fourth step in writing a business plan

How to Write a Business Plan: Step-by-Step Guide + Examples

Noah Parsons

24 min. read

Updated July 29, 2024

Writing a business plan doesn’t have to be complicated. 

In this step-by-step guide, you’ll learn how to write a business plan that’s detailed enough to impress bankers and potential investors, while giving you the tools to start, run, and grow a successful business.

• The basics of business planning

If you’re reading this guide, then you already know why you need a business plan . 

You understand that planning helps you: 

• Raise money
• Grow strategically
• Keep your business on the right track 

As you start to write your plan, it’s useful to zoom out and remember what a business plan is .

At its core, a business plan is an overview of the products and services you sell, and the customers that you sell to. It explains your business strategy: how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow. 

A good business plan is much more than just a document that you write once and forget about. It’s also a guide that helps you outline and achieve your goals. 

After completing your plan, you can use it as a management tool to track your progress toward your goals. Updating and adjusting your forecasts and budgets as you go is one of the most important steps you can take to run a healthier, smarter business. 

We’ll dive into how to use your plan later in this article.

There are many different types of plans , but we’ll go over the most common type here, which includes everything you need for an investor-ready plan. However, if you’re just starting out and are looking for something simpler—I recommend starting with a one-page business plan . It’s faster and easier to create. 

It’s also the perfect place to start if you’re just figuring out your idea, or need a simple strategic plan to use inside your business.

Dig deeper : How to write a one-page business plan

Brought to you by

Create a professional business plan

Using ai and step-by-step instructions.

Secure funding

Validate ideas

Build a strategy

• What to include in your business plan

Executive summary

The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally just one to two pages. Most people write it last because it’s a summary of the complete business plan.

Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan. 

In fact, it’s common for investors to ask only for the executive summary when evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation , or more in-depth financial forecasts .

Your executive summary should include:

• A summary of the problem you are solving
• A description of your product or service
• An overview of your target market
• A brief description of your team
• A summary of your financials
• Your funding requirements (if you are raising money)

Dig Deeper: How to write an effective executive summary

Products and services description

This is where you describe exactly what you’re selling, and how it solves a problem for your target market. The best way to organize this part of your plan is to start by describing the problem that exists for your customers. After that, you can describe how you plan to solve that problem with your product or service. 

This is usually called a problem and solution statement .

To truly showcase the value of your products and services, you need to craft a compelling narrative around your offerings. How will your product or service transform your customers’ lives or jobs? A strong narrative will draw in your readers.

This is also the part of the business plan to discuss any competitive advantages you may have, like specific intellectual property or patents that protect your product. If you have any initial sales, contracts, or other evidence that your product or service is likely to sell, include that information as well. It will show that your idea has traction , which can help convince readers that your plan has a high chance of success.

Market analysis

Your target market is a description of the type of people that you plan to sell to. You might even have multiple target markets, depending on your business. 

A market analysis is the part of your plan where you bring together all of the information you know about your target market. Basically, it’s a thorough description of who your customers are and why they need what you’re selling. You’ll also include information about the growth of your market and your industry .

Try to be as specific as possible when you describe your market. 

Include information such as age, income level, and location—these are what’s called “demographics.” If you can, also describe your market’s interests and habits as they relate to your business—these are “psychographics.” 

Related: Target market examples

Essentially, you want to include any knowledge you have about your customers that is relevant to how your product or service is right for them. With a solid target market, it will be easier to create a sales and marketing plan that will reach your customers. That’s because you know who they are, what they like to do, and the best ways to reach them.

Next, provide any additional information you have about your market. 

What is the size of your market ? Is the market growing or shrinking? Ideally, you’ll want to demonstrate that your market is growing over time, and also explain how your business is positioned to take advantage of any expected changes in your industry.

Dig Deeper: Learn how to write a market analysis

Competitive analysis

Part of defining your business opportunity is determining what your competitive advantage is. To do this effectively, you need to know as much about your competitors as your target customers. 

Every business has some form of competition. If you don’t think you have competitors, then explore what alternatives there are in the market for your product or service. 

For example: In the early years of cars, their main competition was horses. For social media, the early competition was reading books, watching TV, and talking on the phone.

A good competitive analysis fully lays out the competitive landscape and then explains how your business is different. Maybe your products are better made, or cheaper, or your customer service is superior. Maybe your competitive advantage is your location – a wide variety of factors can ultimately give you an advantage.

Dig Deeper: How to write a competitive analysis for your business plan

Marketing and sales plan

The marketing and sales plan covers how you will position your product or service in the market, the marketing channels and messaging you will use, and your sales tactics. 

The best place to start with a marketing plan is with a positioning statement . 

This explains how your business fits into the overall market, and how you will explain the advantages of your product or service to customers. You’ll use the information from your competitive analysis to help you with your positioning. 

For example: You might position your company as the premium, most expensive but the highest quality option in the market. Or your positioning might focus on being locally owned and that shoppers support the local economy by buying your products.

Once you understand your positioning, you’ll bring this together with the information about your target market to create your marketing strategy . 

This is how you plan to communicate your message to potential customers. Depending on who your customers are and how they purchase products like yours, you might use many different strategies, from social media advertising to creating a podcast. Your marketing plan is all about how your customers discover who you are and why they should consider your products and services. 

While your marketing plan is about reaching your customers—your sales plan will describe the actual sales process once a customer has decided that they’re interested in what you have to offer. 

If your business requires salespeople and a long sales process, describe that in this section. If your customers can “self-serve” and just make purchases quickly on your website, describe that process. 

A good sales plan picks up where your marketing plan leaves off. The marketing plan brings customers in the door and the sales plan is how you close the deal.

Together, these specific plans paint a picture of how you will connect with your target audience, and how you will turn them into paying customers.

Dig deeper: What to include in your sales and marketing plan

Business operations

The operations section describes the necessary requirements for your business to run smoothly. It’s where you talk about how your business works and what day-to-day operations look like. 

Depending on how your business is structured, your operations plan may include elements of the business like:

• Supply chain management
• Manufacturing processes
• Equipment and technology
• Distribution

Some businesses distribute their products and reach their customers through large retailers like Amazon.com, Walmart, Target, and grocery store chains. 

These businesses should review how this part of their business works. The plan should discuss the logistics and costs of getting products onto store shelves and any potential hurdles the business may have to overcome.

If your business is much simpler than this, that’s OK. This section of your business plan can be either extremely short or more detailed, depending on the type of business you are building.

For businesses selling services, such as physical therapy or online software, you can use this section to describe the technology you’ll leverage, what goes into your service, and who you will partner with to deliver your services.

Dig Deeper: Learn how to write the operations chapter of your plan

Key milestones and metrics

Although it’s not required to complete your business plan, mapping out key business milestones and the metrics can be incredibly useful for measuring your success.

Good milestones clearly lay out the parameters of the task and set expectations for their execution. You’ll want to include:

• A description of each task
• The proposed due date
• Who is responsible for each task

If you have a budget, you can include projected costs to hit each milestone. You don’t need extensive project planning in this section—just list key milestones you want to hit and when you plan to hit them. This is your overall business roadmap. 

Possible milestones might be:

• Website launch date
• Store or office opening date
• First significant sales
• Break even date
• Business licenses and approvals

You should also discuss the key numbers you will track to determine your success. Some common metrics worth tracking include:

• Conversion rates
• Customer acquisition costs
• Profit per customer
• Repeat purchases

It’s perfectly fine to start with just a few metrics and grow the number you are tracking over time. You also may find that some metrics simply aren’t relevant to your business and can narrow down what you’re tracking.

Dig Deeper: How to use milestones in your business plan

Organization and management team

Investors don’t just look for great ideas—they want to find great teams. Use this chapter to describe your current team and who you need to hire . You should also provide a quick overview of your location and history if you’re already up and running.

Briefly highlight the relevant experiences of each key team member in the company. It’s important to make the case for why yours is the right team to turn an idea into a reality. 

Do they have the right industry experience and background? Have members of the team had entrepreneurial successes before? 

If you still need to hire key team members, that’s OK. Just note those gaps in this section.

Your company overview should also include a summary of your company’s current business structure . The most common business structures include:

• Sole proprietor
• Partnership

Be sure to provide an overview of how the business is owned as well. Does each business partner own an equal portion of the business? How is ownership divided? 

Potential lenders and investors will want to know the structure of the business before they will consider a loan or investment.

Dig Deeper: How to write about your company structure and team

Financial plan

Last, but certainly not least, is your financial plan chapter. 

Entrepreneurs often find this section the most daunting. But, business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast. 

A typical financial forecast in a business plan includes the following:

• Sales forecast : An estimate of the sales expected over a given period. You’ll break down your forecast into the key revenue streams that you expect to have.
• Expense budget : Your planned spending such as personnel costs , marketing expenses, and taxes.
• Profit & Loss : Brings together your sales and expenses and helps you calculate planned profits.
• Cash Flow : Shows how cash moves into and out of your business. It can predict how much cash you’ll have on hand at any given point in the future.
• Balance Sheet : A list of the assets, liabilities, and equity in your company. In short, it provides an overview of the financial health of your business. 

A strong business plan will include a description of assumptions about the future, and potential risks that could impact the financial plan. Including those will be especially important if you’re writing a business plan to pursue a loan or other investment.

Dig Deeper: How to create financial forecasts and budgets

This is the place for additional data, charts, or other information that supports your plan.

Including an appendix can significantly enhance the credibility of your plan by showing readers that you’ve thoroughly considered the details of your business idea, and are backing your ideas up with solid data.

Just remember that the information in the appendix is meant to be supplementary. Your business plan should stand on its own, even if the reader skips this section.

Dig Deeper : What to include in your business plan appendix

Optional: Business plan cover page

Adding a business plan cover page can make your plan, and by extension your business, seem more professional in the eyes of potential investors, lenders, and partners. It serves as the introduction to your document and provides necessary contact information for stakeholders to reference.

Your cover page should be simple and include:

• Company logo
• Business name
• Value proposition (optional)
• Business plan title
• Completion and/or update date
• Address and contact information
• Confidentiality statement

Just remember, the cover page is optional. If you decide to include it, keep it very simple and only spend a short amount of time putting it together.

Dig Deeper: How to create a business plan cover page

How to use AI to help write your business plan

Generative AI tools such as ChatGPT can speed up the business plan writing process and help you think through concepts like market segmentation and competition. These tools are especially useful for taking ideas that you provide and converting them into polished text for your business plan.

The best way to use AI for your business plan is to leverage it as a collaborator , not a replacement for human creative thinking and ingenuity. 

AI can come up with lots of ideas and act as a brainstorming partner. It’s up to you to filter through those ideas and figure out which ones are realistic enough to resonate with your customers. 

There are pros and cons of using AI to help with your business plan . So, spend some time understanding how it can be most helpful before just outsourcing the job to AI.

Learn more: 10 AI prompts you need to write a business plan

• Writing tips and strategies

To help streamline the business plan writing process, here are a few tips and key questions to answer to make sure you get the most out of your plan and avoid common mistakes .  

Determine why you are writing a business plan

Knowing why you are writing a business plan will determine your approach to your planning project. 

For example: If you are writing a business plan for yourself, or just to use inside your own business , you can probably skip the section about your team and organizational structure. 

If you’re raising money, you’ll want to spend more time explaining why you’re looking to raise the funds and exactly how you will use them.

Regardless of how you intend to use your business plan , think about why you are writing and what you’re trying to get out of the process before you begin.

Keep things concise

Probably the most important tip is to keep your business plan short and simple. There are no prizes for long business plans . The longer your plan is, the less likely people are to read it. 

So focus on trimming things down to the essentials your readers need to know. Skip the extended, wordy descriptions and instead focus on creating a plan that is easy to read —using bullets and short sentences whenever possible.

Have someone review your business plan

Writing a business plan in a vacuum is never a good idea. Sometimes it’s helpful to zoom out and check if your plan makes sense to someone else. You also want to make sure that it’s easy to read and understand.

Don’t wait until your plan is “done” to get a second look. Start sharing your plan early, and find out from readers what questions your plan leaves unanswered. This early review cycle will help you spot shortcomings in your plan and address them quickly, rather than finding out about them right before you present your plan to a lender or investor.

If you need a more detailed review, you may want to explore hiring a professional plan writer to thoroughly examine it.

Use a free business plan template and business plan examples to get started

Knowing what information to include in a business plan is sometimes not quite enough. If you’re struggling to get started or need additional guidance, it may be worth using a business plan template. 

There are plenty of great options available (we’ve rounded up our 8 favorites to streamline your search).

But, if you’re looking for a free downloadable business plan template , you can get one right now; download the template used by more than 1 million businesses. 

Or, if you just want to see what a completed business plan looks like, check out our library of over 550 free business plan examples . 

We even have a growing list of industry business planning guides with tips for what to focus on depending on your business type.

Common pitfalls and how to avoid them

It’s easy to make mistakes when you’re writing your business plan. Some entrepreneurs get sucked into the writing and research process, and don’t focus enough on actually getting their business started. 

Here are a few common mistakes and how to avoid them:

Not talking to your customers : This is one of the most common mistakes. It’s easy to assume that your product or service is something that people want. Before you invest too much in your business and too much in the planning process, make sure you talk to your prospective customers and have a good understanding of their needs.

• Overly optimistic sales and profit forecasts: By nature, entrepreneurs are optimistic about the future. But it’s good to temper that optimism a little when you’re planning, and make sure your forecasts are grounded in reality. 
• Spending too much time planning: Yes, planning is crucial. But you also need to get out and talk to customers, build prototypes of your product and figure out if there’s a market for your idea. Make sure to balance planning with building.
• Not revising the plan: Planning is useful, but nothing ever goes exactly as planned. As you learn more about what’s working and what’s not—revise your plan, your budgets, and your revenue forecast. Doing so will provide a more realistic picture of where your business is going, and what your financial needs will be moving forward.
• Not using the plan to manage your business: A good business plan is a management tool. Don’t just write it and put it on the shelf to collect dust – use it to track your progress and help you reach your goals.
• Presenting your business plan

The planning process forces you to think through every aspect of your business and answer questions that you may not have thought of. That’s the real benefit of writing a business plan – the knowledge you gain about your business that you may not have been able to discover otherwise.

With all of this knowledge, you’re well prepared to convert your business plan into a pitch presentation to present your ideas. 

A pitch presentation is a summary of your plan, just hitting the highlights and key points. It’s the best way to present your business plan to investors and team members.

Dig Deeper: Learn what key slides should be included in your pitch deck

Use your business plan to manage your business

One of the biggest benefits of planning is that it gives you a tool to manage your business better. With a revenue forecast, expense budget, and projected cash flow, you know your targets and where you are headed.

And yet, nothing ever goes exactly as planned – it’s the nature of business.

That’s where using your plan as a management tool comes in. The key to leveraging it for your business is to review it periodically and compare your forecasts and projections to your actual results.

Start by setting up a regular time to review the plan – a monthly review is a good starting point. During this review, answer questions like:

• Did you meet your sales goals?
• Is spending following your budget?
• Has anything gone differently than what you expected?

Now that you see whether you’re meeting your goals or are off track, you can make adjustments and set new targets. 

Maybe you’re exceeding your sales goals and should set new, more aggressive goals. In that case, maybe you should also explore more spending or hiring more employees. 

Or maybe expenses are rising faster than you projected. If that’s the case, you would need to look at where you can cut costs.

A plan, and a method for comparing your plan to your actual results , is the tool you need to steer your business toward success.

Learn More: How to run a regular plan review

How to write a business plan FAQ

What is a business plan?

A document that describes your business , the products and services you sell, and the customers that you sell to. It explains your business strategy, how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

What are the benefits of a business plan?

A business plan helps you understand where you want to go with your business and what it will take to get there. It reduces your overall risk, helps you uncover your business’s potential, attracts investors, and identifies areas for growth.

Having a business plan ultimately makes you more confident as a business owner and more likely to succeed for a longer period of time.

What are the 7 steps of a business plan?

The seven steps to writing a business plan include:

• Write a brief executive summary
• Describe your products and services.
• Conduct market research and compile data into a cohesive market analysis.
• Describe your marketing and sales strategy.
• Outline your organizational structure and management team.
• Develop financial projections for sales, revenue, and cash flow.
• Add any additional documents to your appendix.

What are the 5 most common business plan mistakes?

There are plenty of mistakes that can be made when writing a business plan. However, these are the 5 most common that you should do your best to avoid:

• 1. Not taking the planning process seriously.
• Having unrealistic financial projections or incomplete financial information.
• Inconsistent information or simple mistakes.
• Failing to establish a sound business model.
• Not having a defined purpose for your business plan.

What questions should be answered in a business plan?

Writing a business plan is all about asking yourself questions about your business and being able to answer them through the planning process. You’ll likely be asking dozens and dozens of questions for each section of your plan.

However, these are the key questions you should ask and answer with your business plan:

• How will your business make money?
• Is there a need for your product or service?
• Who are your customers?
• How are you different from the competition?
• How will you reach your customers?
• How will you measure success?

How long should a business plan be?

The length of your business plan fully depends on what you intend to do with it. From the SBA and traditional lender point of view, a business plan needs to be whatever length necessary to fully explain your business. This means that you prove the viability of your business, show that you understand the market, and have a detailed strategy in place.

If you intend to use your business plan for internal management purposes, you don’t necessarily need a full 25-50 page business plan. Instead, you can start with a one-page plan to get all of the necessary information in place.

What are the different types of business plans?

While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. Here are a few common business plan types worth considering.

Traditional business plan: The tried-and-true traditional business plan is a formal document meant to be used when applying for funding or pitching to investors. This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix.

Business model canvas: The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea.

One-page business plan: This format is a simplified version of the traditional plan that focuses on the core aspects of your business. You’ll typically stick with bullet points and single sentences. It’s most useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.

Lean Plan: The Lean Plan is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance. It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.

What’s the difference between a business plan and a strategic plan?

A business plan covers the “who” and “what” of your business. It explains what your business is doing right now and how it functions. The strategic plan explores long-term goals and explains “how” the business will get there. It encourages you to look more intently toward the future and how you will achieve your vision.

However, when approached correctly, your business plan can actually function as a strategic plan as well. If kept lean, you can define your business, outline strategic steps, and track ongoing operations all with a single plan.

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Table of Contents

• Use AI to help write your plan
• Common planning mistakes
• Manage with your business plan

Related Articles

1 Min. Read

How to Calculate Return on Investment (ROI)

7 Min. Read

How to Write a Bakery Business Plan + Sample

5 Min. Read

How To Write a Business Plan for a Life Coaching Business + Free Example

3 Min. Read

What to Include in Your Business Plan Appendix

The LivePlan Newsletter

Become a smarter, more strategic entrepreneur.

Your first monthly newsetter will be delivered soon..

Unsubscribe anytime. Privacy policy .

The quickest way to turn a business idea into a business plan

Fill-in-the-blanks and automatic financials make it easy.

No thanks, I prefer writing 40-page documents.

Discover the world’s #1 plan building software

• Sources of Business Finance
• Small Business Loans
• Small Business Grants
• Crowdfunding Sites
• How to Get a Business Loan
• Small Business Insurance Providers
• Best Factoring Companies
• Types of Bank Accounts
• Best Banks for Small Business
• Best Business Bank Accounts
• Open a Business Bank Account
• Bank Accounts for Small Businesses
• Free Business Checking Accounts
• Best Business Credit Cards
• Get a Business Credit Card
• Business Credit Cards for Bad Credit
• Build Business Credit Fast
• Business Loan Eligibility Criteria
• Small-Business Bookkeeping Basics
• How to Set Financial Goals
• Business Loan Calculators
• How to Calculate ROI
• Calculate Net Income
• Calculate Working Capital
• Calculate Operating Income
• Calculate Net Present Value (NPV)
• Calculate Payroll Tax

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)

Was This Article Helpful?

Martin luenendonk.

Martin loves entrepreneurship and has helped dozens of entrepreneurs by validating the business idea, finding scalable customer acquisition channels, and building a data-driven organization. During his time working in investment banking, tech startups, and industry-leading companies he gained extensive knowledge in using different software tools to optimize business processes.

This insights and his love for researching SaaS products enables him to provide in-depth, fact-based software reviews to enable software buyers make better decisions.

• Design for Business
• Most Recent
• Presentations
• Infographics
• Data Visualizations
• Forms and Surveys
• Video & Animation
• Case Studies
• Digital Marketing
• Design Inspiration
• Visual Thinking
• Product Updates
• Visme Webinars
• Artificial Intelligence

How to Write a Business Plan: Beginner’s Guide (& Templates)

Written by: Chloe West

Thinking about starting a business? One of the first steps you’ll need to take is to write a business plan. A business plan can help guide you through your financial planning, marketing strategy, unique selling point and more.

Making sure you start your new business off on the right foot is key, and we’re here to help. We’ve put together this guide to help you write your first business plan. Or, you can skip the guide and dive right into a business plan template .

Ready to get started?

Here’s a short selection of 8 easy-to-edit business plan templates you can edit, share and download with Visme. View more templates below:

8-Step Process for Writing a Business Plan

What is a business plan, why is a business plan important, step #1: write your executive summary, step #2: put together your company description, step #3: conduct your market analysis, step #4: research your competition, step #5: outline your products or services, step #6: summarize your financial plan, step #7: determine your marketing strategy, step #8: showcase your organizational chart, 14 business plan templates to help you get started.

A business plan is a document that helps potential new business owners flesh out their business idea and put together a bird’s eye view of their business. Writing a business plan is an essential step in any startup’s ideation process.

Business plans help determine demographics, market analysis, competitive analysis, financial projections, new products or services, and so much more.

Each of these bits of information are important to have on hand when you’re trying to start a business or pitching investors for funds.

Here’s an example of a business plan that you can customize to incorporate your own business information.

We’re going to walk you through some of the most important parts of your business plan as well as how to write your own business plan in 8 easy steps.

If you’re in the beginning stages of starting a business , you might be wondering if it’s really worth your time to write out your business plan. 

We’re here to tell you that it is.

A business plan is important for a number of reasons, but mostly because it helps to set you up for success right from the start.

Here are four reasons to prove to you why you need to start your business off on the right foot with a plan.

Reason #1: Set Realistic Goals and Milestones

Putting together a business plan helps you to set your objectives for growth and make realistic goals while you begin your business. 

By laying out each of the steps you need to take in order to build a successful business, you’re able to be more reasonable about what your timeline is for achieving everything as well as what your financial projections are.

The best way to set goals is using the SMART goals guidelines, outlined below.

Reason #2: Grow Your Business Faster

Having a business plan helps you be more organized and strategic, improving the overall performance of your business as you start out. In fact, one study found that businesses with a plan grow 30% faster than businesses that don’t.

Doesn’t that sound reason enough alone to start out your business venture with a solidified plan? We thought so too, but we’ve still got two more reasons.

Reason #3: Minimize Risk

Starting a new business is uncharted territory. However, when you start with a roadmap for your journey, it makes it easier to see success and minimize the risks that come with startups.

Minimize risk and maximize profitability by documenting the most important parts of your business planning.

Reason #4: Secure Funding

And finally, our last reason that business plans are so important is that if you plan to pitch investors for funding for your new venture, they’re almost always going to want to see a detailed business plan before deciding whether or not to invest.

You can easily create your business plan and investor pitch deck right here with Visme. Just sign up for a free account below to get started. 

Hey executives! Looking to cut design costs?

• Spend less time on presentations and more time strategizing
• Ensure your brand looks and feels visually consistent across all your organization's documents
• Impress clients and stakeholders with boardroom ready presentations

Sign up. It’s free.

The executive summary is a brief overview of your entire business plan, giving anyone who reads through your document a quick understanding of what they’re going to learn about your business idea.

However, you need to remember that some of the people who are going to read your business plan don’t want to or have time to read the entire thing. So your executive summary needs to incorporate all of the most important aspects of your plan.

Here’s an example of an executive summary from a business plan template you can customize and turn into your own.

Your executive summary should include:

• Key objective(s)
• Market research
• Competitor information
• Products/services
• Value proposition
• Overview of your financial plan
• How you’re going to actually start your business

One thing to note is that you should actually write your executive summary after the rest of your business plan so that you can properly summarize everything you’ve already created.

So at this point, simply leave a page blank for your executive summary so you can come back to it at the end of your business plan.

The next step is to write out a full description of your business and its core offerings. This section of your business plan should include your mission statement and objectives, along with your company history or overview.

In this section, you may also briefly describe your business formation details from a legal perspective.

Mission Statement

Don’t spend too much time trying to craft this. Your mission statement is a simple “why” you started this business. What are you trying to achieve? Or what does your business solve?

This can be anything from one single quote or a paragraph, but it doesn’t need to be much longer than that. In fact, this could be very similar to your value proposition.

What are your goals? What do you plan to achieve in the first 90 days or one year of your business? What kind of impact do you hope to make on the market?

These are all good points to include in your objectives section so anyone reading your business plan knows upfront what you hope to achieve.

History or Overview

If you’re not launching a brand new business or if you’ve previously worked on another iteration of this business, let potential investors know the history of your company.

If not, simply provide an overview of your business, sharing what it does or what it will do.

Your third step is to conduct a market analysis so you know how your business will fit into its target market. This page in your business plan is simply meant to summarize your findings. Most of your time should be spent actually doing the research.

Your market analysis needs to look at things like:

• Market size, and if it’s grown in recent years or shrinking
• The segment of the market you plan to target
• Demographics and behavior of your target audience
• The demand for your product or service
• Your competitive advantage or differentiation strategy
• The average price of your product or service

Put together a summary of your market analysis and industry research in a 1-2 page format, like we see below.

Your next step is to conduct a competitive analysis. While you likely touched on this briefly during your market analysis, now is the time to do a deep dive so that you have a good grasp on what your competitors are doing and how they are generating customers.

Start by creating a profile of all your existing competitors, or at the very least, your closest competitors – the ones who are offering very similar products or services to you, or are in a similar vicinity (if you’re opening a brick and mortar store).

Focus on their strengths and what they’re doing really well so that you can emulate their best qualities in your own way. Then, look at their weaknesses and what your business can do better.

Take note of their current marketing strategy, including the outlets you see a presence, whether it’s on social media, you hear a radio ad, you see a TV ad, etc. You won’t always find all of their marketing channels, but see what you can find online and on their website.

After this, take a minute to identify potential competitors based on markets you might try out in the future, products or services you plan to add to your offerings, and more.

Then put together a page or two in your business plan that highlights your competitive advantage and how you’ll be successful breaking into the market.

Step five is to dedicate a page to the products or services that your business plans to offer.

Put together a quick list and explanation of what each of the initial product or service offerings will be, but steer clear of industry jargon or buzzwords. This should be written in plain language so anyone reading has a full understanding of what your business will do.

You can have a simple list like we see in the sample page above, or you can dive a little deeper. Depending on your type of business, it might be a good idea to provide additional information about what each product or service entails.

The next step is to work on the financial data of your new business. What will your overhead be? How will your business make money? What are your estimated expenses and profits over the first few months to a year? The expenses should cover all the spending whether they are recurring costs or just one-time LLC filing fees .

There is so much that goes into your financial plan for a new business, so this is going to take some time to compile. Especially because this section of your business plan helps potential cofounders or investors understand if the idea is even viable.

Your financial plan should include at least five major sections:

• Sales Forecast: The first thing you want to include is a forecast or financial projection of how much you think your business can sell over the next year or so. Break this down into the different products, services or facets of your business.
• Balance Sheet: This section is essentially a statement of your company’s financial position. It includes existing assets, liabilities and equity to demonstrate the company’s overall financial health.
• Income Statement: Also known as a profit and loss statement (P&L), this covers your projected expenses and revenue, showcasing whether your business will be profitable or not.
• Operating Budget: A detailed outline of your business’s income and expenses. This should showcase that your business is bringing in more than it’s spending.
• Cash Flow Statements: This tracks how much cash your business has at any given point, regardless of whether customers or clients have paid their bills or have 30-60+ days to do so.

While these are the most common financial statements, you may discover that there are other sections that you want to include or that lenders may want to see from you.

You can automate the process of looking through your documents with an OCR API , which will collect the data from all your financial statements and invoices.

The next step is coming up with a successful marketing plan so that you can actually get the word out about your business. 

Throughout your business plan, you’ve already researched your competitors and your target market, both of which are major components of a good marketing strategy. You need to know who you’re marketing to, and you want to do it better than your competition.

On this page or throughout this section of your business plan, you need to focus on your chosen marketing channels and the types of marketing content you plan to create.

Start by taking a look at the channels that your competitors are on and make sure you have a good understanding of the demographics of each channel as well. You don’t want to waste time on a marketing channel that your target audience doesn’t use.

Then, create a list of each of your planned marketing avenues. It might look something like:

• Social media ( Facebook, Instagram, Pinterest)
• Email newsletter
• Digital ads

Depending on the type of business you’re starting, this list could change quite a bit — and that’s okay. There is no one-size-fits-all marketing strategy, and you need to find the one that brings in the highest number of potential customers.

Your last section will be all about your leadership and management team members. Showcasing that you have a solid team right from the start can make potential investors feel better about funding your venture.

You can easily put together an organizational chart like the one below, with the founder/CEO at the top and each of your team leaders underneath alongside the department they’re in charge of.

Simply add an organizational chart like this as a page into your overall business plan and make sure it matches the rest of your design to create a cohesive document.

If you want to create a good business plan that sets your new business up for success and attracts new investors, it’s a good idea to start with a template. 

We’ve got 14 options below from a variety of different industries for you to choose from. You can customize every aspect of each template to fit your business branding and design preferences.

If you're pressed for time, Visme's AI business plan generator can churn out compelling business plans in minutes. Just input a detailed prompt, choose the design, and watch the tool generate your plan in a few seconds.

Template #1: Photography Business Plan Template

This feminine and minimalistic business plan template is perfect for getting started with any kind of creative business. Utilize this template to help outline the step-by-step process of getting your new business idea up and running.

Template #2: Real Estate Business Plan Template

Looking for a more modern business plan design? This template is perfect for plainly laying out each of your business plans in an easy-to-understand format. Adjust the red accents with your business’s colors to personalize this template.

Template #3: Nonprofit Business Plan Template

Creating a business and marketing plan for your nonprofit is still an essential step when you’re just starting out. You need to get the word out to increase donations and awareness for your cause.

Template #4: Restaurant Business Plan Template

If your business plan needs to rely heavily on showcasing photos of your products (like food), this template is perfect for you. Get potential investors salivating at the sight of your business plan, and they’re sure to provide the capital you need.

Template #5: Fashion Business Plan Template

Serifs are in. Utilize this template with stunning serif as all the headers to create a contemporary and trendy business plan design that fits your business. Adjust the colors to match your brand and easily input your own content.

Template #6: Daycare Business Plan Template

Creating a more kid-friendly or playful business? This business plan template has bold colors and design elements that will perfectly represent your business and its mission. 

Use the pages you need, and remove any that you don’t. You can also duplicate pages and move the elements around to add even more content to your business plan.

Template #7: Consulting Business Plan Template

This classic business plan template is perfect for a consulting business that wants to use a stunning visual design to talk about its services.

Template #8: Coffee Shop Business Plan Template

Customize this coffee shop business plan template to match your own business idea. Adjust the colors to fit your brand or industry, replace photos with your own photography or stock photos that represent your business, and insert your own logo, fonts and colors throughout.

Template #9: SaaS Business Plan Template

A SaaS or service-based company also needs a solid business plan that lays out its financials, list of services, target market and more. This template is the perfect starting point.

Template #10: Small Business Plan Template

Every startup or small business needs to start out with a strong business plan in order to start off on the right foot and set yourself up for success. This template is an excellent starting point for any small business.

Template #11: Ecommerce Business Plan Template

An ecommerce business plan is ideal for planning out your pricing strategy of all of your online products, as well as the site you plan to use for setting up your store, whether WordPress, Shopify, Wix or something else.

Template #12: Startup Business Plan Template

Customize this template and make it your own! Edit and Download  

This is another generic business plan template for any type of startup to customize. Switch out the content, fonts and colors to match your startup branding and increase brand equity.

Template #13: One-Page Business Plan Template

Want just a quick business plan to get your idea going before you bite the bullet and map out your entire plan? This one-page template is perfect for those just starting to flesh out a new business idea.

Template #14: Salon Business Plan Template

This salon business plan template is easy on the design and utilizes a light color scheme to put more focus on the actual content. You can use the design as is or keep it as a basis for your own design elements.

Create Your Own Business Plan Today

Ready to write your business plan? Once you’ve created all of the most important sections, get started with a business plan template to really wow your investors and organize your startup plan.

Design beautiful visual content you can be proud of.

Trusted by leading brands

Recommended content for you:

Create Stunning Content!

Design visual brand experiences for your business whether you are a seasoned designer or a total novice.

About the Author

Chloe West is the content marketing manager at Visme. Her experience in digital marketing includes everything from social media, blogging, email marketing to graphic design, strategy creation and implementation, and more. During her spare time, she enjoys exploring her home city of Charleston with her son.

Home > Business > Business Startup

How To Write a Business Plan

We are committed to sharing unbiased reviews. Some of the links on our site are from our partners who compensate us. Read our editorial guidelines and advertising disclosure .

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

By signing up I agree to the Terms of Use and Privacy Policy .

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.

Compare the Top Small-Business Banks

Data effective 1/10/23. At publishing time, rates, fees, and requirements are current but are subject to change. Offers may not be available in all areas.

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.

Related content

• 5 Best Business Plan Software and Tools in 2023 for Your Small Business
• How to Get a Business License: What You Need to Know
• What Is a Cash Flow Statement?

Best Small Business Loans

5202 W Douglas Corrigan Way Salt Lake City, UT 84116

Accounting & Payroll

Point of Sale

Payment Processing

Inventory Management

Human Resources

Other Services

Best Inventory Management Software

Best Small Business Accounting Software

Best Payroll Software

Best Mobile Credit Card Readers

Best POS Systems

Best Tax Software

Stay updated on the latest products and services anytime anywhere.

By signing up, you agree to our Terms of Use  and  Privacy Policy .

Disclaimer: The information featured in this article is based on our best estimates of pricing, package details, contract stipulations, and service available at the time of writing. All information is subject to change. Pricing will vary based on various factors, including, but not limited to, the customer’s location, package chosen, added features and equipment, the purchaser’s credit score, etc. For the most accurate information, please ask your customer service representative. Clarify all fees and contract details before signing a contract or finalizing your purchase.

Our mission is to help consumers make informed purchase decisions. While we strive to keep our reviews as unbiased as possible, we do receive affiliate compensation through some of our links. This can affect which services appear on our site and where we rank them. Our affiliate compensation allows us to maintain an ad-free website and provide a free service to our readers. For more information, please see our  Privacy Policy Page . |

© Business.org 2024 All Rights Reserved.

• Credit cards
• View all credit cards
• Banking guide
• Loans guide
• Insurance guide
• Personal finance
• View all personal finance
• Small business
• Small business guide
• View all taxes

You’re our first priority. Every time.

We believe everyone should be able to make financial decisions with confidence. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free.

So how do we make money? Our partners compensate us. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Here is a list of our partners .

How to Write a Business Plan, Step by Step

Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

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.

LLC Formation

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

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

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

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

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

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

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

Your business’s registered name.

Address of your business location .

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

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

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

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

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.

How much do you need?

with Fundera by NerdWallet

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.

On a similar note...

Find small-business financing

Compare multiple lenders that fit your business

How to write a business plan in 12 steps (2024 edition)

This guide breaks down how to write a business plan and what you need to think about to make your business plan as persuasive as possible.

20 August 2024

This guide breaks down how to write a business plan, step-by-step, detailing what your document needs to include and what you need to think about to make your business plan as persuasive as possible.

What is a business plan?

A business plan is an essential document that can provide immense value for new and existing companies of all sizes. It is an overview that includes an outline of your business, its key objectives and plan for achieving important goals.

This information can be used to communicate strategic actions to internal teams and also attract interest from potential partners and investors . However, writing a business plan can be a lengthy and involved process. For many, using a business plan template can be a good way to get started.

For best results, you’ll need to do a lot of thinking and planning before you start writing your business plan. This way you have all the information and resources you need at your fingertips and won’t be under time pressure to come up with something at the last minute. After all, a well-thought-out business plan can help you avoid generic information and set your company up for success.

Download your free business plan template .

Why write a business plan?

Writing your business plan helps to get your strategy nailed down and onto the page. A plan that stays in your head is probably going to be full of unrealistic assumptions and biases, whereas a strategically thought-out and organised approach forces you to notice your blind spots and find a way forward.

If you’re looking for financing, a bank or investor needs to be persuaded by your business proposal and the opportunity to work with you. Therefore, a well-written business plan can help provide potential financial partners with the confidence that your business can become profitable. Your business plan gives them a comprehensive view of all aspects of your business and details your strategy for achieving your goals.

What are the main sections of a business plan?

Whatever your line of work, your business plan will generally need to provide the following:

An executive summary

A business overview

The market opportunity

Your products/services

How to write a business plan

Make sure you cover each of the following steps when preparing your document:

1. Write an executive summary

This section of your business plan should be 1–2 pages in length and enables potential financiers or partners to get an overview of what your business does and – most importantly — what the opportunity is for them. If they’re interested in the opportunity, they’ll conduct their own due diligence - and this will start with going through your business plan and financials.

It’s a good idea to write your executive summary last, when you’ve clarified your thinking around every section of the document. As an overview section, you don’t want to add any new content that isn’t in your business plan. Aim to keep this summary succinct and engaging by using simple, plain language, as this is much more persuasive than complicated or academic wording.

Use sub-headings and bullet points to help your most important information stand out, especially as busy executives may simply scan your executive summary and use this to decide whether they want to find out more.

What to include in an executive summary?

Make sure you include details on:

What your business does

What the opportunity is

What your unique selling points / differentiators are

How much funding you’re looking for

What the funding will be used for

How you'll succeed

Remember, you’re providing the big picture overview of your business - the detail is in the rest of the document and in the appendices.

2. Write your business overview

This section of your business plan needs to be more than just a list of what your business does. Its purpose is to excite those you’re hoping will work with you or help to fund your business.

Information to address includes:

What's the purpose of your business?

What problem does your business’ product or service solve?

What niche could it fill?

What’s different about your offering?

How are you better than anyone else at what you do?

Consider what your customer value proposition is by deciding what you want to achieve and what your number 1 benefit is for your customer.

3. Identify your USP

Think about what your unique selling points (USP) or differentiators are, and what proof-points you can provide to back them up.

For example, you can use terms like “market-leading” but if you don’t provide any evidence to back up your claims, your reader will take them with a big pinch of salt!

You should certainly reference any awards or endorsements that position you as the best person to provide your product or service, as well as any client testimonials. Make sure you include any education or experience that makes you an expert in your field as well.

4. Describe the market opportunity

Show you understand your industry, market and where you fit in it. While no-one can predict the future, offer up where you think the opportunity is for your business and make sales projections based on that. 

For example, imagine your business is selling personalised cookies - there's little competition in your area and you see your market opportunity to create designs for all calendar and holiday events. You expect to increase sales by 30% in one year and 50% in three years, driven primarily by word-of-mouth referrals.

Make sure you also consider macro trends that may create opportunities for you, such as social, environmental, or technological changes that may affect buying behaviour.

5. Include a SWOT analysis

Whatever your business strengths or opportunities, they’ll always be known and unknown weaknesses and threats; there’s no such thing as certainty in business or in life!

However, you can demonstrate that you’ve examined your business through different lenses and have a thorough understanding of it by doing a SWOT (strengths, weaknesses, opportunities, threats) analysis.

Don’t worry about drawing attention to your business’ shortcomings - every opportunity has them and it’ll give investors and partners confidence in you that you won't bury your head in the sand. Naturally, it's important that you specify what you’re going to do to address these weaknesses and counter these threats.

Here are some areas you can think about to get started: reputation, technology, location, experience, staff, overheads, competition, suppliers and price.

6. Present a competitor analysis

Let’s face it, no matter what industry you’re in, or what you’re selling, there’s going to be other businesses offering the same thing. But instead of worrying about the competition, use this as a positive opportunity to up your game and work out the unique advantages you have that will keep you competitive.

Identify your top 3 competitors and analyse what they're doing well and where they’re coming up short. Try to be as objective as possible and identify how to differentiate yourself from them.

You should also look into who the industry leaders are and what the benchmarks are for your industry so that you can set yourself targets for continuous improvement.

7. Create a customer persona

A customer persona is a fictional person who represents your company's ideal customer. Naturally, the persona can be based on a real person - the more you get to know your ideal customer, the more targeted and successful your marketing efforts will be.

To create a customer persona, you need to conduct research into your ideal customer’s age, sex, income, employment, daily activities, interests and hobbies. If you’re feeling unsure about your customer persona, you may need to give your ideal customer further thought and download the customer persona template to get started.

8. Write your marketing strategy

When you’ve created your customer persona, you need to work out how you’re going to reach them. Do they hang out on social media apps, like Facebook, Instagram, Pinterest, Twitter or LinkedIn? Or are they more used to local, traditional marketing like free local papers or high foot traffic areas?

Once you’ve figured where your audience is likely to hang out, you can outline your strategies for promoting and advertising your products or services in the next 12 months.

Make a list of the marketing channels you’ll use to achieve your advertising strategy and be sure to include your budget. How much can you set aside for advertising? And where are you most likely to see a return on your efforts? Paid ads on Facebook? Half or full paid spreads in an industry magazine? Or even a direct mail out? 

For more structured help around this, check out free course: Business 101 | Get social with your business on Facebook . 

9. Design your customer retention strategy

Business success relies heavily on the relationship you’re able to build with your customers. What techniques will you use to keep them coming back? Consider the following:

What can your business do to increase the number of repeat customers? 

Does your business have a referral or loyalty program? 

Do you have a post-purchase follow up in place?

Will you use surveys to track customer satisfaction?

What ways can you continue delivering outstanding service?

Is there a way to continue educating and adding value to your customers?

10. Present your financials

Most people who are looking at investing their time and/or money in your business will want to see your financial statements - your performance to date and your projections over the short and medium term. They'll also want to know how much you’ve received in funding to date and what these other sources of funding are - including your own investment.

Current finances

You need to show how your business has performed financially over the last year, highlighting metrics such as positive cashflow , net profit and assets.

Financial forecasts

You should also provide a balance forecast projecting total assets, total liabilities and net assets over 1, 2 and 3 years, and a profit and loss forecast for the same periods detailing gross profit /net sales, total expenses and net profit/loss. Finally, you should also provide a cash flow forecast month by month over the next year.

It’s also a good idea to speak to an expert like an accountant or bookkeeper about your finances and get advice on how best to present them in this all-important section of your business plan.

11. Detail how much funding is needed

Naturally, you also need to be very clear about how much money you’re looking for and what you plan to do with it. If you’re looking for a loan , you need to detail what it’s for, over what period it’ll be repaid, and what collateral you have to secure it.

12. Propose an exit strategy

Any financial stakeholder in your business will want a return on investment. If you’re pursuing this type of funding, you should include some detail on your proposed exit strategy . For example, do you want to sell the company at some point or go public?

Similarly, you should outline your succession plan so the business can continue to operate if you decide to step away from it. Likewise, you need a plan for what happens if the business loses money and can’t sustain itself. Documenting this means that everyone is on the same page and potential investors have this information upfront.

Frequently asked questions about writing a business plan:

When to write a business plan.

Typically, entrepreneurs write their business plans within the first year of operations. A business plan is a tool that helps business owners refine their strategy, attract partners and financiers, and grow their business.

If a business plan is written too soon, it may lack the substance that comes with time in the market. However, it’s important to note that a business plan isn't a static document - it can and should change as the business evolves.

How long should your business plan be?

There are no hard and fast rules around how long your business plan should be - it just needs to include all the relevant information. Aim for clear, concise sections and build a business plan that is as easy to read and navigate as possible.

Using a business plan template can help you make sure you have everything covered off, while also having a document that looks as professional as possible. Make sure you run a spelling and grammar check too - any sloppy errors can undermine your credibility.

What’s a business plan on a page?

It’s important to write your business plan as it helps to embed your strategy - as well as communicate what you’re about to potential partners or investors. When you have a comprehensive business plan you can easily adapt it to suit different audiences. For example, a full business plan is essential for raising capital but a business plan on a page may be enough for potential partners or employees.

What do venture capitalists look for in a business plan?

Venture capitalists invest money into businesses with the goal of achieving a return on their investment within the short to medium term. As a result, they’re looking for an attractive market opportunity, a clear point of differentiation, a strong management team, a proven track record, solid financials and, importantly, an exit opportunity.

Where to go for help or more information?

There are many great resources out there to help you fine-tune your business strategy and write your business plan. The Australian Government has a comprehensive website dedicated to supporting businesses at all stages of their journey.

You can also get help from Business Enterprise Centres , business advisors, accountants and fellow business owners, so your venture has the very best chance of success. 

Disclaimer:  Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.

Related Guides

How to get a business loan arrow right.

Discover how you can get the business loan you need to get your business up and running.

How to find investors: A guide for startups Arrow right

Business models: definitions, types and key components arrow right.

How to make a business plan

Table of Contents

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

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

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

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

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

What is a business plan?

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

Products or services

Target market

Competitors

Marketing and sales strategies

Financial plan

Management team

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

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

Business plan vs. business model canvas

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

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

Key partnerships

Key activities

Key propositions

Customer relationships

Customer segments

Key resources

Cost structure

Revenue streams

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

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

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

Why is a business plan important?

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

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

Helps to define the business goals and objectives

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

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

Guides decision-making

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

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

Attracts investors and secures funding

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

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

Identifies potential challenges and risks

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

Is there enough demand for my product or service?

Will I have enough capital to start my business?

Is the market oversaturated with too many competitors?

What will happen if my marketing strategy is ineffective?

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

Provides a basis for measuring success

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

Are we where we want to be at this point?

Did we achieve our goals?

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

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

How to make a business plan step by step

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

1. Create an executive summary

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

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

2. Write your company description

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

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

3. Conduct a market analysis

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

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

What does the current market look like?

Who are your competitors?

What are they offering?

What will give you a competitive advantage?

Who is your target market?

What are they looking for and why?

How will your product or service satisfy a need?

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

4. Describe your products and services

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

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

5. Design a marketing and sales strategy

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

Pricing strategy

Advertising and promotional tactics

Sales channels

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

6. Determine budget and financial projections

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

Some details to include in this section are:

Startup costs

Revenue projections

Profit and loss statement

Funding you have received or plan to receive

Strategy for raising funds

7. Set the organization and management structure

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

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

8. Make an action plan

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

Types of business plans

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

Startup business plan

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

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

Strategic business plan

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

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

Operational business plan

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

Organizational structure

Staffing plan

Production plan

Quality control

Inventory management

Supply chain

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

Growth-business plan

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

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

One-page business plan

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

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

Best practices for how to make a good business plan

Here are some additional tips for creating a business plan:

Use a template

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

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

Be practical

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

Be specific

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

Be thorough with your research

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

Get input from others

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

Review and revise regularly

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

Create a winning business plan to chart your path to success

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

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

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

Get on board in seconds

Join thousands of teams using Miro to do their best work yet.

• Starting a Business
• Growing a Business
• Small Business Guide
• Business News
• Science & Technology
• Money & Finance
• For Subscribers
• Write for Entrepreneur
• Tips White Papers
• Entrepreneur Store
• United States
• Asia Pacific
• Middle East
• South Africa

Copyright © 2024 Entrepreneur Media, LLC All rights reserved. Entrepreneur® and its related marks are registered trademarks of Entrepreneur Media LLC

How to Prepare and Write the Perfect Business Plan for Your Company Here's how to write a business plan that will formalize your company's goals and optimize your organization.

By Matthew McCreary May 5, 2021

Are you preparing to start your own business but uncertain about how to get started? A business plan ought to be one of the first steps in your entrepreneurial journey because it will organize the ideas that have been spinning around in your brain and prepare you to seek funding, partners and more.

What is a business plan?

A business plan is a detailed document that outlines a company's goals and how the business, well, plans to achieve those goals over the next three or more years. It helps define expected profits and challenges, providing a road map that will help you avoid bumps in the road.

Stever Robbins writes in an Entrepreneur article titled, "Why You Must Have a Business Plan," that a business plan "is a tool for understanding how your business is put together…. Writing out your business plan forces you to review everything at once: your value proposition, marketing assumptions, operations plan, financial plan and staffing plan." But, a business plan is about more than just reviewing the past state of your business or even what your business looks like today.

Robbins writes that a well-written business plan will help you drive the future by "laying out targets in all major areas: sales, expense items, hiring positions and financing goals. Once laid out, the targets become performance goals."

The business plan can help your company attract talent and funding, because when prospects ask about your business, you already have an articulated overview to offer them. How they react can allow you to quickly understand how others see your business and pivot if necessary.

What should you do before you write your business plan?

It might sound redundant, but you actually need to plan your business plan. Business plans can be complicated, and you'll be held accountable for the goals you set. For example, if you plan to open five locations of your business within the first two years, your investors might get angry if you only manage to open two.

That's why it's essential that, before writing your business plan, you spend some time determining exactly which objectives are essential to your business. If you're struggling to come up with a list of goals on your own, Entrepreneur article "Plan Your Business Plan" offers some questions you can ask yourself to spark some inspiration.

How determined am I to see this venture succeed?

Am I willing to invest my own money and work long hours for no pay, sacrificing personal time and lifestyle, maybe for years?

What's going to happen to me if this venture doesn't work out?

If it does succeed, how many employees will this company eventually have?

What will be the business's annual revenue in a year? What about in five years?

What will be the company's market share in that amount of time?

Will the business have a niche market, or will it sell a broad spectrum of goods and services?

What are my plans for geographic expansion? Should it be local or national? Can it be global?

Am I going to be a hands-on manager, or will I delegate a large proportion of tasks to others?

If I delegate, what sorts of tasks will I share? Will it be sales, technical work or something else?

How comfortable am I taking direction from others? Can I work with partners or investors who demand input into the company's management?

Is the business going to remain independent and privately owned, or will it eventually be acquired or go public?

It's also essential to consider your financial goals. Your business might not require a massive financial commitment upfront, but it probably will if you're envisioning rapid growth. Unless you're making your product or service from scratch, you'll have to pay your suppliers before your customers can pay you, and as "Plan Your Business Plan" points out, "this cash flow conundrum is the reason so many fast-growing companies have to seek bank financing or equity sales to finance their growth. They are literally growing faster than they can afford."

How much financing will you need to start your business? What will you be willing to accept? If you're desperate for that first influx of cash, you might be tempted to accept any offer, but doing so might force you to either surrender too much control or ask investors for a number that's not quite right for either side.

These eight questions can help you determine a few financial aspects of your planning stages:

What initial investment will the business require?

How much control of the business are you willing to relinquish to investors?

When will the business turn a profit?

When can investors, including you, expect a return on investment?

What are the business's projected profits over time?

Will you be able to devote yourself full-time to the business?

What kind of salary or profit distribution can you expect to take home?

What are the chances the business will fail, and what will happen if it does?

You should also consider who, primarily, is going to be reading your business plan, and how you plan to use it. Is it a means of raising money or attracting employees? Will suppliers see it?

Lastly, you need to assess the likelihood of whether you actually have the time and resources to see your plan through. It might hurt to realize the assumptions you've made so far don't actually make a successful business, but it's best to know early on, before you make further commitments.

Related: Need a Business Plan Template? Here Is Apple's 1981 Plan for the Mac.

How to Write a Business Plan

Once you've worked out all the questions above and you know exactly what goals you have for your business plan, the next step is to actually write the darn thing. A typical business plan runs 15 to 20 pages but can be longer or shorter, depending on the complexity of the business and the needs of your venture. Regardless of whether you intend to use the business plan for self-evaluation or to seek a seven-figure investment, it should include nine key components, many of which are outlined in Entrepreneur 's introduction to business plans:

1. Title page and contents

Presentation is important, and a business plan should be presented in a binder with a cover that lists the business's name, the principals' names and other relevant information like a working address, phone number, email and web address and date. Write the information in a font that's easy to read and include it on the title page inside, too. Add in the company logo and a table of contents that follows the executive summary.

2. Executive summary

Think of the executive summary as the SparkNotes version of your business plan . It should tell the reader in as few words as possible what your business wants and why. The executive summary should address these nine things:

The business idea and why it is necessary. (What problem does it solve?)

How much will it cost, and how much financing are you seeking?

What will the return be to the investor? Over what length of time?

What is the perceived risk level?

Where does your idea fit into the marketplace?

What is the management team?

What are the product and competitive strategies?

What is your marketing plan?

What is your exit strategy?

When writing the executive summary, remember that it should be somewhere between one-half page to a full page. Anything longer, and you risk losing your reader's attention before they can dig into your business plan. Try to answer each of the questions above in two or three sentences, and you'll wind up with an executive summary that's about the right length.

Related: First Steps: Writing the Executive Summary of Your Business Plan

3. Business description

You can fill anywhere from a few paragraphs to a few pages when writing your business description, but try again to keep it short, with the understanding that more sections will follow. The business description typically starts with a short explanation of your chosen industry, including its present outlook and future possibilities. Use data and sources (with proper footnotes) to explain the markets the industry offers, along with the developments that will affect your business. That way, everyone who reads the business description, particularly investors, will see that they can trust the various information contained within your business plan.

When you pivot to speaking of your business, start with its structure. How does your business work? Is it retail, service-oriented or wholesale? Is the business new or established? Is the company a sole proprietorship, partnership or corporation? Who are the principals and who are your customers? What do the distribution channels look like, and how can you support sales?

Next, break down your business's offerings. Are you selling a physical product, SaaS or a service? Explain it in a way that a reader knows what you're planning to sell and how it differentiates itself from the competition (investors call this a Unique Selling Proposition, or USP, and it's important that you find yours). Whether it's a trade secret or a patent, you should be specific about your competitive advantage and why your business is going to be profitable. If you plan to use your business plan for fundraising, you can use the business description section to explain why new investments will help make the business even more profitable.

This, like everything else, can be brief, but you can tell the reader about your business's efficiency or workflow. You can write about other key people within the business or cite industry experts' support of your idea, as well as your base of operations and reasons for starting in the first place.

4. Market strategies

Paint a picture about your market by remembering the four Ps: product, price, place and promotion.

Start this section by defining the market's size, structure and sales potential. What are the market's growth prospects? What do the demographics and trends look like right now?

Next, outline the frequency at which your product or service will be purchased by the target market and the potential annual purchase. What market share can you possibly expect to win? Try to be realistic here, and keep in mind that even a number like 25% might be a dominant share.

Next, break down your business's plan for positioning, which relates to the market niche your product or service can fill. Who is your target market, how will you reach them and what are they buying from you? Who are your competitors, and what is your USP?

The positioning statement within your business plan should be short and to the point, but make sure you answer each of those questions before you move on to, perhaps, the most difficult and important aspect of your market strategy: pricing.

In fact, settling on a price for your product or service is one of the most important decisions you have to make in the entire business plan. Pricing will directly determine essential aspects of your business, like profit margin and sales volume. It will influence all sorts of areas, too, from marketing to target consumer.

There are two primary ways to determine your price: The first is to look inward, adding up the costs of offering your product or service, and then adding in a profit margin to find your number. The second is called competitive pricing, and it involves research into how your competitors will either price their products or services now or in the future. The difficult aspect of this second pricing method is that it often sets a ceiling on pricing, which, in turn, could force you to adjust your costs.

Then, pivot the market strategies section toward your distribution process and how it relates to your competitors' channels. How, exactly, are you going to get your offerings from one place to the next? Walk the reader step by step through your process. Do you want to use the same strategy or something else that might give you an advantage?

Last, explain your promotion strategy. How are you going to communicate with your potential customers? This part should talk about not only marketing or advertising, but also packaging, public relations and sales promotions.

Related: Creating a Winning Startup Business Plan

5. Competitive analysis

The next section in your business plan should be the competitive analysis, which helps explain the differences between you and your competitors … and how you can keep it that way. If you can start with an honest evaluation of your competitors' strengths and weaknesses within the marketplace, you can also provide the reader with clear analysis about your advantage and the barriers that either already exist or can be developed to keep your business ahead of the pack. Are there weaknesses within the marketplace, and if so, how can you exploit them?

Remember to consider both your direct competition and your indirect competition, with both a short-term and long-term view.

6. Design and development plan

If you plan to sell a product, it's smart to add a design and development section to your business plan. This part should help your readers understand the background of that product. How have the production, marketing and company developed over time? What is your developmental budget?

For the sake of organization, consider these three aspects of the design and development plan:

Product development

Market development

Organizational development

Start by establishing your development goals, which should logically follow your evaluation of the market and your competition. Make these goals feasible and quantifiable, and be sure to establish timelines that allow your readers to see your vision. The goals should address both technical and marketing aspects.

Once the reader has a clear idea of your development goals, explain the procedures you'll develop to reach them. How will you allocate your resources, and who is in charge of accomplishing each goal?

The Entrepreneur guide to design and development plans offers this example on the steps of producing a recipe for a premium lager beer:

Gather ingredients.

Determine optimum malting process.

Gauge mashing temperature.

Boil wort and evaluate which hops provide the best flavor.

Determine yeast amounts and fermentation period.

Determine aging period.

Carbonate the beer.

Decide whether or not to pasteurize the beer.

Make sure to also talk about scheduling. What checkpoints will the product need to pass to reach a customer? Establish timeframes for each step of the process. Create a chart with a column for each task, how long that task will take and when the task will start and end.

Next, consider the costs of developing your product, breaking down the costs of these aspects:

General and administrative (G&A) costs

Marketing and sales

Professional services, like lawyers or accountants

Miscellaneous costs

Necessary equipment

The next section should be about the personnel you either have or plan to hire for that development. If you already have the right person in place, this part should be easy. If not, then this part of the business plan can help you create a detailed description of exactly what you need. This process can also help you formalize the hierarchy of your team's positions so that everyone knows their roles and responsibilities.

Finish the development and design section of your business plan by addressing the risks in developing the product and how you're going to address those risks. Could there be technical difficulties? Are you having trouble finding the right person to lead the development? Does your financial situation limit your ability to develop the product? Being honest about your problems and solutions can help answer some of your readers' questions before they ask them.

Related: The Essential Guide to Writing a Business Plan

7. Operations and management plan

Want to learn everything you'll ever need to know about the operations and management section of your business plan, and read a real, actual web article from 1997? Check out our guide titled, "Writing A Business Plan: Operations And Management."

Here, we'll more briefly summarize the two areas that need to be covered within your operations and management plan: the organizational structure is first, and the capital requirement for the operation are second.

The organizational structure detailed within your business plan will establish the basis for your operating expenses, which will provide essential information for the next part of the business plan: your financial statements. Investors will look closely at the financial statements, so it's important to start with a solid foundation and a realistic framework. You can start by dividing your organizational structure into these four sections:

Marketing and sales (including customer relations and service)

Production (including quality assurance)

Research and development

Administration

After you've broken down the organization's operations within your business plan, you can look at the expenses, or overhead. Divide them into fixed expenses, which typically remain constant, and variable, which will change according to the volume of business. Here are some of the examples of overhead expenses:

Maintenance and repair

Equipment leases

Advertising and promotion

Packaging and shipping

Payroll taxes and benefits

Uncollectible receivables

Professional services

Loan payments

Depreciation

Having difficulty calculating what some of those expenses might be for your business? Try using the simple formulas in "Writing A Business Plan: Operations And Management."

8. Financial factors

The last piece of the business plan that you definitely need to have covers the business's finances. Specifically, three financial statements will form the backbone of your business plan: the income statement, the cash-flow statement and balance sheet . Let's go through them one by one.

The income statement explains how the business can make money in a simple way. It draws on financial models already developed and discussed throughout the business plan (revenue, expenses, capital and cost of goods) and combines those numbers with when sales are made and when expenses are incurred. When the reader finishes going through your income statement, they should understand how much money your company makes or loses by subtracting your costs from your revenue, showing either a loss or a profit. If you like, you or a CPA can add a very short analysis at the end to emphasize some important aspects of the statement.

Second is the cash-flow statement, which explains how much cash your business needs to meet its obligations, as well as when you're going to need it and how you're going to get it. This section shows a profit or loss at the end of each month or year that rolls over to the next time period, which can create a cycle. If your business plan shows that you're consistently operating at a loss that gets bigger as time goes on, this can be a major red flag for both you and potential investors. This part of the business plan should be prepared monthly during your first year in business, quarterly in your second year and annually after that.

Our guide on cash-flow statements includes 17 items you'll need to add to your cash-flow statement.

Cash. Cash on hand in the business.

Cash sales . Income from sales paid for by cash.

Receivables. Income from collecting money owed to the business due to sales.

Other income. The liquidation of assets, interest on extended loans or income from investments are examples.

Total income. The sum of the four items above (total cash, cash sales, receivables, other income).

Material/merchandise . This will depend on the structure of your business. If you're manufacturing, this will include your raw materials. If you're in retail, count your inventory of merchandise. If you offer a service, consider which supplies are necessary.

Direct labor . What sort of labor do you need to make your product or complete your service?

Overhead . This includes both the variable expenses and fixed expenses for business operations.

Marketing/sales . All salaries, commissions and other direct costs associated with the marketing and sales departments.

Research and development . Specifically, the labor expenses required for research and development.

General and administrative expenses. Like the research and development costs, this centers on the labor for G&A functions of the business.

Taxes . This excludes payroll taxes but includes everything else.

Capital. Required capital for necessary equipment.

Loan payments. The total of all payments made to reduce any long-term debts.

Total expenses. The sum of items six through 14 (material/merchandise, direct labor, overhead, marketing/sales, research and development, general and administrative expenses, taxes, capital and loan payments).

Cash flow. Subtract total expenses from total income. This is how much cash will roll over to the next period.

Cumulative cash flow . Subtract the previous period's cash flow from your current cash flow.

Just like with the income statement, it's a good idea to briefly summarize the figures at the end. Again, consulting with a CPA is probably a good idea.

The last financial statement is the balance sheet. A balance sheet is, as our encyclopedia says, "a financial statement that lists the assets, liabilities and equity of a company at a specific point in time and is used to calculate the net worth of a business." If you've already started the business, use the balance sheet from your last reporting period. If the business plan you wrote is for a business you hope to start, do your best to project your assets and liabilities over time. If you want to earn investors, you'll also need to include a personal financial statement. Then, as with the other two sections, add a short analysis that hits the main points.

9. Supporting documents

If you have other documents that your readers need to see, like important contracts, letters of reference, a copy of your lease or legal documents, you should add them in this section.

Related: 7 Steps to a Perfectly Written Business Plan

What do I do with my business plan after I've written it?

The simplest reason to create a business plan is to help people unfamiliar with your business understand it quickly. While the most obvious use for a document like this is for financing purposes, a business plan can also help you attract talented employees — and, if you share the business plan internally, help your existing employees understand their roles.

But it's also important to do for your own edification, too. It's like the old saying goes, "The best way to learn something is to teach it." Writing down your plans, your goals and the state of your finances helps clarify the thoughts in your own mind. From there, you can more easily lead your business because you'll know whether the business is reaching the checkpoints you set out to begin with. You'll be able to foresee difficulties before they pop up and be able to pivot quickly.

That's why you should continue to update your business plan when the conditions change, either within your business (you might be entering a new period or undergoing a change in management) or within your market (like a new competitor popping up). The key is to keep your business plan ready so that you don't have to get it ready when opportunity strikes.

Entrepreneur Staff

Associate Editor, Contributed Content

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

Editor's Pick Red Arrow

• Lock This Learning Expert Developed a Hack to Get Honest Answers Out of People — 'I Was Shocked. Had I Not Asked He Never Would've Told Me.'
• The Largest Franchise Operator in the U.S. Owns 2,800 Locations — And He Just Added 83 Wendy's to His Portfolio
• She Batched a Beloved Product at Home , Inspired By a Black-Owned Business From the 1960s. Then It Became a Multimillion-Dollar Brand : 'We'd Never Intended This.'
• Lock I Was a Highly-Paid Executive In Customer Experience . Then I Started Working Minimum Wage Jobs, And Realized Everything I'd Gotten Wrong .
• 'Human-Capable' AI Agents Will Change the Workforce Within 3 Years , According to a CEO Currently Creating the 'Perfect' AI Employee
• Lock This CEO Might Have an Unconventional Morning Routine — But It's Her Secret for Leading the Multimillion-Dollar Company Behind Your Social Media

Most Popular Red Arrow

She started a 'fun' side hustle — then it earned $100,000 and became a multimillion-dollar business: 'beyond what i could ever have expected'.

Melissa Tavss, founder and CEO of boozy ice cream company Tipsy Scoop, was burnt out from her corporate job — so she revived a family tradition.

AI Startups Raised $50 Billion Last Year, But Some Investors Are Starting to Pass — Here's Why

AI can take more than $100 million to develop.

Infographic: The 20 Most Common Reasons Startups Fail and How to Avoid Them

These do's and don'ts can make or break your startup.

ChatGPT Finally Gives Businesses What They've Been Asking For

A new feature personalizes ChatGPT for every business client.

Amazon Cloud CEO Predicts a Future Where Most Software Engineers Don't Code — and AI Does It Instead

In a leaked chat, Garman told Amazon employees that in about two years, "it's possible that most developers are not coding."

U.S. Added 818,000 Fewer Jobs Than Reported. Here's What That Could Mean for the Fed's Plan to Cut Interest Rates.

Job growth figures across multiple sectors saw significant downward revisions.

Successfully copied link

Blog / Small business tips / How to create a business plan: A complete guide to writing your company roadmap

How to create a business plan: A complete guide to writing your company roadmap

A business plan is a roadmap that outlines what your business does, how it’s going to work and how you’re going to achieve your goals. 

According to Bplans , who worked with the University of Oregon to analyse academic research around planning, entrepreneurs who take the time to create a plan for their business idea are 152% more likely to start that business.

Further, 129% are more likely to push forward with it beyond the start-up phase. And companies that strategically plan grow 30% faster than those that don’t. 

In this guide, we’re going to walk you through how to write a business plan that helps your company start, build and achieve success.   

Table of contents

What is a business plan and why do you need one, the nine key components of a business plan and how to write them.

• Five top tips for writing a compelling business plan

📹 Masterclass video: How to write the perfect business plan

Wrapping up.

A business plan is a document that guides you through the various stages of building, launching and running your business. Essentially, it helps you put the building blocks in place to make your company a success.

If you’re bringing a new small business to market, a business plan will be crucial in:

• Securing funding or loans
• Achieving investment or raising venture capital
• Attracting talent or business partners
• Guiding your go-to-market strategy

All banks and most investors and venture capitalists will only invest in a business if they can see that they’ll get their money back. They want to know that you have the business idea, team, scalability and planned sales growth to succeed. A business plan gives financiers the details they need to make informed decisions. 

Similarly, for talent or prospective partners, a business plan is your assurance to them that your business matches their short and long-term career ambitions. 

A business plan also keeps you focused on what you need to do to accomplish your goals. If you’re not meeting your targets, you can turn to your business plan to help guide you on changes that need to be made. It’s the drawing board you can always go back to. 

Because of this, having a business plan is as important for existing businesses as it is for start-ups. 

Top Tip: Business plans also apply to side hustles. Even if you have a full-time job or already run a small business, a side hustle can be a great way to pull in extra income or capitalise on a hobby. But just because it doesn’t take up all of your time doesn’t mean it should lack structure. To learn more about how to effectively run a side business, read our guide to 5 side businesses you can start quickly and affordably 💡

How long should a business plan be?

According to Growthink surveys, 15 to 25 pages is the optimum business plan length. But the number of pages isn’t the ideal way to measure length. 

As Bplans points out: “A 20-page business plan with dense text and no graphics is much longer than a 35-page plan broken up into readable bullet points, useful illustrations of locations or products, and business charts to illustrate important projections.”

Instead, Bplans says that your business plan should: 

• Take no longer than 15 minutes to skim read . Make sure that key information in each section is easy for readers to find.
• Mirror the length of its audience . The length is directly tied to the intent. If the purpose is for outsiders who know nothing about your business to gain a deeper understanding, it must include detailed executive summaries and team descriptions. If the intent is to procure investment, it must be built to withstand legal scrutiny and include any information a bank would look for in a business loan application. Know your audience, and work backwards to create the ideal business plan to match that scenario (we’ll dive into exactly how to do this in a later section).

How to present your business plan?

Your business plan is designed to evolve as your business grows. It’s a living document that should be consistently tweaked to match the health and goals of your company. Because of this, it’s best to keep your plan as a digital document that can be easily updated and sent to third parties as a PDF. 

That said, there may be times when your plan needs to be presented to investors or bank managers in person, so it should always be print-ready with a front cover that includes your:

• Company name
• Company logo and colour scheme
• Business name and date
• Contact information

It should also have a contents page, with numbered pages and sections so that readers can easily find what they’re looking for.

When you are ready – register your business with Tide for only £14.99 ! Registering your business with Tide is incredibly fast, easy and only £14.99. You not only get to officially start your company, but you get a free business bank account at the same time, which is the best way to ensure you’re keeping your finances in order from day one. Be your own boss and register your company with Tide !

A business plan features nine main sections related to your business operations, structure and finances: 

• Executive summary
• Company description

Market analysis

• Management and company structure
• Service or product information
• Marketing and sales strategy
• Funding information
• Financial projections

Let’s take a closer look at each. 

1. Executive summary

The executive summary is a top-level look at your business that summarises the detailed information found in the rest of the sections.

It’s also your elevator pitch—a chance for you to immediately captivate the reader by portraying your mission, vision, goals, product, leadership, finance information and growth plans.

Picture yourself in a lift for 45 seconds with a potential investor. How would you sell your business? Think about that when writing this section. Be concise and compelling with your words.

Because it is a summary, it’s often easier to write this section last after you’ve fleshed out the finer details of your business plan .

Writing your executive summary

Start with the basic information:

• Your company name
• Company address
• Names of all owners and partners

Then, get into the business information. 

• Value proposition . Describe in one sentence what your company does and why it’s great. This is your value proposition. For example, Uber’s value proposition is “The smartest way to get around”. For email marketing platform MailChimp it’s “Send Better Email”. For Dollar Shave Club it’s “A great shave for a few bucks a month”.
• Problem and solution . In a paragraph, briefly explain the problem customers are facing and how your product or service solves it.
• Target customers. Who is your ideal customer? Be extremely specific. For example, if you’re selling men’s suits, your audience won’t simply be every man because every man wears suits. That doesn’t hold true. It’s more likely to be targeted towards ‘fashion-conscious men’ or ‘businessmen’.
• Competitors . List other companies that are solving the same problems you are and how they’re solving them.
• Team . A sentence or two on why your team is the best team to bring your product or service to market.
• Finances . Focus on the key aspects of your financial plan–your planned costs and how you will make money.
• Funding . Details of your start-up costs and how much you need to raise to get your business off the ground. 
• Milestones . Briefly mention what you’ve achieved so far and what goals you plan to achieve. This lets potential investors, talent or partners know how serious you are in building a successful business. 

As mentioned above, before you can write this section you have to flesh out all of your company details, including who you are, who you’re selling to, how you’re going to sell your product or service, what your financial goals are, how you will reach those financial goals, and so on. 

The rest of this article will inform you on how to do just that. 

2. Company description

The company description is your story. It digs deeper into your value proposition, looking at how you came to be and what you intend to achieve.

Break your description down into three sections: 

Mission statement

Company profile, business objectives.

Your mission statement is a sentence or short paragraph that describes why your business exists.

To create your mission statement, answer the following questions:

• What does my business do?
• How do we do it?
• Who do we do it for?
• What value are we bringing to customers?

For example, Patagonia’s mission statement is “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”

In a single sentence, they get across their aims and ambitions, their value to the market (safe, quality products) and their value to people and the world (helping the environment). 

Use this as inspiration to come up with a statement that captures the heart and soul of your business.

Top Tip: Your company description will also help to inform your business culture. You will carry these core values throughout all of your business behaviours and they will also influence how you make future business decisions. Because of this, it’s crucial to devote the necessary time and energy to get this right. To learn exactly how to do that, read our guide on why business culture matters & how to get it right from the start ☀️

In a paragraph or two, your company profile should detail your: 

• Founding date
• Company location
• Products or services
• Number of employees
• Details of company leaders and their roles
• Company milestones

The information is the most important thing here, so approach it like a business profile and stick to the facts and figures.

In a paragraph or two explain what you want to achieve as a business. This needs to be a realistic aim that investors can get behind and your team members can work towards. 

The SMART goals method can help you to ensure your goals are practical.

SMART stands for: Specific, Measurable, Attainable, Relevant, and Timely. 

Use graphs to add weight to your objectives. For example, if you aim to increase revenue from £100,000 in year one to £500,000 by year five, create a chart that plots your growth. The visual aspect helps to grab attention whilst providing readers with key information they may miss if skim reading. 

This chart from an example business plan does just that:

You’re immediately drawn to the planned-growth projections and want to learn about how they’ll reach such high goals. We will get into the specifics of how to create accurate sales and revenue forecasts in a later section.

Top Tip: To learn more about how to establish practical SMART goals that will inform your business strategy and help you effectively market your brand, read our beginners guide to digital marketing strategy . 

3. Market analysis

Marketing analysis focuses on three areas:

• Your target market (the industry your selling in)
• Your customers (who you’re selling to)
• Your competitors (who you’re selling against)

By detailing information about the themes and trends within your industry, you’ll be able to show that the appetite for your product or service exists. Outlining information about your ideal customer helps you to identify the marketing and sales tactics you can use to attract them. And highlighting your competitor’s strengths and weaknesses gives you a chance to showcase what you do better than the rest. 

Market analysis should identify the market as a whole, as well as your addressable market and your share of the market. From this information, you can begin to get an idea of your target market, which informs your messaging, positioning and unique selling point (USP).

Start by researching the current state of your industry and where the market is heading in terms of size, trends and projected growth.

Your approach here will depend on your business. For example, if you’re opening a small local shop, you should assess the market around your shop. If you’re starting an ecommerce business and selling UK-wide, you’ll need to analyse the market at a national level. 

When estimating market size, look at:

• Volume . The number of potential customers
• Value . The value of the market

You can find this information by searching for publicly available data or by commissioning a market research report. If you’re searching on a national level, you may find figures published online. On a local level, data might not be as easy to come by, which is where you’ll need to carry out your own research. 

Top Tip: Conducting market research takes time, but it’s important that you get a full picture of your audience to ensure your message and USP resonates. To learn more, read our detailed guide on how to conduct market research for your business idea ⚡️

Once you have the information, you can use TAM SAM SOM to work out your business’ relationship to the market size.

• TAM stands for Total Addressable Market
• SAM stands for Serviceable Addressable Market
• SOM stands for Serviceable Obtainable Market

• To calculate your TAM, work out how many people have a need for your business. For example, let’s say you’re opening a shop selling custom-designed women’s clothes in a town of 100,000 people. Market research shows that 50% (50,000) of residents are women. Your total addressable market would be 50,000 people. 
• To calculate your SAM, take your TAM and discount all the people that fall outside of your target market. Let’s say your target market is women between 18 and 35, with disposable income. This discounts 30,000 people, which means your serviceable addressable market is 40% (20,000) of your total addressable market. 
• To calculate your SOM, work out how many of your SAM you can realistically serve. Your shop offers a measuring service and design consultation but only to people in a five-mile radius, which means you can serve 200 people a month. That would mean serving 2,400 people a year, which makes your SOM around 12% of your SAM.

Ideal customer

Your ideal customer is the person your product or service is aimed at. In the above example of the women’s clothes shop, the ideal customer is between 18 and 35, with disposable income. 

Customer analysis digs deeper than this, looking at your target customers’ education, income, job, relationship, buying concerns, interests and more.

You’ll find methods to help you discover your ideal customer and create customer personas in our guide on how to create a go-to-market strategy . 

Competitors

Competitive analysis is the process of identifying gaps in the market that your product or service can fill. It’s about finding out what the competition does so you gain a competitive advantage. 

In our guide on how to run a competitive analysis , we walk you through the process of analysing the finer details of your rivals in five steps:

Step 1: Identify & segment your competitors

Step 2: Analyse their market positioning

Step 3: Review their content & social media

Step 4: Check out what their customers are saying

Step 5: Walk through their customer journey

Use this information to show potential investors and talent that your business is going places. Our competitive analysis matrix template is a great starting point.

Once complete, take it a step further and create a simple visual that clearly shows where your company outperforms the competition. Here is a basic example of how to build out this visual.

It’s hard to ignore a chart that checks all of the boxes. 

4. Management and company structure

This section goes into detail on how your company is structured and who is running it. 

The structure here means two different things:

Team structure

Company structure.

First, you need to show your management structure: what each leader’s role is within the company. 

The simplest way to show your company hierarchy is with an organisational chart like this example:

For each member of your team, give details on their background and credentials with a bio that includes their:

• Professional background
• Achievements

Including this information gives readers assurances that the team you have in place is well-positioned to take the company forward. 

If there are any roles yet to be filled, give details on those positions.

Company structure is your legal structure. For example, limited company or sole trader.

Top Tip: If you’re yet to decide on a business structure, you can weigh up the pros and cons for setting up as a sole trader or limited company in our sole trader vs limited company guide.

If you plan on changing the structure of your company in the future, include details on this as well. For example, you may start as a private limited company (Ltd), but grow to become a public limited company with shares offered to members of the public. 

5. Service or product information

Here is where you get to wax lyrical about your offer and why it’s better than anything currently on the market. 

This section should include: 

• A description of your product or service . Details on what it is and what it does.
• How your product or service will be priced . Do you offer tiered pricing or a subscription model, for example.

Top Tip: Choosing the right pricing strategy is another key part of your go-to-market strategy. Will you price higher, lower, or similar to your competitors? What does the market demand? How does your pricing strategy reflect the value of your products and services? To learn more about how to answer these questions, read our 6-step guide on how to price a product and achieve profitable markups 💷

• How your products compare to competitors . List several competitor products along with their pros and cons.
• The production process . Details on how your products are created, how your source materials, quality control management, supply chain, inventory and bookkeeping.
• Product lifecycle . Details on upsells and cross-sells, research and development plans and time between purchases.
• Orders . Details on how you process and fulfil orders.
• Legal aspects . Details on any intellectual property or trademarks you own.
• Future products or services . If you plan on expanding your offer, give details on the offer and any research and development plans.

While there are formal and practical details to get across, the main point of this section is to get the reader excited about your product. To do this:

• Focus on the benefits . Describe how features give value to the customer. Here are some examples of features turned into benefits:

• Highlight your features. Get across what features your product or service has that the competition doesn’t. For example, your product might be the cheapest on the market or your turnaround time might be quicker or your expertise might allow you to offer a better level of service. 
• Get across why you’re needed . Shine the light on why your product or service is important to the market. This will be especially crucial if your startup is bringing a new invention to the market, or you’re creating an entirely new market. 

6. Marketing and sales strategy

If your business is going to be a success, you need a marketing strategy and sales plan that takes customers on a journey from awareness to purchase.

This section of your business plan should include:

• Your target market . Reiterating the information from the market analysis section.
• Which marketing channels you’ll use and which you’ll prioritise . For example, social media, word of mouth, Google Ads, print or radio advertising, exhibition stands or fairs, or referrals.
• Your plan to attract customers at launch . For example, you might run an opening discount offer to people who share your post on social media. Or give a voucher to every customer who refers a friend.
• Your plan to retain customers . For example, you may offer reward programs that allow customers to collect points for every purchase that can be redeemed for free or discounted products.
• Your expected results . What you hope to achieve from your marketing and how it will help you grow your business in terms of sales and visibility. If you’ve already started marketing your business, give details on what you’ve done and how it’s benefited the business.

7. Funding information 

Funding information is all about how much money you need to start your business, why you need it and how you’ll use any capital. 

The most critical part of this is your startup costs, which detail:

• The cost of producing your product or service
• Your fixed outgoings
• The cost of equipment, premises, supplies, insurance and other necessities required to run your business

Top Tip: If you’re yet to work out how much capital you need, check out our guide on how much it costs to start a business in the UK 📌

If you have the figures in place, you can set out presenting them. 

This section should be broken down into three parts: 

Current and future funding requirements

How funds will be used, current and future financial plans.

Include how much money you need to get your business off the ground, along with any funding you’ll need in the foreseeable future (up to five years). Be clear about why you’re requesting a loan or investment and outline what your needs are based on in your financial forecasts (we’ll get onto those soon). 

If you’re offering equity in exchange for investment, provide details on how an investor will be paid, as well as how and when they can cash out. For most small businesses, investors are paid in dividends (a share of company profits).

This part should explain how you plan to use the funds so that investors can determine if your business is a worthwhile investment. If you plan on using capital for several things, list and provide costs for each.

Again, putting these numbers into a visual format will help to more clearly outline your vision.

Finally, if applicable, provide information on any current investments and/or outstanding loan repayment plans. 

If you’re seeking investment or a loan for the first time, most lenders will have their own repayment schedules. However, you should detail any factors that may affect lenders, such as any plans to relocate or sell the business. 

Unlike other sections, funding information will need to be tailored to each financier. Investors will be interested in return on investment (ROI), whereas lenders will be interested in loan repayments. Create separate reports so that information is relevant to the reader. 

Top Tip: Investors and banks will also be interested in your business credit report (if you have one). To learn more about why your business credit score is important and how it’s determined, read our guide to everything you need to know about your business credit score (and how to improve it) 🙌

8. Financial projections

Financial projections supplement your funding information by showing potential lenders and investors that your business has a positive financial outlook.

This section should include the following key information: 

• Sales forecast. The amount of money you expect to raise from sales.
• Cash flow statement. Your cash flow balance and monthly cash flow patterns–how much is coming in and going out of your business every month.
• Balance sheet. An overview of the financial health of your business.
• Profit and loss statement . Your profit level and how much you expect to make based on projected sales, minus the cost of overheads and providing goods or services. 

Top Tip: Unless you’re an accountant, this part of the business plan can be overwhelming. To learn more about the fundamentals of accounting and how to create each of the aforementioned statements, read our complete guide to accounting for startups 📣 

If your business is already established, you’ll need to include financial figures from the last three years (or however long you’ve been trading if it’s less than three years) for all of the above, other than your sales forecast. 

If you’re a new business, your financial figures need to be predicted.

We’ve built several spreadsheet templates to help you generate the below financial reports:

• Three main financial statements (balance sheet, profit and loss statement, cash flow statement)
• Cash flow forecast
• Estimated sales

Forecasting your finances

Sales forecast.

Use your market analysis and knowledge of industry trends to estimate your future sales. For the first year, break these figures down into monthly sales, detailing what you’re selling, price points and how much you expect to sell. Moving into the second and third year of business, reduce forecasting to quarterly sales.

Cash flow statement

As a startup, your cash flow statement becomes a cash flow forecast based on your sales forecast, minus your expenses. Your expenses are the: 

• Fixed costs . Expenses that are the same or close the same every month (e.g. rent, insurance and utilities).
• Variable costs . Expenses that vary every month depending on demand (e.g.costs for raw materials, production costs, shipping and advertising).

Provide monthly cash flow patterns for the first 36 months. Keep in mind that, depending on your business, you may need to account for a lag in revenue. For example, if you provide a service to a client, their payment terms might dictate the invoice is paid 60 days after being sent.

Top Tip: To learn more about the various types of expenses and how to manage them, read our guide to small business expense management 🙌

Balance sheet

Create a balance sheet by calculating company assets, minus company liabilities.  

Company assets include:

• Property you own
• Equipment you own
• Unsold inventory
• Company vehicles you own
• Outstanding invoices

Company liabilities include:

• The amount you owe on a business loan
• The amount you owe unpaid invoices

Your balance is the difference between your assets total and your liabilities total.

Profit and loss statement

Use the figures from your sales forecast, expenses and cash flow statement to forecast how much you expect in profit and losses for your first three years in business. 

Your statement needs profit and loss projections for each year, as well as a total figure for the three years and should include a breakdown of:

• Sales . Based on figures from your sales forecast.
• Cost of goods sold (COGS) . The total cost of selling your product or service. If you need help with this, check out our guide on everything you need to know about cost of sales .
• Gross margin . Your sales minus your COGS. This is usually listed as a percentage, which you can calculate as: 

Gross margin (total revenue – COGS / total revenue x 100

For example, £500,000 total revenue, minus £300,000 leaves a gross margin of £200,000. 

£200,000 / £500,000 x 100 = 40%

• Operating expenses . A list of all your expenses, minus COGS (which you’ve already included), tax, amortisation and depreciation. List each expense individually and include a total sum. 
• Operating income statement . Your total operating expenses minus your COGS, before interest, tax, amortisation and depreciation.
• Total expenses . Your expenses including interest, tax, amortisation and depreciation.
• Net profit . Your monthly and yearly bottom line.

List financial figures using bullet points and include graphs to show how you predict your business will grow over your first three years of trading.

9. Appendix 

The appendix is the place to include any supporting documents. If a lender or investor hasn’t requested additional documentation, you can choose to leave this section out. But it’s a good place to strengthen your business plan, by including: 

• Reference letters
• Credit reports
• Permits and licences
• Client contracts or customer purchase orders
• Legal documents
• Associations and memberships  

Format the appendix with a clear table of contents and sections that correspond to the business plan section.

5 top tips for writing a compelling business plan 

• Keep it concise . Say what you need to say using simple language (no jargon) in as few words as possible. Your business plan only needs to get the key information across. The intricacies can come later. 
• Make it easy on the eye . Most lenders and investors will skim read your business plan, picking out relevant information as they go. Use headings to define sections and make key data stand out on each page by using bullet points for lists, bolding important sentences and using graphs and charts to add weight to financial figures. 
• Think about your audience . Consider who your business plan is aimed at and write with them in mind. If it’s an internal plan, think about what your team would want to gain from reading the document. If it’s for a lender or investor, think about the questions they might ask and which information is of particular interest to them. 
• Get the figures right. If you’re forecasting costs, sales and expenses, numbers will never be 100% accurate and it’s better to overestimate than underestimate. However, figures must be realistic and they must add up. Expect lenders and investors to scrutinise your calculations. Always double and triple check the numbers. 
• Proofread and proofread again . Don’t let your hard work be undone by something as simple as a typo or grammar mistake. Proofread your document from start to finish and then finish to start. Have someone you trust look over it too.

You now know what goes into a strong business plan, but you might be wondering what tools and frameworks you can use to bring it to life.

In this Tide Masterclass, our Events Manager Cuan Hawker is joined by Tom Horbye , Head of Campaigns Development at Seedrs .

Seedrs connects investors and businesses. They help startups raise capital and grow a supportive community. As they put it, it’s “equity crowdfunding done properly”. It’s unlikely anyone has seen and improved more business plans than Tom!

Tom will explain:

• Why you need a business plan 📘
• How to structure your plan 📃 Two tried-and-tested structures that work.
• What to include in your plan 📋 And what to leave out.
• Tools, help and next steps 🛠

This Masterclass is useful for anyone thinking about starting their own business in the UK.

A business plan is the cornerstone of your company. By clearly detailing your business objectives, strategies, marketing and sales plans, and financial forecasts you’ll be able to set out your business goals and keep track of your progress. 

Use this guide to complete the key components and put together a plan that a) brings clarity to your team, and b) provides assurances to lenders and investors that your business is a safe bet.

Photo by William Ivan, published on Unsplash

Valentine Hutchings

Head of Community and small business enthusiast

Subscribe to our FREE business tips newsletter

I am a: Sole Trader Registered Business

By subscribing you agree to receive marketing communications from Tide. You can unsubscribe anytime using the link in the footer of any of our emails. See our privacy policy .

Thanks for signing up.

Related Articles

Pros and cons: 10 ways to fund your small business

How much does it cost to start a business in the UK?

Everything you need to know about your business credit score (and how to improve it)

A business bank account that's free, easy to open, and helps you start doing what you love..

Tide is about doing what you love. That’s why we’re trusted by 575,000+ sole traders, freelancers and limited companies throughout the UK.

Get useful stuff in your inbox

Be the first to hear about our webinars, new features and business tips to help you save time and money.

Welcome to the Tide community!

Contact our Support team now on phone   01277 284499 . They are on hand to answer any questions you may have about opening a Tide account or any of our products, 9am - 6pm daily.

• Case Studies
• Flexible Products

• Expert Insights
• Research Studies

• Creativity and Culture
• Management and Leadership
• Business Solutions

• Member Spotlight
• Employee Spotlight

How to write a business plan in seven simple steps

When written effectively, a business plan can help raise capital, inform decisions, and draw new talent.

Companies of all sizes have one thing in common: They all began as small businesses.  Starting small  is the corner for those just getting off the ground. Learn about how to make that first hire, deal with all things administrative, and set yourself up for success.

Writing a business plan is often the first step in transforming your business from an idea into something tangible . As you write, your thoughts begin to solidify into strategy, and a path forward starts to emerge. But a business plan is not only the realm of startups; established companies can also benefit from revisiting and rewriting theirs. In any case, the formal documentation can provide the clarity needed to motivate staff , woo investors, or inform future decisions.  

No matter your industry or the size of your team, the task of writing a business plan—a document filled with so much detail and documentation—can feel daunting. Don’t let that stop you, however; there are easy steps to getting started. 

What is a business plan and why does it matter? 

A business plan is a formal document outlining the goals, direction, finances, team, and future planning of your business. It can be geared toward investors, in a bid to raise capital, or used as an internal document to align teams and provide direction. It typically includes extensive market research, competitor analysis, financial documentation, and an overview of your business and marketing strategy. When written effectively, a business plan can help prescribe action and keep business owners on track to meeting business goals. 

Who needs a business plan?

A business plan can be particularly helpful during a company’s initial growth and serve as a guiding force amid the uncertainty, distractions, and at-times rapid developments involved in starting a business . For enterprise companies, a business plan should be a living, breathing document that guides decision-making and facilitates intentional growth.

“You should have a game plan for every major commitment you’ll have, from early-stage founder agreements to onboarding legal professionals,” says Colin Keogh, CEO of the Rapid Foundation—a company that brings technology and training to communities in need—and a WeWork Labs mentor in the UK . “You can’t go out on funding rounds or take part in accelerators without any planning.”

How to make a business plan and seven components every plan needs

While there is no set format for writing a business plan, there are several elements that are typically included. Here’s what’s important to consider when writing your business plan. 

1. Executive summary 

No longer than half a page, the executive summary should briefly introduce your business and describe the purpose of the business plan. Are you writing the plan to attract capital? If so, specify how much money you hope to raise, and how you’re going to repay the loan. If you’re writing the plan to align your team and provide direction, explain at a high level what you hope to achieve with this alignment, as well as the size and state of your existing team.

The executive summary should explain what your business does, and provide an introductory overview of your financial health and major achievements to date.  

2. Company description 

To properly introduce your company, it’s important to also describe the wider industry. What is the financial worth of your market? Are there market trends that will affect the success of your company? What is the state of the industry and its future potential? Use data to support your claims and be sure to include the full gamut of information—both positive and negative—to provide investors and your employees a complete and accurate portrayal of your company’s milieu. 

Go on to describe your company and what it provides your customers. Are you a sole proprietor , LLC, partnership, or corporation? Are you an established company or a budding startup? What does your leadership team look like and how many employees do you have? This section should provide both historical and future context around your business, including its founding story, mission statement , and vision for the future. 

It’s essential to showcase your point of difference in your company description, as well as any advantages you may have in terms of expert talent or leading technology. This is typically one of the first pieces of the plan to be written.

3. Market analysis and opportunity

Research is key in completing a business plan and, ideally, more time should be spent on research and analysis than writing the plan itself. Understanding the size, growth, history, future potential, and current risks inherent to the wider market is essential for the success of your business, and these considerations should be described here. 

In addition to this, it’s important to include research into the target demographic of your product or service. This might be in the form of fictional customer personas, or a broader overview of the income, location, age, gender, and buying habits of your existing and potential customers. 

Though the research should be objective, the analysis in this section is a good place to reiterate your point of difference and the ways you plan to capture the market and surpass your competition.

4. Competitive analysis 

Beyond explaining the elements that differentiate you from your competition, it’s important to provide an in-depth analysis of your competitors themselves.

This research should delve into the operations, financials, history, leadership, and distribution channels of your direct and indirect competitors. It should explore the value propositions of these competitors, and explain the ways you can compete with, or exploit, their strengths and weaknesses. 

5. Execution plan: operations, development, management 

This segment provides details around how you’re going to do the work necessary to fulfill this plan. It should include information about your organizational structure and the everyday operations of your team, contractors, and physical and digital assets.

Consider including your company’s organizational chart, as well as more in-depth information on the leadership team: Who are they? What are their backgrounds? What do they bring to the table? Potentially include the résumés of key people on your team. 

For startups, your execution plan should include how long it will take to begin operations, and then how much longer to reach profitability. For established companies, it’s a good idea to outline how long it will take to execute your plan, and the ways in which you will change existing operations.

If applicable, it’s also beneficial to include your strategy for hiring new team members and scaling into different markets. 

6. Marketing plan 

It’s essential to have a comprehensive marketing plan in place as you scale operations or kick off a new strategy—and this should be shared with your stakeholders and employees. This segment of your business plan should show how you’re going to promote your business, attract customers, and retain existing clients.

Include brand messaging, marketing assets, and the timeline and budget for engaging consumers across different channels. Potentially include a marketing SWOT analysis into your strengths, weaknesses, opportunities, and threats. Evaluate the way your competitors market themselves, and how your target audience responds—or doesn’t respond—to these messages.

7. Financial history and projections  

It’s essential to disclose all finances involved in running your company within your business plan. This is so your shareholders properly understand how you’re projected to perform going forward, and the progress you’ve made so far. 

You should include your income statement, which outlines annual net profits or losses; a cash flow statement, which shows how much money you need to launch or scale operations; and a balance sheet that shows financial liabilities and assets. 

“An income statement is the measure of your financial results for a certain period and the most accurate report of business activities during that time, [whereas a balance sheet] presents your assets, liabilities, and equity,” Amit Perry, a corporate finance expert, explained at a WeWork Labs educational session in Israel.

It’s crucial to understand the terms correctly so you know how to present your finances when you’re speaking to investors. Amit Perry, CEO and founder of Perryllion Ltd.

In addition, if you’re asking for funding, you will need to outline exactly how much money you need as well as where this money will go and how you plan to pay it back. 

12 quick tips for writing a business plan 

Now that you know what components are traditionally included in a business plan, it’s time to consider how you’ll actually construct the document.

Here are 12 key factors to keep in mind when writing a business plan. These overarching principles will help you write a business plan that serves its purpose (whatever that may be) and becomes an easy reference in the years ahead. 

1. Don’t be long-winded

Use clear, concise language and avoid jargon. When business plans are too long-winded, they’re less likely to be used as intended and more likely to be forgotten or glazed over by stakeholders. 

2. Show why you care

Let your passion for your business shine through; show employees and investors why you care (and why they should too). 

3. Provide supporting documents

Don’t be afraid to have an extensive list of appendices, including the CVs of team members, built-out customer personas, product demonstrations, and examples of internal or external messaging. 

4. Reference data

All information regarding the market, your competitors, and your customers should reference authoritative and relevant data points.  

5. Research, research, research

The research that goes into your business plan should take you longer than the writing itself. Consider tracking your research as supporting documentation. 

6. Clearly demonstrate your points of difference

At every opportunity, it’s important to drive home the way your product or service differentiates you from your competition and helps solve a problem for your target audience. Don’t shy away from reiterating these differentiating factors throughout the plan. 

7. Be objective in your research

As important as it is to showcase your company and the benefits you provide your customers, it’s also important to be objective in the data and research you reference. Showcase the good and the bad when it comes to market research and your financials; you want your shareholders to know you’ve thought through every possible contingency. 

8. Know the purpose of your plan

It’s important you understand the purpose of your plan before you begin researching and writing. Be clear about whether you’re writing this plan to attract investment, align teams, or provide direction. 

9. Identify your audience

The same way your business plan must have a clearly defined purpose, you must have a clearly defined audience. To whom are you writing? New investors? Current employees? Potential collaborators? Existing shareholders? 

Related articles

10. Avoid jargon

Avoid using industry-specific jargon, unless completely unavoidable, and try making your business plan as easy to understand as possible—for all potential stakeholders. 

11. Don’t be afraid to change it

Your business plan should evolve with your company’s growth, which means your business plan document should evolve as well. Revisit and rework your business plan as needed, and remember the most important factor: having a plan in place, even if it changes.

A business plan shouldn’t just be a line on your to-do list; it should be referenced and used as intended going forward. Keep your business plan close, and use it to inform decisions and guide your team in the years ahead. 

Creating a business plan is an important step in growing your company 

Whether you’re just starting out or running an existing operation, writing an effective business plan can be a key predictor of future success. It can be a foundational document from which you grow and thrive . It can serve as a constant reminder to employees and clients about what you stand for, and the direction in which you’re moving. Or, it can prove to investors that your business, team, and vision are worth their investment. 

No matter the size or stage of your business, WeWork can help you fulfill the objectives outlined in your business plan—and WeWork’s coworking spaces can be a hotbed for finding talent and investors, too. The benefits of coworking spaces include intentionally designed lounges, conference rooms, and private offices that foster connection and bolster creativity, while a global network of professionals allows you to expand your reach and meet new collaborators. 

Using these steps to write a business plan will put you in good stead to not only create a document that fulfills a purpose but one that also helps to more clearly understand your market, competition, point of difference, and plan for the future. 

For more tips on growing teams and building a business, check out all our articles on  Ideas by WeWork.

Caitlin Bishop is a writer for WeWork’s  Ideas by WeWork , based in New York City. Previously, she was a journalist and editor at  Mamamia  in Sydney, Australia, and a contributing reporter at  Gotham Gazette .

Should you send that follow-up? Get your answer by discovering the best practices for pitching to investors.

If you’ve been asking questions like, how will I know when I find a product market fit? How long should I explore before launching? Or what should I initially price my product? These are all questions that founders have asked, and below are the answers from the founders who’ve figured it out.

Tom Hewitson, Chief AI Officer at leading AI training company General Purpose , offers tips for small businesses

• Pricing Customers Get a Demo
• Platform Data Reporting Analytics Collaboration Security Integrations
• Solutions Strategic Planning Organizational Alignment Business Reporting Dashboards OKRs Project Management
• Industries Local Government Healthcare Banking & Finance Utilities & Energy Higher Education Enterprise

How To Write A Business Strategy: Your Four-Step Guide

Tricia Jessee

Tricia manages our implementation and onboarding team to ensure the success of ClearPoint customers.

Here’s a simple guide on how to write a business strategy that works.

Table of Contents

Creating a solid business strategy happens in three parts: 1) understanding where you stand strategically as an organization right now; 2) deciding where you want to be in the future; and 3) determining how you’ll get there. The steps below cover each of these areas, with steps three and four both being part of the final phase.

Jumpstart the strategic planning process with our free, downloadable templates., how to write a business strategy: four steps, step 1: conduct a swot analysis..

The best way to understand your organization’s current state is to conduct a SWOT (strengths, weaknesses, opportunities, threats) analysis. A SWOT analysis provides wide-ranging insights about your company from multiple perspectives. Not only does it reveal where things are going well and where you can improve internally, but it also requires you to evaluate the environment outside your company to understand potential threats and opportunities you can minimize or leverage (respectively) going forward.

To glean these insights, you’ll need to do some information-gathering from your employees, external stakeholders, and even your customers (where relevant). You can read more about how to do a SWOT analysis in this article, but in brief, here are the questions you should ask:

Once you’ve gathered all this information, study it. Identify seemingly significant points, things to follow up on, and trends. Also, look for connections between the areas. For example, some of your strengths may naturally support the identified opportunities, and eliminating certain weaknesses might present additional opportunities.

Step 2: Clarify your mission, vision, and values.

Next, with your SWOT insights in mind, you can begin thinking about where you want your company to go. This direction should be reflected in your organization’s mission and vision statements. A mission statement articulates your purpose—why the organization exists and the value of the product or service it provides. A vision statement clarifies the direction in which your organization is headed by stating the outcomes you expect to achieve in the near future.

Another element to consider is your core values; these define your organization’s fundamental beliefs and practices.

All of these elements are a foundational part of your organizational structure, and form the linchpin of your strategy.

The SWOT analysis you completed in Step 1 is helpful because it serves as an objective assessment of your company—what you’re good at and your weaknesses. Knowing this information will help you formulate realistic goals, and create a plan that the organization is reasonably prepared to execute. Without those insights, it’s possible you could be busy developing a business strategy that’s categorically beyond your reach.

Another way of articulating your strategy is with an OAS statement:

• Clarify your organization’s objective, or the reason you exist.
• Clarify your advantage, or how you do things differently, better, or more efficiently than competitors.
• Clarify the scope —what you’re doing (and not doing) to achieve your objective.

Step 3: Select a strategy management framework.

Before you begin to write a business strategy, choose a strategy management framework to hold it all together.

A strategy framework brings structure to your plan, connecting your projects and initiatives with the outcomes you hope to achieve. It serves as support for your organization’s daily activities, and makes your priorities clear to everyone involved. Think of it as the master plan for your strategy, unifying all activities organization-wide.

There’s no shortage of frameworks to choose from, including (our favorite) the Balanced Scorecard (BSC), Theory of Change (TOC), and Objectives and Key Results (OKRs) .

Step 4: Develop your five-year plan with SMART measures and objectives.

Now that you know where you’d like to go, it’s down to the details of creating a business strategy—what can you do that will get you there? Note that the framework you’ve chosen may use specific terminology, but you’re still essentially going through the same exercise: clearly identifying high-level goals and performance measures .

Using the Balanced Scorecard as an example:

• You’ll create objectives, which are high-level organizational goals. To do this, focus on what your organization is trying to accomplish strategically. A very general example of an objective would be “Become an internationally-recognized brand.” Organizations using the BSC typically create 10 to 15 strategic objectives .
• You’ll create measures, which help you understand if you’re accomplishing your objectives. Using the above example, a measure would force you to answer the question, “How do I know that I’m becoming an internationally recognized brand?” Create one to two measures per objective. Also known as KPIs, measures use the process of measurement to help you understand what you can influence and which actions you can take. (Note that these might change if you discover over time that a particular measure is not accurate.)
• You’ll set targets for your measures. By setting targets, you’ll be able to see whether or not you’re on track to meet your specific goals.

In ClearPoint, you can structure your plan with common elements, creating linkages (as many as needed) to show alignment. You can also customize the terminology you use to match the framework you’re using.

Tip: Use the SMART framework to create objectives.

SMART is an acronym for specific, measurable, attainable, realistic, and timely. This methodology will guide you in creating goals that are clear and achievable. Each objective you create should be:

• Specific: Goals should be well-defined and explicitly state who, what, when (see “Timely,” below), where, and why.
• Measurable: Goals should be quantitative and number-oriented.
• Attainable: Goals should be feasible given your organization’s capabilities and resources.
• Realistic: Goals should be realistic given the external environment and your company’s current stage of growth.
• Timely: Goals should have an end date, and, if applicable, dates for completion of various phases.

What happens after you write a business strategy? How To Complete The Strategic Planning Process

Learning how to write the business strategy itself is only part of the strategic planning process. Once you’ve created your plan, there are a few more steps to complete in order to set yourself up to execute it successfully.

Execution is the most difficult part of strategy. It’s easy to generate excitement around the initial writing of a plan; the hard part is sustaining momentum over the space of three to five years. Doing the following as part of the planning phase will put you in the best possible position as you begin strategy implementation:

Communicate your plan organization-wide.

No matter how good your business plan is, it won’t work if your co-workers at the executive, management, and employee levels don’t know how to contribute to it, or if they simply don’t know about it. That’s why you need to create a strategy communication plan that builds awareness.

A strategy map is a visual representation of the things your organization must do well in order to execute its plan successfully. It is easy to understand and share. For more ideas on how to communicate strategy effectively, read this article.

Set up a way to measure your results.

To know if you’re making progress, develop a plan to report on your strategy regularly. The best way to do that is with strategy reporting software like ClearPoint. ClearPoint bridges the gap between strategy creation and execution, helping you to maintain focus on the big picture (your objectives) while managing all the operational pieces that will bring it to fruition.

In ClearPoint, you can work within the framework of your choice (Balanced Scorecard, OKRs, etc.) and focus on the data that drives results.

ClearPoint users are more likely to achieve their goals because they can:

• Clearly see how measures and projects align with objectives
• Spot trends and learn the key influencers of outcomes
• Understand how all departments contribute to the organization’s goal

In addition, they are more likely to stick with strategy execution for the long haul because they can:

• Automate data collection and report generation , removing the burdens traditionally associated with manual reporting
• Keep conversations continuously centered around strategy, using ClearPoint as a guide
• Provide open access (if desired) to progress data to keep employees informed and motivated

Developing a business strategy is only a prelude to the hard work entailed in putting it to work. But with preparation and the right tools, you have a very good chance of being the kind of organization that actually accomplishes what it sets out to do. If you want to talk more about how ClearPoint can help, please reach out.

What are the different types of business strategies?

Different types of business strategies include:

- Growth Strategy: Focuses on expanding the company’s market share, product line, or geographic reach. - Cost Leadership Strategy: Aims to become the lowest-cost producer in the industry to attract price-sensitive customers. - Differentiation Strategy: Involves offering unique products or services that stand out from competitors. - Focus Strategy: Concentrates on serving a specific market niche, either through cost focus or differentiation focus. - Innovation Strategy: Emphasizes creating new products, services, or processes to gain a competitive edge. - Sustainability Strategy: Integrates environmental and social considerations into the business model to meet the needs of present and future generations.

How can I conduct a SWOT analysis for my business?

To conduct a SWOT analysis for your business:

- Identify Strengths: List internal strengths such as strong brand reputation, skilled workforce, proprietary technology, and robust financial health. - Identify Weaknesses: List internal weaknesses such as limited resources, outdated technology, or gaps in capabilities. - Identify Opportunities: List external opportunities such as market growth, emerging trends, technological advancements, and regulatory changes. - Identify Threats: List external threats such as competition, market volatility, economic downturns, and changing customer preferences. - Analyze and Prioritize: Analyze the items in each category and prioritize them based on their impact on your business.

How can I clarify my mission, vision, and values?

To clarify your mission, vision, and values:

- Define Mission: Articulate the purpose of your business, what it does, who it serves, and how it serves them. It should be clear and concise. - Define Vision: Outline your long-term aspirations and what you aim to achieve in the future. It should be inspiring and forward-looking. - Define Values: Identify the core principles and beliefs that guide your business’s behavior and decision-making. They should reflect your company culture and ethics. - Engage Stakeholders: Involve employees, customers, and other stakeholders in the process to ensure alignment and buy-in. - Communicate Clearly: Ensure the mission, vision, and values are communicated clearly across the organization and incorporated into all strategic planning.

What are some different strategy management frameworks?

Different strategy management frameworks include:

- Balanced Scorecard: A framework that balances financial and non-financial performance measures across four perspectives: financial, customer, internal processes, and learning and growth. - SWOT Analysis: A tool for identifying strengths, weaknesses, opportunities, and threats to inform strategic planning. - Porter’s Five Forces: Analyzes the competitive forces within an industry to understand its attractiveness and potential profitability. - PEST Analysis: Examines the external macro-environmental factors (Political, Economic, Social, Technological) that could impact the organization. - OKR (Objectives and Key Results): A goal-setting framework that defines clear objectives and tracks the outcomes to measure progress. - Growth-Share Matrix: Helps businesses prioritize their product portfolio based on market growth and market share.

How can I develop a five-year plan for my business?

To develop a five-year plan for your business:

-Set Clear Objectives: Define long-term goals that align with your mission and vision. - Conduct a SWOT Analysis: Assess your business’s strengths, weaknesses, opportunities, and threats to inform strategic decisions. - Define Key Initiatives: Identify the key initiatives and projects needed to achieve your objectives. - Create Action Plans: Develop detailed action plans with timelines, resources, and responsibilities for each initiative. - Allocate Resources: Ensure you have the necessary resources (financial, human, technological) to support your plans. - Establish KPIs: Set key performance indicators to measure progress and success over the five-year period. - Review and Adjust: Regularly review the plan and make adjustments based on performance and changing external conditions.

Latest posts

Streamlining Strategic Planning with AI

Top 5 Change Management Challenges & How to Navigate Them Successfully

Strategic Planning in Times of Change: A Roadmap to Success

• Newsletters
• Best Industries
• Business Plans
• Home-Based Business
• The UPS Store
• Customer Service
• Black in Business
• Your Next Move
• Female Founders
• Best Workplaces
• Company Culture
• Public Speaking
• HR/Benefits
• Productivity
• All the Hats
• Digital Transformation
• Artificial Intelligence
• Bringing Innovation to Market
• Cloud Computing
• Social Media
• Data Detectives
• Exit Interview
• Bootstrapping
• Crowdfunding
• Venture Capital
• Business Models
• Personal Finance
• Founder-Friendly Investors
• Upcoming Events
• Inc. 5000 Vision Conference
• Become a Sponsor
• Cox Business
• Verizon Business
• Branded Content
• Apply Inc. 5000 US

Inc. Premium

How to Write a Business Plan: A Step-by-Step Template

Writing a business plan doesn't have to be an intimidating task, but it does require foresight, honesty, and plenty of research. here is an outline and some smart tips to help get you started..

Creating a business plan is the first and most crucial step to building a successful company .

"A business plan is important because it communicates to everyone involved in the organization what the goals are, and how management plans to get there," says Drew Starbird, a professor of operations management and information systems at Santa Clara University's Leavey School of Business.

Growing up, Starbird helped to manage Hall & Rambo, his family's commercial insurance firm that launched roughly 110 years ago. The San Jose, California-based company began by serving fruit processing plants in the Silicon Valley before pivoting in the late 1960s to work with tech ventures.

At Leavey School of Business, the My Own Business Institute (MOBI)  program provides online education tools for entrepreneurs around the world. Its website generates roughly 70,000 page views each month. Business owners can register for a web course and earn a certificate for free. MOBI also offers a downloadable business plan template , which is designed to help startups in any sector--from bakeries to IT services.

The parts that make up a business plan are straightforward. According to guidelines from the U.S. Small Business Administration , you need to include the following:

• an executive summary
• a company description
• a market analysis
• an organization and management breakdown
• a description of the service or product line
• an overview of your marketing strategy, a request for funding (if applicable)
• some financial projections to back up your ask
• an Appendix (optional) that includes relevant resumes, permits, or leases. 

Here's a step-by-step breakdown to get you started with your business plan, along with a few expert tips on how to attract investors.

1. Describe your startup. 

The first step is to simply describe the business you want to build. During the process, it's important to be honest about the obstacles you're likely to face.

Starbird suggests including a breakdown of the target market and customers. You should also be clear about the factors offering a competitive edge. 

Be careful not to have any blinders on when it comes to your product or service. "People spend a lot of time focusing on the features that make them unique without taking the time to translate that into a value proposition," says Starbird. 

Do diligent research on what your market is, and how to communicate with customers accordingly. "The most successful investors are looking for an idea that is going to have a clear and understandable market potential," he adds.

2. Have a thorough plan: Document all aspects of your company. 

"As the founder, you need to be concerned about all parts of the plan," says Starbird. That means including any licensing agreements, or your location strategy, for example. 

It's especially important to know and understand your numbers. "The number one reason firms go under is inadequate cash flow. If you don't know what's going on in that area, you're going to be in big trouble," Starbird warns.

3. Make sure the plan is modifiable for different audiences.

Different sections of your business plan will be more important depending on your audience. Investors, for instance, will want to see your financial projections, whereas employees might be more concerned with the organizational structure of your company.

The SBA recommends that you project that status of your company for between three and five years into the future, though it's a good idea to outline your annual goals, too. Keep in mind that the further ahead you look, the less accurate your conclusions are going to be.

"A five-year horizon is fine, but a thorough business plan looks beyond that [up to 10 years], with the recognition that some of the forecasts would be of decreasing accuracy," says Starbird.

He recommends updating your business plan every year as the company grows.

4. Include details to put you over the edge.  

When writing the market analysis, it's a good idea to include any information about external growth trends, and why one company might have the market share. Pricing power -- meaning how consumer demand would be affected if your company shifted its prices -- is one detail that often gets excluded from business plans, but which can help put you over the edge.

It's also important to keep your expectations realistic and honest: The biggest mistake entrepreneurs can make when writing a business plan, says Starbird, is to be overly optimistic with sales and future cost estimates.

5. Remember why you care. 

At Hall & Rambo, Starbird says his primary role was to be the "gopher guy." It allowed him to learn the ropes of running a business, and to prioritize goals beyond the bottom line.

"It was very clear working with my father and grandfather and uncle that it wasn't just about making money," he said. Other priorities included raising the payroll for employees, offering competitive benefits, and making an impact on the local Central California community.

Your business plan should reflect not only your financial goals, but also your values, and those of the community you're working to build. 

The Daily Digest for Entrepreneurs and Business Leaders

Privacy Policy

Everything that you need to know to start your own business. From business ideas to researching the competition.

Practical and real-world advice on how to run your business — from managing employees to keeping the books

Our best expert advice on how to grow your business — from attracting new customers to keeping existing customers happy and having the capital to do it.

Entrepreneurs and industry leaders share their best advice on how to take your company to the next level.

• Business Ideas
• Human Resources
• Business Financing
• Growth Studio
• Ask the Board

Looking for your local chamber?

Interested in partnering with us?

Start » startup, writing a business plan here’s how to do it, step by step.

At the foundation of every strong business is a solid business plan. Looking to develop a business plan for your new venture? Here’s what to include in each step.

In our Startup2021 series, we're helping aspiring entrepreneurs navigate the new business climate of the COVID-19 era. Each week, we'll share an in-depth look at one step you can to take toward launching your business in 2021.

At the foundation of every strong business is a solid business plan. A business plan outlines important information regarding a company’s operations and goals, and serves as a blueprint for how to achieve those goals. This document not only helps entrepreneurs think through and research their venture thoroughly, it also demonstrates to investors the viability of the business idea.

If you’re looking to develop a business plan for your new venture, it’s important to include all the necessary information. Here are the nine sections to include in a strong business plan, step by step.

1. Executive summary.

Your business plan should begin with an executive summary, which outlines what your company is about and why it will succeed. This section includes your mission statement, a brief description of the product or service you are offering, a summary of your plans and basic logistical details about your team.

2. Company description.

Your company description should further detail the logistics of your business, such as its registered name, address and key people involved. Here, you should also provide specific information about your product or service, including who your business serves and what problem you solve for that population.

3. Market analysis.

Conducting thorough market research can help you understand the nature of your industry, as well as how to stand out from competitors. Include a summary of your research findings in this section. Consider any trends or themes that emerge, what other successful businesses in the field are doing (or failing to do) and how your business can do better.

[Read: How to Conduct a Market Analysis ]

4. Organization and management.

This section should include your business’s legal structure — for example, whether you are incorporating as an S or C corporation, forming a partnership or operating as an LLC or sole proprietor. Provide pertinent information on your leadership team and other key employees, including each relevant individual’s percent of ownership and extent of involvement.

Describe how you will attract and retain your customer base, including what makes you stand out from competitors, and detail the actual sales process.

5. Products/services.

Your product or service is the crux of your business idea, so you’ll want to ensure you make a strong case for it being on the market. Use this section to elaborate on your product or service throughout its life cycle, including how it works, who it serves, what it costs and why it is better than the competition. If you have any pending or current intellectual property, include this information here. You can also detail any research and development for your product or service in this section.

6. Marketing and sales.

In this section, you should explain what your marketing and sales strategies are, and how you will execute them. (Note that these strategies will likely evolve over time, and you can always make adjustments as needed.) Describe how you will attract and retain your customer base, including what makes you stand out from competitors, and detail the actual sales process.

[Read: 5 KPIs to Measure Your Business’s Marketing Success ]

7. Funding request.

If you’re seeking funding, this section is critical for investors to understand the level of funding you need. Specify what type of funding you need (debt or equity) and how much, as well as how that capital will be used. You should also include information on any future financial plans, such as selling your business or paying off debts.

8. Financial projections.

The goal of your financial projections section is to show that your business is viable and worth the investment. Offer a financial forecast for the next five years, using information from current or projected income statements, balance sheets and cash flow statements to support it. Graphs and charts can be an especially helpful tool in visualizing your business’s finances.

9. Appendix.

Finally, use the appendix for any information that could not fit or did not apply to other sections of the document. Information such as employee resumes, permits, credit history and receipts are often included in this section. If you have a long appendix, consider adding a table of contents to make it easier for the reader.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

Follow us on Instagram for more expert tips & business owners stories.

CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here .

Subscribe to our newsletter, Midnight Oil

Expert business advice, news, and trends, delivered weekly

By signing up you agree to the CO— Privacy Policy. You can opt out anytime.

For more startup tips

How to choose a legal entity for your startup, 5 steps to use social media to launch your business, 5 alternatives to writing a traditional business plan.

By continuing on our website, you agree to our use of cookies for statistical and personalisation purposes. Know More

Welcome to CO—

Designed for business owners, CO— is a site that connects like minds and delivers actionable insights for next-level growth.

U.S. Chamber of Commerce 1615 H Street, NW Washington, DC 20062

Social links

Looking for local chamber, stay in touch.

More From Forbes

How To Start A Business Plan: A Step-By-Step Guide

• Share to Facebook
• Share to Twitter
• Share to Linkedin

Creating a business plan is a critical first step for any entrepreneur. Knowing how to start a business plan will help you create a roadmap, guiding your business from startup to growth and beyond. Whether you're looking for investment, trying to set clear goals, or simply organizing your thoughts, a solid business plan can make all the difference.

Here is a guide to help you get started on your business plan:

1. executive summary.

What It Is: This section summarizes your business plan as a whole and outlines your company profile and goals.

What to Include:

• Business name and location
• Products or services offered
• Mission statement
• The purpose of the plan (e.g., seeking funding, guiding the startup process)

Tip: Keep it concise. Although it's the first section, it's often best to write it last, after you’ve detailed everything else.

2. Company Description

What It Is: This section provides detailed information about your company, including who you are, what you do, and what markets you serve.

Best High-Yield Savings Accounts Of 2024

Best 5% interest savings accounts of 2024.

• Your business structure (e.g., sole proprietorship, LLC, corporation)
• The industry and marketplace needs your business meets
• Your business’s objectives and how you stand out from competitors

Tip: Use this section to highlight your company’s strengths and what makes you unique.

3. Market Research

What It Is: Market research demonstrates your understanding of the industry and target market.

• Market size and growth potential
• Target customer demographics
• Market trends and outlook
• Competitive analysis, including strengths and weaknesses of competitors

Tip: Include data and statistics to back up your findings and show that you’ve done your homework.

4. Organization and Management

What It Is: This section outlines your business’s organizational structure and management team.

• Organizational chart
• Information about the ownership of the company
• Backgrounds and qualifications of the management team
• Roles and responsibilities within the company

Tip: Highlight the skills and experiences of your team that will help the business succeed.

5. Products or Services Line

What It Is: Here, you detail the products or services you offer or plan to offer.

• A description of each product or service
• The lifecycle of products or services
• Research and development activities, if applicable
• Intellectual property, such as patents or trademarks

Tip: Focus on the benefits your products or services bring to your customers.

6. Marketing and Sales Strategy

What It Is: This section explains how you will attract and retain customers.

• Marketing strategies, including advertising, promotions, and public relations
• Sales strategies, including sales processes, channels, and tactics
• Pricing strategy and how it compares to competitors

Tip: Ensure your marketing and sales strategies are aligned with your market research findings.

7. Funding Request

What It Is: If you’re seeking funding , this section outlines your requirements.

• Your current funding needs
• Future funding requirements over the next five years
• How you intend to use the funds
• Potential future financial plans (e.g., selling the business, repaying debt)

Tip: Be specific and realistic about how much funding you need and how it will be used.

8. Financial Projections

What It Is: Financial projections provide a forecast of your business’s financial future.

• Income statements
• Cash flow statements
• Balance sheets
• Break-even analysis

Tip: Use realistic and conservative estimates. Consider hiring a financial professional to help with this section if needed.

9. Appendix

What It Is: The appendix includes any additional information that supports your business plan.

• Resumes of key management team members
• Permits and leases
• Legal documents
• Detailed market research data
• Product photos

Tip: Only include essential information that adds value to your business plan.

Final Tips for Creating a Business Plan

Creating a business plan requires clarity and precision. First and foremost, keep your business plan clear and concise. Avoid using jargon or complex language that could make the plan difficult to read or understand. Your aim should be to communicate your ideas effectively and efficiently.

Next, be realistic in your approach. Ensure that your goals and financial projections are attainable based on your research and understanding of the market. Overly ambitious projections can undermine your credibility and potentially lead to unrealistic expectations.

It's also essential to remember that a business plan is a dynamic document. As your business grows and market conditions change, you should revisit and revise your plan regularly. This helps you stay aligned with your goals and adapt to new challenges and opportunities.

Finally, seek feedback from experienced business professionals. Having someone with business experience review your plan can provide valuable insights and help identify any potential issues or areas for improvement. Their feedback can enhance the overall quality and effectiveness of your business plan.

By following these tips, you'll be better equipped to create a robust and effective business plan that can guide your business towards success.

The bottom line is that starting a business plan may seem challenging, but with careful planning and attention to detail, you can create a comprehensive guide to steer your business toward success. Use this step-by-step guide to ensure that all essential components are covered, giving your business the best possible start.

Melissa Houston, CPA is the author of Cash Confident: An Entrepreneur’s Guide to Creating a Profitable Business and the founder of She Means Profit . As a Business Strategist for small business owners, Melissa helps women making mid-career shifts, to launch their dream businesses, and I also guide established business owners to grow their businesses to more profitably.

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

• Editorial Standards
• Reprints & Permissions

Join The Conversation

One Community. Many Voices. Create a free account to share your thoughts. 

Forbes Community Guidelines

Our community is about connecting people through open and thoughtful conversations. We want our readers to share their views and exchange ideas and facts in a safe space.

In order to do so, please follow the posting rules in our site's  Terms of Service.   We've summarized some of those key rules below. Simply put, keep it civil.

Your post will be rejected if we notice that it seems to contain:

• False or intentionally out-of-context or misleading information
• Insults, profanity, incoherent, obscene or inflammatory language or threats of any kind
• Attacks on the identity of other commenters or the article's author
• Content that otherwise violates our site's  terms.

User accounts will be blocked if we notice or believe that users are engaged in:

• Continuous attempts to re-post comments that have been previously moderated/rejected
• Racist, sexist, homophobic or other discriminatory comments
• Attempts or tactics that put the site security at risk
• Actions that otherwise violate our site's  terms.

So, how can you be a power user?

• Stay on topic and share your insights
• Feel free to be clear and thoughtful to get your point across
• ‘Like’ or ‘Dislike’ to show your point of view.
• Protect your community.
• Use the report tool to alert us when someone breaks the rules.

Thanks for reading our community guidelines. Please read the full list of posting rules found in our site's  Terms of Service.

How To Write a Thrift Store Business Plan in 9 Steps

by ThriftCart | Aug 21, 2024

Have you ever wanted to run your own thrift store or secondhand shop? With the right approach, your thrift businesses can be successful and profitable. If you’re interested in becoming a thrift store owner, you’ll need a business plan that outlines your objectives and vision. 

Follow this step-by-step thrift store business plan template and turn your startup thrift shop into a successful venture your customers will enjoy visiting.

Step One: Create an Executive Summary

An executive summary is a brief look into what your business is all about. It summarizes everything from business objectives to the types of products you want to sell and the experiences you want to convey to your customers. You should include these elements in your thrift shop’s summary:

• Mission Statement: Explain what your thrift shop hopes to achieve and what makes it stand out. For instance, you might open a thrift store to offer your local community affordable, gently-used clothing, with the sales proceeds supporting a nearby humane society for pets.
• Business Goals: Outline what success will look like for your thrift shop, when you expect it to turn a profit, and if you plan to expand to additional locations.
• Business Focus: Detail what items your shop specializes in and the shopping experience you want to provide your customers.
• Financial Overview: You’ll need to outline the initial funding required to cover all startup costs for your thrift business. Then, provide an estimated revenue projection for the first year to demonstrate its expected profitability.

Potential stakeholders in your thrift store, such as partners looking to financially support your nonprofit organization and its mission, often read the executive summary first. Keep each point concise, clear, and compelling to maximize the chances of getting them on board. The summary must achieve two objectives: demonstrating the thrift shop can be run as a profitable business and explaining how it advances the nonprofit’s goals.

Step Two: Write a Business Overview

Think of your thrift store’s business overview as its business card, introducing its essential details at a glance. It should include:

• The business’ complete name
• Geographic location
• Business structure , such as 501(c)(3) organization, sole proprietorship, LLC, or corporation
• Short version of the mission statement
• Brief explanation of the shop’s purpose, core values, and future goals

Potential partners and investors use your business overview to understand your shop’s identity and what sets it apart from other thrift shops.

Step Three: Conduct Industry and Market Analysis

Starting a thrift store is a challenge. The thrift store industry is a competitive environment with a mix of different business types. Depending on your location and target market, your competitors may include independent mom-and-pop stores, online ventures, or large and established chains like Goodwill and Savers.

Research the current state of the thrift shop industry and check out what businesses local customers turn to when they want to go thrifting. Then, analyze the type and number of competitors. 

Are they primarily independent businesses, or are there bigger chain stores? How many are there in your region? These market research details can help you find a way to differentiate your thrift business and offer items, services, and experiences the competition doesn’t.

Step Four: Perform a Thrift Customer Analysis

All kinds of people love to go thrifting. Look into what type of customers like to visit secondhand shops and analyze their demographics , purchasing behaviors, and reasons for going thrifting.

Are local thrifters budget-conscious customers looking for a great deal, or are they visiting thrift shops to reduce waste and be eco-conscious shoppers? Do they look for vintage items and one-of-a-kind objects, or do they stick to wardrobe staples? The answers can help you understand what your customers are like and how best to answer their needs.

Step Five: Describe Products and Services

Decide whether to specialize in specific items, such as used clothing and accessories, or run your business like a secondhand general store offering a wide variety of goods.

Besides choosing what products to sell, consider providing additional services to your customers to encourage more sales, like donation drop-off points, repairs, and loyalty programs. Choose your approach based on the local community’s needs, giving your customers what they expect while standing out from competing businesses.

Step Six: Outline an Operations Plan

An operations plan is a guide detailing everything your store needs to run smoothly on any given business day. Most operational plans for thrift businesses include:

• Inventory management: Determine the tools and systems the store needs to sort, price, and categorize items. An all-in-one POS system built for thrift stores is ideal and often includes powerful tools to help you automate or streamline inventory management. For instance, they include donation processing tools designed to sort all the items your store will handle.
• Pricing and discounting strategies: Develop strategies to group items into bundles or categorize them by type, color, theming, or other descriptors. These strategies can help you create exclusive deals or seasonal discounts, attracting customers looking to score deals. Regular deals and discounts incite deal-hunting customers to return to your store more frequently, naturally building loyalty and creating anticipation for your store’s next discounts.
• Donation processing: Establish the store’s procedures to source, accept, and sort donated items.
• Staff and training: Define roles, responsibilities, and training standards for each staff member.
• Store layout: Organize your store’s space and determine how items are grouped and showcased to visitors as they navigate your thrift store.
• Customer service: Set guidelines for greeting customers, managing transactions, offering services and assistance, and contributing to a positive shopping experience.
• Finances and budgeting: Detail your store’s procedures for tracking sales and transactions, managing revenues and expenses, and ensuring long-term profitability.

Your shop’s operations plan is the framework for managing a typical business day. A well-designed plan encourages repeated business and keeps thrifters coming back so your store can turn a profit. 

Step Seven: Develop a Marketing Plan

Your thrift store’s marketing plan is similar to its operations plan, but specific to marketing and advertising efforts. It should include the strategies your shop will use to increase foot traffic, establish a loyal customer base, and make the store profitable long-term. 

Consider all of the following in your marketing plan:

• Branding and Identity: Design your store’s logo, signage, lettering, interior theming, and colors.
• Advertising: Choose how you will promote your store, what advertising channels and digital marketing tools you’ll use, and what messages and values to convey.
• Promotions: Offer loyalty programs to attract customers or entice new business with deals and promotion codes on specific items.

A solid marketing plan should present your secondhand shop in the best possible light. Besides attracting new customers, it contributes to your store’s brand identity, making it more visible and creating a positive reputation.

Step Eight: Identify Your Management Team

The success of your thrift store ultimately comes down to who is running the day-to-day operations. As part of your business plan, you need to identify the staff members who will manage your thrift store, including information on their education, managerial skill set, and industry experience.

Highlight your managers’ backgrounds, showcase how their talents will contribute to the store’s success, and outline their total compensation plan. A credible, trustworthy team will show your investors and partners that your thrift store business is in good hands — and ready to grow into a successful venture!

Step Nine: Build a Financial Plan

Develop a financial plan to get the approval of your investors and potential partners. Your plan should expand on the initial estimates and financial projections in your executive summary with more details. 

Outline your shop’s projected expenses and expected revenues so you can assess its profitability over time. Include initial startup purchases and operational spending, like salaries, utilities, and maintenance, in your expenses. 

The data will help you estimate how long your business will take to break even, generate financial returns, and become a successful thrift store.

Set Up Your Thrift Store for Success With ThriftCart

A good thrift store business plan is the right solution to turn an idea into a money-making venture. Everything that makes a successful business should be accounted for and planned, from the basic details to day-to-day operations, customer analysis, marketing, and team management. Once you’re confident in your business plan, it’s time to think about the technology that will support your operations. Every retail store needs a point of sale (POS) solution, and the best in the industry is ThriftCart. Our POS software was developed specifically for nonprofit thrift stores and can support your startup from day one. Book a demo today and discover a simpler, better way to manage your thrift shop’s inventory, operations, finances, and marketing!

4 Steps for a Global Employee Benefits Strategy that Works – Anywhere in the World

Build a culture of belonging among your people no matter where they are in the world.

Ready to see NFP’s full guide to global employee benefits?

Expanding internationally is an exciting step for your business; it’s a statement of your success and your desire to continue growing. However, without thinking about how to implement a global employee benefits strategy that is consistent with your business’ values and locations, the success of your overseas operation could come under threat. 

In this article, NFP’s global employee benefits team shares their top tips on how you can achieve a level of consistency within your business’ international employee benefits strategy. By focusing on global benefits management, you can work to build a culture of belonging among your people no matter where they are in the world. 

1. Create Core Values to Stand By Regardless of Location 

When it comes to your international employee benefits approach, we suggest having an overriding philosophy as well as several key principles. Ultimately, your capabilities may be limited by local rules, regulations, norms and access to solutions, but you can still create some core values to stand by regardless of location, such as:  

• “We support the physical, mental and financial well-being of our people.” 
• “We protect the families of our people.” 
• “We invest in our people’s financial futures.” 
• “We ensure our people are provided with benefits that meet the benchmark of the top 50%/25%/10% of local employers, wherever we operate.”  

The values above can be whatever makes sense for your business and can help you build a picture of what you want your company to be known for, both internally and externally. These clear statements can improve the employee experience and help you recruit and retain the best talent, no matter where in the world your people are based. According to research from Gartner, “Organizations that effectively improve the employee experience can decrease annual employee turnover by just under 70% and increase new hire commitment by nearly 30%.” 

By creating a consistent global employee benefits strategy for your people, no matter where they’re based, you can ensure: 

• Everyone across each location is equally valued, treated fairly and feels motivated as part of the same mission. 
• You attract like-minded people that embody your business and its values. 
• Your business identity is clear across the globe, internally and externally. 
• You are known as a company that stands by its values wherever it operates in the world, increasing authenticity and trustworthiness. 

2. Benchmark to Understand How Far Your Budget Will Go 

Your budget will play a huge part in determining your global employee benefits strategy and which benefits you can offer to your people.  

Benchmarking and networking with peers can be a good measure of how an employer’s global benefits strategy shapes up in the market, allowing you to offer a starting point from which you’re able to develop further. At the very least, you should be looking for the legal minimum to make sure your offering is compliant, then beyond that, ask yourself questions like:  

• “What is the global employee benefits norm?” 
• “What benefits do the majority offer?”  
• “What sort of organization are we and how can our global benefits offering reinforce this?” 

3. Know How “Standard” Benefits Differ from Country to Country 

Although it may sound easy to create global employee benefits philosophies and standards to support the well-being of your people, the challenges appear when you start looking at things on a granular level. While you may be able to keep your core values more general, you have to get specific when it comes to the insurance coverage that you are providing to your people. We’ve examined some general global employee benefits philosophical statements and highlighted why they may be hard to implement.  

Philosophy statement: “We will provide all our people around the globe with at least three times salary life coverage.” 

Challenge: Norms for this specific type of coverage can be four or even five times in some parts of the world, including in certain parts of Europe. So, because this norm has a wide range, it can be very difficult to implement three-times salary life cover; this would be not enough coverage in certain parts of the world.  

Philosophy statement: “We will provide a retirement program for all employees.”  

Challenge: When it comes to pensions and retirement, these can look very different from country to country, and many nations even offer retirement programs in some form. France, for example, has a state system, while in the UK it is standard to also pay into private plans. In parts of the Middle East where there is very little tax, pension and retirement benefits are not the cultural norm, with employers instead usually offering termination indemnities instead of a workplace saving plan.  

Philosophy statement: “Everyone will need coverage, but we will leave it to each location to make its arrangements.”  

Challenge: While it may be true that everyone in your organization needs medical insurance, figuring out if you should leave it up to each country or implement this benefit from a central level requires a lot of factors to consider. These are the types of conversations a specialist employee benefits partner can have with you through the process of benchmarking and ongoing consulting. 

4. Get Specialized Support When Needed 

In scenarios like this, your business can deeply benefit from external global employee benefits consultants and partners. The biggest challenge is basing your strategy on principles that can be consistent from location to location, even if the benefits themselves may not look the same. A partner you can depend on can help you come up with these consistent principles and back them with benefits that fit the location and your predetermined business values.  

NFP’s Guide to International Benefits 

If you run an international business, we understand how challenging it can be to manage the global employee benefits strategy in all your locations. From navigating legal and tax legislation to understanding local cultures, creating compliant and competitive benefits packages in multiple countries is no easy task. 

In our latest guide, our global employee benefits management specialists outline how you can help your business thrive internationally , i mplement new benefits and, importantly, ensure they remain fit for purpose . You will learn: 

• What to consider when designing your global benefits strategy. 
• How to identify the right benefits and provider(s) to deliver them in all your locations. 
• How to efficiently administer and run your global benefits program. 
• How to review and maintain oversight of your strategy.

• Get Started

Home >> #realtalk Blog >> Manage a business >> How to Start a Busin…

How to Start a Business in Hawaii: Complete Guide

By Homebase Team

Starting a business in Hawaii can seem like a dream come true. The islands offer a unique blend of culture, natural beauty, and economic opportunity. However, turning that dream into reality requires careful planning and understanding the local business landscape.

You might feel excitement and apprehension, wondering how to navigate the bureaucratic maze and ensure your business idea clicks with the local market. From creating a solid business plan to registering with the state, each step is vital to your success.

Here’s a straightforward guide to help you navigate the process.

What is Required to Start a Business in Hawaii?

Starting a business in Hawaii is thrilling, but the initial steps can feel overwhelming. You need to know what’s required to get your business.

Business Concept and Plan

Before anything else, you need a clear business concept and a detailed plan. This involves identifying what your business will offer, who your target market is, and how you plan to operate. A well-thought-out business plan serves as your roadmap, outlining your goals, strategies, and financial projections. For more insights, check out these tips for starting a business . Setting and achieving clear business goals can significantly enhance your planning process. Learn how to set and achieve business goals .

Business Name

The next step is choosing a business name. Your name should be unique, memorable, and reflective of your brand. To avoid any legal issues down the line, make sure to check the availability of your chosen name with the Hawaii Secretary of State.

Business Structure (LLC, Corporation, etc.)

Selecting the right business structure is crucial. Whether you opt for a sole proprietorship, LLC, corporation, or nonprofit, each structure has legal and tax implications. An LLC offers flexibility and liability protection, while a corporation provides personal solid liability protection but requires more formalities.

Registration with the Hawaii Secretary of State

Once you have your business name and structure, register your business with the Hawaii Secretary of State. This involves filing the necessary formation documents, such as Articles of Organization for an LLC or Articles of Incorporation for a corporation.

Business Licenses and Permits

Depending on your industry, you may need various licenses and permits to operate legally in Hawaii. This could include a General Excise Tax (GET) License, professional and vocational licenses, and county-specific permits for zoning, building, and signage. If you’re interested in a specialized field, consider how to start an event planning business .

Business Bank Account

Opening a business bank account is essential for separating your personal and business finances. This helps manage your finances more efficiently and provides a clear record for tax purposes. Most banks will require your business registration documents and an Employer Identification Number (EIN) to open an account. For more operational tips, explore these small business operational hacks .

What are the Steps to Register a Business in Hawaii?

Navigating the registration process is crucial to making your business dream a reality. Each step ensures your business is legally recognized and ready to operate.

Choose a Business Name and Check Availability

Start by selecting a unique and memorable business name. Your name should reflect your brand and be easy for customers to remember. Check the availability of your chosen name through the Hawaii Business Express website to ensure no other business has already registered it. This step helps avoid legal issues and ensures your business stands out.

Select a Business Structure

Next, decide on your business’s legal structure. Your options include a sole proprietorship, partnership, LLC, corporation, and nonprofit. Each structure has different implications for liability, taxes, and management. Choose the one that best fits your business goals and needs. For a comprehensive guide, check out these steps to start a small business .

File Formation Documents with the Hawaii Secretary of State

Once you have your business name and structure, you must file the appropriate formation documents with the Hawaii Secretary of State. For an LLC, file the Articles of Organization. For a corporation, file the Articles of Incorporation. These documents officially register your business with the state and provide it with legal standing.

Obtain an Employer Identification Number (EIN) from the IRS

An EIN, or a Federal Tax Identification Number, is required for tax purposes. You can apply for an EIN through the IRS website. This number is necessary to open a business bank account, hire employees, and file taxes. It also helps separate your personal and business finances.

Get Necessary Business Licenses and Permits

You may need various licenses and permits to operate legally, depending on your industry and location. Common requirements include a General Excise Tax (GET) License, professional and vocational licenses, and county-specific permits for zoning, building, and signage. Ensure you obtain all necessary licenses to avoid fines and legal issues.

What Business Structures are Available in Hawaii?

Choosing the right business structure is a critical decision that impacts your liability, taxes, and management style. Let’s explore your options.

Sole Proprietorship

A sole proprietorship stands as the simplest business structure. You don’t need formal registration to start. This structure means there’s no legal distinction between you and your business. You bear unlimited personal liability for debts and obligations. If your business faces financial trouble, your assets could be at risk. This structure suits small, low-risk businesses or those testing a business idea before scaling up.

Limited Liability Company (LLC)

An LLC combines the flexibility of a partnership with liability protection. To form an LLC in Hawaii, you must file Articles of Organization with the state. This structure protects personal assets, meaning your assets remain separate from business liabilities. LLCs provide flexibility in management and tax options. You can be taxed as a sole proprietor, partnership, or corporation. This structure suits businesses seeking liability protection without the complexity of a corporation.

Corporation

A corporation exists as a separate legal entity from its owners. Forming a corporation in Hawaii requires filing Articles of Incorporation. This structure offers the most vital personal liability protection, shielding your assets from business debts and obligations. Corporations can raise capital by issuing stock, making them attractive to investors. However, they involve more complex formalities and recordkeeping. You must maintain corporate minutes, hold regular board meetings, and comply with state regulations. This structure suits businesses planning to scale significantly or seek outside investment.

Nonprofit Corporation

A nonprofit corporation aims to further a charitable, educational, religious, or scientific purpose. To form a nonprofit in Hawaii, you must file Articles of Incorporation and obtain tax-exempt status from the IRS. Nonprofits reinvest any profits into their mission rather than distributing them to shareholders. This structure provides liability protection similar to a corporation. Nonprofits can also apply for grants and receive tax-deductible donations. This structure suits organizations focused on social, educational, or charitable missions.

Onboard employees, track their time, and pay them — all in one place.

What Licenses and Permits are Needed in Hawaii?

Understanding the required licenses and permits is essential for operating legally and avoiding fines. Let’s break down what you need.

General Excise Tax (GET) License

Every business in Hawaii must obtain a General Excise Tax (GET) License. This license allows you to conduct business activities and collect taxes on sales. The GET applies to all business activities, including retail sales, services, and rentals. The tax rate varies depending on the type of business and location, but it generally ranges from 0.15% to 4%. You can apply for the GET License online through the Hawaii Department of Taxation website.

Professional and Vocational Licenses for Certain Industries

Certain professions and industries in Hawaii require specific licenses. If you operate in healthcare, real estate, or construction, you must obtain the appropriate professional or vocational license. These licenses ensure you meet the state’s education, experience, and competency standards. Check with the Hawaii Department of Commerce and Consumer Affairs (DCCA) to determine the specific licensing requirements for your industry. For example, here’s a guide on how to start a lawn care business .

County Permits (Building, Zoning, Signage, etc.)

Depending on your business location, you may need various county permits. Building permits are necessary to construct or renovate a physical space. Zoning permits ensure your business complies with local land use regulations. Signage permits are required for any signs you plan to display on your property. Contact your county’s planning department to determine which permits apply to your business and how to obtain them. If you’re in the construction industry, learn how to start a construction business .

Health Permits for Food Businesses

You must obtain health permits if your business involves handling or selling food. These permits ensure your business meets the state’s health and safety standards. The Hawaii Department of Health issues these permits and conducts regular inspections to ensure compliance. You must complete a food safety training program and submit an application detailing your food handling processes, facility layout, and sanitation practices. For more detailed steps, check out how to start a bakery business .

Seller’s Permit for Retail Businesses

Retail businesses in Hawaii must obtain a seller’s permit. This permit allows you to collect sales tax from customers. It’s necessary for any business that sells tangible goods, including online retailers. You can apply for a seller’s permit through the Hawaii Department of Taxation. The application process requires you to provide information about your business, including your GET License number and location.

How to Write a Business Plan for a Hawaii Business

A solid business plan is your blueprint for success. It guides your decisions and helps secure funding.

Executive Summary

Start your business plan with an executive summary. This section provides a snapshot of your business concept. Describe what your business does, the products or services you offer, and your target market. Include your business’s mission statement and highlight your goals. This summary should be concise but compelling, giving readers a clear understanding of your business.

Company Description

In the company description, provide detailed information about your business. Explain the nature of your business and the marketplace needs you aim to fulfill. Describe your business’s legal structure, location, and the type of business you are starting. Highlight what differentiates your business from others in the market. This section should give a comprehensive view of what your business is and what it aims to achieve.

Market Analysis

Conduct thorough research on your industry, market, and competitors. In the market analysis section, present your findings. Identify your target market and provide demographic details. Analyze market trends and growth potential. Assess your competitors, noting their strengths and weaknesses. This analysis helps you understand the market landscape and identify opportunities for your business. Use data and statistics to support your findings and give a clear picture of the market environment.

Organization and Management

Outline your business structure and introduce your management team. Describe the organizational hierarchy and the roles and responsibilities of each team member. Include brief bios highlighting their experience and expertise. If you have a board of directors or advisors, mention them here. This section demonstrates that your business has a capable team to execute the business plan and achieve its goals. For real-life insights, check out advice from business owners . Fostering an employee-first culture can significantly enhance your team’s productivity and morale.

Service or Product Line

Detail what your business will sell or provide. Describe your products or services, including their features and benefits. Explain how they meet the needs of your target market. If you have any patents, trademarks, or proprietary technology, mention them here. This section should convey what you offer and why it is valuable to your customers.

Marketing and Sales

Explain how you will reach and retain customers. Outline your marketing strategy, including advertising, promotions, and public relations. Describe your sales strategy and the sales process. Identify your sales channels, whether online, in-store, or other means. Discuss your pricing strategy and how it compares to competitors. This section should show you have a clear plan for attracting and keeping customers. For more detailed guidance, learn how to create a marketing plan .

Financial Projections

Provide forecasted income, expenses, and funding needs. Include projected profit and loss statements, cash flow statements, and balance sheets for three to five years. Explain your assumptions and how you arrived at your projections. If you are seeking funding, specify how much you need and how you plan to use it. This section should demonstrate that your business is financially viable and has a solid growth plan. Check out these finance tips for new business owners for essential financial advice .

What are the Costs of Starting a Business in Hawaii?

Understanding the costs involved helps you budget effectively and avoid financial pitfalls. Let’s break down the essential expenses.

Business Registration Fees

When starting a business in Hawaii, you need to account for registration fees. These fees vary depending on the type of business entity you choose. For example, forming an LLC typically costs around $50, while incorporating a business can range from $50 to $100. These fees cover the cost of filing necessary documents with the Hawaii Secretary of State and obtaining your official business status.

Business License and Permit Fees

Operating legally requires obtaining various licenses and permits, each with its fee. A General Excise Tax (GET) License, mandatory for all businesses, costs $20. Additional licenses, such as professional or vocational licenses, may also be necessary, depending on your industry. County-specific permits for zoning, building, and signage can add to your initial costs, so it’s important to budget for these expenses.

Equipment and Supply Costs

Starting a business often involves purchasing equipment and supplies. Whether you need computers, furniture, manufacturing equipment, or inventory, these costs can add up quickly. The specific amount will depend on your business type and scale. For instance, a retail store might need shelving and point-of-sale systems, while a restaurant will require kitchen appliances and dining furniture.

Office Space or Retail Lease

Securing a physical location is another significant expense. Leasing office space or a retail storefront in Hawaii can be costly, especially in high-demand areas like Honolulu. Lease prices vary widely based on location, size, and amenities. Researching and comparing different options is crucial to finding a space that fits your budget and business needs.

Inventory Costs

If your business sells products, you must invest in inventory. This includes the cost of purchasing goods from suppliers, shipping, and storage. Initial inventory costs can be substantial, especially if you are stocking a wide range of products. Proper inventory management is essential to avoid overstocking or running out of popular items.

Marketing and Advertising Expenses

Attracting customers requires effective marketing and advertising. This can include online marketing, social media campaigns, print ads, and promotional events. The marketing cost varies based on your strategy and the platforms you choose. Allocating a budget for marketing is vital to building brand awareness and driving sales.

Professional Fees

Starting a business often involves seeking professional help. Legal fees for setting up your business structure, drafting contracts, and ensuring compliance with regulations can be significant. Accountants can help with financial planning, tax preparation, and bookkeeping. These professional services ensure your business operates smoothly and adheres to legal requirements.

Starting a business in Hawaii involves several steps, from developing a business plan to obtaining the necessary licenses. Once you have everything in place, managing your team efficiently becomes crucial. That’s where we come in.

• What : Starting a business in Hawaii.
• So What : Legal compliance and planning are key.
• Pros & Cons : Unique market vs. high costs and bureaucracy.
• Bottom Line : Plan well and follow local rules.

Let’s make work easier. Get started today with Homebase by signing up here . Simplify your scheduling, time tracking, payroll, and team communication with us.

Remember:  This is not legal advice. If you have questions about your particular situation, please consult a lawyer, CPA, or other appropriate professional advisor or agency.

Related posts

August 22, 2024

How to Start a Business in Virginia in 2024

Thinking about starting a business in Virginia? You’re in the right place. Virginia offers a strong, business-friendly environment that can…

How to Start a Business in New York

Starting a business in New York can feel like trying to navigate a maze blindfolded, but breaking it down into…

How to Open a Business in Louisiana

Starting a business in Louisiana in 2024 involves several key steps. You need to understand the formation process and meet…

How to Start a Business in Massachusetts

Thinking about starting a business in Massachusetts in 2024? You’re not alone. The Bay State’s robust economy and skilled workforce…

How to Launch a Business in New Jersey

Starting a business in New Jersey involves several steps, each requiring careful planning and execution. Whether you’re launching a small…

How to Launch a Business in Wisconsin

Starting a business in Wisconsin can seem overwhelming, but breaking it down into manageable steps makes it more accessible. You…

Subscribe to our newsletter

Looking for ways to stay up to date on employment laws and small business news?

Homebase makes managing hourly work easier for over 100,000 local businesses. With free employee scheduling , time tracking , and team communication , managers and employees can spend less time on paperwork and more time on growing their business.

• Hiring & onboarding
• Team communication
• Employee happiness
• HR & compliance
• Integrations
• Food & beverage
• Beauty & wellness
• Medical & veterinary
• Home & repair
• Hospitality & leisure
• Education & caregiving
• Contact sales
• Become a Partner
• Careers – We’re hiring!
• #realtalk Blog