handle them.

Example of great business goals

My all time-favorite long-term company goals are included in Tesla’s Master Plan, Part Deux . These goals were written in 2016 and drive the company’s decisions through 2026. They are the reason that investors are so forgiving when Elon Musk continually fails to meet his quarterly and annual goals.

If the progress aligns with the business plan investors are likely to continue to believe in the company. Just make sure the goals are reasonable or you’ll be discredited (unless you’re Elon Musk).

You did target market research before creating a business plan. Now it’s time to add it to the plan so others understand what your ideal customer looks like. As a new business owner, you may not be considered an expert in your field yet, so document everything. Make sure the references you use are from respectable sources. 

Use information from the specific lender when you are applying for lending. Most lenders provide industry research reports and using their data can strengthen the position of your business plan.

A small business plan should include a section on the external environment. Understanding the industry is crucial because we don’t plan a business in a vacuum. Make sure to research the industry trends, competitors, and forecasts. I personally prefer IBIS World for my business research. Make sure to answer questions like:

• What is the industry outlook long-term and short-term?
• How will your business take advantage of projected industry changes and trends?
• What might happen to your competitors and how will your business successfully compete?

Industry resources

Some helpful resources to help you establish more about your industry are:

• Trade Associations
• Federal Reserve
• Bureau of Labor Statistics

Legal Structure

There are five basic types of legal structures that most people will utilize:

• Sole proprietorships
• Limited Liability Companies (LLC)

Partnerships

Corporations.

• Franchises.

Each business structure has their pros and cons. An LLC is the most common legal structure due to its protection of personal assets and ease of setting up. Make sure to specify how ownership is divided and what roles each owner plays when you have more than one business owner.

You’ll have to decide which structure is best for you, but we’ve gathered information on each to make it easier.

Sole Proprietorship

A sole proprietorship is the easiest legal structure to set up but doesn’t protect the owner’s personal assets from legal issues. That means if something goes wrong, you could lose both your company and your home.

To start a sole proprietorship, fill out a special tax form called a  Schedule C . Sole proprietors can also join the American Independent Business Alliance .

Limited Liability Company (LLC)

An LLC is the most common business structure used in the United States because an LLC protects the owner’s personal assets. It’s similar to partnerships and corporations, but can be a single-member LLC in most states. An LLC requires a document called an operating agreement.

Each state has different requirements. Here’s a link to find your state’s requirements . Delaware and Nevada are common states to file an LLC because they are really business-friendly. Here’s a blog on the top 10 states to get an LLC.

Partnerships are typically for legal firms. If you choose to use a partnership choose a Limited Liability Partnership. Alternatively, you can just use an LLC.

Corporations are typically for massive organizations. Corporations have taxes on both corporate and income tax so unless you plan on selling stock, you are better off considering an LLC with S-Corp status . Investopedia has good information corporations here .

There are several opportunities to purchase successful franchises. TopFranchise.com has a list of companies in a variety of industries that offer franchise opportunities. This makes it where an entrepreneur can benefit from the reputation of an established business that has already worked out many of the kinks of starting from scratch.

How to Write a Business Plan Step 5. Products and Services

This section of the business plan should focus on what you sell, how you source it, and how you sell it. You should include:

• Unique features that differentiate your business products from competitors
• Intellectual property
• Your supply chain
• Cost and pricing structure 

Questions to answer about your products and services

Mike gave us a list  of the most important questions to answer about your product and services:

• How will you be selling the product? (in person, ecommerce, wholesale, direct to consumer)?
• How do you let them know they need a product?
• How do you communicate the message?
• How will you do transactions?
• How much will you be selling it for?
• How many do you think you’ll sell and why?

Make sure to use the worksheet on our business plan template .

How to Write a Business Plan Step 6. Sales and Marketing Plan

The marketing and sales plan is focused on the strategy to bring awareness to your company and guides how you will get the product to the consumer.  It should contain the following sections:

SWOT Analysis stands for strengths, weaknesses, opportunities, and threats. Not only do you want to identify them, but you also want to document how the business plans to deal with them.

Business owners need to do a thorough job documenting how their service or product stacks up against the competition.

If proper research isn’t done, investors will be able to tell that the owner hasn’t researched the competition and is less likely to believe that the team can protect its service from threats by the more well-established competition. This is one of the most common parts of a presentation that trips up business owners presenting on Shark Tank .

SWOT Examples

Examples of strengths and weaknesses could be things like the lack of cash flow, intellectual property ownership, high costs of suppliers, and customers’ expectations on shipping times.

Opportunities could be ways to capitalize on your strengths or improve your weaknesses, but may also be gaps in the industry. This includes:

• Adding offerings that fit with your current small business
• Increase sales to current customers
• Reducing costs through bulk ordering
• Finding ways to reduce inventory
•  And other areas you can improve

Threats will normally come from outside of the company but could also be things like losing a key member of the team. Threats normally come from competition, regulations, taxes, and unforeseen events.

The management team should use the SWOT analysis to guide other areas of business planning, but it absolutely has to be done before a business owner starts marketing. 

Include Competitor Data in Your Business Plan

When you plan a business, taking into consideration the strengths and weaknesses of the competition is key to navigating the field. Providing an overview of your competition and where they are headed shows that you are invested in understanding the industry.

For smaller businesses, you’ll want to search both the company and the owners names to see what they are working on. For publicly held corporations, you can find their quarterly and annual reports on the SEC website .

What another business plans to do can impact your business. Make sure to include things that might make it attractive for bigger companies to outsource to a small business.

Marketing Strategy

The marketing and sales part of business plans should be focused on how you are going to make potential customers aware of your business and then sell to them.

If you haven’t already included it, Mike recommends:

“They’ll want to know about Demographics, ages, and wealth of your target market.”

Make sure to include the Total addressable market .  The term refers to the value if you captured 100% of the market.

Advertising Strategy

You’ll explain what formats of advertising you’ll be using. Some possibilities are:

• Online: Facebook and Google are the big names to work with here.
• Print : Print can be used to reach broad groups or targeted markets. Check out this for tips .
• Radio : iHeartMedia is one of the best ways to advertise on the radio
• Cable television : High priced, hard to measure ROI, but here’s an explanation of the process
• Billboards: Attracting customers with billboards can be beneficial in high traffic areas.

You’ll want to define how you’ll be using each including frequency, duration, and cost. If you have the materials already created, including pictures or links to the marketing to show creative assets.

Mike told us “Most businesses are marketing digitally now due to Covid, but that’s not always the right answer.”

Make sure the marketing strategy will help team members or external marketing agencies stay within the brand guidelines .

This section of a business plan should be focused on pricing. There are a ton of pricing strategies that may work for different business plans. Which one will work for you depends on what kind of a business you run.

Some common pricing strategies are:

• Value-based pricing – Commonly used with home buying and selling or other products that are status symbols.
• Skimming pricing – Commonly seen in video game consoles, price starts off high to recoup expenses quickly, then reduces over time.
• Competition-based pricing – Pricing based on competitors’ pricing is commonly seen at gas stations.
• Freemium services –  Commonly used for software, where there is a free plan, then purchase options for more functionality.

HubSpot has a great calculator and blog on pricing strategies.

Beyond explaining what strategy your business plans to use, you should include references for how you came to this pricing strategy and how it will impact your cash flow.

Distribution Plan

This part of a business plan is focused on how the product or service is going to go through the supply chain. These may include multiple divisions or multiple companies. Make sure to include any parts of the workflow that are automated so investors can see where cost savings are expected and when.

Supply Chain Examples

For instance, lawn care companies  would need to cover aspects such as:

• Suppliers for lawn care equipment and tools
• Any chemicals or treatments needed
• Repair parts for sprinkler systems
• Vehicles to transport equipment and employees
• Insurance to protect the company vehicles and people.

Examples of Supply Chains

These are fairly flat supply chains compared to something like a clothing designer where the clothes would go through multiple vendors. A clothing company might have the following supply chain:

• Raw materials
• Shipping of raw materials
• Converting of raw materials to thread
• Shipping thread to produce garments
• Garment producer
• Shipping to company
• Company storage
• Shipping to retail stores

There have been advances such as print on demand that eliminate many of these steps. If you are designing completely custom clothing, all of this would need to be planned to keep from having business disruptions.

The main thing to include in the business plan is the list of suppliers, the path the supply chain follows, the time from order to the customer’s home, and the costs associated with each step of the process.

According to BizPlanReview , a business plan without this information is likely to get rejected because they have failed to research the key elements necessary to make sales to the customer.

How to Write a Business Plan Step 7. Company Organization and Operational Plan

This part of the business plan is focused on how the business model will function while serving customers.  The business plan should provide an overview of  how the team will manage the following aspects:

Quality Control

• Legal environment

Let’s look at each for some insight.

Production has already been discussed in previous sections so I won’t go into it much. When writing a business plan for investors, try to avoid repetition as it creates a more simple business plan.

If the organizational plan will be used by the team as an overview of how to perform the best services for the customer, then redundancy makes more sense as it communicates what is important to the business.

Quality control policies help to keep the team focused on how to verify that the company adheres to the business plan and meets or exceeds customer expectations.

Quality control can be anything from a standard that says “all labels on shirts can be no more than 1/16″ off center” to a defined checklist of steps that should be performed and filled out for every customer.

There are a variety of organizations that help define quality control including:

• International Organization for Standardization – Quality standards for energy, technology, food, production environments, and cybersecurity
• AICPA – Standard defined for accounting.
• The Joint Commission – Healthcare
• ASHRAE – HVAC best practices

You can find lists of the organizations that contribute most to the government regulation of industries on Open Secrets . Research what the leaders in your field are doing. Follow their example and implement it in your quality control plan.

For location, you should use information from the market research to establish where the location will be. Make sure to include the following in the location documentation.

• The size of your location
• The type of building (retail, industrial, commercial, etc.)
• Zoning restrictions – Urban Wire has a good map on how zoning works in each state
• Accessibility – Does it meet ADA requirements?
• Costs including rent, maintenance, utilities, insurance and any buildout or remodeling costs
• Utilities – b.e.f. has a good energy calculator .

Legal Environment

The legal requirement section is focused on defining how to meet the legal requirements for your industry. A good business plan should include all of the following:

• Any licenses and/or permits that are needed and whether you’ve obtained them
• Any trademarks, copyrights, or patents that you have or are in the process of applying for
• The insurance coverage your business requires and how much it costs
• Any environmental, health, or workplace regulations affecting your business
• Any special regulations affecting your industry
• Bonding requirements, if applicable

Your local SBA office can help you establish requirements in your area. I strongly recommend using them. They are a great resource.

Your business plan should include a plan for company organization and hiring. While you may be the only person with the company right now, down the road you’ll need more people. Make sure to consider and document the answers to the following questions:

• What is the current leadership structure and what will it look like in the future?
• What types of employees will you have? Are there any licensing or educational requirements?
• How many employees will you need?
• Will you ever hire freelancers or independent contractors?
• What is each position’s job description?
• What is the pay structure (hourly, salaried, base plus commission, etc.)?
• How do you plan to find qualified employees and contractors?

One of the most crucial parts of a business plan is the organizational chart. This simply shows the positions the company will need, who is in charge of them and the relationship of each of them. It will look similar to this:

Our small business plan template has a much more in-depth organizational chart you can edit to include when you include the organizational chart in your business plan.

How to Write a Business Plan Step 8. Financial Statements 

No business plan is complete without financial statements or financial projections. The business plan format will be different based on whether you are writing a business plan to expand a business or a startup business plan. Let’s dig deeper into each.

Provide All Financial Income from an Existing Business

An existing business should use their past financial documents including the income statement, balance sheet, and cash flow statement to find trends to estimate the next 3-5 years.

You can create easy trendlines in excel to predict future revenue, profit and loss, cash flow, and other changes in year-over-year performance. This will show your expected performance assuming business continues as normal.

If you are seeking an investment, then the business is probably not going to continue as normal. Depending on the financial plan and the purpose of getting financing, adjustments may be needed to the following:

• Higher Revenue if expanding business
• Lower Cost of Goods Sold if purchasing inventory with bulk discounts
• Adding interest if utilizing financing (not equity deal)
• Changes in expenses
• Addition of financing information to the cash flow statement
• Changes in Earnings per Share on the balance sheet

Financial modeling is a challenging subject, but there are plenty of low-cost courses on the subject. If you need help planning your business financial documentation take some time to watch some of them.

Make it a point to document how you calculated all the changes to the income statement, balance sheet, and cash flow statement in your business plan so that key team members or investors can verify your research.

Financial Projections For A Startup Business Plan

Unlike an existing business, a startup doesn’t have previous success to model its future performance. In this scenario, you need to focus on how to make a business plan realistic through the use of industry research and averages.

Mike gave the following advice in his interview:

Financial Forecasting Mistakes

One of the things a lot of inexperienced people use is the argument, “If I get one percent of the market, it is worth $100 million.” If you use this, investors are likely to file the document under bad business plan examples.

Let’s use custom t-shirts as an example.

Credence Research estimated in 2018 there were 11,334,800,000 custom t-shirts sold for a total of $206.12 Billion, with a 6% compound annual growth rate.

With that data,  you can calculate that the industry will grow to $270 Billion in 2023 and that the average shirt sold creates $18.18 in revenue.

Combine that with an IBIS World estimate of 11,094 custom screen printers and that means even if you become an average seller, you’ll get .009% of the market.

Here’s a table for easier viewing of that information.

The point here is to make sure your business proposal examples make sense.

You’ll need to know industry averages such as cost of customer acquisition, revenue per customer, the average cost of goods sold, and admin costs to be able to create accurate estimates.

Our simple business plan templates walk you through most of these processes. If you follow them you’ll have a good idea of how to write a business proposal.

How to Write a Business Plan Step 9. Business Plan Example of Funding Requests

What is a business plan without a plan on how to obtain funding?

The Small Business Administration has an example for a pizza restaurant that theoretically needed nearly $20k to make it through their first month.

In our video, How to Start a $500K/Year T-Shirt Business (Pt. 1 ), Sanford Booth told us he needed about $200,000 to start his franchise and broke even after 4 months.

Freshbooks estimates it takes on average 2-3 years for a business to be profitable, which means the fictitious pizza company from the SBA could need up to $330k to make it through that time and still pay their bills for their home and pizza shop.

Not every business needs that much to start, but realistically it’s a good idea to assume that you need a fairly large cushion.

Ways to get funding for a small business

There are a variety of ways to cover this. the most common are:

• Bootstrapping – Using your savings without external funding.
• Taking out debt – loans, credit cards
• Equity, Seed Funding – Ownership of a percentage of the company in exchange for current funds
• Crowdsourcing – Promising a good for funding to create the product

Keep reading for more tips on how to write a business plan.

How funding will be used

When asking for business financing make sure to include:

• How much to get started?
• What is the minimum viable product and how soon can you make money?
• How will the money be spent?

Mike emphasized two aspects that should be included in every plan, 

How to Write a Business Plan Resources

Here are some links to a business plan sample and business plan outline. 

• Sample plan

It’s also helpful to follow some of the leading influencers in the business plan writing community. Here’s a list:

• Wise Plans –  Shares a lot of information on starting businesses and is a business plan writing company.
• Optimus Business Plans –  Another business plan writing company.
• Venture Capital – A venture capital thread that can help give you ideas.

How to Write a Business Plan: What’s Next?

We hope this guide about how to write a simple business plan step by step has been helpful. We’ve covered:

• The definition of a business plan
• Coming up with a business idea
• Performing market research
• The critical components of a business plan
• An example business plan

In addition, we provided you with a simple business plan template to assist you in the process of writing your startup business plan. The startup business plan template also includes a business model template that will be the key to your success.

Don’t forget to check out the rest of our business hub .

Have you written a business plan before? How did it impact your ability to achieve your goals?

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31 Best Self-Employment Ideas 2024

You don’t have to hire employees to be a business owner. Many people start working for themselves just because they want the freedom to be their own boss and set their own hours. Get ready! We’re going to share some of the best self-employment ideas for new business owners.

[su_note note_color="#dbeafc"]We’ve compiled a list of the best self-employed jobs you can find today. Click on any of the links below to jump straight to the section that interests you!

12 Unique Business Ideas for Self-Employment

Top 10 work-for-yourself jobs, self-employed jobs with no qualifications, self-employment ideas for over 50, faqs about self-employment jobs ideas.

#1. Phone or Electronics Repair

Average Annual Revenue: $560,320 Average Profit Margins: 5.7% Startup Cost: $500-$5K Time To Revenue: 1-3 months Annual Market Growth Rate: 1.4% Best for: Detail- and systems-focused entrepreneurs, electronics and repair experts

Check out our video on how Joe Pilat, of Joe’s Gaming & Electronics, started his business from scratch by repairing and refurbishing broken gadgets and electronics.

[su_youtube url="https://www.youtube.com/watch?v=Rqce8NAZWYw&ab_channel=UpFlip"]

Cell phone repair alone was a $1.3 billion industry in 2022, and it makes sense why–97% of Americans own a cellphone, and 66% of them have damaged their phones in the past year. 

Best for people considering self-employed jobs, 70% of cellphone repair shops are opened by local business owners with no prior industry experience. 

You don’t need to open a brick-and-mortar storefront to start your own repair business, either. A mobile repair business, or one with pick-up and drop-off service, is even more convenient for customers and saves you the expense of a physical location.

#2. Grocery Delivery Service

Average Annual Revenue: $340,600 Average Profit Margins: 6.7% Startup Cost: $500-$250K Time To Revenue: 3+ months Annual Market Growth Rate: 3.6% Best for: Drivers, those that like to socialize and meet new people, those with networks with other business owners

Demand for last-mile grocery delivery soared during the pandemic, with online grocery sales exceeding $85 billion in 2022, more than double pre-pandemic figures. 

At the same time, many grocery stores don’t have the staff, infrastructure, or capability to offer delivery in-house. This opens the door for self-employed entrepreneurs seeking a profitable business opportunity. 

Starting a delivery service also lets you support other local small businesses while you gain financial freedom. That was one of Adam Haber’s main goals when he started Trellus, a same-day local delivery market. You can hear his advice on how to start a delivery business in this podcast interview: 

#3. Project Management Services

Average Annual Revenue: $363,300 Average Profit Margins: 10.3% Startup Cost: $1K-$100K Time To Revenue: 1-3 months Annual Market Growth Rate: 0.8% Best for: People with an expertise in organizing and delegating tasks, taking responsibility for managing the work of other people, and people with strong leadership and communication skills

The number of project managers in the workforce hasn’t kept up with the demand for them in recent years. That talent gap leaves space for those with project management skills to start a self-employed business and work for companies on a freelance basis. 

As a freelance project manager, you get more freedom over when you work and the projects that you take on than when you work full-time for a company. There’s also a wide variety of work available, from software and IT projects to marketing and PR campaigns, construction projects, or just about any other industry you can name.

You can also make more money. Freelance project managers earn $451 per work day on average, which equates to roughly $117,000 a year, far higher than the $85,662 salary average reported for project managers on Indeed.

#4. Career Coaching and Resume Writing Service

Average Annual Revenue: $234K Average Profit Margins: 5.8%   Startup Cost: $500-$5K Time To Revenue: 1-3 months Annual Market Growth Rate: 1.1% Best for: People that enjoy managing, mentoring, and coaching other people, and those that are detail-oriented and independent entrepreneurs with good interpersonal skills

A career coach helps other professionals make career progress. This often starts by helping them map out their career path. A career coach also often offers services like resume or cover letter writing, interview preparation, and offer negotiation advice. 

People with a background in recruiting or HR are ideally suited to become self-employed as career coaches. This is also a great business idea for former executives and managers who have first-hand insights into what businesses look for in applicants. 

#5. Tax Preparation

Average Annual Revenue: $1.57M Average Profit Margins: 18% Startup Cost: $500-$5K Time To Revenue: 1-3 months (not including time training as a CPA) Annual Market Growth Rate: 1.7% Best for: CPAs, finance experts, entrepreneurs with strong math skills

Tax preparation is one of the few self-employment job ideas with a built-in demand. Every individual and business needs to file taxes, and that means tons of potential clients. 

While you do need professional certification to start a tax prep business, it’s not hard to get, and there’s no fee to obtain one. Aside from this certification, all you’ll need is an understanding of the tax code and a few clients to start building your reputation and customer trust. 

#6. Catering Business

Average Annual Revenue: $124,410 Average Profit Margins: 5.5% Startup Cost: $1K-$100K Time To Revenue: 6-18 months Annual Market Growth Rate: 1% Best for: Chefs, cooks, bakers, and other food experts

For chefs, bakers, and other food service workers who want to become self-employed, a catering business is one of the most affordable ways to go about it. 

Watch the video below on how Kyle Gourlie, the owner of Vet Chef, built a successful food truck business.

[su_youtube url="https://www.youtube.com/watch?v=YCnE13BaQlk&ab_channel=UpFlip"]

This can also be an ideal business plan for a home cook or baker who wants to break into the food industry without starting from the bottom of the hierarchy in a restaurant. 

One reason for this is that you don’t need a storefront to start catering. Many use clients’ kitchens to prepare the food, or they rent a commercial kitchen when they need it. You can also easily scale a catering business by opening a food truck , cafe, or restaurant as you grow. 

#7. Airbnb Hosting

Average Annual Revenue: $201K Average Profit Margins: 8.1%   Startup Cost: $100K-$3.5M Time To Revenue: 6-18 months Annual Market Growth Rate: 2.2% Best for: Homeowners, frequent travelers, people with hospitality experience

If you’re looking for self-employed jobs from home, why not turn your home into a source of income? As an Airbnb host, you can rent out unused rooms, buy and fix up properties to rent, or convert a shed or garage into a mini-apartment.

The unique and varied properties available for rent are one of the biggest appeals of Airbnb for travelers, and unique places to stay often do quite well on the site. 

However you go about it, Airbnb hosting can be a very lucrative business. Nicasa started from a single property in 2009 and has now grown to 22 properties that bring in $3 million in annual revenue. Hear how the business started in this YouTube interview:

[su_youtube url="https://www.youtube.com/watch?v=6m-MosXlpOE"]

#8. Tutoring 

Average Annual Revenue: $18,170 Average Profit Margins: 13.1% Startup Cost: $100-$1K Time To Revenue: 1-3 months Annual Market Growth Rate: 8.5% Best for: Teachers, educators, professors, and experts in a particular skill or knowledge area

Tutoring is among the top self-employed business ideas for recent graduates and a common way for college students to make a bit of extra cash. 

You don’t need to be close to your school years to make a good living as a tutor, either. It’s also an excellent self-employed job for teachers, professors, and other education professionals who want to branch out on their own. 

The trickiest part of starting a tutoring business for many is where to connect with students. The Tutor Resource’s guide to finding students is a great place to start. You can also grow your reputation online by posting how-to videos, informative blog posts, and other educational content that demonstrates your knowledge. 

#9. Car Wrapping

Average Annual Revenue: $241,230 Average Profit Margins: 16.1% Startup Cost: $1K-$100K Time To Revenue: 1-6 months Annual Market Growth Rate: 1.8% Best for: Car enthusiasts, detail-oriented entrepreneurs, and those that enjoy working with their hands

People keep their cars longer than in the past, with the average age of a car on the road increasing by 44% since 1995 . Protective car wrapping helps cars and trucks look like new for longer. Offering that service is one of the best small business ideas for people who love cars. 

Car wrapping can be a creative pursuit, too. A car can be wrapped in graphics just to change the look or for marketing and branding of company cars or driving billboards. 

Between these two uses, there’s a high demand for car wrapping. Fred Roman started WrapCo in 2012 and has grown it to $70,000 in monthly revenue. See how in this YouTube interview:

[su_youtube url="https://www.youtube.com/watch?v=LM1wFesfapQ&list=PLaU6uY9Yy7XkECNQPPT_LNAxEghhffqv7&index=11"]

#10. Notary Public

Average Annual Revenue: $552,900 Average Profit Margins: 9.4% Startup Cost: $500-$5K Time To Revenue: 1-3 months Annual Market Growth Rate: -0.5% Best for: People interested in legislative and legal topics, and those who have excellent reading and writing skills

Notaries are basically professional witnesses, verifying people’s identities when they sign contracts, give oaths, or other legally-binding agreements. 

Some notaries work for other businesses, but many are working for yourself jobs. A self-employed business as a notary public can be very profitable, too. Roughly 33% of all mobile notaries earn more than $4,000 a month, and it’s double that figure for notaries with at least 3 years of experience. 

While you do need a license to work as a notary, the process for getting licensed isn’t complicated. You can see the regulations state-by-state on the American Society of Notaries website.

#11. Be a Tour Guide

Average Annual Revenue: $995,900 Average Profit Margins: 6.6% Startup Cost: $500-$5K Time To Revenue: 1-3 months Annual Market Growth Rate: 3.5% Best for: Those with a love for local history and attractions, those who like to socialize and meet new people, and those who like to educate

If you live in a place that gets a lot of visitors, giving tours can be a fun and profitable business venture. The types of tours you give can depend on your location and interests. For example, a foodie could give a tour of local restaurants, or you could give haunted history tours if you’re into the supernatural. 

The most difficult part of starting a tour guide business is often finding customers, especially since your target market tends to be people who don’t live near you. Having your own website and a strong online presence can help.

#12. Tailoring or Clothing Alterations

Average Annual Revenue: $27,825 Average Profit Margins: 8.3% Startup Cost: $500-$250K Time To Revenue: 3+ months Annual Market Growth Rate: 1.6% Best for: Those that like to work with their hands, those that enjoy sewing and handicraft, fashionistas tuned into fashion trends

Tailoring is among the best home business ideas for fashionistas who love to sew. Depending on your skills and interests, you can focus on a niche like formalwear alterations or hand-made custom clothes, or provide a range of services to maximize your revenue.

#1. Real Estate Agent

Average Annual Revenue: $298,870 Average Profit Margins: 44.6% Startup Cost: $500-$5K Time To Revenue: 1-3 months Annual Market Growth Rate: -0.3% Best for: Strong salespeople and negotiators, entrepreneurs who want a passive income

A realtor or real estate agent works on behalf of property buyers or sellers to help them get what they want out of the deal. If you’re an active listener with strong sales, organization, and negotiation skills, real estate can be a great business idea. 

Now, you do need a license to become a real estate agent. The licensing requirements vary by state and usually involve around 60-120 hours of coursework followed by an exam. None require a degree beyond a high school diploma, so while you will need specific knowledge to excel in this field, that doesn’t need to be a barrier to entry.

Do you want to know how to become a successful real estate agent? Highly successful real estate agents can earn upwards of $500,000 a year! But, to make it into the highest tier of earners, you need to be aware of certain insider information which details the best path for how to become a successful real estate agent. Watch our video to uncover these secrets!

[su_youtube url="https://www.youtube.com/watch?v=lzgxxq_FYHY"]

Do you want to know how to be a real estate agent–and one that doesn’t fail in their first 5 years, like 87% of new agents? Santino Filipelli is the principal broker and owner of the $175K/month firm Modern Realty, and he’s sharing his tips and insight in this episode. 

#2. Web Designer

Average Annual Revenue: $239K+ Average Profit Margins: 5.3% Startup Cost: $100-$1K Time To Revenue: 1-3 months Annual Market Growth Rate: 1.4% Best for: Designers, programmers, or anyone with website building skills

Freelance web design is a profitable self-employment idea for people with strong visual design and computer skills. The Bureau of Labor Statistics projects a 23% increase in demand for website designers through 2031, making this a potentially lucrative business venture with a lot of opportunities. 

You don’t need to be a tech expert to start your own business designing websites, either. While a basic understanding of HTML and other coding languages is helpful, people with expertise in WordPress templates, search engine optimization, and user experience can build a successful small business as a web designer.

#3. Freelance Writing

Average Annual Revenue: $712K/employee Average Profit Margins: 14.6% Startup Cost: $100-$200 Time To Revenue: 1 month to 3 years Annual Market Growth Rate: -1.5% Best for: Creative entrepreneurs with strong communication skills

Despite the doom and gloom predictions that AI will eliminate writing jobs, these tools still have major limitations and freelance writers are as in-demand as ever. 

As a self-employed freelance writer, you can take on a huge variety of work. Some focus on online content like news articles and blogs, while others ghostwrite novels, memoirs, and other books for clients. 

Freelance writing can also be combined with other skills to boost your self-employment income. For example, technical writing is a profitable option for tech industry experts, while those with healthcare experience can turn that into a career as a medical writer.

#4. Graphic Designer

Average Annual Revenue: $123,240 Average Profit Margins: 13.5% Startup Cost: $500-$5K Time To Revenue: 3+ months Annual Market Growth Rate: 2% Best for: Visual artists, creative entrepreneurs, and entrepreneurs with web design, user interface, or similar tech skills

Another creative profession that’s a great self-employment idea is graphic design. Just like with writing, there are a lot of ways you can earn money if you have these skills. 

Some graphic designers work closely with web designers, creating the images that enhance this online content. Others create images for ads and marketing materials, design logos for companies, or upload their designs to print-on-demand sites like Redbubble .

Another great business opportunity for graphic designers is to open your own online shop through a site like Etsy. Vlad Kuksenko combined his graphic design expertise with his love of animals to start TagPup, now the site’s #1 pet products store. 

[su_youtube url="https://www.youtube.com/watch?v=7dqHBHA4AmU"]

#5. Affiliate Marketing

Average Annual Revenue: $60K-$160K Average Profit Margins: 8% Startup Cost: $500-$2K Time To Revenue: 1-3 months Annual Market Growth Rate: 10.5% Best for: Bloggers, YouTubers, those with a large social media presence

If you have a substantial social media presence, affiliate marketing could be the right business idea for you. It’s also a good home business idea for bloggers, copywriters, and experts in search rankings, SEO, and other digital marketing skills.

Affiliate marketers promote products and services to earn money on commission from each sale made through their site. This can bring in a big income with a small time commitment if you’re able to generate a lot of traffic.

To make even more money, you can scale your business into a marketing agency. Affiliate marketer Matt Diggity started his own firm and now makes about $400,000 in monthly revenue:

The best part about affiliate marketing for many is that you work completely for yourself, not for clients. This gives you full control to set your own hours and pick what products you promote. 

#6. Photography

Average Annual Revenue: $50K Average Profit Margins: 7.3% Startup Cost: $1K-$10K Time To Revenue: 1-6 months Annual Market Growth Rate: 0.3% Best for: Photographers and visual artists with strong customer service, communication, and organization skills

Photography is another of those self-employed businesses that can take a lot of forms. You can open a portrait studio, photograph events like weddings, or sell your pictures as stock photos through sites like Shutterstock or Getty Images , just to name a few options.

Another great way to make money as a photographer is to partner with other businesses. Mile High Productions specializes in drone photography and videography for real estate agents, commercial marketing, and similar clients, and makes upward of $35,000 a month doing it. Hear more advice from them in this YouTube interview:

[su_youtube url="https://www.youtube.com/watch?v=EUcv1HAAbns"]

Katelyn James Photography has grown into the premier online destination for photography education. The business’s revenue has grown along with its reputation, generating more than $200,000 every month. That’s way beyond the $24,000 a month goal Katelyn made starting a photography business in college. 

#7. Direct Sales Consultant

Average Annual Revenue: $68,310 Average Profit Margins: 6.8% Startup Cost: $1K-$100K Time To Revenue: 3+ months Annual Market Growth Rate: 0.5% Best for: Salespeople, those with marketing skills, those that like to travel and socialize with other people

The classic door-to-door salesman is a type of direct sales consultant, though today, many connect with customers online or over the phone as well as face-to-face.

Being a direct sales consultant is similar to affiliate marketing in that you earn a commission for selling other people’s products to customers. The commission is higher in direct sales, though, usually around 20%-40%, so you can make money fast if you have strong sales skills. 

#8. Landlord or Property Manager

Average Annual Revenue: $372,940 Average Profit Margins: 10.1% Startup Cost: $100K-$3.5M Time To Revenue: 6-18 months Annual Market Growth Rate: 1.3% Best for: Those that are interested in real estate investing, home repair, and maintenance

You can become a landlord by investing in real estate and renting it to tenants, or managing properties on behalf of others if you don’t have the cash on hand to invest.

Property management is among the most profitable self-employment ideas, too. Thach Nguyen averages $800,000 every month from his properties. Hear his advice and strategies in this YouTube interview:

[su_youtube url="https://www.youtube.com/watch?v=TWCzwn3R78A"]

#9. Social Media Consultant

Average Annual Revenue: $817K  Average Profit Margins: 6.9% Startup Cost: $100-$10K Time To Revenue: 1-6 months Annual Market Growth Rate: 1.3% Best for: Social media experts, writers, and content creators, people with search engine optimization (SEO) expertise

In the interview below, we talk to the CEO and founder of Socialistics, learning how he turned a side hustle into a mid-six-figure business.

[su_youtube url="https://www.youtube.com/watch?v=kb1czTEK8f8&ab_channel=UpFlip"]

A strong presence on social media platforms is a must-have for many businesses today, but not every business owner is skilled with these platforms. If you are, self-employment as a social media consultant could be the right business idea for you.

Growth potential is one of the main advantages of starting a social media consulting business. It can be easily scaled into a digital marketing agency, as Eric Berman did with Brandetize. You can learn how he built his business in this podcast interview:

#10. Event Planning

Average Annual Revenue: $34,380 Average Profit Margins: 12.2% Startup Cost: $500-$5K Time To Revenue: 3+ months Annual Market Growth Rate: 1% Best for: Strong networkers, great party planners, outgoing and social entrepreneurs

An event planner does exactly what it sounds like: helps people and businesses put together big gatherings. These could be corporate events for companies or private events like weddings, Bar and Bat Mitzvahs, family reunions, or birthday and anniversary parties. 

How much you can expect to earn as an event planner depends on what niche you focus on. The average salary of a corporate event planner in the US is around $63,000 a year , while wedding planners earn an average annual revenue of $112,000 .

#1. Start an Online Store

Average Annual Revenue: $60K-$120K Average Profit Margins: 5-15% Startup Cost: $100-$10K Time To Revenue: 30-90 days Annual Market Growth Rate: -9.3% Best for: Thrifters, collectors, hobbyists, and craftsmen

You can make money selling just about anything with an e-commerce business. For makers and artists, it’s a way to sell your wares to customers all over the world. You could also resell things like vintage clothes, collectibles, rare books, or whatever else tickles your fancy.

Whatever you decide to sell with your e-commerce business, you’ll need customers to buy it. This is why people with strong marketing skills tend to do the best with an e-commerce business. 

Portland Razor Company built a community around their brand to grow their sales to $7,500 a month. You can hear how they did it in this YouTube interview: 

[su_youtube url="https://www.youtube.com/watch?v=aXWiqmePZe0&list=PLaU6uY9Yy7XmTcFZcez2SJipVSL_iC_J8"]

E-commerce was still a fairly new industry when Unique Vintage started 22 years ago. The company has grown with the industry, earning accolades like being one of Inc 5000’s fastest-growing private companies in 2020 and Newsweek’s Best Online Shop for 2020/2021. In our interview with her, Unique Vintage founder Katie Echeverry explains how she started and grew this thriving online clothing store. 

#2. Be a Virtual Assistant

Average Annual Revenue: $35K-$50K Average Profit Margins: 10.5% Startup Cost: $100-$200 Time To Revenue: 1-3 months Annual Market Growth Rate: 1.9% Best for: Outgoing and social entrepreneurs; those with strong scheduling, time management, and problem-solving skills

A virtual assistant business is one of the easiest to start from home. All you need is a reliable internet connection and a few clients who need help planning or organizing their life or business.

The type of work you do as a virtual assistant depends on your clients. It often involves things like replying to emails, making travel or dinner reservations, and other planning and logistic things. 

The site 24/7 Virtual Assistants is a great place to find work if you’re thinking of starting this type of business. 

#3. Start a Cleaning Service

Average Annual Revenue: $74,880 Average Profit Margins: 6.7% Startup Cost: $1K-$30K Time To Revenue: 1-6 months Annual Market Growth Rate: 1.2% Best for: Self-motivated, independent, and detail-oriented entrepreneurs

Life is messy–and that’s why cleaning services exist. Like other options on this list, there are a variety of niches you can go into, from residential home cleaning to janitorial services to outdoor work like window or gutter cleaning. 

The 7-Figure Cleaning Business Blueprint is an excellent resource for anyone who’s considering self-employment in home cleaning services.

A cleaning business is a great option for a first-time entrepreneur because start-up costs are low and you don’t need special training to get started. Just ask Chris Mondragon. He and his wife started Queen Bee Cleaning Service in 2015 with just $5,000. Five years later, they’ve grown to a staff of 25 and earned a revenue of $1.5 million in 2021, with more than $3.2 million in cumulative sales. 

If you’re more interested in something like power washing or roof cleaning, this interview with Northwest Pro Wash founder Spencer Claeys can give you some helpful insights.

[su_youtube url="https://www.youtube.com/watch?v=2lTDQb4HJH0&list=PLaU6uY9Yy7XmmBfiLC1KpSMZ3-Ms0vGtc&index=4"]

#4. Be a Child Care Provider

Average Annual Revenue: $143,110 Average Profit Margins: 0.9% Startup Cost: $0-$1K Time To Revenue: 1-3 months Annual Market Growth Rate: 51.7% Best for: Those that enjoy childcare and like children

Busy parents need people they can trust to keep their kids safe and healthy when they’re not home. You can provide this service while being your own boss by starting a child care business. 

The simplest and most affordable way to start is with nanny or babysitting services right in clients’ homes. If you want to scale, you can open your own daycare center, either out of your home or in a commercial space. 

#5. Be a Personal Trainer

Average Annual Revenue: $16,867 Average Profit Margins: 10.9% Startup Cost: $500-$5K Time To Revenue: 1-6 months Annual Market Growth Rate: 0.6% Best for: Fitness buffs, exercise experts, people who excel at motivating others

Personal trainers work one-on-one with clients to help them lose weight, recover from injuries, prepare for athletic events, or simply improve their overall health. It’s one of the best self-employed business ideas for people who love to exercise and stay active on the job.

The average salary for a personal trainer in the US is $65,790 a year , but in truth, there’s no upper limit on what you can earn. Personal training is a big part of Bedros Keuilian’s multi-million dollar empire. You can hear how he built it in this YouTube interview:

[su_youtube url="https://www.youtube.com/watch?v=gXdFpkfXvGA"]

#1. Life Coach

Average Annual Revenue: $63,400 Average Profit Margins: 10.5% Startup Cost: $500-$5K Time To Revenue: 1-3 months Annual Market Growth Rate: 1.5% Best for: Therapists, productivity experts, people who love helping others

Being self-employed as a life coach can be a very rewarding job, helping other people to improve their personal life, mental health, relationships, career progress, or whatever else they struggle with.

People come to life coaches for their experience and wisdom, making this one self-employed job where being over 50 gives you an advantage over younger entrepreneurs. 

#2. Personal Finance Consultant

Average Annual Revenue: $1,810,230 Average Profit Margins: 36.1% Startup Cost: $500-$5K Time To Revenue: 1-3 months Annual Market Growth Rate: 8.2% Best for: Accountants and financial experts

This is another excellent way to leverage a lifetime of experience managing your personal finances into a self-employed job. People look to finance consultants to help them plan for retirement, save for their kids’ college, or prepare for a large purchase like a home or new business. 

Bankers and accountants are especially well-suited to this type of work, and you’ll have the easiest time landing clients and earning their trust if you have certification like a CPA .

#3. Reselling

Average Annual Revenue: $60K-$120K Average Profit Margins: 5-15% Startup Cost: $100-$1K Time To Revenue: 30-90 days Annual Market Growth Rate: -9.3% Best for: Shoppers and collectors, thrifters and collectors

If you have an eye for spotting valuable items at garage sales, thrift stores, or storage unit auctions, you can make self-employment income selling these items for a profit. 

Life-long collectors may not even need to buy inventory to resell if they have items around their home they’re willing to part with. You can also find free inventory on sites like Craigslist or Facebook Marketplace to get started with no investment. 

You can turn your passion for collecting valuable items into a lucrative business, just like how Tia discovered when she was reselling clothes and sneakers. Check out the video below on how she managed.

[su_youtube url="https://www.youtube.com/watch?v=dJryzKeGwtU&ab_channel=UpFlip"]

An eBay shop or similar online store is the fastest and most affordable way to start reselling. That’s what Mike Wilson did to start Golden State Picker, a $30,000-a-month reselling business:

If you’d rather stay analog, you can open a storefront or rent a booth at a flea market or similar venue. 

#4. Professional Organizer

Average Annual Revenue: $168,360 Average Profit Margins: 10.6% Startup Cost: $1K-$100K Time To Revenue: 1-3 months Annual Market Growth Rate: 1.2% Best for: Highly organized entrepreneurs, strong planners, communicators, and collaborators, creative problem-solvers

Professional organizers help people bring order to the chaos of daily life. It’s among the top self-employment ideas for seniors with high analytical reasoning, high empathy, and strong communication skills.  

As an organizer, the main thing you bring to the table is your knowledge and guidance, so this is a very affordable business to start. There also isn’t too much physical work involved. While you may help move items, much of the work is helping people decide what to keep or dispose of and giving them strategies they can use to maintain the order you’ve created.

What are the 4 types of self employment?

The most common types of self-employment include:

• Freelancing - Also known as independent contractors, freelancers perform services for clients but control when and how they work.
• Gig work - This includes jobs like rideshare and delivery drivers. Gig workers choose which jobs they take on, but usually have less control over when and how they work than freelancers. However, these terms are often used interchangeably.
• Sole proprietor - A sole proprietor owns their own business selling a product or service. They may be a solo entrepreneur or have a team of employees.
• Partnership - This is when you own your own business along with a business partner. 

Can I do self-employed business ideas from home?

For those wondering what kind of business I can start from home, you can start any of these self-employment business ideas from home.

What is the cheapest, most profitable business to start?

This depends on what skills and knowledge you bring to the table. However, on average, the businesses with low upfront costs that have the highest profit margins include affiliate marketing, Airbnb hosting, and digital marketing. 

What are some self-employment ideas for nurses?

Having medical credentials opens up a lot of options for RNs, LPNs, or other nursing professionals. One option is to become a traveling nurse or nurse consultant who works in healthcare facilities as a contractor.

If you’d rather work with people in their homes, working as a personal trainer, nutritionist, or wellness consultant might be up your alley. 

Senior care is a growing home health segment that opens up self-employment jobs for trained nurses. 

What kind of business can I start from home?

Many of the business ideas listed here can be started easily out of a private home without needing a brick-and-mortar space. Any service-based business falls into this category, including things like event planning, cleaning, tutoring, writing, or any kind of coaching. Online stores can also be easily run from home. 

What are some easy self-employment ideas for ladies?

Any of the self-business ideas listed in this article can be a great way for people of any gender to set their own hours and be their own boss. 

The most popular self-employment ideas for women in the US, according to the Bureau of Labor Statistics , are professional services (such as accounting or consulting), education, health, and retail. 

What are good self-employment ideas to earn passive income

Being a landlord or Airbnb host can generate a large, mostly-passive income stream, and can be fully passive income if you hire someone to work with guests or tenants. 

Are you ready to start your own business and make your own hours?

We’ve provided you with dozens of self employment ideas for you to try. 

Using this list is just the beginning. We aim to create content that helps people the most. 

If you are self employed, we want to know what you think are the best self-employed jobs. What is your favorite business idea?

How to Start a $360K+/Year Comic Book Store

• What is a comic book store?
• Products that comic book stores sell
• Resources necessary
• Licensing and legal requirements
• Funding your comic book shop
• Hiring employees

Step 1: What is a comic book store?

Step 2: Products that are sold in the comic book industry

• Rare Comic Book Issues

Marvel Comics

Dark horse comics, graphic novels, dungeons and dragons, rare comic books.

• 32.2% of comic book store sales are Marvel titles
• 62% of people 18-29 claim to be Marvel fans
• 87% of Americans recognize Spider-Man
• The plot is normally fully contained within a graphic novel while comic book plots normally span numerous episodes or even multiple series.
• The length is typically longer than a comic book.
• The spine is more like a standard book than the comic book genre.

Step 3. Resources needed when starting a comic book store

• A comic book store business plan
• An online presence

Retail Space

A business plan for your comic book store.

• Companies with business plans tend to grow 30% faster.
• Companies with business plans are 120%-260% more likely to move past the startup stage.
• Business owners who have a business plan are 271% more likely to walk away before it becomes a major loss.

How much does it cost to open a comic shop?

Step 4: licensing and legal requirements, business formation.

• Getting a free Employee Identification Number (EIN) from the IRS
• Getting a state/local business license

Unemployment Insurance

• Workman’s Comp (if necessary)
• Business Insurance/General Liability Insurance

Sole proprietorship

Limited liability corporation (llc), partnerships and corporations, apply for an ein, state/local business licenses, workman’s compensation, business insurance/ general liability insurance.

Step 5. Funding Your Store

• Personal funds
• Loan from family or friends
• Business partner(s)– inc.com has a great blog on considerations about a partnership
• Business loans- Check out our partners

Step 6. Hiring Employees

• Help Wanted signs
• Pinning notices at local hot spots.

Step 7. Marketing

• Identifying target markets.
• Creating a website that allows you to sell online.
• Creating and using your social media wisely.

Identify your target market

Find the best way to reach your target market, create a website.

• Squarespace

Create and Use Social Media Well

Influencers.

• Kevin Smith
• Marvel Entertainment
• Robert Downey Jr.

Put Your Customers First

Best Products To Sell On Amazon (and What You Shouldn’t)

Is it Profitable to Sell on Amazon?

Why you should sell on amazon, features of best products to sell on amazon for beginners, games and toys, health & household, beauty products & personal care, grocery & gourmet food, clothing, shoes, and jewelry, baby products, home & kitchen, kitchen & dining, tools & home improvement, pet supplies, sports & outdoors.

• Patio, Lawn and Garden
• Electronics/ Cell Phones & Accessories

Amazon Restricted Products

What is an amazon #1 best seller, how to find the best products to sell on amazon, what is the best selling strategy on amazon, where to get products to sell on amazon, make your own brand the best amazon products.

• Amazon had over 2.4 billion views in March 2023, according to SimilarWeb . (Only Google, YouTube, and Facebook have more.)
• Amazon categories make selling items easy.
• Fulfillment by Amazon (FBA) handles fulfillment, shipping, and quality control so you can focus on growing your business.
• Amazon has the most sophisticated logistics network on the planet. This helps you provide better service to your customers.
• Low Competition
• High Demand For the Product
• Low Shipping Costs
• $10-$100 Selling Price
• Small Dimensions and Weight (These factors impact the Amazon seller costs.)
• Lower Amazon Commissions
• High Profit [/su_note]

What Are the Best Products to Sell on Amazon?

• Easter Items: 12 of the top selling items 
• Squishmallows: 7 high performing keywords
• Fake Money: 4 high performing keywords
• Buffalo Puzzles: 3 high performing keywords
• Water Guns: 3 of the top selling products under $100
• Pool Floats: 2 appearances on the list -ne for swimming floats for kids/babies, the other for adults floats
• Chuckle and Roar: 1 appearance for the popular board game
• Thomas and Friends: 1 appearance
• Tejocote: 7 appearances for this Mexican root that provides vitamins, minerals, and appetite suppression
• Pain Relievers/Headache Medicine
• Triple A Batteries
• Drain Cleaner
• Other Vitamins and Minerals
• Cleaning Products

• Travel bags and razors
• Soap, Shampoo, and Conditioner
• Body Scrubs 
• Lash Growth Stimulating Products
• Candy (especially for approaching holidays)
• Orange Juice
• Energy Drinks
• Coffee and Creamer
• Peanut Butter and Jelly
• Toddler Shoes and Sandals (specifically sizes 6, 9, and 10)
• Matching Outfits
• Gynecomastia Compression Shirts
• Plaid Shirts
• Taylor Swift and Sublime merch
• Cable and Gauge Tops

• Breastfeeding Equipment and Storage for Milk
• Hello Bello Diapers
• Pacifiers and Accessories
• Baby Pillows 
• Airplane Beds
• Wash Cloths
• Baby Wash/Shampoo
• Mama Bear Diapers
• Decorations for Shelves
• Waterproof Sofa Covers
• 15th Birthday Party Items
• Cruise Ship Magnets
• Slushie Cups
• Seasonal Tablecloths
• Gifts for Women
• Pink Dish Rack
• Dash Griddle Mini Maker

• Wall Paper & Vinyl
• Painter’s Tape
• Tabletop Water Dispensers
• Dog Whistles
• ChomChom Rollers (pet hair removal tools)
• Cat Scratch Carpet Protectors
• Fancy Feast Purely
• Baseball cards packs
• 5 gallon bottles
• Potable aqua
• Pushup board for men

Patio, Lawn, and Garden

• Propane Heaters
• Tractor Rakes
• Farmers Almanac
• Waterfall Kits
• Outdoor Furniture

Electronics/Cell Phones & Accessories

• iPhones and accessories
• Headphones and ear buds
• All video game systems
• Security systems like Ring
• Mice, keyboards, webcams, and other computer accessories

Can you sell alcohol on Amazon?

Amazon's Best Selling Products

• Researching Competitors’ Stores

Keyword Research

Find private label products to sell on amazon, use retail arbitrage to source amazon products.

• Find Direct-Source Products on Amazon

Check Out Other Marketplaces

Avoid big brands.

• Consider Selling Custom Print-on-Demand Products on Amazon
• Reverse Engineer Top Industry Amazon Affiliate Publishers

Research the Competition

• Identify top-selling products
• Track performance over time
• Find high-performing keywords
• Source products
• Create optimized product listings
• Learn about selling items on Amazon

• Search Volume
• Sales Volume
• Keywords for Title and Product Description

What Can You Sell On Amazon: Direct-Source Products

• Higher seller’s rank
• Better SEO strategy
• Lower product cost

Copy Amazon Affiliate Strategies

Use google trends.

Amazon Merch

• Print-on-Demand 

Digital Products

Fulfillment by manufacturer.

Print-on-Demand

• Dropshipping Companies
• Wholesalers
• Private Label Sellers

Dropshipping

Private Label

• What sells the most on Amazon
• Ways to identify the best Amazon finds
• What can I sell as a new seller?
• Where to buy products to sell on Amazon FBA
• 74 Amazon Statistics
• The World's Tech Giants, Compared to the Size of Economies

nice work https://binarychemist.com/

My Name is PRETTY NGOMANE. A south African female. Aspiring to do farming. And finding a home away from home for the differently abled persons in their daily needs.

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The Essential Guide to Writing a Business Plan Here's the no-nonsense guide on how to write a business plan that will help you map success for your startup.

By Carolyn Sun

Opinions expressed by Entrepreneur contributors are their own.

President Dwight D. Eisenhower once said, "In preparing for battle I have always found that plans are useless, but planning is indispensable." If you're starting a business, you should have a business plan regardless of whether you're bootstrapping it or looking for outside funding.

The best sorts of business plans tell a clear story of what the company plans to do and how it will do it. Given the high failure rate of startups in their first year, a business plan is also an ideal opportunity to safely test out the feasibility of a business and spot flaws, set aside unrealistic projections and identify and analyze the competition.

A business plan doesn't need to be complicated, but for it to serve its purpose and set you up for success, it must be clear to whomever is reading your plan that you have a realistic handle on the why and how your business will be a success.

To get you moving in the right direction, here's a guide on how to write a business plan.

Overall tips

There's a lot of advice in the infosphere about how to write a business plan, but there's no single correct way. Your approach depends on your industry, who is reading your plan and what the plan is intended for. Are you trying to get funding? Sara Sutton Fell, founder of FlexJobs , a job site for flexible telecommuting jobs, says her business plan was an initiator for more in-depth conversation with potential investors. "A plan does help to see if investors and entrepreneurs are on the same page with general expectations for the business," she says.

A business plan serves many purposes, but there is universal consensus on the following when it comes to your business plan:

Have several versions tailored for specific audiences: "One of the mistakes that inexperienced business owners make is not understanding who they're writing the plan for," says David Ciccarelli, a small business owner who got consultation from his local Small Business Association (SBA) when he was starting his company Voices.com , which connects employers with voiceover talent.

Your plan is a living document: Tim Berry, the founder of a business planning software company Palo Alto Software , took his company from zero to $5 million in sales in its first three years. To do so requires frequent review and close tracking, says Berry, who met with his management team every month to review the plan versus what actually happened -- and then to revise. "There is no virtue to sticking to a plan if it's not useful and responsive to what actually happens," he cautions.

Be realistic about financial estimates and projections: "When you present a plan to bankers and financiers, or even to your employees, people will get way more excited about what's real rather than some huge thing that's never going to happen," says Ciccarelli. So present an achievable sales forecasts based on bottom-upwards information (i.e. how many units per month get sold in how many stores) and stop over projecting profits.

Writing your business plan is about the process and having a blueprint: Your business plan "reflects your ideas, intuitions, instincts and insights about your business and its future," according to Write Your Business Plan (Entrepreneur, 2015). The plan serves as a safe way to test these out before you commit to a course of action. And once you get your business going, the plan also serves as a reference point. "I still print the document," says Ciccarelli. "You're capturing it in time. If you're changing it all the time, you kind of don't remember where you were last year."

Back up any claims: Follow up your projections and assertions with statistics, facts or quotes from a knowledgeable source to lend your plan credibility.

Presentation counts: Reading any long, text-heavy document is hard on the eyes, so format with this in mind. Consider formatting your text pages into two-columns and break up long passages with charts or graphs. Arial, Verdana or Times New Roman are standard industry fonts.

Writing your business plan isn't busy work or a luxury; it's a vital part of the process of starting a business and arms you with information you need to know. So, let's get into what information goes into your business plan.

Related: Bu siness Plans: A Step-by-Step Guide

What goes into a business plan?

A typical business plan is 15 to 25 pages. Its length depends on a variety of factors, such as whether your business is introducing a new product or belongs to a new industry (which requires explanation to the reader), or if you're pitching to bankers, who generally expect to see a traditional written business plan and financials.

"Most equity investors prefer either an executive summary or pitch deck for first contact, but will often request a more detailed plan later in the due diligence process. Potential customers don't need all the details of your internal operation. Your management team needs access to everything," says Akira Hirai, managing director of business plan consulting service Cayenne Consulting .

Most business plans include these seven sections:

1. Executive summary : The executive summary follows the title page and explains the fundamentals of your business. It should provide a short and clear synopsis of your business plan that describes your business concept, financial features and requirements (i.e. cash flow and sales projections plus capital needed), your company's current business position (i.e. its legal form of operation, when the company was formed, principals and key personnel) and any major achievements in the company that are relevant to its success, including patents, prototypes or results from test marketing.

2. Business description : This section typically begins with a brief description of your industry and its outlook. Get into the various markets within the industry, including any new products that will benefit or hurt your business. For those seeking funding, reinforce your data with reliable sources and footnote when possible. Also provide a description of your business operation's structure (i.e. wholesale, retail or service-oriented), who you will sell to, how you will distribute your products/services, the products/services itself (what gives you the competitive edge), your business's legal structure, your principals and what they bring to the organization.

Here are some worksheets from Write Your Business Plan that will help determine your unique selling proposition and analyze your industry.

Click to Enlarge+

3. Market strategies: Here is where you define your target market and how you plan to reach them. Market analysis requires research and familiarity with the market so that the target market can be defined and the company can be positioned (i.e. are you a premium product or a price-competitive product?) in order to garner its market share. Analyze your market in terms of size, structure, growth prospects, trends and sales/growth potential. This section also talks about distribution plans and promotion strategy and tactics that will allow you to fulfill your plans.

Here is a worksheet from Write Your Business Plan that will guide you toward identifying your target market.

4. Competitive analysis: The purpose of the competitive analysis is to determine the strengths and weaknesses of the competitors within your market, strategies that will provide you with a distinct advantage, the barriers that can be developed in order to prevent competition from entering your market, and any weaknesses that can be exploited within the product development cycle. Show why your business will be a success over others.

5. Design and development plan: You will only need this section if you have a product in development, such as an app. The purpose of this section is to provide investors with a description of the product's design, chart its development within the context of production and marketing and show a development budget that will enable the company to reach its goals.

6. Operations and management plan: This section describes how the business functions on a daily basis, its location, equipment, people, processes and surrounding environment. If you have a product that needs to be manufactured, explain the how and where; also, describe your work facility, the personnel, the legal environment (such as licensing, permits, special regulations, etc.), key suppliers and inventory. This section will also highlight the logistics of the organization such as the various responsibilities of the management team and the tasks assigned to each division within the company.

7. Financial factors: Financial data is always at the back of a business plan -- yet it's extremely important. The financial data can include your personal financial statement, startup expenses and capital, your projected cash flow statement and 12-month profit-and-loss statement. PaloAlto's Berry stresses that if you're going after investors, you'll need to show a cash flow statement and a break-even analysis -- or the breakdown to see where your business breaks even.

The best way to prepare for running a business is to have all the components of the plan ready. So if you are are showing a prospective lender your business plan on 10 PowerPoint slides and get asked about something that isn't in the presentation, you can speak knowledgeably and follow up with a more fleshed out plan -- and quickly.

Some business owners hire business plan writing services. Cayenne Consulting's Hirai says that his clients generally fall into one of two categories: those intimidated by the process and those who could write the plan themselves but would prefer to spend their time on other priorities.

If you find yourself intimidated or stuck, you can always write the parts of plan yourself that you understand and hire a consultant or researcher to help with parts that you find confusing.

Or if you're a startup watching every dollar, then tap the free services of the federal Small Business Association (SBA). Every state has a district office . Through the SBA, you can get business plan assistance through its various resource partners, which includes Women's Business Centers , Small Business Development Centers and Service Corps of Retired Executives .

Allow this business plan template for Business Plan for a Startup Business to guide you:

Different types of business plans

Generally, business plans can be divided into four categories :

Working plan: This plan is what you will use to operate your business and is not meant to be admired. This version of your plan is an internal document and will be long on detail, short on presentation. Here, you can omit descriptions that you need not explain to yourself or your team.

Mini plan: The reader may request a mini plan, or a condensed version of your business plan (1-10 pages), which includes most of the same components as in a longer traditional plan -- minus the details and explanation. This includes the business concept, financing needs, marketing plan, financial statements (especially cash flow), income project and balance sheet. This shorter plan is not meant to be a substitute for a full-length plan, but serves as an option to present to potential partners or investors.

Presentation plan: Whether you're using a pitch deck or a written business plan, the information in your presentation plan will be, more or less, the same as in your working plan but worded differently and styled for the eyes of an outsider. The reader of your presentation plan will be someone who is unfamiliar with your business, such as investor or venture capitalist, so lose any jargon or shorthand from your working plan, which only makes sense to you. Also, keep in mind that investors will want to see due diligence on your competition threats and risks as well as financial projections. In addition, looks count, so use the color printer, a nice cover and bindings and the fancy paper stock. Or else, if you're presenting your business plan as a PowerPoint presentation, you can use this business plan presentation template .

What-if plan: This is a contingency plan -- in case your worst case scenario happens, such as market share loss, heavy price competition or defection of a key member of your team. You want to think about what to do in the face of an of these, and if you're trying to get outside funds, having a contingency plan shows that you've considered what to do if things don't go according to plan. You don't necessarily need this, but if you are getting outside funding, then it can strengthen your credibility showing that you have thought about these what-if possibilities. Even if you're not going to get outside funding, shouldn't you be thinking of the what ifs?

If four plans seem like a mountain of work, don't panic. Select two to start off -- a working plan and a mini plan, which will be an abbreviated version of your working plan.

Take several months to write your business plan. Consider it a journey, not a sprint.

Related: The Ultimate Guide to Writing a Business Plan

Carolyn Sun is a freelance writer for Entrepreneur.com. Find out more on Twitter  and  Facebook . 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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How to Write a Detailed Business Plan, Step-by-Step (Free Templates)

Posted november 14, 2022 by noah parsons.

Writing a business plan is one of the most valuable things you can do for your business. Study after study proves that business planning significantly improves your chances of success by up to 30 percent . That’s because the planning process helps you think about all aspects of your business and how your business will operate and grow.

In fact, writing a business plan is one of the only free things you can do to greatly impact the success and growth of your business. Ready to write your own detailed business plan? Here’s everything you need ( along with a free template ) to create your plan.

Before you write a detailed business plan, start with a one-page business plan

Despite the benefit of planning, it’s easy to procrastinate writing a business plan. Most people would prefer to work hands-on in their business rather than think about business strategy. That’s why, to make things easier, we recommend you start with a simpler and shorter one-page business plan .

With a one-page plan, there’s no need to go into a lot of details or dive deep into financial projections—you just write down the fundamentals of your business and how it works. A one-page plan should cover:

• Value proposition
• Market need
• Your solution

Competition

Target market.

• Sales and marketing
• Budget and sales goals
• Team summary
• Key partners
• Funding needs

A one-page business plan is a great jumping-off point in the planning process. It’ll give you an overview of your business and help you quickly refine your ideas.

If you’re ready to work on your one-page plan, check out our guide to writing a one-page business plan . It has detailed instructions, examples, and even a free downloadable template .

When do you need a more detailed business plan?

A one-page plan doesn’t always capture all the information that you need, however. If that’s the case, then it may be time to expand into a more detailed business plan.

There are several reasons for putting together a detailed business plan:

Flesh out the details 

A one-page business plan is just a summary of your business. If you want to document additional details such as market research, marketing and sales strategies, or product direction—you should expand your plan into a longer, more detailed plan. 

Build a more detailed financial forecast

A one-page plan only includes a summary of your financial projections. A detailed plan includes a full financial forecast, including a profit and loss statement , balance sheet , and cash flow forecast —one of the most important forecasts for any business.

Be prepared for lenders and investors

While investors might not ask to actually read your business plan, they will certainly ask detailed questions about your business. Planning is the only way to be well-prepared for these investor meetings.

Selling your business

If you’re selling your business, a detailed business plan presentation will be part of your sales kit. Potential buyers will want to know the details of how your business works, from marketing details to your product roadmap.

How to write a detailed business plan

When you do need to write a detailed business plan, focus on the parts most important to you and your business. If you plan on distributing your plan to outsiders, you should complete every section. But, if your plan is just for internal use, focus on the areas that will help you right now.

For example, if you’re struggling with marketing, spend time working on your target market section and marketing strategy and skip the sections covering the company organization.

Let’s go step-by-step through the sections you should include in your business plan:

1. Executive summary

Yes, the executive summary comes first in your plan, but you should write it last, once you know all the details of your business plan. It is truly just a summary of all the details in your plan, so be careful not to be too repetitive—just summarize and try to keep it to one or two pages at most. If you’ve already put together a one-page business plan, you can use that here instead of writing a new executive summary.

Your executive summary should be able to stand alone as a document because it’s often useful to share just the summary with potential investors. When they’re ready for more detail, they’ll ask for the full business plan.

For existing businesses, write the executive summary for your audience—whether it’s investors, business partners, or employees. Think about what your audience will want to know and just hit the highlights.

The key parts of your plan that you’ll want to highlight in your executive summary are:

• Your opportunity: This is a summary of what your business does, what problem it solves, and who your customers are. This is where you want readers to get excited about your business
• Your team: For investors, your business’s team is often even more important than what the business is. Briefly highlight why your team is uniquely qualified to build the business and make it successful.
• Financials: What are the highlights of your financial forecast ? Summarize your sales goals , when you plan to be profitable, and how much money you need to get your business off the ground.

2. Opportunity

The “opportunity” section of your business plan is all about the products and services that you are creating. The goal is to explain why your business is exciting and the problems that it solves for people. You’ll want to cover:

Mission statement

A mission statement is a short summary of your overall goals. It’s a short summary of how you hope to improve customers’ lives with your products and services. It’s a summary of the aspirations of your business and the guiding north star for you and your team. 

Problem & solution

Most successful businesses solve a problem for their customers. Their products and services make people’s lives easier or fill an unmet need in the marketplace. In this section, you’ll want to explain the problem that you solve, whom you solve it for, and what your solution is. This is where you go in-depth to describe what you do and how you improve the lives of your customers.

In the previous section, you summarized your target customer. Now you’ll want to describe them in much greater detail. You’ll want to cover things like your target market’s demographics (age, gender, location, etc.) and psychographics (hobbies and other behaviors). Ideally, you can also estimate the size of your target market so you know how many potential customers you might have.

Every business has competition , so don’t leave this section out. You’ll need to explain what other companies are doing to serve your customers or if your customers have other options for solving the problem you are solving. Explain how your approach is different and better than your competitors, whether it’s better features, better pricing, or a better location. Explain why a customer would come to you instead of going to another company. 

3. Execution

This section of your business plan dives into how you’re going to accomplish your goals. While the Opportunity section discussed what you’re doing, you now need to explain the specifics of how you’re going to do it.

Marketing & sales

What marketing tactics do you plan to use to get the word out about your business? You’ll want to explain how you get customers to your door and what the sales process looks like. For businesses that have a sales force, explain how the sales team gets leads and what the process is like for closing a sale.

Depending on the type of business that you are starting, the operations section needs to be customized to meet your needs. If you are building a mail-order business you’ll want to cover how you source your products and how fulfillment will work .

If you’re building a manufacturing business, explain the manufacturing process and the facilities you need to use. This is where you’ll talk about how your business “works,” meaning, you should explain what day-to-day functions and processes are needed to make your business successful.

Milestones & metrics

Until now, your business plan has mostly discussed what you’re doing and how you’re going to do it. The milestones and metrics section is all about timing. Your plan should highlight key dates and goals that you intend to hit. You don’t need extensive project planning in this section, just key milestones that you want to hit and when you plan to hit them. You should also discuss key metrics: the numbers you will track to determine your success.

Use the Company section of your business plan to explain the overall structure of your business and the team behind it.

Organizational structure

Describe your location, facilities, and anything else about your physical location that is relevant to your business. You’ll also want to explain the legal structure of your business—are you an S-corp, C-corp, or an LLC? What does company ownership look like?

Arguably one of the most important parts of your plan when seeking investment is the “Team” section. This should explain who you are and who else is helping you run the business. Focus on experience and qualifications for building the type of business that you want to build. 

It’s OK if you don’t have a complete team yet. Just highlight the key roles that you need to fill and the type of person you hope to hire for each role.

5. Financial plan and projections

Your business plan has now covered the “what”, the “how”, and the “when” for your business. Now it’s time to talk about money. What revenue do you plan on bringing in and when? What kind of expenses will you have?

Financial Forecasts

Your sales forecast should cover at least the first 12 months of your business and ideally contain educated guesses at the following two years in annual totals. Some investors and lenders might want to see a five-year forecast, but three years is usually enough.

You’ll want to cover sales, expenses, personnel costs, asset purchases, and more. You’ll end up with three key financial statements: An Income Statement (also called Profit and Loss), a Cash Flow Statement , and a Balance Sheet .

If you’re raising money for your business, the Financing section is where you describe how much you need. Whether you’re getting loans or investments, you should highlight what you need, and when you need it. Ideally, you’ll also want to summarize the specific ways that you’ll use the cash once you have it in hand.

6. Appendix 

The final section of your business plan is the appendix. Include detailed financial forecasts here as well as any other key documentation for your business. If you have product schematics, patent information, or any other details that aren’t appropriate for the main body of the plan but need to be included for reference.

Download a business plan template

Are you ready to write your business plan? Get started by downloading our free business plan template . With that, you will be well on your way to a better business strategy, with all of the necessary information expected in a more detailed plan.

If you want to elevate your ability to build a healthy, growing business, you may want to consider LivePlan.

It’s a product that makes planning easy and features step-by-step guidance that ensures you cover everything necessary while reducing the time spent on formatting and presenting. You’ll also gain access to financial forecasting tools that propel you through the process. Finally, it will transform your plan into a management tool that will help you easily compare your forecasts to your actual results.

Using your plan to grow your business

Your business plan isn’t just a document to attract investors or close a bank loan. It’s a tool that helps you better manage and grow your business. And you’ll get the most value from your business plan if you use it as part of a growth planning process . 

With growth planning, you’ll easily create and execute your plan, track performance, identify opportunities and issues, and consistently revise your strategy. It’s a flexible process that encourages you to build a plan that fits your needs.  So, whether you stick with a one-page plan or expand into a more detailed business plan—you’ll be ready to start growth planning. 

Ready to try it for yourself? Learn how LivePlan can help you use this modern business planning method to write your plan and consistently grow your business.

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How to Write a Business Plan

Last Updated: February 16, 2024, 12:05 pm by TRUiC Team

Writing a business plan can be an intimidating endeavor. Whether you’ve decided to start a business , or you already have a business and need to write a business plan to apply for a loan or to pitch to investors , we cover the process in-depth.

Recommended: Our business plan generator walks you through topics like marketing and financial projections so that your business is prepared to succeed.

What Is a Business Plan?

The traditional business plan is typically a 20 to 40-page formal document that describes what your business does, what your objectives are, and how you plan to achieve them.

It lays out your plans for operating, marketing, and managing your business, along with your goals and financial projections.

There are many different types of business plans, depending on the stage of your venture and the purpose of your business plan. In the earliest stages of your business idea, you may want to start small with a three-sentence business plan , or perhaps by sketching out a lean canvas or business model canvas .

Once your business idea has been developed, you’ll be ready to begin writing your business plan .

Why Do You Need a Business Plan?

Writing a business plan requires you to think through all of the key elements of your business. This gives you insights into the challenges you’ll face and the strengths you bring.

A business plan is also often requested by lenders or investors when you are ready to seek financing.

While many companies do not need a formal business plan unless they are planning on seeking investors or applying for a business loan , writing a business plan has extensive benefits.

The process of writing your business plan allows you to take an in-depth look at your industry , market , and competitive position . It helps you set goals , determine your keys to success , and plan your strategies . It also allows you to explore your financial projections and manage cash. So, even if you do not need a formal business plan, the process of planning may still reap huge rewards.

Your Audience

You need to think carefully about who is going to read your business plan.

Although you might begin writing a business plan only to convince yourself, there are a number of stakeholders who may end up reading your business plan.

Your plan might be read by your:

• Partners or potential partners
• Board of directors
• Senior management team
• Current employees
• Employment candidates

Outside the organization , the following stakeholders may want to read your business plan before they decide to do business with you:

• Distributors
• And independent contractors

Think about your primary audience when you are writing your business plan. What are the aspects that are most important to them? This is where you will want to put the majority of your focus.

For example, lenders will be most interested in your financial projections — your cash flow statement and balance sheet.

Investors might be most interested in your business model, the uniqueness of your product or service, and your competitive advantage.

Partners, your senior management team, and current employees might be most interested in your strategic plans- your vision, your operational plan, and your organizational plan.

Find Sample Business Plans in Your Industry

One great resource you should check out before sitting down to write your business plan are sample business plans in your industry.

Not only will you have the opportunity to gain insights on your industry and your competitors, you also might be able to find troves of industry and market research that will make conducting your own analysis of the industry and market much easier.

To find example business plans in your industry, try searching the web for “ your industry business plan example.”

Writing Your Business Plan

Once you have spent some time looking at sample business plans in your industry, it is now time to start writing your business plan . An easy place to begin is by outlining the major sections you will need in your plan.

What you need to include in your business plan will depend on the type of business you are creating, your business model, and who your intended audience is.

Common business plan sections include:

• Executive Summary — a high-level overview of your business or business idea
• Venture Overview — a description of your company, vision, mission, and goals
• Product or Service Description — a detailed description of your product or service
• Industry and Market Analysis — an analysis of the industry and market you compete in
• Marketing Plan — your overall strategy and specific plans to capture market share
• Organizational Plan — the legal form of the business and the key players
• Operational Plan — how you will operate the business and your key resources
• Goals, Milestones, and Risks — short and long-term goals, milestones, and risks
• Financial Statements — Financial statements or the projected financials of your business

Not every type of venture will require every one of these sections to be included in their business plans. However, most business plans will at least include an executive summary, venture overview, a description of the products and services, and some form of financial projections.

Executive Summary

As suggested in its name, an executive summary is a summary of the key points in your business plan . This is your first chance to convey to readers the what, why, who, and how of your business or business idea.

Although there is no set structure for an executive summary, a good executive summary should summarize :

• The problem you are solving
• Your solution
• Your target market
• Any competitive advantages
• The team you’ll build
• Goals and objectives
• An overview of your financials or financial forecast

If you are writing your business plan for the purpose of acquiring funding , you will also need to discuss the amount of funding required, the purpose of the funds, as well as how your investors will get paid back.

The executive summary should be clear and concise . Ideally, this section should be one to two pages and typically follows either a synopsis or story approach, depending on the intended audience.

In the synopsis approach, you would provide a brief summary of each of the key sections of your business plan. In the story approach, your executive summary reads like a narrative, allowing you to tell the “story” of your business or idea.

With either approach to writing the executive summary, the information you want to convey remains the same. The executive summary needs to provide an overall picture of your current business or business idea.

The executive summary should include:

• A brief description of you and your venture,
• The problem your product or service is solving,
• Some information on your target market, including size, potential, & competition, and
• The solution you are offering.

The executive summary should also include:

• A statement of where you are now,
• A statement of your objectives and future plans,
• A list of what you see as keys to your success, and (if you are seeking investors)
• Any relevant financial information such as start-up costs, funding required, and how you will use investor funding.

Although the executive summary is the first section in the business plan, because it is a summary of the rest of your business plan, it is often written last.

Venture Overview

The venture overview is a top-level depiction of your company.

It contains the:

Description of the Venture

• Vision Statement
• Mission Statement
• Goals & Objectives
• Keys to Your Success

The first part of your venture overview is a description of your venture.

The description of your venture should include what you do (a brief description of your products or services), the value you provide to customers, your current operating status or a brief history of the venture, and a short description of the industry or niche in which you compete.

How to Write a Vision Statement

After describing your venture, a vision statement is a very simple, 5 to 10 word sentence or tagline that expresses the fundamental goals of your firm. Good vision statements reflect your company’s long term passion and purpose, often in a way that evokes emotion.

Take a look at the vision statements below for some inspiration:

Disney —  To make people happy. Oxfam —  A world without poverty. Stanford —  To become the Harvard of the West. Marriott —  To be the #1 hospitality company in the world. Microsoft —  A computer on every desk and in every home; all running Microsoft software.

How to Write a Mission Statement

After having crafted your vision statement, you should also create a mission statement. A mission statement explains your company's goals in terms of what you do for your customers. A good mission statement should tell your reader what your company does, who you do it for, and why you do what you do.

Check out these excellent examples of compelling mission statements:

Patagonia —  “Our Reason For Being: Build the best products, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.” Trader Joes —  “Our mission is to give our customers the best food and beverage values that they can find anywhere and to provide them with the information required to make informed buying decisions. We provide these with a dedication to the highest quality of customer satisfaction delivered with a sense of warmth, friendliness, fun, individual pride, and company spirit.” Facebook —  "Founded in 2004, Facebook's mission is to give people the power to build community and bring the world closer together. People use Facebook to stay connected with friends and family, to discover what's going on in the world, and to share and express what matters to them."

Goals and Objectives

In this section of the business plan, break down your most important short-term and long-term goals and objectives.

Aim for five to seven of your most important short and long term goals.

This subsection of your venture description should be kept short. You will come back to your goals at the end of your business plan.

However, your key short-term and long-term goals should be highlighted early on in your business plan as well. The rest of your business plan will act as evidence of how you plan on achieving your goals.

Keys to Success

Your keys to success are your insights into what it takes to be successful in your industry, market, or niche.

Your keys to success can include several of the most important milestones that you will need to accomplish in order to achieve your goals.

These may include providing high quality products and services, your ability to attract customers or users and gain market share, or even your ability to develop the technology to deliver your products or services.

Your keys to success may also include the major milestones that you will need to reach along the way in order to achieve your vision. You will come back to your milestones and objectives at the end of your business plan.

Product or Service Description

The product or service description section is where you will go into detail in describing your products or services.

Not only will you describe your product in more detail, you should also discuss the uniqueness of your product, and what gives you an advantage over your competitors.

These are the three main parts of the Product (or Service) Description:

Description of Products or Services

Uniqueness of product, competitive advantage.

In this subsection of your business plan, describe the products or services you will provide, why they are a fit in the market, and how you will compete with similar products and services.

Begin by clearly describing the products or services you will provide. Make sure to explain the features and characteristics of your products and services. Your product or service description does not have to be highly technical. Rather, in addition to describing the features, focus on highlighting the advantages and benefits associated with your products or services.

Also, let your reader know why your product or service is needed. How does your product or service differ from those offered by your competitors? How does it better fill your customers wants and needs?

This is where you tell your reader why your solution is unique. Is it different from everything else out there? How is it different? Why would potential users choose your product or service over your competitors? In order to stand out, you need to distinguish yourself in some way.

To describe your product or service’s uniqueness, you may want to come up with a unique value proposition (or unique selling point). A value proposition is a short description of what you do, who you do it for, and how this benefits them.

A value proposition is similar to a mission statement. However, it differs in that a mission statement is written from the perspective of the company, while a value proposition is written from the perspective of the customer.

Your value proposition should be the center of your customer messaging. It should be front and center on your website, in your marketing materials, and in your advertising.

Here a few examples of great value propositions:

Dollar Shave Club —  A Great Shave for a Few Bucks a Month. No Commitment. No Fees. No B.S. Unbounce —  Build, Publish, & A/B Test Landing Pages Without IT Freshbooks —  Small Business Accounting Software Built for You, the Non-Accountant Skype —  Skype Keeps the World Talking, for Free. Share, Message, and Call - Now with Group Video on Mobile and Tablet Too.

What makes you better than competitors?

Does your competitive advantage come from superior products and services, customer service, technical support, logistics, price? What are the factors that give you an advantage over your competitors?

Clearly defining your competitive advantage is important.

Your competitive advantage is not just some abstract concept. It is at the core of how you deliver value to your customers. Your competitive advantage lays the foundation for your business model and should be a key component of your strategic plans.

Common areas where businesses find competitive advantages include:

• Intellectual Property
• Resources/Capital
• Economies of Scale
• Knowledge/Experience
• Connections and Network
• Customer Service
• Technical Support
• Customization
• Brand Recognition/Loyalty

Industry and Market Analyses

The industry and market analysis is the “big picture” view of your industry and market.

Conducting an industry and market analysis is going to take a good deal of research. You will likely need to research your industry, your competitors, and your customers. But do not rush through this section of your business plan.

A good understanding of your industry and market is critical to your success. By understanding the forces at play within your industry, you will be better able to find additional ways to create value that will allow you to succeed in the current and anticipated competitive environment.

Conducting an industry and market analysis can be intimidating, especially if you do not know what to look for or how to find the information you need. In the next section, we will discuss what should be included in your industry analysis. Then, we will tell you where to begin looking.

Industry Analysis

The industry analysis is a big picture analysis of the industry you will compete in. What does your overall industry look like today? There are a number of insights that will help you assess the attractiveness of your idea and form a big picture view of the industry and segment you are considering competing in.

Key insights to be alert for include:

• The dominant economic features of the industry
• The industry’s driving forces
• The industry’s competitive environment
• The competitive position of major players and key competitors
• Key industry success factors

To arrive at meaningful insights from your industry analysis, try to find answers to the following questions:

• What primary products or services are provided by your industry?
• What is the size and trajectory of the industry?
• What was the annual growth rate of the industry over the past year? Three years? Five years? Ten years?
• What is the forecasted annual growth rate over the next three years? Five years? Ten years?
• What is the average profitability of firms in your industry?
• What trends are affecting your industry?
• Who are the major customer segments served by your industry?
• Who are the major players in your industry?
• Who will be your key competitors in your industry?
• What key factors determine success or failure?

Industry Research

Now that you have a better idea of what to look for, you will need to know where to begin your search. There are a number of great free resources to begin looking for industry research. However, the first step is to determine the industry you are in.

While by this point, you should have some idea of the industry you are in, it is not always so clear. You could try an internet search to see what information you can find on your industry, but you will also want to find the NAICS code. You can do a NAICS Code Lookup and find the NAICS Code for LLC that matches your industry.

Here, you use the NAICS identification tool to drill-down through a list of industries to find the appropriate NAICS code for your business.

Once you know your industry, you can begin collecting more information about the industry trends and trajectory.

www.Bizstats.com provides free industry statistics including industry averages for income statement revenues and expenses, balance sheets, and key financial ratios. This is very helpful in making financial forecasts and setting benchmarks.

The US Census Bureau also provides several tools to help you conduct industry research:

• The Economic Census provides information on employer businesses, including data sorted by industry, state, region, and more.
• Statistics of US Businesses (SUSB) provides additional data on US businesses by enterprise size and industry. Both of these tools may help in conducting your industry analysis.

Target Market Analysis

Once you have a better understanding of the industry, you can begin to narrow down to your target market. In this section of the business plan you describe who your target market is and what you know about them.

What is a target market? Your target market is the specific group of customers to whom your product is intended. And no, it is not everyone. Although many new venture founders would like to sell their product or service to everyone, you should focus your efforts on your most likely customers.

Narrowing your target market requires understanding the three types of markets for your products or services. Your venture’s market can be narrowed down into three categories, the TAM, the SAM, and the SOM.

The total available market (TAM) is the total market for your products and services. Everyone in the universe who might be your customer.

The serviceable available market (SAM) is the subset of the total market that you can actually reach. Although anyone in your universe might be your customer, you are limited in your ability to reach them all.

The share of market (SOM) is the subset of the serviceable available market that you will actually reach. These are your most likely customers. Your target market.

Target markets can be segmented in many different ways. The idea is to narrow down to your most likely customers. This is where your focus should be.

Ways you can segment the market include:

• Demographic (e.g., age, gender, family size, education, income)
• Geographic (e.g., country, state, region, city, neighborhood)
• Psychographic (e.g., benefits sought, personality, social class, lifestyle)
• Behavioral (e.g., benefits sought, usage, attitude, loyalty)

Once you understand who your target market segments are, you will be able to start determining how you can reach them. To do this, consider:

• Where does your target market get information to make purchasing decisions?
• What is it they are looking for when considering buying this product/service?
• What will your target market pay attention to?

Market Research

To determine your target market and conduct a market analysis, you will most likely have to do market research.

Market research is the collection, analysis, and interpretation of data related to your target market and target customer to support strategic decision making.

There are two types of market research : secondary market research, and primary market research.

Secondary market research is the collection, analysis, and interpretation of data that has already been collected for other purposes. Secondary market research may include the collection of data from a number of sources such as the U.S. Census Bureau, consumer agencies, and for-profit organizations.

Primary market research is the collection of new information to gain a further understanding of the problem at hand. Primary market research involves you collecting the data or hiring a market research firm to collect data for you. This is you going out and actually collecting the opinions of your potential customers.

Common methods of primary market research include customer observation, focus groups, customer surveys, and customer interviews .

Because primary market research typically takes more time to complete and may incur significant costs , secondary market research is often conducted before conducting primary market research. This allows you to gather enough insights that you can narrow your primary market research to those more likely to be your customers.

To begin conducting secondary market research, consider these sources:

Think with Google provides a number of free tools and resources to help you find and understand your target market. From tools like Find My Audience and an Insights Library to a wealth of information on customer trends and the consumer journey, Think with Google is a valuable tool in conducting your market analysis.

City Town Info provides free statistics on people and places, colleges and universities, and jobs and careers. You can search for data on more than 20,000 U.S. communities at the city and state levels.

Google Trends is another useful tool for conducting market research. Google Trends allows you to explore what people are searching on the internet. You can examine trending topics, see trends by year, or search your own topic to discover interest over time, by region, or by related queries.

Social Mention allows you to conduct a real-time social media search for topics across more than 100 social media platforms. Social Mention provides you with information on the sentiment behind topic mentions, top keywords, top hashtags, and the social media platforms where these topics are being discussed.

Needless to say, there are several other great sources for both industry and market research. The key is to get creative to find the data and information to both guide your strategy as well as justify your business opportunity.

Competitive Analysis

Once you understand your industry and market, you should also include an analysis of your major competitors.

Your competitors may include anyone offering alternatives to your solution that people are using now to solve the same problem.

You will want to understand and explain who your competitors are along with their market share , price, major competitive advantages and disadvantages, and what makes your product unique from theirs.

Start by identifying the major competitors within your industry. You should focus on your closest competitors. Those that compete with you directly.

Next, for each competitor, describe their strategies, their strengths, and their weaknesses. In doing so, try to answer the following questions:

• What are their primary products and or services?
• Who are their target customers?
• What differentiates your product or service from theirs?
• What is their pricing strategy?
• What is their marketing strategy?
• What is their main message or value proposition?
• What are their strengths and weaknesses?
• What are their competitive advantages?

You should complete a competitive analysis for your top three to five competitors. Doing so will allow you to gain a much better perspective on the competitive landscape and may provide insight into how you can distinguish yourself from your competitors and even how you can take advantage of areas where your competitors fall short.

Marketing Plan

The marketing plan depicts the overall strategy your venture pursues to capture market share.

The marketing plan describes all aspects of marketing for your venture, including the product, price, place, and promotion . This includes a big picture view of your marketing strategy, your planned marketing mix, as well as your pricing strategy, sales strategy, and advertising strategy.

The marketing plan should be well informed by your industry and market analysis. By now, you have a plethora of knowledge about who your target customer is, the problem and pain points that you are alleviating for them, and how your competitors are positioned. All of this knowledge allows you to hone your marketing plan to reach your target market with the right message in the channels they turn to for information.

Marketing Strategy

The first section of your marketing plan is your marketing strategy. Your marketing strategy refers to your overall strategy of how you will market your product. How will you get your message out to your potential customers?

Your marketing strategy should consider the four essential elements of marketing:

The 4 Ps of Marketing:

The product is everything the customer gets, whether it be a physical product, a service, or an experience.

It is what you deliver. This includes the product or service itself, along with its branding, packaging, labeling, and even benefits.

The price is what you charge. What the customer gives you. Your business plan should discuss your pricing strategy and where this fits in your marketing mix.

Are you competing on price and thus offer low pricing? Or are you focusing on value at a medium price point? Or maybe you are positioned as a luxury label or item, and compete at a high price point? Why did you choose this strategy? Does it fit with your target market and within your marketing mix?

Location refers to where your customers find you, or where you find them.

While much of today’s marketing is done online, location is still as important as ever. Once you understand the place, you will have a much better idea on how to deploy your marketing mix. Where do your ideal customers get their information? Where do they shop? What forms of social media do they use?

Promotion is how you tell customers about your products and services.

Simply put, promotion is how you raise awareness of your products, services, or brand. Promotion strategies may include public relations, content creation and curation, marketing, and advertising.

But, keep in mind, your promotional strategies should be focused on one thing: your target customer and the strategies and messaging that works for them.

Your Marketing Mix

Your marketing mix is how you allocate resources to the marketing channels that you plan to pursue. In this section of your marketing plan, you will describe the marketing messaging and channels that you plan to use, and why these are appropriate for your target market.

Inbound Marketing

Inbound marketing, or content marketing, is a form of marketing designed to draw traffic to your website by providing valuable content to your target market. This is often achieved by posting useful web content, content, videos, and blogs.

The idea behind inbound marketing is pretty simple- by providing knowledge and information on your products, services, and other information that is valuable to your customers, you generate more leads and, hopefully, more sales.

Social Media Marketing

With over 3.5 billion people around the world using social media, social media marketing is another powerful tool to reach potential customers.

Social media marketing has many advantages, including allowing you to get your message in front of your specified target audience at little to no cost.

Although there is an overabundance of social media channels to choose from. Focus on the ones that your target market uses to get their information.

For instance, if your target market is middle age or older people, you may want to focus on platforms that are more popular with these demographics such as Facebook, Twitter, and Pinterest. However, if your target market is teen agers and young adults, you are more likely to find them on platforms such as Instagram and TikTok.

The Power of Video Marketing

Do not forget to discuss the use of video marketing in your marketing mix.

In both inbound and social media marketing, video has begun to play an increasingly important role. Video marketing can be employed in inbound marketing, email marketing, and social media marketing to serve a variety of purposes. The most common uses of video marketing include explainer videos, presentation videos, testimonial videos, sales videos, and video ads.

Not only can video marketing be used in a variety of methods and contexts, it is a highly consumed type of advertising. In fact, in 2020, 96% of consumers watched an explainer video to find out more about a product or service. Video works. And marketers believe this too. 92% of marketers who utilize video marketing say that it is a key part of their marketing strategy.

Email Marketing

Depending on the type of venture your company is, email marketing may also be an important element in your marketing mix. A good email marketing strategy balances gaining new customers with keeping your existing customers engaged with your company.

Although you do not want to overdo it, and a lot of email marketing seems “spammy”, email marketing can be very effective in the right form. Welcome notes, confirmation emails, informational emails, newsletters, digital magazines, promotional emails, and seasonal and birthday campaigns are just a few of the many types of email marketing.

Referral Marketing

Another common type of marketing in a company's marketing mix is referral or recommendation marketing. Referral or recommendation marketing can take many forms. Referral marketing might include good old organic word-of-mouth marketing wherein you ask customers for referrals, or even a formal system for rewarding customers who refer new clients.

Pricing Strategy

The Marketing Plan section of the business plan should also describe your pricing strategy. How are you going to price your products and services?

There are a number of ways you can approach pricing:

Markup Pricing —  Markup pricing is pricing based on your costs, plus a predetermined markup. The amount you mark up your product or service is usually expressed as a percentage, known as the gross margin. Markup pricing is most often found in high volume manufacturing industries where manufacturers must cover the cost of the products they are making.

Competitive Pricing —  Competitive pricing is pricing based on your competitors prices for similar products or services. Competitive pricing is most often seen in products or services where there are numerous competitors or substitutes.

Value Pricing —  Value pricing is pricing based on the value or perceived value that you deliver to your customers. In value-based pricing, you set the prices of your products and services in line with what the customer believes your product or service is worth. Value-based pricing is most often seen in higher value products and services, those that cater to self-image, or those that are niche or unique.

Penetration Pricing —  Penetration pricing is setting a low initial price, and then raising it as demand increases. Penetration pricing is designed to capture market share. It is a strategy often used by a new business or in launching new products and services. The idea is to set the price low enough to draw customers from your competition.

Price skimming —  Price skimming pricing is setting a high initial price and then reducing this price as the market evolves. Price skimming is most often used on new or trendy products and services. As initial demand slows and alternatives or competitors emerge, the high initial pricing must then be lowered to stay competitive in the market.

Sales Strategy

A sales strategy is how you plan on selling your products or services to your target market. This includes your sales channels (where will your product or service be available for sale) as well as how you will sell your product or service.

Your sales strategy depends on your business model and the nature of your business. If your business involves retailing, food services, or personal services where your customers come to you to make a purchase, your sales strategy may be quite simple (or even unnecessary to income). However, if your business involves personal selling, you may need a more thought-out sales strategy.

Some questions to ask to determine and document your sales strategy in your business plan:

• Will your products or services be available on your website?
• On a third-party website?
• In retail locations?
• In your own stores?
• In other retail stores?
• Directly to consumers? (Business to Consumer or B2C)
• To businesses? (Business to Business or B2B)
• Cold calling?
• Networking?
• Inside salespeople?
• Outside sales representatives?
• Sales through strategic partners?

Advertising Strategy

An advertising strategy is how you plan to use sponsored, non-personal messaging to reach and inform potential customers of your product, service, or brand.

Your advertising plan should describe the mediums you are going to advertise in , who you are targeting advertising in these mediums, your advertising message(s), and your advertising budget. A good advertising plan is also measurable, so be sure to consider how you are going to measure the effect of your advertising strategy to see if it is working.

Advertising Mediums

The most common advertising mediums typically fall into the categories of traditional advertising and digital advertising.

Traditional advertising includes print advertising such as newspapers, magazines, flyers, direct mail, and even billboards, as well as radio and tv advertising.

Digital advertising includes email advertising, search engine advertising, website advertising, social media advertising, influencer advertising, among many, many more.

The secret to finding the right advertising strategy and advertising mediums for your business is knowing where to find your most likely customers. Where is your target market, and where do they go to get their information?

Organizational Plan

The organizational (or management) plan describes:

• The legal form of the business
• Its organizational structure
• The background and roles of the leadership team
• Key personnel that are already in place or you will need to fill.

Organizational Type and Structure

The first part of your organizational plan describes your organizational type and structure . Who owns your company? And what is its legal business structure?

There are four primary types of organizational structures:

Sole Proprietorships

Partnerships.

• Limited Liability Companies (LLCs)

Corporations

Sole Proprietorships and Partnerships are informal business structures , while LLCs and Corporations are more formal business structures .

The best type of structure for your business will depend on your business’s particular characteristics and needs. A partnership structure may be the best choice for some businesses, while an LLC or a corporation might work better for others.

Sole proprietorships are an informal type of business structure. While many businesses start out as sole proprietorships because they are an informal business structure the owner is liable for 100% of the business's liabilities and risks. Thus sole proprietorships are typically not the preferred ownership structure for small businesses.

Similar to a sole proprietorship, a partnership is also an informal type of business structure. While a sole proprietorship involves only one owner, a partnership is a business structure with two or more partners where there is still no legal distinction between the owners of a partnership and their business.

An LLC is a formal business structure that distinguishes the owners from the business itself.

LLCs offer the personal liability protection of a corporation with the pass-through taxation of a sole proprietorship or partnership.

It is the simplest way of structuring your business to protect your personal assets in the event your business is sued.

LLCs can be owned by one or more people, who are known as LLC “members.” An LLC with one owner is known as a single-member LLC, and an LLC with more than one owner is a multi-member LLC.

LLCs require operating agreements . Operating agreements are legal documents that outline the ownership and member duties of your LLC. This agreement allows you to set out the financial and working relations among business owners ("members") and between members and managers.

Recommended: Learn how to form an LLC in your state using our free guides.

A corporation is a legal business entity that is owned by shareholders, run by a board of directors, and created through registration with the state.

Corporations offer limited liability and tax benefits but are required to follow more complex operating procedures than their counterpart, the limited liability company (LLC).

Ownership and Executive Team

Now it’s time to sell the single most important element in your business plan. You!

This subsection of your business plan tells readers who is in your ownership and executive team and outlines the accomplishments of your team.

You should include a short profile on each member of your ownership and executive team that will play a role in company decision making.

Who is on your ownership and executive team? What roles will each perform? What knowledge, experience, and accomplishments do you and your team bring to the table? What roles do you still need to fill, and how and when do you plan on filling them?

It is well known that many investors consider the experience and ability of the ownership and management team to be just as important as the idea itself. Do not pass over this opportunity to highlight how your knowledge, experience, and accomplishments set you up to succeed.

Also, remember that when you are writing your descriptions of your ownership team, talk about your accomplishments- as opposed to experience. Accomplishments signify that you have a track record and can get things done.

Key Personnel

This section of the business plan highlights the key personnel associated with the business . This may include members of the management team outside of the owners and executive management, the board of directors, and any outside advisors.

Here, include profiles on each key figure associated with your company, focusing on their accomplishments and the knowledge and skill they bring to the business.

Operational Plan

The operational plan describes how you will operate. The processes, strategies, and resources that you will use to operate your business on a daily basis.

This includes descriptions of production (if you produce a product) or the process you will use to carry out your service. The operational plan may also include, as necessary, descriptions of your logistics and supply chain, physical resources and needs, human resources and needs, technological resources and needs, and timetables for carrying out your plan.

Production Plan or Service Description

The production plan or service description explains how you are going to make and deliver your product(s) or provide your service(s). Although the production plans for products and services may look slightly different, both describe how your company will operate in the day-to-day.

If you are making a product , the production plan is where you will describe the process for making the product. What are your methods of production? What are the steps in your processes? How will you ensure quality? Maintain inventory? Handle Logistics?

If you are providing a service , the production plan is where you can describe the process you go through providing that service. What are your service methods? What will your sales and customer service look like? What is the customer experience like?

Most importantly, which of these might give you an advantage over your competitors? If you have any superior methods, processes, or other advantages, make sure to highlight them in your production plan or service description.

Logistics and Supply Chain

This section of the business plan describes your logistics and where you fall within the supply chain in your industry.

If you produce a product , you should discuss how you source materials, where your materials come from, and who your suppliers are. You will also need to discuss how you handle inventory, how you warehouse, and how you distribute your product(s).

If you are a service business , you may still have to discuss how you source materials used in your service, who your suppliers are, and how you handle inventory.

Physical Resources

In this section of the operational plan, you describe the physical resources that you have and the physical resources that you need to acquire. Think through everything you might need. This will become important when it is time to make financial projections.

• What facilities, machinery, equipment, and supplies do you require?
• Do you require raw materials?
• Who will be your primary suppliers?
• Secondary suppliers?
• Do you have back up suppliers and contingency plans if you cannot acquire raw materials?

Technological Resources

You should discuss the technological resources that you are developing, have, or need to create or acquire. Technological resources may include any software, applications, or websites that you have or will need to create, outsource, or purchase.

• What hardware or machinery will you require?
• What software or applications will you require?
• Can you purchase the software and applications you need?
• Are the software and applications you will need off-the-shelf or specialty?
• Will you have to create the software and applications you need?
• Do you need a website?
• Will you create and maintain your website inside the company or have it created and maintained by someone else?

Human Resources

Here, you describe the people that are a part of your team, and the human resources that you need to add to your team, hire, or outsource. Since you have already described the ownership and management team as well as key personnel, this section is more focused on production level workers and lower management.

• How much staffing will you need?
• What skills will your staff require?
• What will your staffing typically look like?
• How will you recruit, train, and retain employees?

Goals, Milestone, and Risk

The goals, milestones, and risks section of your business plan is the place to outline your goals, set key milestones, and explore and explain your preparation for the risks you will face.

Goals lay the foundation of where you intend to take your company and how you are going to get there. It is important to ascertain the short and long-term goals for your company.

Your goals should be connected to your mission and vision, your business model, and your strategic plans. They should also reflect your ambition to move the company forward and are often reflected in key performance indicators (KPIs) , such as numbers of users and customers, revenues, expenses, retention, satisfaction, and other indicators of performance.

Here are some questions to help you develop the goals for your company:

• When do you expect to break even?
• What do you expect your revenue to be in one year? Three years? Five years?
• What market share do you expect to capture in the next year? Three years? Five years?
• Where do you plan to expand from here?
• What KPIs do you need to achieve or improve?
• When do you expect to implement major objectives?
• What level of customer satisfaction do you hope to achieve?

When developing your goals, in addition to defining what your goals are, you also need to consider the how , the when , and the who . First, consider how your goals will get accomplished? What actions need to be taken to achieve your goals? What milestones do you need to accomplish along the way?

Your goals should also include your plan on when you plan on attaining each goal . Not only will your readers be curious about when you plan to achieve your goals, due dates and deadlines make for really powerful motivators.

Finally, you should also determine who is going to be responsible for working toward each goal. In a sole-proprietorship or startup it may be you, the business owner, or your founding team. However, as your organization grows, it will become more and more important to define who is responsible for pushing toward and achieving each goal.

SMART Goals

Your goals should be SMART: S pecific, M easurable, A ttainable, R ealistic, and T imely.

• Specific —  Your goals should be clear and specific. They should be narrow enough that you can determine the appropriate steps to attain them. In addition to what , in planning your goals, do not forget to be specific about how , when , and who . How will your goals be attained? When do you anticipate achieving them? Who is going to be responsible?
• Measurable —  Your goals should be measurable. There should be some objective metric or performance indicator by which you can tell if you have met your goals? How are you going to measure your goals? What metrics or performance indicators will you use? How will you know if you achieve your goals?
• Attainable —  Your goals must also be realistic and attainable. For a goal to be attainable you must be able to achieve it. Do not be afraid to push yourself, but setting unrealistic goals will cast doubt on your entire business plan. Ask yourself, can your goals be accomplished? By you? What will it take to attain them?
• Relevant —  Your goals also need to be relevant. To be relevant, they should contribute to the mission, vision, and success of your venture. Do your goals align with your company’s values? Are they within the scope of and aligned with your operational plan? Your marketing plan? Are they within the budget?
• Timely —  Your goals should also be timely and time-bound. Their process and progress should be clearly defined and they should have a starting and ending date. Without a timeframe, there is no sense of urgency, or motivation to get started. Make your goals time-bound. How long do you expect it to take? When do you plan on getting started? When do you anticipate achieving each goal?

Milestones are important events in your venture’s growth that mark significant change or stage of development.

Creating a list of milestones can act as a checklist of what you need to accomplish for your venture to reach its goals. They tell the story of how you are going to get from where you are to where you are going.

Milestones might include major events and accomplishments, such as:

• Forming an LLC
• Writing a Business Plan
• Securing Seed Capital
• Develop a Prototype
• Begin Production
• First Major Sale
• Reach 10,000 Downloads
• Achieve 1,000 Paying Customers

It is alright to list a few milestones that you have already completed. Or to leave them in your business plan once you complete them. Accomplished milestones show that you are making traction.

Milestones act as a signal to potential investors and other stakeholders what to expect from your venture and when to expect it. They also signal whether the venture is progressing and growing as expected.

Implementation Timeline

The implementation timeline is where you describe where your company is in its lifespan . You should set a timeline to reach your goals and milestones. This should include a short-term timeframe as well as where you anticipate being in the long term.

This section of the business plan should not be long. A simple chart will do. You can find several free timeline templates online to plug in your milestones and the time frame you expect to achieve them.

You will also want to include a section in your business plan showing that you understand the critical risks that your business may be subject to . The risks you will face in your business include both internal and external risks. These are any areas that expose your venture to any kind of loss- assets, customers, sales, profits, and reputation, among others.

By exploring your assumptions and identifying possible risks in those assumptions, you can show that you have assessed and are prepared to handle risks and threats that may arise. There are several tools available to analyze business risks, including SWOT Analysis and contingency planning .

SWOT Analysis

You may want to conduct a SWOT analysis or even include it in your business plan. A SWOT analysis is an analysis of your strengths, weaknesses, opportunities, and threats.

A SWOT analysis can help you understand your industry and market, your venture, and the strategies that you should pursue.

To conduct a SWOT analysis, you will need to assess factors both inside and outside your venture.

Here is how to conduct your own:

• What does your company do well?
• What are your company’s advantages?
• What do you do better than your competitors?
• What unique or low-cost assets do you have access to?
• What does your company not do well?
• What are your company’s disadvantages?
• What do your competitors do better than you?
• What needs to be improved?
• Where can you improve?
• Where can you grow?
• How can you turn your strengths into opportunities?
• How can you turn your weaknesses into opportunities?
• Do the trends of the industry or market represent a threat?
• Is the number of competitors growing?
• Do changes in technology or regulation threaten your success?
• Do your weaknesses represent a threat?

Contingency Plans

After assessing your risks and your SWOT analysis, you should address any major threats or risks that your venture faces with contingency plans.

Contingency plans are plans to help mitigate these risks by establishing a plan of action should an adverse event happen.

Contingency plans show that you understand the threats and risks to your venture, and you have a plan in place to lessen the damage should these risks emerge. There are various ways to prepare for adverse events. One is through planning- identifying alternatives and determining the best course of action. Another is business insurance.

Business Insurance

Business insurance protects against risk from several sources. The type of business insurance you will need varies greatly depending on the nature of your business.

While there are standard types of coverage like general liability insurance , professional liability insurance , workers’ compensation , insurance for commercial property and commercial auto insurance , there are also insurance policies that cover specific business activities and specialized equipment.

You can bundle most of these into what is called a Business Owner’s Policy (BOP) by a trusted insurance provider to get you started doing business.

Financial Statements

Your financial statements should include detailed projections of your income statement , cash flow statement, and balance sheet for the first year. You should also provide quarterly projections for the first three (or preferably five) years as well.

You also will likely need to include some sort of financial statement in your business plan. If you are a new venture, you will supply pro forma financial statements. Pro forma financial statements are simply financial projections.

Financial statements can help you to evaluate the cash needs of your venture, determine whether your venture is feasible and desirable, compare your expected returns with the alternatives, identify milestones and benchmarks, and demonstrate the value of your venture to investors.

Financial Assumptions

Before you begin completing your financial statements, you should first sit down and list the assumptions you will rely on to project your financial statements .

These should include projections concerning your:

• Initial revenue level per month
• Your growth and factors affecting growth
• Your inventory and inventory turnover
• And your operating expenses.

One of the biggest mistakes new ventures make is in making unrealistic assumptions .

Remember, revenue assumptions are key assumptions in determining whether your business will be viable. However, many entrepreneurs are overly optimistic about their revenue assumptions and tend to underestimate their expenses.

In order to make more accurate financial assumptions, back up your assumptions with data whenever possible. To find data to back up your assumptions, look for things like industry averages, market trends, and comparisons with similar ventures. You should already have a substantial amount of this data from your industry and market research.

Pro Forma Income Statements

The income statement , also known as the profit and loss statement , is a statement that shows the projections of your venture’s income and expenses over a fiscal year. On the income statement, you will detail your revenue and sources of revenue based on the assumptions you have made. You will also detail your anticipated expenses and use these to estimate your net income.

The typical income statement includes:

• Revenue —  the total amount of sales, or revenue, projected to be brought in by your business.
• Cost of Goods Sold —  the total direct cost of producing your product or delivering your service.
• Gross Margin —  the difference between revenue and cost of goods sold.
• Operating Expenses —  this section of your income statement details all of the expenses associated with operating your business. Common operating expenses might include rent, utilities, office
• expenses, salary expenses, and marketing and advertising expenses, among others.
• Total Operating Expenses —  the total of your operating expenses, excluding interest, depreciation, and taxes.
• Operating Income —  the difference between your gross margin and operating expenses.
• Interest, Depreciation, and Taxes —  this section of your income statement lists your non-operating expenses- expenses such as interest, depreciation, amortization, and taxes.
• Net Profit —  the total of how much you actually made. This is calculated by subtracting interest, depreciation, and taxes from your operating income.

Pro Forma Cash Flow Statements

The cash flow statement is a financial statement that shows when and where cash (and cash equivalents) flow in and out of your venture. This tells you how much cash you will have on hand at any single point in time.

• Cash from Operating —  Cash flowing into and out of your venture from operating, beginning with “cash on hand.” Cash flowing into your venture from operating includes cash from sales, payments from credit sales, investment income, and any other types of cash income related to operations. Cash flowing out of your venture from operations, your expenses, includes costs of raw goods, materials, inventory, salary expenses, office expenses, marketing and advertising expenses, rent, interest, taxes, insurance, or any other expenses that are paid by the venture.
• Capital Cash Flow —  Cash flow, in or out of the venture, for capital assets such as the purchase or sale of fixed assets.
• Cash from Financing —  Cash flow from financing includes cash flowing in or out of your venture relating to venture financing activities. Inflows of cash from financing include the investments by founders or owners, any loans taken out during the period, or the issuance of any equity. The outflow of cash from financing may include the payment of the principal of any loans, along with the repurchase of any outstanding equity.

Pro Forma Balance Sheet

The balance sheet is a financial statement that balances a venture's finances at a specific point in time. It describes how much the company is worth. The balance sheet uses the accounting equation: assets = liabilities + equity . In fact, these are the main components of the balance sheet:

• Assets —  Resources that hold economic value. A business's assets include current assets and fixed assets. Current assets are resources that can be accessed in the short term. These include cash, accounts receivable, inventory, and other currently available resources. Fixed assets are resources that are intended for long-term use but hold economic value. These include land and buildings, machinery and equipment, furniture and fixtures, vehicles, and other fixed resources.
• Liabilities —  What the business owes. Like assets, a business’s liabilities are also current liabilities and long-term liabilities. Current liabilities are liabilities that are due within 12 months. Current liabilities include accounts payable, loans, and taxes. Long-term liabilities are liabilities that are due after one year. These include long-term loans, notes, and other long-term debts.
• Equity —  What the owners or shareholders own. Equity is also composed of two parts: Capital and Retained Earnings. Retained earnings is the amount of profit that has been retained by the company over the life of the venture. Capital earnings , then, is what’s left. It is what has been invested. For new ventures, this may be the founder’s or early investors’ initial investments. For larger corporations, this would be the value of their shares of stock.

Break-Even Analysis

The break-even analysis shows you how much you have to sell before you break even. The break-even analysis uses fixed and variable costs in order to determine the sales volume you have to attain to reach a break-even point. This is the point where your sales volume covers both your fixed costs and your variable costs.

The break-even point is most often expressed as a number of units. You can calculate the break-even point by dividing fixed cost by the average profit per unit (average price per unit minus the variable cost).

Break-Even Point = Fixed Costs/ Profit Per Unit (Avg. Price - Avg. Variable Costs)

You can also calculate the break-even point in terms of $ of sales. To calculate the break-even point in $ of sales, you can divide total fixed costs for the period by the contribution margin ratio (net sales minus total variable cost / net sales).

Break-Even Point ($ of Sales) = Fixed Costs / Contribution Margin Ratio Contribution Margin Ratio = (Net Sales - Total Variable Cost) / Net Sales

Startup/Funds Required

If you are writing your business plan for the purpose of seeking funding, you should conclude your business plan by describing the investment opportunity.

With your financial projections in place, you will now be able to determine the amount of startup capital or investment you require.

This is because the funding you need is highly dependent on your profit and loss, cash flow, and break-even point. With well-researched assumptions and the evidence to back them up, you are ready to make the case that your business is worth the investment and will be able to pay it back or reward investors in the future.

In this section of the business plan, you will need to explain the amount of funding you are requesting as well as describe what those funds will be used for. The startup funding request will need to cover all expenses (maybe even your own personal expenses) at least until you reach your break-even point.

Business Plan Appendices (Optional)

If you have additional evidence to support your business idea, your business model, or your ability to achieve your goals and meet your financial objectives, you may want to consider including it as an appendix to your business plan.

Additional / Optional Evidence

Owners’ Resumes —  One thing you may want to consider including in your business plan is the resume for each owner. Investors often invest as much in the startup team as they do in the idea itself. Illustrations of Product —  Another helpful appendix is pictures or illustrations of your product. These are especially helpful for new products or those which are difficult to depict with words. Storyboard of Customer Experience — If your business is a service business, you could also consider including a storyboard depicting your customer’s experience. Customer Survey Results — You can also include any market research that you have conducted in an appendix. Showing that you have solicited feedback from real customers or potential customers provides further credence to your venture and venture idea.

Develop Your Business Idea

Before writing your business plan, it is important to take some time to develop your business idea .

If you are starting a new company, there are likely many details of the venture that have not been fully worked through. If you already have an existing venture, the following tools can also be useful in evaluating your business model:

• A three-sentence business plan

The Lean Canvas

The business model canvas, three-sentence business plan.

An easy place to start is with a three-sentence business plan . The three-sentence business plan is easy to construct, and consists of three parts:

• your product or service
• your market and marketing
• your revenue model.

Your Product or Service

The first sentence of your business plan clearly yet simply states your business's primary product or service. This includes the what and the where.

Example: “CoffeeMe is an upscale bakery and coffee shop specializing in imported coffees and international delicacies that will be located in downtown Atlanta.”

Your Market(ing)

The second sentence of your three-sentence business plan describes who your target market is and how you will promote to them.

Example: “CoffeeMe’s target market is urban professionals living and working in downtown Atlanta, marketed and promoted through traditional advertising, company partnerships, and social media.”

Your Revenue Model

The third sentence of your three-sentence business plan explains your revenue model. How will you make money?

Example: “CoffeeMe’s revenue model includes one-time retail sales as well as a unique subscription model featuring all-you-can-drink coffee for subscribers.”

Put it all together, and you have your three-sentence business plan:

Example: “CoffeeMe is an upscale bakery and coffee shop specializing in imported coffees and international delicacies that will be located in downtown Atlanta. CoffeeMe’s target market is urban professionals living and working in downtown Atlanta, marketed and promoted through traditional advertising, company partnerships, and social media. Our revenue model includes one-time retail sales as well as a unique subscription model featuring all-you-can-drink coffee for subscribers.”

Another useful tool for developing your business idea is the Lean Canvas . The Lean Canvas takes a problem-solution approach to helping you plan your business, focusing on the problems you are solving for your customers.

The Lean Canvas helps you describe and visualize your problem, solution, customers, value proposition, key performance indicators, and competitive advantage.

The steps to complete the Lean Canvas are:

• Define your target customers or users
• List the problems you are solving for them and how they are currently solving those problems today
• Describe your solution
• Explain your unique value proposition
• Describe your revenue streams
• Depict how you will reach customers
• Define the key metrics that will tell if you are doing well
• Detail your cost structure
• Explain your unfair advantage

The Lean Canvas, created by Ash Maurya, and licensed under Creative Commons Attribution-Share Alike 3.0 Unported License: https://leanstack.com/lean-canvas

The Business Model Canvas helps you describe and visualize the key aspects of your venture including your customers, value proposition, infrastructure, and revenue and cost models.

If you have already completed a Lean Canvas, you will already have several of the central parts of the Business Model Canvas complete.

The steps to complete the Business Model Canvas are:

• Explain your value proposition
• Describe how you interact with customers
• List the key activities that you will need to do to deliver on your value proposition
• List the key assets that you will need to deliver on your value proposition
• Describe the key partnerships that you will need to put in place to deliver on your value proposition

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

This is the ultimate guide to creating a comprehensive and effective plan to start a business . In today’s dynamic business landscape, having a well-crafted business plan is an important first step to securing funding, attracting partners, and navigating the challenges of entrepreneurship.

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.

Whether you’re a seasoned entrepreneur or launching your very first startup, the guide will give you the insights, tools, and confidence you need to create a solid foundation for your business.

Table of Contents

How to Write a Business Plan

Embarking on the journey of creating a successful business requires a solid foundation, and a well-crafted business plan is the cornerstone. Here is the process of writing a comprehensive business plan and the main parts of a winning business plan . From setting objectives to conducting market research, this guide will have everything you need.

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.

It’s crucial to include a clear mission statement, a brief description of your primary products or services, an overview of your target market, and key financial projections or achievements.

Think of it as an elevator pitch in written form: it should be compelling enough to engage potential investors or stakeholders and provide them with a clear understanding of what your business is about, its goals, and why it’s a promising investment.

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.

Our target market includes environmentally conscious consumers and businesses seeking to reduce their carbon footprint. We project a 200% increase in revenue within the first three years of operation.

Overview and Business Objectives

In the Overview and Business Objectives section, outline your business’s core goals and the strategic approaches you plan to use to achieve them. This section should set forth clear, specific objectives that are attainable and time-bound, providing a roadmap for your business’s growth and success.

It’s important to detail how these objectives align with your company’s overall mission and vision. Discuss the milestones you aim to achieve and the timeframe you’ve set for these accomplishments.

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

Example: EcoTech’s primary objective is to become a market leader in sustainable technology products within the next five years. Our key objectives include:

• Introducing three new products within the first two years of operation.
• Achieving annual revenue growth of 30%.
• Expanding our customer base to over 10,000 clients by the end of the third year.

Company Description

The Company Description section is your opportunity to delve into the details of your business. Provide a comprehensive overview that includes your company’s history, its mission statement, and its vision for the future.

Highlight your unique selling proposition (USP) – what makes your business stand out in the market. Explain the problems your company solves and how it benefits your customers.

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.

Example: EcoTech is committed to developing cutting-edge sustainable technology products that benefit both the environment and our customers. Our unique combination of innovative solutions and eco-friendly design sets us apart from the competition. We envision a future where technology and sustainability go hand in hand, leading to a greener planet.

Define Your Target Market

Defining Your Target Market is critical for tailoring your business strategy effectively. This section should describe your ideal customer base in detail, including demographic information (such as age, gender, income level, and location) and psychographic data (like interests, values, and lifestyle).

Elucidate on the specific needs or pain points of your target audience and how your product or service addresses these. This information will help you know your target market and develop targeted marketing strategies.

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

The Market Analysis section requires thorough research and a keen understanding of the industry. It involves examining the current trends within your industry, understanding the needs and preferences of your customers, and analyzing the strengths and weaknesses of your competitors.

This analysis will enable you to spot market opportunities and anticipate potential challenges. Include data and statistics to back up your claims, and use graphs or charts to illustrate market trends.

This section should demonstrate that you have a deep understanding of the market in which you operate and that your business is well-positioned to capitalize on its opportunities.

Example: The market for eco-friendly technology products has experienced significant growth in recent years, with an estimated annual growth rate of 10%. As consumers become increasingly aware of environmental issues, the demand for sustainable solutions continues to rise.

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

A SWOT analysis in your business plan offers a comprehensive examination of your company’s internal and external factors. By assessing Strengths, you showcase what your business does best and where your capabilities lie.

Weaknesses involve an honest introspection of areas where your business may be lacking or could improve. Opportunities can be external factors that your business could capitalize on, such as market gaps or emerging trends.

Threats include external challenges your business may face, like competition or market changes. This analysis is crucial for strategic planning, as it helps in recognizing and leveraging your strengths, addressing weaknesses, seizing opportunities, and preparing for potential threats.

Including a SWOT analysis demonstrates to stakeholders that you have a balanced and realistic understanding of your business in its operational context.

• Innovative and eco-friendly product offerings.
• Strong commitment to sustainability and environmental responsibility.
• Skilled and experienced team with expertise in technology and sustainability.

Weaknesses:

• Limited brand recognition compared to established competitors.
• Reliance on third-party manufacturers for product development.

Opportunities:

• Growing consumer interest in sustainable products.
• Partnerships with environmentally-focused organizations and influencers.
• Expansion into international markets.
• Intense competition from established technology companies.
• Regulatory changes could impact the sustainable technology market.

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.

By conducting a thorough competitive analysis, you can gain insights into your competitors’ strengths and weaknesses, enabling you to develop strategies to differentiate your business and gain a competitive advantage in the marketplace.

Example: Key competitors include:

GreenTech: A well-known brand offering eco-friendly technology products, but with a narrower focus on energy-saving devices.

EarthSolutions: A direct competitor specializing in sustainable technology, but with a limited product range and higher prices.

By offering a diverse product portfolio, competitive pricing, and continuous innovation, we believe we can capture a significant share of the growing sustainable technology market.

Organization and Management Team

Provide an overview of your company’s organizational structure, including key roles and responsibilities. Introduce your management team, highlighting their expertise and experience to demonstrate that your team is capable of executing the business plan successfully.

Showcasing your team’s background, skills, and accomplishments instills confidence in investors and other stakeholders, proving that your business has the leadership and talent necessary to achieve its objectives and manage growth effectively.

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

Describe the products or services your business offers, focusing on their unique features and benefits. Explain how your offerings solve customer pain points and why they will choose your products or services over the competition.

This section should emphasize the value you provide to customers, demonstrating that your business has a deep understanding of customer needs and is well-positioned to deliver innovative solutions that address those needs and set your company apart from competitors.

Example: EcoTech offers a range of eco-friendly technology products, including energy-efficient lighting solutions, solar chargers, and smart home devices that optimize energy usage. Our products are designed to help customers reduce energy consumption, minimize waste, and contribute to a cleaner environment.

Marketing and Sales Strategy

In this section, articulate your comprehensive strategy for reaching your target market and driving sales. Detail the specific marketing channels you plan to use, such as social media, email marketing, SEO, or traditional advertising.

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.

Discuss how these marketing and sales efforts will work together to attract and retain customers, generate leads, and ultimately contribute to achieving your business’s revenue goals.

This section is critical to convey to investors and stakeholders that you have a well-thought-out approach to market your business effectively and drive sales growth.

Example: Our marketing strategy includes digital advertising, content marketing, social media promotion, and influencer partnerships. We will also attend trade shows and conferences to showcase our products and connect with potential clients. Our sales strategy involves both direct sales and partnerships with retail stores, as well as online sales through our website and e-commerce platforms.

Logistics and Operations Plan

The Logistics and Operations Plan is a critical component that outlines the inner workings of your business. It encompasses the management of your supply chain, detailing how you acquire raw materials and manage vendor relationships.

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.

Quality control measures are essential to maintain product standards and customer satisfaction. This plan assures investors and stakeholders of your operational competency and readiness to meet business demands.

Highlighting your commitment to operational efficiency and customer satisfaction underlines your business’s capability to maintain smooth, effective operations even as it scales.

Example: EcoTech partners with reliable third-party manufacturers to produce our eco-friendly technology products. Our operations involve maintaining strong relationships with suppliers, ensuring quality control, and managing inventory.

We also prioritize efficient distribution through various channels, including online platforms and retail partners, to deliver products to our customers in a timely manner.

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.

Ground these projections in solid assumptions based on your market analysis, industry benchmarks, and realistic growth scenarios. Break down revenue streams and include an analysis of the cost of goods sold, operating expenses, and potential investments.

This section should also discuss your break-even analysis, cash flow projections, and any assumptions about external funding requirements.

By presenting a thorough and data-backed financial forecast, you instill confidence in potential investors and lenders, showcasing your business’s potential for profitability and financial stability.

This forward-looking financial plan is crucial for demonstrating that you have a firm grasp of the financial nuances of your business and are prepared to manage its financial health effectively.

Example: Over the next three years, we expect to see significant growth in revenue, driven by new product launches and market expansion. Our financial projections include:

• Year 1: $1.5 million in revenue, with a net profit of $200,000.
• Year 2: $3 million in revenue, with a net profit of $500,000.
• Year 3: $4.5 million in revenue, with a net profit of $1 million.

These projections are based on realistic market analysis, growth rates, and product pricing.

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.

Regularly reviewing and analyzing your income statement allows you to monitor the health of your business, evaluate the effectiveness of your strategies, and make data-driven decisions to optimize profitability and growth.

Example: The income statement for EcoTech’s first year of operation is as follows:

• Revenue: $1,500,000
• Cost of Goods Sold: $800,000
• Gross Profit: $700,000
• Operating Expenses: $450,000
• Net Income: $250,000

This statement highlights our company’s profitability and overall financial health during the first year of operation.

Cash Flow Statement

A cash flow statement is a crucial part of a financial business plan that shows the inflows and outflows of cash within your business. It helps you monitor your company’s liquidity, ensuring you have enough cash on hand to cover operating expenses, pay debts, and invest in growth opportunities.

By including a cash flow statement in your business plan, you demonstrate your ability to manage your company’s finances effectively.

Example:  The cash flow statement for EcoTech’s first year of operation is as follows:

Operating Activities:

• Depreciation: $10,000
• Changes in Working Capital: -$50,000
• Net Cash from Operating Activities: $210,000

Investing Activities:

•  Capital Expenditures: -$100,000
• Net Cash from Investing Activities: -$100,000

Financing Activities:

• Proceeds from Loans: $150,000
• Loan Repayments: -$50,000
• Net Cash from Financing Activities: $100,000
• Net Increase in Cash: $210,000

This statement demonstrates EcoTech’s ability to generate positive cash flow from operations, maintain sufficient liquidity, and invest in growth opportunities.

Tips on Writing a Business Plan

1. Be clear and concise: Keep your language simple and straightforward. Avoid jargon and overly technical terms. A clear and concise business plan is easier for investors and stakeholders to understand and demonstrates your ability to communicate effectively.

2. Conduct thorough research: Before writing your business plan, gather as much information as possible about your industry, competitors, and target market. Use reliable sources and industry reports to inform your analysis and make data-driven decisions.

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.

4. Focus on your unique selling proposition (USP): Clearly articulate what sets your business apart from the competition. Emphasize your USP throughout your business plan to showcase your company’s value and potential for success.

5. Be flexible and adaptable: A business plan is a living document that should evolve as your business grows and changes. Be prepared to update and revise your plan as you gather new information and learn from your experiences.

6. Use visuals to enhance understanding: Include charts, graphs, and other visuals to help convey complex data and ideas. Visuals can make your business plan more engaging and easier to digest, especially for those who prefer visual learning.

7. Seek feedback from trusted sources: Share your business plan with mentors, industry experts, or colleagues and ask for their feedback. Their insights can help you identify areas for improvement and strengthen your plan before presenting it to potential investors or partners.

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.

The template is divided into the following sections:

• Mission statement
• Business Overview
• Key products or services
• Target market
• Financial highlights
• Company goals
• Strategies to achieve goals
• Measurable, time-bound objectives
• Company History
• Mission and vision
• Unique selling proposition
• Demographics
• Psychographics
• Pain points
• Industry trends
• Customer needs
• Competitor strengths and weaknesses
• Opportunities
• Competitor products and services
• Market positioning
• Pricing strategies
• Organizational structure
• Key roles and responsibilities
• Management team backgrounds
• Product or service features
• Competitive advantages
• Marketing channels
• Advertising campaigns
• Promotional activities
• Sales strategies
• Supply chain management
• Inventory control
• Production processes
• Quality control measures
• Projected revenue
• Assumptions
• Cash inflows
• Cash outflows
• Net cash flow

What is a Business Plan?

A business plan is a strategic document that outlines an organization’s goals, objectives, and the steps required to achieve them. It serves as a roadmap as you start a business , guiding the company’s direction and growth while identifying potential obstacles and opportunities.

Typically, a business plan covers areas such as market analysis, financial projections, marketing strategies, and organizational structure. It not only helps in securing funding from investors and lenders but also provides clarity and focus to the management team.

A well-crafted business plan is a very important part of your business startup checklist because it fosters informed decision-making and long-term success.

Why You Should Write a Business Plan

Understanding the importance of a business plan in today’s competitive environment is crucial for entrepreneurs and business owners. Here are five compelling reasons to write a business plan:

• Attract Investors and Secure Funding : A well-written business plan demonstrates your venture’s potential and profitability, making it easier to attract investors and secure the necessary funding for growth and development. It provides a detailed overview of your business model, target market, financial projections, and growth strategies, instilling confidence in potential investors and lenders that your company is a worthy investment.
• Clarify Business Objectives and Strategies : Crafting a business plan forces you to think critically about your goals and the strategies you’ll employ to achieve them, providing a clear roadmap for success. This process helps you refine your vision and prioritize the most critical objectives, ensuring that your efforts are focused on achieving the desired results.
• Identify Potential Risks and Opportunities : Analyzing the market, competition, and industry trends within your business plan helps identify potential risks and uncover untapped opportunities for growth and expansion. This insight enables you to develop proactive strategies to mitigate risks and capitalize on opportunities, positioning your business for long-term success.
• Improve Decision-Making : A business plan serves as a reference point so you can make informed decisions that align with your company’s overall objectives and long-term vision. By consistently referring to your plan and adjusting it as needed, you can ensure that your business remains on track and adapts to changes in the market, industry, or internal operations.
• Foster Team Alignment and Communication : A shared business plan helps ensure that all team members are on the same page, promoting clear communication, collaboration, and a unified approach to achieving the company’s goals. By involving your team in the planning process and regularly reviewing the plan together, you can foster a sense of ownership, commitment, and accountability that drives success.

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:

• Startup Business Plan: Tailored for new ventures, a startup business plan outlines the company’s mission, objectives, target market, competition, marketing strategies, and financial projections. It helps entrepreneurs clarify their vision, secure funding from investors, and create a roadmap for their business’s future. Additionally, this plan identifies potential challenges and opportunities, which are crucial for making informed decisions and adapting to changing market conditions.
• Internal Business Plan: This type of plan is intended for internal use, focusing on strategies, milestones, deadlines, and resource allocation. It serves as a management tool for guiding the company’s growth, evaluating its progress, and ensuring that all departments are aligned with the overall vision. The internal business plan also helps identify areas of improvement, fosters collaboration among team members, and provides a reference point for measuring performance.
• Strategic Business Plan: A strategic business plan outlines long-term goals and the steps to achieve them, providing a clear roadmap for the company’s direction. It typically includes a SWOT analysis, market research, and competitive analysis. This plan allows businesses to align their resources with their objectives, anticipate changes in the market, and develop contingency plans. By focusing on the big picture, a strategic business plan fosters long-term success and stability.
• Feasibility Business Plan: This plan is designed to assess the viability of a business idea, examining factors such as market demand, competition, and financial projections. It is often used to decide whether or not to pursue a particular venture. By conducting a thorough feasibility analysis, entrepreneurs can avoid investing time and resources into an unviable business concept. This plan also helps refine the business idea, identify potential obstacles, and determine the necessary resources for success.
• Growth Business Plan: Also known as an expansion plan, a growth business plan focuses on strategies for scaling up an existing business. It includes market analysis, new product or service offerings, and financial projections to support expansion plans. This type of plan is essential for businesses looking to enter new markets, increase their customer base, or launch new products or services. By outlining clear growth strategies, the plan helps ensure that expansion efforts are well-coordinated and sustainable.
• Operational Business Plan: This type of plan outlines the company’s day-to-day operations, detailing the processes, procedures, and organizational structure. It is an essential tool for managing resources, streamlining workflows, and ensuring smooth operations. The operational business plan also helps identify inefficiencies, implement best practices, and establish a strong foundation for future growth. By providing a clear understanding of daily operations, this plan enables businesses to optimize their resources and enhance productivity.
• Lean Business Plan: A lean business plan is a simplified, agile version of a traditional plan, focusing on key elements such as value proposition, customer segments, revenue streams, and cost structure. It is perfect for startups looking for a flexible, adaptable planning approach. The lean business plan allows for rapid iteration and continuous improvement, enabling businesses to pivot and adapt to changing market conditions. This streamlined approach is particularly beneficial for businesses in fast-paced or uncertain industries.
• One-Page Business Plan: As the name suggests, a one-page business plan is a concise summary of your company’s key objectives, strategies, and milestones. It serves as a quick reference guide and is ideal for pitching to potential investors or partners. This plan helps keep teams focused on essential goals and priorities, fosters clear communication, and provides a snapshot of the company’s progress. While not as comprehensive as other plans, a one-page business plan is an effective tool for maintaining clarity and direction.
• Nonprofit Business Plan: Specifically designed for nonprofit organizations, this plan outlines the mission, goals, target audience, fundraising strategies, and budget allocation. It helps secure grants and donations while ensuring the organization stays on track with its objectives. The nonprofit business plan also helps attract volunteers, board members, and community support. By demonstrating the organization’s impact and plans for the future, this plan is essential for maintaining transparency, accountability, and long-term sustainability within the nonprofit sector.
• Franchise Business Plan: For entrepreneurs seeking to open a franchise, this type of plan focuses on the franchisor’s requirements, as well as the franchisee’s goals, strategies, and financial projections. It is crucial for securing a franchise agreement and ensuring the business’s success within the franchise system. This plan outlines the franchisee’s commitment to brand standards, marketing efforts, and operational procedures, while also addressing local market conditions and opportunities. By creating a solid franchise business plan, entrepreneurs can demonstrate their ability to effectively manage and grow their franchise, increasing the likelihood of a successful partnership with the franchisor.

Using Business Plan Software

Creating a comprehensive business plan can be intimidating, but business plan software can streamline the process and help you produce a professional document. These tools offer a number of benefits, including guided step-by-step instructions, financial projections, and industry-specific templates. Here are the top 5 business plan software options available to help you craft a great business plan.

1. LivePlan

LivePlan is a popular choice for its user-friendly interface and comprehensive features. It offers over 500 sample plans, financial forecasting tools, and the ability to track your progress against key performance indicators. With LivePlan, you can create visually appealing, professional business plans that will impress investors and stakeholders.

2. Upmetrics

Upmetrics provides a simple and intuitive platform for creating a well-structured business plan. It features customizable templates, financial forecasting tools, and collaboration capabilities, allowing you to work with team members and advisors. Upmetrics also offers a library of resources to guide you through the business planning process.

Bizplan is designed to simplify the business planning process with a drag-and-drop builder and modular sections. It offers financial forecasting tools, progress tracking, and a visually appealing interface. With Bizplan, you can create a business plan that is both easy to understand and visually engaging.

Enloop is a robust business plan software that automatically generates a tailored plan based on your inputs. It provides industry-specific templates, financial forecasting, and a unique performance score that updates as you make changes to your plan. Enloop also offers a free version, making it accessible for businesses on a budget.

5. Tarkenton GoSmallBiz

Developed by NFL Hall of Famer Fran Tarkenton, GoSmallBiz is tailored for small businesses and startups. It features a guided business plan builder, customizable templates, and financial projection tools. GoSmallBiz also offers additional resources, such as CRM tools and legal document templates, to support your business beyond the planning stage.

Business Plan FAQs

What is a good business plan.

A good business plan is a well-researched, clear, and concise document that outlines a company’s goals, strategies, target market, competitive advantages, and financial projections. It should be adaptable to change and provide a roadmap for achieving success.

What are the 3 main purposes of a business plan?

The three main purposes of a business plan are to guide the company’s strategy, attract investment, and evaluate performance against objectives. Here’s a closer look at each of these:

• It outlines the company’s purpose and core values to ensure that all activities align with its mission and vision.
• It provides an in-depth analysis of the market, including trends, customer needs, and competition, helping the company tailor its products and services to meet market demands.
• It defines the company’s marketing and sales strategies, guiding how the company will attract and retain customers.
• It describes the company’s organizational structure and management team, outlining roles and responsibilities to ensure effective operation and leadership.
• It sets measurable, time-bound objectives, allowing the company to plan its activities effectively and make strategic decisions to achieve these goals.
• It provides a comprehensive overview of the company and its business model, demonstrating its uniqueness and potential for success.
• It presents the company’s financial projections, showing its potential for profitability and return on investment.
• It demonstrates the company’s understanding of the market, including its target customers and competition, convincing investors that the company is capable of gaining a significant market share.
• It showcases the management team’s expertise and experience, instilling confidence in investors that the team is capable of executing the business plan successfully.
• It establishes clear, measurable objectives that serve as performance benchmarks.
• It provides a basis for regular performance reviews, allowing the company to monitor its progress and identify areas for improvement.
• It enables the company to assess the effectiveness of its strategies and make adjustments as needed to achieve its objectives.
• It helps the company identify potential risks and challenges, enabling it to develop contingency plans and manage risks effectively.
• It provides a mechanism for evaluating the company’s financial performance, including revenue, expenses, profitability, and cash flow.

Can I write a business plan by myself?

Yes, you can write a business plan by yourself, but it can be helpful to consult with mentors, colleagues, or industry experts to gather feedback and insights. There are also many creative business plan templates and business plan examples available online, including those above.

We also have examples for specific industries, including a using food truck business plan , salon business plan , farm business plan , daycare business plan , and restaurant business plan .

Is it possible to create a one-page business plan?

Yes, a one-page business plan is a condensed version that highlights the most essential elements, including the company’s mission, target market, unique selling proposition, and financial goals.

How long should a business plan be?

A typical business plan ranges from 20 to 50 pages, but the length may vary depending on the complexity and needs of the business.

What is a business plan outline?

A business plan outline is a structured framework that organizes the content of a business plan into sections, such as the executive summary, company description, market analysis, and financial projections.

What are the 5 most common business plan mistakes?

The five most common business plan mistakes include inadequate research, unrealistic financial projections, lack of focus on the unique selling proposition, poor organization and structure, and failure to update the plan as circumstances change.

What questions should be asked in a business plan?

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?

What’s the difference between a business plan and a strategic plan?

A business plan focuses on the overall vision, goals, and tactics of a company, while a strategic plan outlines the specific strategies, action steps, and performance measures necessary to achieve the company’s objectives.

How is business planning for a nonprofit different?

Nonprofit business planning focuses on the organization’s mission, social impact, and resource management, rather than profit generation. The financial section typically includes funding sources, expenses, and projected budgets for programs and operations.

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How to Write an Online Business Plan in 2024

Written by Vanessa Petersen on July 26, 2023 Blog , Sell Online .

You’ve committed to turning your ecommerce or online business idea into something real. You want your small business to produce revenue and change the course of your life, but what’s your first step in realizing your dream? Developing a plan. If you’re not sure about how to write an online business plan, you’ve come to the right place.

One of the most essential tasks involved in starting any kind of business is to write a business plan. An online business plan won’t look that different from a traditional business plan and will include many of the same elements.

In this post, we’ll show you how to write an online business plan, including all the components and sections. We’ll also walk through how WooCommerce can help you put your plan to action and achieve your business goals.

Why write a business plan? 

Starting your own business is a great experience and something that will shape your life, fill you with self-confidence and independence, and inspire other people around you. A new business is also a serious endeavor that will take time, money, sweat, lots of decisions, and a degree of risk.

A traditional business plan template helps you document and keep track of your business goals, challenges, opportunities, and all the steps and processes involved with making your idea work. It will help you conduct thorough market research and set you up for success.

When you write a business plan, it can confirm that you’ve found the best online business to start , or provide clarity about the need to pivot.

It details all the things you will need to do in order to successfully launch and grow your business, and may include revenue projections, timelines for specific goals, concept art for products, and architectural drawings for any brick and mortar aspects of your business. 

Business plans help create a structure for your company’s development and keep you grounded in reality, focused, and not distracted by less important matters. 

If you have more than one person helping run the business, the business plan also keeps everyone unified around the same set of goals and objectives. 

Another reason to write a business plan is for situations where you are presenting your idea to someone else and asking them to invest. In that scenario, your business plan is also a sort of sales document. It makes the argument for why your business idea is so good and well-considered that an investor should want to be a part of it. 

But even if you’re self-funding your entire business — which is more common with online businesses — you still want to write the plan for the reasons given earlier.

The benefits of running an online business

Starting an online business or ecommerce store offers many of the same great benefits as any other business, but without as much risk. If you’re thinking of starting a business, here’s why an online one is a great option:

It has low startup costs

Without a storefront, you eliminate so many costs of running a business. With all the bills that come with having property — like rent, parking, furnishings and decor, etc. — there’s a much higher investment required to start a brick-and-mortar-based business. Online businesses still have startup costs, but they are much lower. 

It gives you freedom over your schedule

With an online business, you have more freedom to set your own hours, because you don’t always have to be open during the usual times. You can build your business to suit the lifestyle you want. Rearrange your time to get things done in the fastest possible way and take time off when you need it. 

You can start small

Once you have a location, it’s yours, and you have to make it work. With an online business, you can start very small, offering just a few products or even just a single service. You can more easily test the waters without making huge commitments with inventory, and other physical investments.

You can more easily pivot

If your online or ecommerce business doesn’t do as well as you expected, it’s easier to pivot and adapt to something new because you haven’t committed so much to making your original idea work. There are many business success stories where the business owner adjusted their idea after gaining some experience, and then it took off. It’s a lot easier to do that when you aren’t tied to a physical location.

But, there’s one thing online businesses have in common with every other type of business: You need a robust business plan to help guide your idea from concept to a successful reality that makes money and fulfills your dreams and goals. 

So, let’s get into business planning. 

How do I write my own online business plan?

Most formal business plans and business plan templates include seven sections, plus an executive summary. You’ll need to keep in mind who you’re writing your business plan for. If you are taking this to potential investors or will be seeking a business loan, your business plan needs to sell the idea of your business as a great investment opportunity and communicate the skills, expertise, and commitment you personally bring to the table. 

Here are the key sections of a traditional business plan format:

• Executive summary
• Company description
• Market analysis
• Organization and management
• Service and product line
• Sales and marketing plans
• Financial projections
• Funding request (if working with investors or partners)

Here’s a brief look at each step of creating an online business plan:

Draft an executive summary

In the executive summary, the first section of almost every business plan template, you’ll present your vision and focus on building excitement. If the business plan is a sales document, the executive summary is the lead. It gets the reader engaged and excited to hear more. 

Your executive summary should achieve two goals:

• Deliver the basic facts about your business
• Motivate the reader to keep going and get them excited about your idea

What facts should you include? Whatever helps the reader understand your business idea. Describe the industry and niche. Mention the target market. Briefly state the needs or problems your products and services will be solving. Touch on the potential for growth in terms of revenue and customers. 

For motivation, describe your mission statement and company values. What will set you apart from the competition? What is your value proposition as a business owner? What makes you different? Again — keep this brief. You’ll elaborate later. 

It might be a good move to write all the other sections first, then finish with the executive summary so it will be the most concise and best version of how you describe your business.

Write a company description

Here, you’ll give a brief overview of your company. What are your strengths, skills, and areas of expertise as a business owner that will position you for success? If you have a compelling story behind why you’re starting your business, you can include that too.

Conduct a SWOT analysis 

If you’re not sure where to start, consider doing a SWOT analysis , which is a diagram outlining your strengths, weaknesses, opportunities, and threats. 

It’s a common part of many business plans and will help paint a realistic picture of what your business can achieve, and what stands in the way. You won’t include all of this in the company description, but your strengths and opportunities may fit here. 

Create a mission and vision statement

The company description is also the place to create a mission statement and a vision statement. What’s the difference between these? 

The vision is where you’re going, the mission is how you’ll get there. A vision statement paints a picture of a future reality for your customers and perhaps the world at large, as a result of your company’s influence. A mission statement expresses how you will achieve that.

The company description can elaborate on your vision and mission beyond just a single sentence, and later you can fine-tune what you write into a succinct pair of statements. Feeling some writer’s block? See company description templates by industry for some inspiration.

Include any unique attributes

If your company will involve particular attributes such as manufacturing, supply chains, dropshipping, affiliates, coaching or advising, online courses, or other relevant particulars, include that in your company description, too. 

State your business location, industry, niche, and other details

Also, state the location of your business, even though it’s online. Name your industry and niche target market again, and describe the nature of your company. For example, is it an ecommerce business, a consulting firm, delivery service, wholesale, or ad-based website? These are just some of many types of online business structures. 

You may also want to include whether your business is in any special class of business that might position it for special loan or grant opportunities like women-owned businesses or veteran-owned businesses.

After reading your description, readers should have a good understanding of what your business is about, why it exists, and how it works. Here’s a detailed look at company descriptions , with an example.

Perform a market analysis

A market analysis uses industry research to assess the scope of your business’s target market and describe the current competition in your industry. It can help you estimate the potential for success and prepare for the challenges you may face when you launch your online business or ecommerce shop.

Doing this research, and including it your business plan, can also help you:

• Identify industry trends
• Pinpoint opportunities 
• Diminish risks and reduce costs
• Generate new ideas for products and services
• Learn from the failures and shortcomings of your competitors
• Find ways to stand out from your competitors
• Discover new markets
• Refine your marketing plans

Now let’s dig into the elements involved in a thorough market analysis.

Understand your audience

Here, you will explain in detail who your target customers are and why they want or need what you’ll be selling. What problems or needs does your product solve? What will motivate people to buy from you? And why can’t they get it somewhere else just as easily? An ecommerce business competes against other ecommerce businesses as well as brick-and-mortar stores and shopping malls. Stores with omnichannel strategies compete with both. Why would someone choose you?

Share your key customer demographics, psychographics, and interests. Who will you be serving? What drives them? 

What are their values? If your product, service, or personal brand will appeal to a customer segment that also shares particular values, that’s a strength, not a weakness, and you can use that to win them over. 

Perform customer segmentation

Break down different categories of target customers your business plans to serve. One category could be age. Another might be life situations such as retirees, parents, divorcees, or living with older relatives. You could create a segment of people with particular health conditions, or who live certain lifestyles. 

But you can also get way more specific than that. Runners are different from hikers, who are different from bikers, yoga enthusiasts, and gym enthusiasts. Different supplements, philosophies about food, motivations for eating various foods — all of these present near endless possibilities for more narrowly defining your customer segments, all under the broad category of ‘health.’ And you might serve multiple segments. 

The more customer segments you know, the more effectively you can market to them. In an online store, good product descriptions call out the various customer segments that product is designed for.

Also, give a sense of the potential size of your target market. How many people need what you’re selling? Show how this market is large enough to justify your business and drive revenue. You might do this by studying revenue reports from other companies in your industry. Or look at specific products related to yours and research their sales and revenue performance. 

You may also perform a survey of some kind, or an online quiz, and use that to express the needs your potential customers have that aren’t currently being met.

Perform a competitive analysis

Study your competition. What are they doing well? What areas are they underserving? Where are they underperforming? Make note of what other companies in your industry are struggling with or failing at so that you can deliver something more valuable and gain a competitive advantage.

It could be product quality, customer service, or selection. Maybe their ecommerce store is badly designed and hard to use. Perhaps there’s a huge industry serving the masses, but customers who have more particular tastes or needs aren’t being well-served by the big companies. Those customers might spend more on something that delivers what they really want. 

Maybe your key competition has been rocked by scandal. Maybe a company went out of business, was sold, or closed down due to retirement and there’s an opening in the market you want to leverage. 

The main point of the competitive analysis is to persuade investors that there’s an underserved market that your business plans to cater to. You must be able to promise something that no one else is currently delivering. Otherwise, why should your business exist? Put them at ease by demonstrating proper market research.

Refer to your SWOT analysis and present any potential threats from the competition here, too.

Outline management and organizational structure

Next, present your management and legal structure. Is your company an LLC, sole proprietorship, S corporation, partnership, or some other arrangement? Who’s in charge of what? If you have different departments, list out the leadership for each one. If relevant, you might even include some information about the expertise of your leaders concerning the areas under their charge and the tasks they’ll be performing.

Remember — if your business plan will be used to persuade investors to help fund your business idea, this sort of information will reassure them that your company has strong and competent leadership. 

If there’s a chain of command, use a diagram or other method for laying out who reports to whom. 

List your products and services

What are you selling? You’ll touch on this briefly in the earlier sections, but here is where you’ll expand on the details. If you have an array of similar products, such as food flavors or clothing variations, list as many as seem relevant. But focus on the spirit of the business plan — you’re simply communicating what your business is about, not listing every SKU in your projected inventory. 

Also, include information about your products such as quality, durability, expirations, patents, and whatever else will give a clear picture of what you’re selling.

For service businesses and memberships that may include multiple packages, bundles, or tiers, describe each of these so your readers get a sense of how you’ll appeal to different types of customers and price points. 

Develop a sales and marketing strategy

Having products is great, but how do you intend to sell them? How will people find your business? How will anyone know you exist? And once they know, what will motivate them to buy from you and not from your competition? What is your unique value proposition — the thing that sets you apart from your direct competitors?

You’ll need to develop an initial marketing plan to help promote your business, products, and services to your target customers.

And remember, competition isn’t limited just to other businesses. Sometimes, competition is against the customer’s time, or their budget, or mere indifference — the conflict between doing something and doing nothing. Your SWOT analysis should touch on several of these potential barriers to the success of your online business.

Your marketing plan will obviously change over time, but give your readers and potential investors a sense of how you plan to launch and grow your business. 

Discuss media channels you plan to use, such as pay-per-click (PPC) ads , social media , email marketing , affiliate marketing , direct mail, referrals, joint ventures, search engine optimization (SEO), webinars, influencer marketing , and live events. Describe the ones you actually plan to use, and explain the core strategy you’ll begin with and how you will measure success. 

Also, include a sense of your marketing budget. If you will have a dedicated marketing team, or actual sales professionals using a particular process or sales script, discuss that as well. 

For ecommerce businesses, include a discussion of how you plan to leverage platforms like WooCommerce, which features a host of extensions that can help manage your business , engage customers, save money, and promote growth .

Make financial projections

You’ve made a lot of claims in your business plan, but how will your investors be convinced of your future success? At some point, you have to show them the money. 

If this is a brand new business with no income, where will your finances come from for the first year? Give realistic financial projections for anticipated profits and losses, as well as growth expectations for the first five years. Include financial documents if you have them, including profit and loss statements, balance sheets, and cash flow statements. Include costs of employment, manufacturing, and other investments both one-time and ongoing.

Your financial projections should reference your:

• market analysis 
• anticipated sales volume 

Investors will feel more confident when they can see your business plan does not rely entirely on just one or two ‘wins.’ For example, if your entire plan hinges on selling on eBay or Amazon , what happens if Amazon suspends your store, changes the terms, or you struggle to get noticed there? 

If your plan depends on winning over a few Instagram influencers, what if they don’t come through? It’s really easy to say what you hope will happen. But actually making it happen is another thing. Business success happens more easily when you apply a multi-channel marketing and sales approach. 

Your financial projections will feel based in reality, when you can demonstrate some prior successes, either in other businesses you’ve already launched, test audiences, local sales you made, prior experience, or data from other businesses. 

Explain your funding request — if applicable

If you intend to ask investors to help fund your business idea, present your request in the final main section of your business plan. If you’ve already secured funding from other sources, include that here as well. An investor will feel better knowing they are not the only one who believes in the potential of your business. 

Will your funding request be for a one-time payment, monthly, annually, or at some other interval? How do you plan to repay their investment? Will you allow them to charge interest? How much ROI can you promise them? 

How WooCommerce can help

WooCommerce can help you build a scalable online business that supports your business plan. No matter what you’re selling, WooCommerce offers a suite of flexible tools that allows you to customize your store to meet your needs and goals. 

Here are just some of the benefits your business will enjoy when you choose to build your store with WooCommerce:

• Sell absolutely anything you can imagine . From physical items and digital downloads to subscriptions, memberships, bookings, courses, and affiliate products, WooCommerce provides everything you need. Want to run a wholesale store? You can do that, too!
• Harness the power of WordPress . Since WooCommerce is a plugin specifically for WordPress, you can take advantage of powerful features like the block editor and blogging capabilities. 
• Capture payments securely. Choose from a large number of payment gateways, from popular options like PayPal and Stripe, to more niche processors for specific locations and types of regulated products. And with tools like WooPayments , you can keep customers on-site, capture a variety of currencies, and even accept digital wallets like Apple Pay and Google Pay.
• Customize your shipping options. Offer free shipping, charge based on weight, set fixed prices, or calculate shipping costs based on real-time carrier rates. You can even use extensions like Table Rate Shipping to create complicated shipping rules based on conditions that you set. And with WooCommerce Shipping , you benefit from discounted shipping labels and the ability to print right from your dashboard. 
• Connect to your social media channels. Use extensions to sync your store with social media platforms like Facebook, Instagram, and Pinterest. You can even sell on those platforms alongside your store without having to update inventory and information manually.
• Integrate with marketing tools. Quickly connect your store to any number of marketing tools, from email platforms like MailPoet to CRMs like Jetpack CRM . You can also implement a number of marketing strategies, from abandoned cart emails to loyalty programs.
• Keep track of your numbers. Ecommerce accounting is a big part of running an online business. While you can easily view data in your dashboard, you can also sync with tools like QuickBooks to make your accountant’s life a little bit easier.
• Manage inventory. Update your inventory levels manually or connect to tools like Scanventory to sync with your warehouse. Running low or out of stock? Add a wishlist option so customers get an alert as soon as it’s available.

As you can see, WooCommerce is well-equipped to handle any type of online store and support you as you grow. Here are a few more reasons that WooCommerce should be your go-to choice for implementing the ecommerce side of your online business plan:

WooCommerce itself is free! Many extensions for WooCommerce can also be found for free in the WordPress.org plugins library or on the Woo Marketplace . If you need to start your website with a limited budget, but want to build on a platform that can grow to support a thriving, high-traffic store, WooCommerce is an excellent option.

You have full control over your store

Unlike other ecommerce solutions that are tied to the platform’s own web hosting, WooCommerce is designed to be used with WordPress along with any hosting provider of your choice. You are also free to use whatever payment processor you want without any additional fees from WooCommerce. You can also customize your site’s appearance and functionality more extensively than you can with other ecommerce platforms and with less (or no) coding knowledge.

Thousands of free and premium extensions

There are over 800 free and premium extensions for WooCommerce on WooCommerce.com alone and over 1,000 in the WordPress.org plugins library . There are also hundreds of independent developers and agencies that offer premium and custom extensions for WooCommerce so that you can customize your store with the exact features you need. 

Excellent support and large community of users

WooCommerce is used by over 3.9 million stores — 23% of all online stores worldwide . The support team is available to answer questions and the documentation library is extensive and thorough. There are also plenty of independent resources for learning how to use WordPress and WooCommerce.

Dedicate time and resources to put your online business plan in action

A successful business plan is one that empowers and guides the business owner to launch their online or ecommerce business, and possibly secure funding. But it only works if you use it.

One advantage of starting an ecommerce store or online business is that you aren’t as locked down by deadlines. With a physical location, once you start paying the rent, you better have your business plan ready to put into action. 

But the beauty of being online is that you have more flexibility on the front end. Despite having more wiggle room with your timelines, you still need to keep your momentum going forward. Staying on track with your business projects and goals is one of the keys to reaching profitability sooner and turning your business plan into reality. A few quick tips:

• Schedule your time. Block out hours and specific days to work on your business.
• Treat it like a job, not a hobby. Build on your momentum week after week.
• Always keep learning. Research your industry, competition, target audience, and potential customers. Learn marketing — you can never know too much.
• Try stuff! Take risks, make calls, create campaigns, write content.

Your business plan template should give you a concrete list of tasks and business objectives. Once you write a business plan, then you can implement it.

Frequently asked questions about writing an online business plan

What are the seven steps of a business plan.

The seven key elements of a business plan are the executive summary, company description, market analysis, organization and management, services and products, marketing plan, and financial projections. If you’re making a funding request, that would be an eighth section.

Where can I find business plan templates?

You can find a free business plan template online, for general business plans as well as for specific industries. However, since each business is different and your plan must be authentic and specific to your company — a business plan template can only get you so far. 

If you need design inspiration for your own custom business plan template or want to start with a pre-designed template that you can customize, you can purchase one for a relatively low cost through a stock resources site like Envato Market or Creative Market .

Do I need a business plan if I am already running an online business or ecommerce shop?

Business plans aren’t only for people who are launching new businesses. You can create a business plan at any time to help you maintain or change the direction of your store or just to get a better picture of the health of your business. Below are a few different types of business plans that you might want to consider for your established online business:

• Operational business plan. Outlines the structure of your business operations, staffing, and logistics.
• Feasibility plan. Feasibility plans are like mini business plans that cover new business ideas and outline steps for implementation.
• Growth business plan. This plan is for businesses that want to demonstrate opportunities and plans for growth to attract investors.
• Maturing business plan. This plan is for businesses looking to merge with or acquire other companies, significantly expand, or go public.
• Strategic business plan. Any time your business wants to shift strategies regarding products or marketing or any other major changes to your previous business plan, you’ll want to create a new strategic business plan to address your new goals and the steps involved in achieving them.

What software should I use for my online business plan?

Your business plan should include some images, graphs, and graphic elements in the layout, so you’ll want to at least use word processing software to put your business plan together. If you have access to Google Workspace, Microsoft 365, Canva, or Adobe Creative Cloud, you’ll have some other options that might lead to a more professional layout.

Here’s a list of free and paid software that can help you put together your online business plan outline:

What do investors want to see in a business plan?

The most important piece of information to show investors in your business plan is potential for profitability. Investors don’t want to throw money at a sinking ship, no matter how cool and exciting the business sounds. 

Most investors also want to make sure that they’ll see a decent return on their investment in a relatively short time period — probably around 5-7 years. How much of a return they’ll expect will depend on your industry and what kind of investor they are. 

Investors will also want to see that you clearly understand your business, your industry, and that you have concrete, actionable steps for achieving, maintaining, and growing profitability. They’ll want to make sure that the key people on your team also understand your business and the roles they play and they’ll want to see that each person has a good amount of experience in their field and the required skill sets to fulfill their job duties, if not go above and beyond. 

Any details you can include that highlight unique aspects of your business will also be important. Any area where you have a competitive edge, are offering a unique or proprietary solution, have established any celebrity endorsements, have the backing of other investors, or have secured special grants will be of special interest to investors.

Create your plan for success

Now that you understand what goes into creating a formal business plan, it’s time to write one! Take the time to think through and consider each aspect of the list included in this article, and you’ll be well on your way to finding success.

And WooCommerce is here to support your business every step of the way, with powerful and flexible tools that help your business grow. Start selling online today !

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How to Start a Business From Scratch in 6 Easy Steps

10 min. read

Updated April 30, 2024

Did you know that most of the world’s new businesses are bootstrapped ? 

That’s right, most business owners do not launch with loans or outside investment but instead use their personal resources and savings to get up and running. They start from scratch and reinvest in the business as it gains traction.

And you can do the same. 

Key Takeaways:

• Start with an idea that uses your experience, knowledge, or passion.
• Determine if there’s a need for your product or service.
• Create a plan and financial forecasts.
• Treat it like a side hustle until you get traction.
• What does it mean to start from scratch?

“Starting a business from scratch” does not mean:

• Using no money to launch your business.
• Getting no outside assistance.
• Inventing a business idea no one has done before.

Starting from scratch is about building a business from the ground up, using personal resources and minimal external financial support. The goal is to establish a sustainable business you control that satisfies a need in the market. 

• Why start a business from scratch?

Here’s why starting from scratch might be the right approach for you:

• Risk reduction: Control your initial investment and expenses and scale gradually, allowing you to avoid overspending.
• Full control: With no outside investment or stakeholders to please, you can shape your business how you see fit.
• Proves your idea has real customers: Test your concept with customers early to help refine your offering and validate market demand.
• Fast decision-making: Quickly pivot to meet changing market demands without the red tape of larger organizations.
• Potentially makes future funding easier: You take the time to prove your business model and profitability before seeking funding. Your track record reduces investor and lender risk and can lead to better funding terms.

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• 6 steps to start a new business from scratch

For this article, we will focus on the steps that take you from a budding business idea to generating sales. 

For additional resources, check out our starting a business guide .

1. Start with an idea

Do some self-reflection and choose an idea you’re passionate about or one that uses your existing skills and experience. 

This will make it far easier to execute and often requires less research, training, and upfront investment to get up and running than an idea completely new to you.

For example, service-based businesses, like accounting or consulting, often need just your time and expertise. If any cash is needed, it should be a small enough amount to fund yourself, giving you full control over the speed at which you grow your business.

As you explore possible ideas, create a one-page business plan to document how it could work. 

It doesn’t have to be an official plan at this stage; just fill in what you can, mark any assumptions, and keep adding details throughout the rest of this process.

What businesses can you typically start from scratch?

While not an exhaustive list, here are a few potential ideas that can be started from scratch:

• Freelance Writing or Content Creation: Offer writing skills to businesses and online publications.
• Consulting Services: Share your professional management, marketing, or tech expertise.
• Handmade Crafts and Art: Sell your unique creations on platforms like Etsy or at local fairs.
• Tutoring: Offer either in-person or online.
• Web Design and Development: Build websites for small businesses or individuals.
• Virtual Assistant: Provide administrative support to businesses remotely.
• Landscaping and Gardening Services: Turn your love of plants into a business with basic gardening tools.

For more business options and a process to generate ideas, check out our guide on developing good business ideas .

2. Find product-market fit

Landing on an idea is not enough to create a viable business. You need to determine if you have initial product-market fit—that your business satisfies and is demanded by a large enough group of people. 

This involves identifying your potential customers, understanding their motivations and needs, and determining whether they are willing to pay for your product or service. Additionally, spend time researching the market and understand who your competitors are. 

At this stage, you don’t need a fully fleshed-out business. You just need enough of an idea to start speaking to potential customers.  

This is where your one-page plan can be incredibly useful, as it helps you formalize enough information to have the working framework of a business. You can even add notes from your customer interviews to help adapt your plan.

Your goal, in this instance, is to:

• Hone in on pain points your potential customers have
• Verify that you can solve them
• Identify any gaps or issues with your idea
• (Bonus) Make initial sales 

Keep in mind that you may find none of that. Your solution may not be needed or is missing key components. You may even be targeting the wrong audience and need to change course.

That’s completely okay! Most businesses don’t get things right the first time. Be willing to refine and iterate on your initial idea. Verify what works and what doesn’t, and make the right adjustments to create a sustainable business that customers really want.

3. Examine your resources

While I have this as the third step, you’ll likely be doing this throughout every stage of starting a business.

Start by evaluating your funding sources. Personal savings are ideal as they keep you in full control of your business. If needed, consider asking friends and family for small contributions, as they’ll likely be much more flexible about repayment than traditional lenders.

Next, consider if a partner could benefit your venture. Do they bring complementary skills, share the workload, or offer additional resources? 

The right partner can fill crucial roles – like marketing or operations – allowing you to focus on your core strengths. They may even fill a necessary gap to get customers in the door.

Finally, don’t underestimate the power of your network. Reach out to former colleagues, industry peers, and mentors for advice, services, or referrals.

Why you need to know your available resources

Taking stock of your resources is the first step in understanding what is feasible for your business. It helps you determine whether you have enough cash, expertise, and support to meet your customers’ expectations.

For example, let’s say you want to launch an eCommerce website and have enough cash on hand to fulfill orders but require customers to pay for shipping. If you’re competing with similar businesses that offer free shipping, your lack of it could turn customers away.

Similarly, you have a solid understanding of product development and have already gotten pre-orders. But you have no idea how to set up an eCommerce site , keep track of orders, and ensure they actually ship.

In both circumstances, your resources fall short of the needs of your customers. You may have to explore funding ( it doesn’t have to be a loan ) and find a partner with the right skill set to get your site up and running. 

4. Write a business plan and develop financial forecasts

At this point, you need to finalize your business plan and create initial forecasts . 

If you’ve been using the one-page plan throughout the last few steps, then this shouldn’t be a time-consuming process. Your goal at this point is to clearly define:

• Business Model: Value proposition, customer segments, distribution channels, and revenue streams.
• Milestones: Set realistic goals (landing your first customer, scaling, etc.) with specific timelines and action steps to track progress.

For your forecasts, start by estimating your:

• Startup costs and ongoing expenses
• Revenue in the first year of operation
• Cash flow — how much money will be moving in and out of your business each month as you collect revenue and pay expenses

These numbers do not have to be perfect. You’ll likely be making educated guesses or using industry estimates. The point is to have something that you believe represents your business. It will help you maintain a healthy cash flow and understand what it will take to be profitable.

Remember, you don’t need to create an overly lengthy plan or complex financial statements. They’re your tools, so focus on usability – they should be flexible and evolve with your business, helping you make informed decisions.

Dedicate time ( at least monthly or quarterly) to reviewing and updating your plan and forecasts as you gather data to ensure your strategy aligns with real-world performance.

5. Protect your business

As a business owner, you must make your business legal and guard against liabilities. To keep things simple, we’ll assume you’re starting as a sole proprietorship for this article.

Check out our full guide to learn more about the specifics of each legal structure .

Necessary legal components for a simple startup:

• Business Registration: As a sole proprietor, you may not need to register your business with the state government if you do business under your legal name. However, if you operate under a name that’s not yours, you must file for a “Doing Business As” (DBA) name. This is often required to set up a business bank account.
• Licenses & Permits: Research local requirements for your specific business type. You may need a general business license, professional licenses, or specific permits (e.g., health and safety). Contact your city or county business office for details.
• Tax Registration: Report business income on your personal tax return. If you plan to hire employees, you’ll need to apply for an Employer Identification Number (EIN) from the IRS. Even without employees, an EIN can protect your personal information and may streamline certain business transactions. Check if you need to register for state sales tax collections.
• Insurance : Consider general liability insurance for accidents and negligence claims. Get professional liability (errors and omissions) insurance if you offer professional services.
• Contracts: Use written agreements for business partners and supplier or contractor transactions. This clarifies expectations, prevents disputes, and protects both parties. Contact a lawyer to review or help you write this documentation if needed.

6. Promote and run your business

At this point, you just need to run your business. You don’t need to go all in, either. Launch it as a side hustle until you hit the point where it can become your full-time focus.

Don’t overcomplicate it: Set up a simple website, payment system, and essential operational tools. You want to serve customers immediately and learn from real-world experience.

But unless you locked in pre-orders earlier in this process, you’ll need to market your business to do it. 

Select marketing channels you believe will reach your target customers. Start small — you want to avoid overspending while you determine the right mix of marketing tactics. If you’re unsure where to start, paid social media ads (Facebook and Instagram), email campaigns, and local partnerships can be inexpensive options.

Stick to the budget you created, run small, easily measured marketing tests, and look for a positive return on investment (i.e., bringing in more revenue from sales than you spent on advertising). 

Only consider increasing spending after you start bringing in customers.

• Continue to review and revise

You are on your way to running a sustainable business and may even have your first customers already! 

Just don’t get too far ahead of yourself. You’re still proving that there is traction that can be repeated with multiple customers. 

As you operate, review your plan and forecasts. Pay close attention to your cash flow and be willing to pivot if things aren’t working. 

That’s the benefit of starting from scratch: You are in full control and can scale and spend at a pace that improves your chances of success.

If you haven’t yet, download a free one-page business plan template to document your idea. The earlier you begin developing the plan, the more useful it will be throughout the startup process.

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

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

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Project Management

How to write a business case: the formula for getting project approval from stakeholders.

Praburam Srinivasan

Growth Marketing Manager

April 29, 2024

Do you feel you’ve found a solution to one of your company’s most pressing problems? Do you want to go straight to your seniors and tell them about your idea, basking in the glory of your eureka moment? 💡

Before you do that, take a deep breath and consider if your solution requires a significant financial commitment or a shift into critical business functions . If it does, you should learn how to write a business case to properly present your idea to the higher-ups.

Never done that before? No worries. In this article, we’ll explore:

• The concept of a business case
• The difference between a business case and a business plan
• The process of building a compelling business case
• Some real-life examples to understand how business cases help win project approval

Importance of a business case in project management

What is the difference between a business case and a business plan, 1. executive summary, 2. project definition, 3. financial appraisal, 4. project goals and success criteria , 5. project scope and schedule, 6. risks and mitigation strategies, step 1: problem identification, step 2: stakeholder identification, step 3: drafting background information and project definition, step 4: cost-benefit analysis and financial appraisal, step 5: evaluation of alternatives, step 6: describing the project scope and implementation approach, step 7: drafting the executive summary, step 8: putting it all together, lean startup example, venture capital funding example, outsourcing example, supply chain example, 1. drafting it alone, 2. not taking stakeholder feedback, 3. not reviewing or proofreading, create a compelling business case with clickup.

What Is a Business Case?

A business case explains how the rewards of investing in a business idea or initiative outweigh the risks and costs . 

It’s one of the many project management documents (like a project charter or a project plan ) you may have to create when seeking the green light to proceed with a project. A well-crafted business case can be crucial for obtaining approval from your client, management, or other stakeholders in the early stages of your project’s lifecycle . 🟢

The key role of a business case is to justify an investment . It plays other important roles that make project management more efficient . Some of them include:

• Providing clarity: Drafting a business case requires careful planning and research, which brings clarity of thought and improves your understanding of the initiative or project you’re going to propose
• Resource optimization: A business case helps ensure that the company’s resources are being used productively and contributing to its long-term strategic objectives
• Removing doubt: By comparing different solutions, the document eliminates any doubt that an alternative way to fix a business problem is better than what you’re proposing

Preparing a business case can take a lot of time and effort, so it only makes sense when a project or an initiative requires a significant financial commitment. For all other approvals, you can use the project charter. Some scenarios in which a business case can make sense include:

• A new project
• New product line
• Introduction of a new customer persona to your marketing strategy
• Major changes to the supply chain, like introducing new suppliers or distributors

While a business case may seem like a synonym for a business plan , based on its definition, content, and name, there are major differences between them. The most notable ones are:

• Use case: A business plan is made for an entirely new business, while a business case is created when asking for a substantial financial commitment within an existing business
• Purpose: A business plan aims to hammer out the complete business strategy, while a business case tries to explain the advantages of a specific initiative
• A company’s mission and vision
• Financial projections
• SWOT Analysis
• Market analysis
• Go-to-market strategy
• Team profile

A business case, on the other hand, includes only financial projections, risks, and costs of a project

• Level of detail: Given the scope of information they need to cover, business plans tend to be much more detailed than business cases

Key Elements of a Business Case

While the exact structure of a business case will vary based on a specific situation, here are some of the essential components: 

The executive summary provides a quick overview of the critical details covered in your business case. 

Given that managers and executives are usually strapped for time, the executive summary will often be the only part of the document they actually read. That’s why it’s crucial to get this part of the document right and leave a powerful first impression.

The project definition sets the context for your business case by explaining the problem you aim to solve. It highlights an unfulfilled business requirement, outlines why it’s not being met, and finally presents your solution for addressing the mentioned shortcomings.

This is the crux of the matter—the financial appraisal part outlines the ROI your proposed initiative or project will likely generate for the business. It also covers the expected cost of executing your project or implementing your solution.

This part of the business case defines all the objectives and key results (OKRs) you want to achieve through the proposed project or solution. It also explains how those goals align with the company’s short-term and long-term goals. Lastly, it establishes success criteria for your project in the form of KPIs and key metrics . 

The project scope sets limits and boundaries for your project by allocating resources and budgets and developing a schedule for completion.

A business case has to list all the risks associated with implementing the proposed solution and the mitigation strategies for dealing with them. It also weighs in on alternative approaches and their respective risks to explain why your initiative should be the preferred option.

How to Write a Business Case in 8 Steps

Writing a business case is an elaborate task that requires extensive research and numerous analyses, from SWOT and cost-benefit analysis to stakeholder analysis. It’s no walk in the park, but it becomes much easier with an exceptional project management platform like ClickUp .

ClickUp equips project managers and business professionals with all the tools they need to craft a business case that will win the hearts and minds of their superiors—from ready-made templates to AI-powered document management features. Let’s find out how to write a business case in eight steps with the help of ClickUp. 

Many business ventures fail because they create solutions to non-existing problems. To prevent this scenario, make sure you consider the following:

• Objective(s) your company wants to achieve. Examples include achieving a revenue target , meeting an unaddressed customer need, or achieving a competitive advantage
• Problem(s) holding your company from achieving its desired objectives. Examples include a lack of operational efficiency , incorrect customer targeting, and supply chain issues
• The solution you want to propose to solve the problem and meet the objectives
• Evidence and case studies to prove that your proposed solution can indeed solve the problem

A structured way to identify your business problems is to use the ClickUp Root Cause Analysis Template . Classify everything going wrong with your business into multiple “Why” columns and then add their root causes in the relevant color-coded blocks. Once you analyze the root causes, you can tailor your solution to target and fix them. 

After pinpointing the problem, the next step is identifying the stakeholders to whom you’ll pitch your business case. A stakeholder is anyone who has a say in approving your business case . Depending on the scope and complexity of your business case, one or all of the following stakeholders may play a role in its approval:

• The Chief Executive Officer (CEO) of the company
• The head of the finance department
• The head of business operations
• The head of the marketing and sales department
• The representative of a client

Discuss your initiative with the stakeholders to see whether they’re interested in it or not. It can also help you understand their perspective on the problem you’re aiming to solve. After all, you don’t want to put your efforts into a full business case only for the stakeholders to reject it. 🙅‍♂️

The easiest way to identify key stakeholders is to leverage the ClickUp Stakeholder Analysis Template . This framework can help you gauge the influence and support level of all stakeholders who will play a role in approving your business case. This information can also come in handy when you want to collect feedback from a stakeholder.

Once you’ve identified your problem and the involved stakeholders, it’s time to start drafting your business case. 

The first part is the project definition section, which sets the background for presenting your case before stakeholders . It covers the problem your business case proposes to solve and explains why solving the problem is important. The section should cover the following:

• The problem you identified and its impact on business functions
• How your project or solution can fix it
• The goals your project or initiative wants to achieve
• How project goals align with the company’s near-term objectives 
• The success criteria for your project or initiative 
• How its success will move the company towards its long-term strategic goals

The best tool for drafting this part of the document is ClickUp Docs —ClickUp’s built-in text editor and documentation management platform. 

With ClickUp Docs’ collaborative editing possibilities, you and your stakeholders can work on the business case document in real time, ensuring its speedy and accurate completion. Stakeholders can also comment on areas for improvement . Finally, you can add a cover image to make your business case look more appealing or use slash commands to quickly add compelling blocks of formatted text. 

After setting the background, the next step is the financial appraisal part. This section will be examined carefully during your pitch and serves to capture the stakeholders’ interest in your business case. For maximum accuracy, consult with a colleague from the finance department while drafting this part of the document. 

Some of the information you may want to cover here includes:

• Projections about financial gains
• Costs to be incurred by the project
• Cash flow forecast
• Cost-benefit analysis and return on investment (ROI)
• Sensitivity analysis to explain the margin of error in your numbers

Besides the financial aspects, this section also deals with risk analysis . Information on all potential risk factors identified through SWOT analysis, Monte Carlo analysis, and other risk identification strategies are outlined along with their respective mitigation strategies . It’ll be best to discuss the project risks with stakeholders identified in the first step—they can often share hidden insights and perspectives.

ClickUp provides a number of tools to help you conduct each of these analyses. For instance, you can use the ClickUp Cost Benefit Analysis Template to complete your cost-benefit analysis. 

Similarly, the ClickUp SWOT Analysis Template can save you from jotting down rows of data to identify your initiative’s strengths, weaknesses, opportunities, and threats. It is a visually rich template that lets you easily identify high-impact activities and functions.

In this section, you should evaluate the alternatives to your proposed solution in the business case. Highlight the pros and cons of each option so the stakeholders can have a complete overview of every possible solution. Make sure to include your proposed solution in the comparison as well to explain why it’s better than all the alternatives.

If you need help examining and comparing the alternatives, fall back on the ClickUp Comparison Matrix Template . Use it to record all the information about each possible alternative in different fields and then compare them on a Kanban board. Its visual format makes decision making easier, while its fully customizable fields allow you to record as many comparison parameters as you wish. 

After you detail all the financial aspects of your project and compare it to alternatives, define a project scope in your business case. This section sets boundaries for the pending work and limitations on resources needed to complete it. Crucial information covered in it includes:

• Budget and resource allocation: Financial and other resources, like team members, workspace, equipment, etc., that should be allocated to the project
• Deadlines: Time required to complete each part of the project
• Dependencies and relationships : Details of current business functions that may be affected by the project
• Deliverables: What you plan to deliver by the end of your project
• Exclusions: What’s not a part of your project

Once you define the project scope, outline the exact steps for implementing it. The easiest way to do this is to use the ClickUp Scope of Work Template . It allows you to record every aspect of the project scope in a well-organized manner to share with your stakeholders and get their opinions. 

Once all major sections of your business case have been completed, you need to draft an executive summary to digest the crucial details from each section. This summary should be concise, ideally no longer than two pages. It will appear as the first item in your business case, providing stakeholders with a quick overview of your proposed project.

If you need help drafting your executive summary, team up with ClickUp Brain , a neural network and AI writing assistant built into ClickUp Docs. In mere seconds, it can generate a pitch-perfect summary of any business case document prepared until now. 

Once you have your executive summary draft, use the ClickUp Executive Summary Template to format and organize it in a structured and presentable manner. 

Now, it’s time to put together and structure all the sections drafted to this point to finalize your business case. That’s where the ClickUp Business Case Analysis Template can be a lifesaver. 

The template includes dedicated sections to record each part of the business case. All sections are arranged in a structured manner to ensure that when you pitch your case, it makes a lasting impact on your stakeholders.

Real-Life Examples of Business Cases

Now that you know how to write a business case, let’s check out some real-life examples of how business cases allow companies to approve major projects and make strategic decisions:

A lean startup operating in the healthcare space is facing workforce issues, which are preventing it from launching its product on time. The head of the product development team wants to hire three more engineers to speed up the product development process . 

However, since it’s a lean startup with budget constraints , the team head needs approval from the startup founders before making the decision. So, the product team compiles a business case for hiring additional employees , and here are the main elements of their proposal:

• A brief overview of how insufficient staffing is delaying product development and pushing the product launch beyond the planned deadline
• Elaboration of how three new engineers can bring product development back on track
• Cost-benefit analysis of the move 
• Exploration of the involved risks
• Presentation of alternatives and their associated risks
• Scope of the change, like the nature of work the new engineers will perform

A venture capital-funded fintech startup decides to launch a new product line of credit cards . It will allow the startup to onboard a slew of new customers but will also require significant financial investment for marketing and lending purposes. So the company prepares a business case for this new product line in an effort to obtain funding for it. Here’s what they detail in their business case:

• The need for this new product line and how it complements the company’s other offerings
• The market opportunity with revenue projections and cost-benefit analysis
• Risks involved in the project, like competition, mass default, and regulatory scrutiny
• Alternatives available, like launching prepaid debit cards, which probably wouldn’t be as useful for customer acquisition
• Scope of the project, like team members working on it, the budget allocated, launch schedule, and timeline

A SaaS software vendor based out of Silicon Valley wants to reduce customer service spending without compromising service quality . The product manager of one of their leading products comes up with the idea of outsourcing customer service . So, they decide to prepare a business case before proposing the solution to the management. The business case outlines:

• The problem, which is a significant share of revenue going into customer service operations and how outsourcing can help bring it down
• Risks associated with outsourced customer service and mitigation strategies for them, like having an escalation mechanism for unresolved support tickets
• Alternatives and their risks, like using AI chatbots to automate customer service , which can be frustrating for customers who need human guidance
• Cost-benefit analysis of making the change
• Scope of change, like how many of the customer support employees will be laid off

A construction company in Virginia is facing raw material supply issues . The cement supplier they work with repeatedly fails to meet the demand, so the project supervisor decides to add some redundancy by onboarding a new vendor. 

This change can greatly influence the project, so the supervisor prepares a business case to propose the initiative to the management. The case addresses the following:

• How the new cement supplier can keep the project from being delayed
• The supplier’s reliability, as demonstrated by the years of industry presence, major companies for which they have supplied cement, etc.
• Alternative suppliers, their capacity, and reliability information
• Cost-benefit analysis of making the change, since the rates of this supplier are slightly higher than those of the existing vendor
• Scope of change, including how much of the supplies will be delivered by the new supplier, for how long, and at what price 

Potential Business Case Challenges and How to Overcome Them

There are a number of mistakes project managers make when drafting a business case, which can jeopardize the approval of the entire project or initiative. Now that we’ve covered the complete process of writing a compelling business case, let’s look at the most common pitfalls and explore ways to avoid them. 

The details of a business case require extensive research and knowledge of different business functions. No project manager can do it all alone without making mistakes or errors of judgment, so look for help from different departments in your company, whether it’s finance, marketing, or operations. 💁

Another crucial mistake when building a business case is presenting the document to stakeholders out of the blue. When you don’t involve relevant stakeholders at any stage in your business case development process, you increase the risk of it being rejected. That happens because:

• You don’t know their expectations
• They didn’t have any role in your business case, which keeps them detached from your work

To avoid this scenario, involve stakeholders at different stages of your business case drafting process and get your progress reviewed regularly.

The last thing you want when pitching your business case is a typo or a misrepresentation of facts. That can leave a bad impression on the stakeholders listening to your pitch. They may not take you seriously and ultimately reject your project proposal . 

To ensure a bulletproof document, you should always review and proofread your entire business case before submitting it . Pay special attention to numbers and facts and double-check that they’re correct. Then, go ahead with your pitch.

A solid business case is the first step to getting project approval from your stakeholders. However, building it requires careful planning and the right tools to streamline the entire process. Fortunately, ClickUp equips you with everything you need at each step of building your business case—from ready-made templates and documentation tools to AI-powered writing assistance.

Sign up for ClickUp today and write a business case that will earn support and trust for your project or initiative.

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