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How To Write a Business Plan

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

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

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

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Step 1: Write your executive summary

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

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

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

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

Step 2: Do your market research homework

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

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

Step 3: Set your business goals and objectives

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

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

Step 4: Plan your business strategy

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

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

Step 5: Describe your product or service

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

Step 6: Crunch the numbers

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

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

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

Step 7: Finalize your business plan

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

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

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The takeaway

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

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How to Write a Business Plan, Step by Step

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What is a business plan?

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

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

ZenBusiness

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?

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

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

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

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

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

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

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How to make a business plan

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

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

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

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

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

What is a business plan?

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

Products or services

Target market

Competitors

Marketing and sales strategies

Financial plan

Management team

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

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

Business plan vs. business model canvas

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

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

Key partnerships

Key activities

Key propositions

Customer relationships

Customer segments

Key resources

Cost structure

Revenue streams

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

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

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

Why is a business plan important?

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

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

Helps to define the business goals and objectives

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

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

Guides decision-making

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

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

Attracts investors and secures funding

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

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

Identifies potential challenges and risks

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

Is there enough demand for my product or service?

Will I have enough capital to start my business?

Is the market oversaturated with too many competitors?

What will happen if my marketing strategy is ineffective?

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

Provides a basis for measuring success

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

Are we where we want to be at this point?

Did we achieve our goals?

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

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

How to make a business plan step by step

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

1. Create an executive summary

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

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

2. Write your company description

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

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

3. Conduct a market analysis

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

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

What does the current market look like?

Who are your competitors?

What are they offering?

What will give you a competitive advantage?

Who is your target market?

What are they looking for and why?

How will your product or service satisfy a need?

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

4. Describe your products and services

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

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

5. Design a marketing and sales strategy

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

Pricing strategy

Advertising and promotional tactics

Sales channels

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

6. Determine budget and financial projections

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

Some details to include in this section are:

Startup costs

Revenue projections

Profit and loss statement

Funding you have received or plan to receive

Strategy for raising funds

7. Set the organization and management structure

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

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

8. Make an action plan

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

Types of business plans

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

Startup business plan

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

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

Strategic business plan

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

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

Operational business plan

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

Organizational structure

Staffing plan

Production plan

Quality control

Inventory management

Supply chain

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

Growth-business plan

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

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

One-page business plan

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

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

Best practices for how to make a good business plan

Here are some additional tips for creating a business plan:

Use a template

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

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

Be practical

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

Be specific

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

Be thorough with your research

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

Get input from others

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

Review and revise regularly

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

Create a winning business plan to chart your path to success

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

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

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

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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.

Four Steps to Create a Competitive Marketing Analysis

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.

Create Management Team For Business Plan

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.

Choosing the right social media platform

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.

Exit Strategy Section of Business Plan Infographic

Key Questions to Answer with Your Financial Plan, Metrics, and Projection

Your financial plan, metrics, and projection section helps investors, creditors, or your internal managers to understand what your expenses are, the amount of cash you need, and what it takes to make your company profitable. It also shows what you will be doing with any funding.

You do not need to show actual financial data if you do not have one. Adding forecasts and projections to your financial statements is added proof that your strategy is feasible and shows investors you have planned properly.

Here are some key questions to answer to help you develop this section.

What is your sales forecast for the next year?
When will your company achieve a positive cash flow?
What are the core expenses you need to operate?
How much money do you need upfront to operate or grow your company?
How will you use the loans or investments?

9. Add an Appendix to Your Business Plan

Adding an appendix to your business plan is optional. It is a useful place to put any charts, tables, legal notes, definitions, permits, résumés, and other critical information that do not fit into other sections of your business plan.

The appendix section is where you would want to include details of a patent or patent-pending if you have one. You can always add illustrations or images of your products here. It is the last section of your business plan.

When writing your business plan, there are details you cut short or remove to prevent the entire section from becoming too lengthy. There are also details you want to include in the business plan but are not a good fit for any of the previous sections. You can add that additional information to the appendix section.

Businesses also use the appendix section to include supporting documents or other materials specially requested by investors or lenders.

You can include just about any information that supports the assumptions and statements you made in the business plan under the appendix. It is the one place in the business plan where unrelated data and information can coexist amicably.

If your appendix section is lengthy, try organizing it by adding a table of contents at the beginning of the appendix section. It is also advisable to group similar information to make it easier for the reader to access them.

A well-organized appendix section makes it easier to share your information clearly and concisely. Add footnotes throughout the rest of the business plan or make references in the plan to the documents in the appendix.

The appendix section is usually only necessary if you are seeking funding from investors or lenders, or hoping to attract partners.

People reading business plans do not want to spend time going through a heap of backup information, numbers, and charts. Keep these documents or information in the Appendix section in case the reader wants to dig deeper.

Common Items to Include in the Appendix Section of Your Business Plan

The appendix section includes documents that supplement or support the information or claims given in other sections of the business plans. Common items you can include in the appendix section include:

Additional data about the process of manufacturing or creation
Additional description of products or services such as product schematics
Additional financial documents or projections
Articles of incorporation and status
Backup for market research or competitive analysis
Bank statements
Business registries
Client testimonials (if your business is already running)
Copies of insurances
Credit histories (personal or/and business)
Deeds and permits
Equipment leases
Examples of marketing and advertising collateral
Industry associations and memberships
Images of product
Intellectual property
Key customer contracts
Legal documents and other contracts
Letters of reference
Links to references
Market research data
Organizational charts
Photographs of potential facilities
Professional licenses pertaining to your legal structure or type of business
Purchase orders
Resumes of the founder(s) and key managers
State and federal identification numbers or codes
Trademarks or patents’ registrations

Avoid using the appendix section as a place to dump any document or information you feel like adding. Only add documents or information that you support or increase the credibility of your business plan.

Tips and Strategies for Writing a Convincing Business Plan

To achieve a perfect business plan, you need to consider some key tips and strategies. These tips will raise the efficiency of your business plan above average.

1. Know Your Audience

When writing a business plan, you need to know your audience . Business owners write business plans for different reasons. Your business plan has to be specific. For example, you can write business plans to potential investors, banks, and even fellow board members of the company.

The audience you are writing to determines the structure of the business plan. As a business owner, you have to know your audience. Not everyone will be your audience. Knowing your audience will help you to narrow the scope of your business plan.

Consider what your audience wants to see in your projects, the likely questions they might ask, and what interests them.

A business plan used to address a company's board members will center on its employment schemes, internal affairs, projects, stakeholders, etc.
A business plan for financial institutions will talk about the size of your market and the chances for you to pay back any loans you demand.
A business plan for investors will show proof that you can return the investment capital within a specific time. In addition, it discusses your financial projections, tractions, and market size.

2. Get Inspiration from People

Writing a business plan from scratch as an entrepreneur can be daunting. That is why you need the right inspiration to push you to write one. You can gain inspiration from the successful business plans of other businesses. Look at their business plans, the style they use, the structure of the project, etc.

To make your business plan easier to create, search companies related to your business to get an exact copy of what you need to create an effective business plan. You can also make references while citing examples in your business plans.

When drafting your business plan, get as much help from others as you possibly can. By getting inspiration from people, you can create something better than what they have.

3. Avoid Being Over Optimistic

Many business owners make use of strong adjectives to qualify their content. One of the big mistakes entrepreneurs make when preparing a business plan is promising too much.

The use of superlatives and over-optimistic claims can prepare the audience for more than you can offer. In the end, you disappoint the confidence they have in you.

In most cases, the best option is to be realistic with your claims and statistics. Most of the investors can sense a bit of incompetency from the overuse of superlatives. As a new entrepreneur, do not be tempted to over-promise to get the interests of investors.

The concept of entrepreneurship centers on risks, nothing is certain when you make future analyses. What separates the best is the ability to do careful research and work towards achieving that, not promising more than you can achieve.

To make an excellent first impression as an entrepreneur, replace superlatives with compelling data-driven content. In this way, you are more specific than someone promising a huge ROI from an investment.

4. Keep it Simple and Short

When writing business plans, ensure you keep them simple throughout. Irrespective of the purpose of the business plan, your goal is to convince the audience.

One way to achieve this goal is to make them understand your proposal. Therefore, it would be best if you avoid the use of complex grammar to express yourself. It would be a huge turn-off if the people you want to convince are not familiar with your use of words.

Another thing to note is the length of your business plan. It would be best if you made it as brief as possible.

You hardly see investors or agencies that read through an extremely long document. In that case, if your first few pages can’t convince them, then you have lost it. The more pages you write, the higher the chances of you derailing from the essential contents.

To ensure your business plan has a high conversion rate, you need to dispose of every unnecessary information. For example, if you have a strategy that you are not sure of, it would be best to leave it out of the plan.

5. Make an Outline and Follow Through

A perfect business plan must have touched every part needed to convince the audience. Business owners get easily tempted to concentrate more on their products than on other sections. Doing this can be detrimental to the efficiency of the business plan.

For example, imagine you talking about a product but omitting or providing very little information about the target audience. You will leave your clients confused.

To ensure that your business plan communicates your full business model to readers, you have to input all the necessary information in it. One of the best ways to achieve this is to design a structure and stick to it.

This structure is what guides you throughout the writing. To make your work easier, you can assign an estimated word count or page limit to every section to avoid making it too bulky for easy reading. As a guide, the necessary things your business plan must contain are:

Table of contents
Introduction
Product or service description
Target audience
Market size
Competition analysis
Financial projections

Some specific businesses can include some other essential sections, but these are the key sections that must be in every business plan.

6. Ask a Professional to Proofread

When writing a business plan, you must tie all loose ends to get a perfect result. When you are done with writing, call a professional to go through the document for you. You are bound to make mistakes, and the way to correct them is to get external help.

You should get a professional in your field who can relate to every section of your business plan. It would be easier for the professional to notice the inner flaws in the document than an editor with no knowledge of your business.

In addition to getting a professional to proofread, get an editor to proofread and edit your document. The editor will help you identify grammatical errors, spelling mistakes, and inappropriate writing styles.

Writing a business plan can be daunting, but you can surmount that obstacle and get the best out of it with these tips.

Business Plan Examples and Templates That’ll Save You Tons of Time

1. hubspot's one-page business plan.

The one-page business plan template by HubSpot is the perfect guide for businesses of any size, irrespective of their business strategy. Although the template is condensed into a page, your final business plan should not be a page long! The template is designed to ask helpful questions that can help you develop your business plan.

Hubspot’s one-page business plan template is divided into nine fields:

Business opportunity
Company description
Industry analysis
Target market
Implementation timeline
Marketing plan
Financial summary
Funding required

2. Bplan’s Free Business Plan Template

Bplans' free business plan template is investor-approved. It is a rich template used by prestigious educational institutions such as Babson College and Princeton University to teach entrepreneurs how to create a business plan.

The template has six sections: the executive summary, opportunity, execution, company, financial plan, and appendix. There is a step-by-step guide for writing every little detail in the business plan. Follow the instructions each step of the way and you will create a business plan that impresses investors or lenders easily.

3. HubSpot's Downloadable Business Plan Template

HubSpot’s downloadable business plan template is a more comprehensive option compared to the one-page business template by HubSpot. This free and downloadable business plan template is designed for entrepreneurs.

The template is a comprehensive guide and checklist for business owners just starting their businesses. It tells you everything you need to fill in each section of the business plan and how to do it.

There are nine sections in this business plan template: an executive summary, company and business description, product and services line, market analysis, marketing plan, sales plan, legal notes, financial considerations, and appendix.

4. Business Plan by My Own Business Institute

My Own Business Institute (MOBI) which is a part of Santa Clara University's Center for Innovation and Entrepreneurship offers a free business plan template. You can either copy the free business template from the link provided above or download it as a Word document.

The comprehensive template consists of a whopping 15 sections.

The Business Profile
The Vision and the People
Home-Based Business and Freelance Business Opportunities
Organization
Licenses and Permits
Business Insurance
Communication Tools
Acquisitions
Location and Leasing
Accounting and Cash Flow
Opening and Marketing
Managing Employees
Expanding and Handling Problems

There are lots of helpful tips on how to fill each section in the free business plan template by MOBI.

5. Score's Business Plan Template for Startups

Score is an American nonprofit organization that helps entrepreneurs build successful companies. This business plan template for startups by Score is available for free download. The business plan template asks a whooping 150 generic questions that help entrepreneurs from different fields to set up the perfect business plan.

The business plan template for startups contains clear instructions and worksheets, all you have to do is answer the questions and fill the worksheets.

There are nine sections in the business plan template: executive summary, company description, products and services, marketing plan, operational plan, management and organization, startup expenses and capitalization, financial plan, and appendices.

The ‘refining the plan’ resource contains instructions that help you modify your business plan to suit your specific needs, industry, and target audience. After you have completed Score’s business plan template, you can work with a SCORE mentor for expert advice in business planning.

6. Minimalist Architecture Business Plan Template by Venngage

The minimalist architecture business plan template is a simple template by Venngage that you can customize to suit your business needs .

There are five sections in the template: an executive summary, statement of problem, approach and methodology, qualifications, and schedule and benchmark. The business plan template has instructions that guide users on what to fill in each section.

7. Small Business Administration Free Business Plan Template

The Small Business Administration (SBA) offers two free business plan templates, filled with practical real-life examples that you can model to create your business plan. Both free business plan templates are written by fictional business owners: Rebecca who owns a consulting firm, and Andrew who owns a toy company.

There are five sections in the two SBA’s free business plan templates.

Executive Summary
Company Description
Service Line
Marketing and Sales

8. The $100 Startup's One-Page Business Plan

The one-page business plan by the $100 startup is a simple business plan template for entrepreneurs who do not want to create a long and complicated plan . You can include more details in the appendices for funders who want more information beyond what you can put in the one-page business plan.

There are five sections in the one-page business plan such as overview, ka-ching, hustling, success, and obstacles or challenges or open questions. You can answer all the questions using one or two sentences.

9. PandaDoc’s Free Business Plan Template

The free business plan template by PandaDoc is a comprehensive 15-page document that describes the information you should include in every section.

There are 11 sections in PandaDoc’s free business plan template.

Executive summary
Business description
Products and services
Operations plan
Management organization
Financial plan
Conclusion / Call to action
Confidentiality statement

You have to sign up for its 14-day free trial to access the template. You will find different business plan templates on PandaDoc once you sign up (including templates for general businesses and specific businesses such as bakeries, startups, restaurants, salons, hotels, and coffee shops)

PandaDoc allows you to customize its business plan templates to fit the needs of your business. After editing the template, you can send it to interested parties and track opens and views through PandaDoc.

10. Invoiceberry Templates for Word, Open Office, Excel, or PPT

InvoiceBerry is a U.K based online invoicing and tracking platform that offers free business plan templates in .docx, .odt, .xlsx, and .pptx formats for freelancers and small businesses.

Before you can download the free business plan template, it will ask you to give it your email address. After you complete the little task, it will send the download link to your inbox for you to download. It also provides a business plan checklist in .xlsx file format that ensures you add the right information to the business plan.

Alternatives to the Traditional Business Plan

A business plan is very important in mapping out how one expects their business to grow over a set number of years, particularly when they need external investment in their business. However, many investors do not have the time to watch you present your business plan. It is a long and boring read.

Luckily, there are three alternatives to the traditional business plan (the Business Model Canvas, Lean Canvas, and Startup Pitch Deck). These alternatives are less laborious and easier and quicker to present to investors.

Business Model Canvas (BMC)

The business model canvas is a business tool used to present all the important components of setting up a business, such as customers, route to market, value proposition, and finance in a single sheet. It provides a very focused blueprint that defines your business initially which you can later expand on if needed.

The sheet is divided mainly into company, industry, and consumer models that are interconnected in how they find problems and proffer solutions.

Segments of the Business Model Canvas

The business model canvas was developed by founder Alexander Osterwalder to answer important business questions. It contains nine segments.

Key Partners: Who will be occupying important executive positions in your business? What do they bring to the table? Will there be a third party involved with the company?
Key Activities: What important activities will production entail? What activities will be carried out to ensure the smooth running of the company?
The Product’s Value Propositions: What does your product do? How will it be different from other products?
Customer Segments: What demography of consumers are you targeting? What are the habits of these consumers? Who are the MVPs of your target consumers?
Customer Relationships: How will the team support and work with its customer base? How do you intend to build and maintain trust with the customer?
Key Resources: What type of personnel and tools will be needed? What size of the budget will they need access to?
Channels: How do you plan to create awareness of your products? How do you intend to transport your product to the customer?
Cost Structure: What is the estimated cost of production? How much will distribution cost?
Revenue Streams: For what value are customers willing to pay? How do they prefer to pay for the product? Are there any external revenues attached apart from the main source? How do the revenue streams contribute to the overall revenue?

Lean Canvas

The lean canvas is a problem-oriented alternative to the standard business model canvas. It was proposed by Ash Maurya, creator of Lean Stack as a development of the business model generation. It uses a more problem-focused approach and it majorly targets entrepreneurs and startup businesses.

Lean Canvas uses the same 9 blocks concept as the business model canvas, however, they have been modified slightly to suit the needs and purpose of a small startup. The key partners, key activities, customer relationships, and key resources are replaced by new segments which are:

Problem: Simple and straightforward number of problems you have identified, ideally three.
Solution: The solutions to each problem.
Unfair Advantage: Something you possess that can't be easily bought or replicated.
Key Metrics: Important numbers that will tell how your business is doing.

Startup Pitch Deck

While the business model canvas compresses into a factual sheet, startup pitch decks expand flamboyantly.

Pitch decks, through slides, convey your business plan, often through graphs and images used to emphasize estimations and observations in your presentation. Entrepreneurs often use pitch decks to fully convince their target audience of their plans before discussing funding arrangements.

Considering the likelihood of it being used in a small time frame, a good startup pitch deck should ideally contain 20 slides or less to have enough time to answer questions from the audience.

Unlike the standard and lean business model canvases, a pitch deck doesn't have a set template on how to present your business plan but there are still important components to it. These components often mirror those of the business model canvas except that they are in slide form and contain more details.

Using Airbnb (one of the most successful start-ups in recent history) for reference, the important components of a good slide are listed below.

Cover/Introduction Slide: Here, you should include your company's name and mission statement. Your mission statement should be a very catchy tagline. Also, include personal information and contact details to provide an easy link for potential investors.
Problem Slide: This slide requires you to create a connection with the audience or the investor that you are pitching. For example in their pitch, Airbnb summarized the most important problems it would solve in three brief points – pricing of hotels, disconnection from city culture, and connection problems for local bookings.
Solution Slide: This slide includes your core value proposition. List simple and direct solutions to the problems you have mentioned
Customer Analysis: Here you will provide information on the customers you will be offering your service to. The identity of your customers plays an important part in fundraising as well as the long-run viability of the business.
Market Validation: Use competitive analysis to show numbers that prove the presence of a market for your product, industry behavior in the present and the long run, as well as the percentage of the market you aim to attract. It shows that you understand your competitors and customers and convinces investors of the opportunities presented in the market.
Business Model: Your business model is the hook of your presentation. It may vary in complexity but it should generally include a pricing system informed by your market analysis. The goal of the slide is to confirm your business model is easy to implement.
Marketing Strategy: This slide should summarize a few customer acquisition methods that you plan to use to grow the business.
Competitive Advantage: What this slide will do is provide information on what will set you apart and make you a more attractive option to customers. It could be the possession of technology that is not widely known in the market.
Team Slide: Here you will give a brief description of your team. Include your key management personnel here and their specific roles in the company. Include their educational background, job history, and skillsets. Also, talk about their accomplishments in their careers so far to build investors' confidence in members of your team.
Traction Slide: This validates the company’s business model by showing growth through early sales and support. The slide aims to reduce any lingering fears in potential investors by showing realistic periodic milestones and profit margins. It can include current sales, growth, valuable customers, pre-orders, or data from surveys outlining current consumer interest.
Funding Slide: This slide is popularly referred to as ‘the ask'. Here you will include important details like how much is needed to get your business off the ground and how the funding will be spent to help the company reach its goals.
Appendix Slides: Your pitch deck appendix should always be included alongside a standard pitch presentation. It consists of additional slides you could not show in the pitch deck but you need to complement your presentation.

It is important to support your calculations with pictorial renditions. Infographics, such as pie charts or bar graphs, will be more effective in presenting the information than just listing numbers. For example, a six-month graph that shows rising profit margins will easily look more impressive than merely writing it.

Lastly, since a pitch deck is primarily used to secure meetings and you may be sharing your pitch with several investors, it is advisable to keep a separate public version that doesn't include financials. Only disclose the one with projections once you have secured a link with an investor.

Advantages of the Business Model Canvas, Lean Canvas, and Startup Pitch Deck over the Traditional Business Plan

Time-Saving: Writing a detailed traditional business plan could take weeks or months. On the other hand, all three alternatives can be done in a few days or even one night of brainstorming if you have a comprehensive understanding of your business.
Easier to Understand: Since the information presented is almost entirely factual, it puts focus on what is most important in running the business. They cut away the excess pages of fillers in a traditional business plan and allow investors to see what is driving the business and what is getting in the way.
Easy to Update: Businesses typically present their business plans to many potential investors before they secure funding. What this means is that you may regularly have to amend your presentation to update statistics or adjust to audience-specific needs. For a traditional business plan, this could mean rewriting a whole section of your plan. For the three alternatives, updating is much easier because they are not voluminous.
Guide for a More In-depth Business Plan: All three alternatives have the added benefit of being able to double as a sketch of your business plan if the need to create one arises in the future.

Business Plan FAQ

Business plans are important for any entrepreneur who is looking for a framework to run their company over some time or seeking external support. Although they are essential for new businesses, every company should ideally have a business plan to track their growth from time to time. They can be used by startups seeking investments or loans to convey their business ideas or an employee to convince his boss of the feasibility of starting a new project. They can also be used by companies seeking to recruit high-profile employee targets into key positions or trying to secure partnerships with other firms.

Business plans often vary depending on your target audience, the scope, and the goals for the plan. Startup plans are the most common among the different types of business plans. A start-up plan is used by a new business to present all the necessary information to help get the business up and running. They are usually used by entrepreneurs who are seeking funding from investors or bank loans. The established company alternative to a start-up plan is a feasibility plan. A feasibility plan is often used by an established company looking for new business opportunities. They are used to show the upsides of creating a new product for a consumer base. Because the audience is usually company people, it requires less company analysis. The third type of business plan is the lean business plan. A lean business plan is a brief, straight-to-the-point breakdown of your ideas and analysis for your business. It does not contain details of your proposal and can be written on one page. Finally, you have the what-if plan. As it implies, a what-if plan is a preparation for the worst-case scenario. You must always be prepared for the possibility of your original plan being rejected. A good what-if plan will serve as a good plan B to the original.

A good business plan has 10 key components. They include an executive plan, product analysis, desired customer base, company analysis, industry analysis, marketing strategy, sales strategy, financial projection, funding, and appendix. Executive Plan Your business should begin with your executive plan. An executive plan will provide early insight into what you are planning to achieve with your business. It should include your mission statement and highlight some of the important points which you will explain later. Product Analysis The next component of your business plan is your product analysis. A key part of this section is explaining the type of item or service you are going to offer as well as the market problems your product will solve. Desired Consumer Base Your product analysis should be supplemented with a detailed breakdown of your desired consumer base. Investors are always interested in knowing the economic power of your market as well as potential MVP customers. Company Analysis The next component of your business plan is your company analysis. Here, you explain how you want to run your business. It will include your operational strategy, an insight into the workforce needed to keep the company running, and important executive positions. It will also provide a calculation of expected operational costs. Industry Analysis A good business plan should also contain well laid out industry analysis. It is important to convince potential investors you know the companies you will be competing with, as well as your plans to gain an edge on the competition. Marketing Strategy Your business plan should also include your marketing strategy. This is how you intend to spread awareness of your product. It should include a detailed explanation of the company brand as well as your advertising methods. Sales Strategy Your sales strategy comes after the market strategy. Here you give an overview of your company's pricing strategy and how you aim to maximize profits. You can also explain how your prices will adapt to market behaviors. Financial Projection The financial projection is the next component of your business plan. It explains your company's expected running cost and revenue earned during the tenure of the business plan. Financial projection gives a clear idea of how your company will develop in the future. Funding The next component of your business plan is funding. You have to detail how much external investment you need to get your business idea off the ground here. Appendix The last component of your plan is the appendix. This is where you put licenses, graphs, or key information that does not fit in any of the other components.

The business model canvas is a business management tool used to quickly define your business idea and model. It is often used when investors need you to pitch your business idea during a brief window.

A pitch deck is similar to a business model canvas except that it makes use of slides in its presentation. A pitch is not primarily used to secure funding, rather its main purpose is to entice potential investors by selling a very optimistic outlook on the business.

Business plan competitions help you evaluate the strength of your business plan. By participating in business plan competitions, you are improving your experience. The experience provides you with a degree of validation while practicing important skills. The main motivation for entering into the competitions is often to secure funding by finishing in podium positions. There is also the chance that you may catch the eye of a casual observer outside of the competition. These competitions also provide good networking opportunities. You could meet mentors who will take a keen interest in guiding you in your business journey. You also have the opportunity to meet other entrepreneurs whose ideas can complement yours.

Exlore Further

12 Key Elements of a Business Plan (Top Components Explained)
13 Sources of Business Finance For Companies & Sole Traders
5 Common Types of Business Structures (+ Pros & Cons)
How to Buy a Business in 8 Steps (+ Due Diligence Checklist)

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Martin luenendonk.

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

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

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The importance of a business plan

Business plans are like road maps: it’s possible to travel without one, but that will only increase the odds of getting lost along the way.

Owners with a business plan see growth 30% faster than those without one, and 71% of the fast-growing companies have business plans . Before we get into the thick of it, let’s define and go over what a business plan actually is.

What is a business plan?

A business plan is a 15-20 page document that outlines how you will achieve your business objectives and includes information about your product, marketing strategies, and finances. You should create one when you’re starting a new business and keep updating it as your business grows.

Rather than putting yourself in a position where you may have to stop and ask for directions or even circle back and start over, small business owners often use business plans to help guide them. That’s because they help them see the bigger picture, plan ahead, make important decisions, and improve the overall likelihood of success. ‍

Why is a business plan important?

A well-written business plan is an important tool because it gives entrepreneurs and small business owners, as well as their employees, the ability to lay out their goals and track their progress as their business begins to grow. Business planning should be the first thing done when starting a new business. Business plans are also important for attracting investors so they can determine if your business is on the right path and worth putting money into.

Business plans typically include detailed information that can help improve your business’s chances of success, like:

A market analysis : gathering information about factors and conditions that affect your industry
Competitive analysis : evaluating the strengths and weaknesses of your competitors
Customer segmentation : divide your customers into different groups based on specific characteristics to improve your marketing
Marketing: using your research to advertise your business
Logistics and operations plans : planning and executing the most efficient production process
Cash flow projection : being prepared for how much money is going into and out of your business
An overall path to long-term growth

10 reasons why you need a business plan

I know what you’re thinking: “Do I really need a business plan? It sounds like a lot of work, plus I heard they’re outdated and I like figuring things out as I go...”.

The answer is: yes, you really do need a business plan! As entrepreneur Kevin J. Donaldson said, “Going into business without a business plan is like going on a mountain trek without a map or GPS support—you’ll eventually get lost and starve! Though it may sound tedious and time-consuming, business plans are critical to starting your business and setting yourself up for success.

To outline the importance of business plans and make the process sound less daunting, here are 10 reasons why you need one for your small business.

1. To help you with critical decisions

The primary importance of a business plan is that they help you make better decisions. Entrepreneurship is often an endless exercise in decision making and crisis management. Sitting down and considering all the ramifications of any given decision is a luxury that small businesses can’t always afford. That’s where a business plan comes in.

Building a business plan allows you to determine the answer to some of the most critical business decisions ahead of time.

Creating a robust business plan is a forcing function—you have to sit down and think about major components of your business before you get started, like your marketing strategy and what products you’ll sell. You answer many tough questions before they arise. And thinking deeply about your core strategies can also help you understand how those decisions will impact your broader strategy.

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2. To iron out the kinks

Putting together a business plan requires entrepreneurs to ask themselves a lot of hard questions and take the time to come up with well-researched and insightful answers. Even if the document itself were to disappear as soon as it’s completed, the practice of writing it helps to articulate your vision in realistic terms and better determine if there are any gaps in your strategy.

3. To avoid the big mistakes

Only about half of small businesses are still around to celebrate their fifth birthday . While there are many reasons why small businesses fail, many of the most common are purposefully addressed in business plans.

According to data from CB Insights , some of the most common reasons businesses fail include:

No market need : No one wants what you’re selling.
Lack of capital : Cash flow issues or businesses simply run out of money.
Inadequate team : This underscores the importance of hiring the right people to help you run your business.
Stiff competition : It’s tough to generate a steady profit when you have a lot of competitors in your space.
Pricing : Some entrepreneurs price their products or services too high or too low—both scenarios can be a recipe for disaster.

The exercise of creating a business plan can help you avoid these major mistakes. Whether it’s cash flow forecasts or a product-market fit analysis , every piece of a business plan can help spot some of those potentially critical mistakes before they arise. For example, don’t be afraid to scrap an idea you really loved if it turns out there’s no market need. Be honest with yourself!

Get a jumpstart on your business plan by creating your own cash flow projection .

4. To prove the viability of the business

Many businesses are created out of passion, and while passion can be a great motivator, it’s not a great proof point.

Planning out exactly how you’re going to turn that vision into a successful business is perhaps the most important step between concept and reality. Business plans can help you confirm that your grand idea makes sound business sense.

A graphic showing you a “Business Plan Outline.” There are four sections on the left side: Executive Summary at the top, Company Description below it, followed by Market Analysis, and lastly Organization and Management. There was four sections on the right side. At the top: “Service or Product Line.” Below that, “Marketing and Sales.” Below that, “Funding Request.” And lastly: “Financial Projections.” At the very bottom below the left and right columns is a section that says “Appendix.

A critical component of your business plan is the market research section. Market research can offer deep insight into your customers, your competitors, and your chosen industry. Not only can it enlighten entrepreneurs who are starting up a new business, but it can also better inform existing businesses on activities like marketing, advertising, and releasing new products or services.

Want to prove there’s a market gap? Here’s how you can get started with market research.

5. To set better objectives and benchmarks

Without a business plan, objectives often become arbitrary, without much rhyme or reason behind them. Having a business plan can help make those benchmarks more intentional and consequential. They can also help keep you accountable to your long-term vision and strategy, and gain insights into how your strategy is (or isn’t) coming together over time.

6. To communicate objectives and benchmarks

Whether you’re managing a team of 100 or a team of two, you can’t always be there to make every decision yourself. Think of the business plan like a substitute teacher, ready to answer questions any time there’s an absence. Let your staff know that when in doubt, they can always consult the business plan to understand the next steps in the event that they can’t get an answer from you directly.

Sharing your business plan with team members also helps ensure that all members are aligned with what you’re doing, why, and share the same understanding of long-term objectives.

7. To provide a guide for service providers

Small businesses typically employ contractors , freelancers, and other professionals to help them with tasks like accounting , marketing, legal assistance, and as consultants. Having a business plan in place allows you to easily share relevant sections with those you rely on to support the organization, while ensuring everyone is on the same page.

8. To secure financing

Did you know you’re 2.5x more likely to get funded if you have a business plan?If you’re planning on pitching to venture capitalists, borrowing from a bank, or are considering selling your company in the future, you’re likely going to need a business plan. After all, anyone that’s interested in putting money into your company is going to want to know it’s in good hands and that it’s viable in the long run. Business plans are the most effective ways of proving that and are typically a requirement for anyone seeking outside financing.

Learn what you need to get a small business loan.

9. To better understand the broader landscape

No business is an island, and while you might have a strong handle on everything happening under your own roof, it’s equally important to understand the market terrain as well. Writing a business plan can go a long way in helping you better understand your competition and the market you’re operating in more broadly, illuminate consumer trends and preferences, potential disruptions and other insights that aren’t always plainly visible.

10. To reduce risk

Entrepreneurship is a risky business, but that risk becomes significantly more manageable once tested against a well-crafted business plan. Drawing up revenue and expense projections, devising logistics and operational plans, and understanding the market and competitive landscape can all help reduce the risk factor from an inherently precarious way to make a living. Having a business plan allows you to leave less up to chance, make better decisions, and enjoy the clearest possible view of the future of your company.

Understanding the importance of a business plan

Now that you have a solid grasp on the “why” behind business plans, you can confidently move forward with creating your own.

Remember that a business plan will grow and evolve along with your business, so it’s an important part of your whole journey—not just the beginning.

Now that you’ve read up on the purpose of a business plan, check out our guide to help you get started.

The information and tips shared on this blog are meant to be used as learning and personal development tools as you launch, run and grow your business. While a good place to start, these articles should not take the place of personalized advice from professionals. As our lawyers would say: “All content on Wave’s blog is intended for informational purposes only. It should not be considered legal or financial advice.” Additionally, Wave is the legal copyright holder of all materials on the blog, and others cannot re-use or publish it without our written consent.

How to Write a Business Plan in 2023: The Ultimate Guide for Every Entrepreneur

Are you starting a new business or trying to get a loan for your existing venture? If so, you’re going to need to know how to write a business plan. Business plans give entrepreneurs the opportunity to formally analyze and define every aspect of their business idea .

In this post, you’ll learn how to put together a business plan and find the best resources to help you along the way.

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What is a Business Plan?

A business plan is a formal document that outlines your business’s goals and how you will achieve those goals. Entrepreneurs who start out with business plans are 16 percent more likely to build successful companies , according to the Harvard Business Review. Developing a business plan ensures sustainable success, guiding you as you grow your business, legitimizing your venture, and helping you secure funding (among countless other benefits).

What Are the Main Purposes of a Business Plan?

Most financial institutions and service providers require you to submit a detailed business plan to obtain funding for your business. Online businesses will likely have a low overhead to start, so they may not need funding and therefore may not feel the need to write a business plan. That said, writing a business plan is still a good idea as it can help you secure a drastic increase limit on your credit card as your business grows or open a business account. This varies per bank.

If you’re growing your business, use it to help you raise expansion capital, create a growth strategy, find opportunities, and mitigate risks.Palo Alto software found that companies who make business plans are twice as likely to secure funding . .

→ Click Here to Launch Your Online Business with Shopify

If you’re just starting your business, making a business plan can help you identify your strengths and weaknesses, communicate your vision to others, and develop accurate forecasts.

How to Make a Business Plan: The Prerequisites

Here are the prerequisites to creating a solid business plan:

Establish goals
Understand your audience
Determine your business plan format
Get to writing!

Establish Goals

There are two key questions to ask here:

What are you hoping to accomplish with your business?
What are you hoping to accomplish with your business plan?

Approaching your business plan through that lens will help you focus on the end goal throughout the writing process. These also provide metrics to measure success against.

Before writing your business plan, gather the content and data needed to inform what goes in it. This includes researching your market and industry – spanning everything from customer research to legalities you’ll need to consider. It’s a lot easier to start with the information already in front of you instead of researching each section individually as you go.

Turn to guides, samples, and small business plan templates to help. Many countries have an official administration or service dedicated to providing information, resources, and tools to help entrepreneurs and store owners plan, launch, manage, and grow their businesses.

The following will take you to online business plan guides and templates for specific countries.

United States Small Business Administration (SBA) – The “write your business plan page” includes traditional and lean startup business plan formats, three downloadable sample business plans, a template, and a step-by-step build a business plan tool.
Australian Government – The “business plan template” page includes a downloadable template, guide, and business plan creation app.
UK Government Business and Self-Employed – The “write a business plan” page includes links to a downloadable business plan template and resources from trusted UK businesses. .
Canada Business Network – The “writing your business plan” page includes a detailed guide to writing your business plan and links to business plan templates from Canadian business development organizations and banks.

These business resource sites also offer a wealth of valuable information for entrepreneurs including local and regional regulations, structuring, tax obligations, funding programs, market research data, and much more. Visit the sites above or do the following Google searches to find official local business resources in your area:

your country government business services
your state/province government business services
your city government business services

Some Chamber of Commerce websites offer resources for business owners, including business plan guides and templates. Check your local chapter to see if they have any.

Banks that offer business funding also often have a resource section for entrepreneurs. Do a Google search to find banks that offer business funding as well as business plan advice to see the business plans that get funding. If your bank doesn’t offer any advice, search for the largest banks in your area:

business plan guide bank name
business plan samples bank name
business plan template bank name

If you’re looking for more sample business plans, Bplans has over 500 free business plan samples organized by business type as well as a business plan template. Their collection includes 116 business plans for retail and online stores. Shopify also offers business plan templates intended to help small business owners and aspiring entrepreneurs identify functional areas of a business they may not have considered.

Understand Your Audience

Because business plans serve different purposes, you’re not always presenting it to the same audience. It’s important to understand who’s going to be reading your business plan, what you’re trying to convince them to do, and what hesitations they might have.

That way, you can adapt your business plan accordingly. As such, your audience also determines which type of business plan format you use. Which brings us to our next point…

Which Business Plan Format Should You Use?

The United States Small Business Administration (SBA) presents two business plan formats:

The traditional business plan format is for entrepreneurs who want to create a detailed plan for themselves or for business funding.
The lean startup business plan format, on the other hand, is for business owners that want to create a condensed, single-page business plan.

If the business plan is just for you and internal folks, draft a lean startup business plan or a customized version of the traditional business plan with only the sections you need. If you need it for business funding or other official purposes, choose the formal business plan and thoroughly complete the required sections while paying extra attention to financial projections.

If your business operates outside the U.S., clarify the preferred format with your bank.

How to Create a Business Plan: Questions to Ask Yourself

As you write a business plan, take time to not only analyze your business idea, but yourself as well. Ask the following questions to help you analyze your business idea along the way:

Why do I want to start or expand my business?
Do my goals (personal and professional) and values align with my business idea?
What income do I need to generate for myself?
What education, experience, and skills do I bring to my business?

How to Write a Business Plan Step by Step

According to the business plan template created by SCORE, Deluxe, and the SBA , a traditional business plan encompasses the following sections.

Executive summary
Company description
Products & services
Market analysis
Marketing & sales
Management & organization
Funding request
Financial projections
SWOT analysis

Since not everyone is aware of the key details to include in each section, we’ve listed information you can copy to fill in your business plan outline. Here’s how to build a business plan step by step.

Executive Summary

The Executive Summary is the first part of your business plan, so this is where you need to hook readers in. Every business plan starts this way — even a simple business plan template should kick off with the Executive Summary. Summarize your entire business plan in a single page, highlighting details about your business that will excite potential investors and lenders.

Explain what your business has to offer, your target market , what separates you from the competition, a little bit about yourself and the core people behind your business, and realistic projections about your business’ success.

While this is the first section of your business plan, write it after you’ve completed the rest of your business plan. It’s a lot easier because you can pull from the sections you’ve already written, and it’s easier to identify the best parts of your business plan to include on the first page.

Company Description

In the Company Description, share 411 about your business. Include basic details like:

Legal structure (sole proprietor, partnership, corporation, etc.)
Business and tax ID numbers
When the business started
Ownership information
Number of employees

Your mission statement , philosophy and values, vision, short- and long-term goals, and milestones along with a brief overview of your industry, market, outlook, and competitors should also be in the Company Description.

Pro tip: These are the details you’ll use each time you create a business profile, whether that's on social media, business directories, or other networks. Keep your information consistent to reduce confusion and instill more confidence in potential customers.

Products & Services

The Products & Services section details what you plan to sell to customers. For a dropshipping business , this section should explain which trending products you’re going to sell, the pain points your products solve for customers, how you’ll price your products compared to your competitors, expected profit margin, and production and delivery details.

Remember to include any unique selling points for specific products or product groupings, such as low overhead, exclusive agreements with vendors, the ability to obtain products that are in short supply / high demand based on your connections, personalized customer service, or other advantages.

For dropshipping businesses selling hundreds or even thousands of products, detail the main categories of products and the number of products you plan to offer within each category. By doing this, it’s easier to visualize your business offerings as a whole to determine if you need more products in one category to fully flesh out your online store.

Market Analysis

The Market Analysis section of your business plan allows you to share the research you have done to learn about your target audience — the potential buyers of your products. People requesting a business plan will want to know that you have a solid understanding of your industry, the competitive landscape, who’s most likely to become your customers. It’s important to demonstrate that there’s a large enough market for your product to make it profitable and/or to make a strong return on investment .

To complete the Market Analysis component of your business plan, check out the following resources for industry, market, and local economic research:

U.S. Embassy websites in most countries have a business section with information for people who want to sell abroad. Business sections include a basic “getting started” guide, links to economic and data reports, trade events, and additional useful business links for a particular region.
IBISWorld is a provider of free and paid industry research and procurement research reports for the United States , United Kingdom , Australia , and New Zealand .
Statista offers free and paid statistics and studies from over 18,000 sources including industry reports, country reports, market studies, outlook reports, and consumer market reports.

Use these websites and others to learn about the projected growth of your industry and your potential profitability. You can also use social media tools like Facebook Audience Insights to estimate the size of your target market on the largest social network

Another way to research your market and products is through Google Trends . This free tool will allow you to see how often people search for the products your business offers over time. Be sure to explain how your business plans to capitalize on increasing and decreasing search trends accordingly.

Marketing & Sales

Knowing your target market is half the battle. In the Marketing & Sales section, share how you plan to reach and sell products to your target market. Outline the marketing and advertising strategies you intend to use to market your product to potential customers – search marketing , social media marketing , email marketing , and influencer marketing methods .

If you’re unsure how to market your business’ products, analyze your competitors for some inspiration. Discovering your competition’s marketing tactics will help you customize your own strategy for building a customer base and ultimately taking your business to the next level.

Do a Google search for your competitor’s business name to find the websites, social accounts, and content they’ve created to market their products. Look at the ways your competitor uses each online entity to drive new customers to their website and product pages.

Then come up with a plan to convert a similar audience with your marketing and advertising messages. For dropshipping businesses, conversions will typically take place on your website as people purchase your products and/or by phone if you take orders over the phone.

Management & Organization

In the Management & Organization piece of your business plan, describe the structure of your business. In terms of legal structure and incorporation, most businesses are classified as sole proprietorships (one owner), partnerships (two or more owners), corporations, or S corporations.

Draft a condensed resume for each of the key members of your business. If you’re a solopreneur , include how your past education and work experience will help you run each aspect of your business. If you have one or more partner(s) and employee(s), include their relevant education and experience as well.

Think of this as a great way to evaluate the strengths of each individual running your business. When self-evaluating, you’ll be able to identify the aspects of your business that’ll be easier to manage and which ones to delegate to freelancers, contractors, employees, and third-party services. This also makes it easier to find the best way to utilize their strengths for business growth.

Funding Request

Chances are, you don’t have a funding request for a startup dropshipping business since the appeal to dropshipping is the low upfront investment . If you’re looking for a loan, however, this would be the section where you outline the dollar amount you need, what you plan to invest in, and how you see the return on your investment.

Another way to use this section is to analyze the investment you have or plan to make when starting or growing your business. This should include everything from the computer you use to run your website to the monthly fee for business services.

Financial Projections

In Financial Projections, share your projected revenue and expenses for the first or next five years of your business. The idea here is to demonstrate that the revenue you’re anticipating will easily lead to a return on any investment, whether from your personal finances or a capital lending service.

If you’re looking for funding, you’ll need to go into detail with projected income statements, balance sheets, cash flow statements, and capital expenditure budgets. If you aren’t looking for funding, it won’t hurt to create these types of financial projections so you can realistically plan for the future of your business.

The Appendix of your business plan includes any supplemental documents needed throughout the sections of your business plan. These may include, but are not limited to:

Credit histories
Product brochures
Legal forms
Supplier contracts

If you’re submitting your business plan for funding, contact the lender to see what documentation they want included with your funding request.

SWOT Analysis

In addition to the above sections, some business plans also include a SWOT Analysis. This is a one-page summary of your business’s strengths, weaknesses, opportunities, and threats. The strengths and weaknesses you include will be internal, whereas opportunities and threats you include will be external.

Depending on the revelations of this section, you may or may not want to make a SWOT analysis when submitting your business plan formally unless it is requested.

Summary: How to Create a Business Plan

As you can see, creating a business plan for your dropshipping business is a great way to validate your business idea , discover your business’s strengths and weaknesses, and make a blueprint for your business's future.

In summary, here are the sections you will need to write for your business plan, step by step:

SWOT analysis (Optional)

If you haven’t already, take the time to create a business plan to launch or grow your business in 2023!

Want to Learn More?

How to Start a Dropshipping Business
How to Register a Business in the USA
How to Launch Your Ecommerce Store in Less Than 30 Minutes Flat
30+ Amazing Startup Business Ideas That’ll Make You Money

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How to write an effective business plan in 11 steps (with workbook)

February 02, 2023 | 14 minute read

Writing a business plan is a powerful way to position your small business for success as you set out to meet your goals. Landmark studies suggest that business founders who write one are 16% more likely to build viable businesses than those who don’t and that entrepreneurs focused on high growth are 7% more likely to have written a business plan. 1 Even better, other research shows that owners who complete business plans are twice as likely to grow their business successfully or obtain capital compared with those who don’t. 2

The best time to write a business plan is typically after you have vetted and researched your business idea. (See How to start a business in 15 steps. ) If conditions change later, you can rewrite the plan, much like how your GPS reroutes you if there is traffic ahead. When you update your plan regularly, everyone on your team, including outside stakeholders such as investors, will know where you are headed.

What is a business plan?

Typically 15-20 pages long, a business plan is a document that explains what your business does, what you want to achieve in the business and the strategy you plan to use to get there. It details the opportunities you are going after, what resources you will need to achieve your goals and how you will define success.

Why are business plans important?

Business plans help you think through barriers and discover opportunities you may have recognized subconsciously but have not yet articulated. A business plan can also help you to attract potential lenders, investors and partners by providing them with evidence that your business has all of the ingredients necessary for success.

What questions should a business plan answer?

Your business plan should explain how your business will grow and succeed. A great plan will provide detailed answers to questions that a banker or investor will have before putting money into the business, such as:

What products or services do you provide?
Who is your target customer?
What are the benefits of your product and service for customers?
How much will you charge?
What is the size of the market?
What are your marketing plans?
How much competition does the business face in penetrating that market?
How much experience does the management team have in running businesses like it?
How do you plan to measure success?
What do you expect the business’s revenue, costs and profit to be for the first few years?
How much will it cost to achieve the goals stated in the business plan?
What is the long-term growth potential of the business? Is the business scalable?
How will you enable investors to reap the rewards of backing the business? Do you plan to sell the business to a bigger company eventually or take it public as your “exit strategy”?

How to write a business plan in 11 steps

This step-by-step outline will make it easier to write an effective business plan, even if you’re managing the day-to-day demands of starting a new business. Creating a table of contents that lists key sections of the plan with page numbers will make it easy for readers to flip to the sections that interest them most.

Use our editable workbook to capture notes and organize your thoughts as you review these critical steps. Note: To avoid losing your work, please remember to save this PDF to your desktop before you begin.

1. Executive summary

The executive summary is your opportunity to make a great first impression on investors and bankers. It should be just as engaging as the enthusiastic elevator pitch you might give if you bumped into a potential backer in an elevator.

In three to five paragraphs, you’ll want to explain what your business does, why it will succeed and where it will be in five years. The executive summary should include short descriptions of the following:

Business concept. What will your business do?
Goals and vision. What do you expect the business to achieve, both financially and for other key stakeholders, such as the community?
Product or service. What does your product or service do — and how is it different from those of competitors?
Target market. Who do you expect to buy your product or service?
Marketing strategy. How will you tell people about your product or service?
Current revenue and profits. If your business is pre-revenue, offer sales projections.
Projected revenue and profits. Provide a realistic look at the next year, as well as the next three years, ideally.
Financial resources needed. How much money do you need to borrow or raise to fund your plan?
Management team. Who are the company’s leaders and what relevant experience will they contribute?

2. Business overview

Here is where you provide a brief history of the business and describe the product(s) or service(s) it offers. Make sure you describe the problem you are attempting to solve, for whom you will solve it (your customers) and how you will solve it. Be sure to describe your business model (such as direct-to-consumer sales through an online store) so readers can envision how you will make sales. Also mention your business structure (such as a sole proprietorship , general partnership, limited partnership or corporation) and why it is advantageous for the business. And be sure to provide context on the state of your industry and where your business will fit into it.

3. Business goals and vision

Explain what you hope to achieve in the business (your vision) as well as its mission and value proposition. Most founders judge success by the size to which they grow the business using measures such as revenue or number of employees. Your goals may not be solely financial. You may also wish to provide jobs or solve a societal problem. If that’s the case, mention those goals as well.

If you are seeking outside funding, explain why you need the money, how you will put it to work to grow the business and how you expect to achieve the goals you have set for the business. Also explain your exit strategy—that is, how you would enable investors to cash out, whether that means selling the business or taking it public.

4. Management and organization

Many investors say they bet on the team behind a business more than the business idea, trusting that talented and experienced people will be capable of bringing sound business concepts to life. With that in mind, make sure to provide short bios of the key members of your management team (including yourself) that emphasize the relevant experience each individual brings, along with their special talents and industry recognition. Many business plans include headshots of the management team with the bios.

Also describe more about how your organization will be structured. Your company may be a sole proprietorship, a limited liability company (LLC) or a corporation in one or more states.

If you will need to hire people for specific roles, this is the place to mention those plans. And if you will rely on outside consultants for certain roles — such as an outsourced CFO — be sure to make a note of it here. Outside backers want to know if you’ve anticipated the staffing you need.

5. Service or product line

A business will only succeed if it sells something people want or need to buy. As you describe the products or services you will offer, make sure to explain what benefits they will provide to your target customers, how they will differ from competing offerings and what the buying cycle will likely be so it is clear that you can actually sell what you are offering. If you have plans to protect your intellectual property through a copyright or patent filing, be sure to mention that. Also explain any research and development work that is underway to show investors the potential for additional revenue streams.

6. Market/industry analysis

Anyone interested in providing financial backing to your business will want to know how big your company can potentially grow so they have an idea of what kind of returns they can expect. In this section, you’ll be able to convey that by explaining to whom you will be selling and how much opportunity there is to reach them. Key details to include are market size; a strengths, weaknesses, opportunities and threats (SWOT) analysis ; a competitive analysis; and customer segmentation. Make it clear how you developed any projections you’ve made by citing interviews or research.

Also describe the current state of the industry. Where is there room for improvement? Are most companies using antiquated processes and technology? If your business is a local one, what is the market in your area like? Do most of the restaurants where you plan to open your café serve mediocre food? What will you do better?

In this section, also list competitors, including their names, websites and social media handles. Describe each source of competition and how your business will address it.

7. Sales and marketing

Explain how you will spread the word to potential customers about what you sell. Will you be using paid online search advertising, social media promotions, traditional direct mail, print advertising in local publications, sponsorship of a local radio or TV show, your own YouTube content or some other method entirely? List all of the methods you will use.

Make sure readers know exactly what the path to a sale will be and why that approach will resonate with customers in your ideal target markets as well as existing customer segments. If you have already begun using the methods you’ve outlined, include data on the results so readers know whether they have been effective.

8. Financials

In a new business, you may not have any past financial data or financial statements to include, but that doesn’t mean you have nothing to share. Preparing a budget and financial plan will help show investors or bankers that you have developed a clear understanding of the financial aspects of running your business. (The U.S. Small Business Administration (SBA) has prepared a guide you can use; SCORE , a nonprofit organization that partners with the SBA, offers a financial projections template to help you look ahead.) For an existing business, you will want to include income statements, profit and loss statements, cash flow statements and balance sheets, ideally going back three years.

Make a list of the specific steps you plan to take to achieve the financial results you have outlined. The steps are generally the most detailed for the first year, given that you may need to revise your plan later as you gather feedback from the marketplace.

Include interactive spreadsheets that contain a detailed financial analysis showing how much it costs your business to produce the goods and services you provide, the profits you will generate, any planned investments and the taxes you will pay. See our startup costs calculator to get started.

9. Financial projections

Creating a detailed sales forecast can help you get outside backers excited about supporting you. A sales forecast is typically a table or simple line graph that shows the projected sales of the company over time with monthly or quarterly details for the next 12 months and a broader projection as much as five years into the future. If you haven’t yet launched the company, turn to your market research to develop estimates. For more information, see “ How to create a sales forecast for your small business. ”

10. Funding request

If you are seeking outside financing such as a loan or equity investment, your potential backers will want to know how much money you need and how you will spend it. Describe the amount you are trying to raise, how you arrived at that number and what type of funding you are seeking (such as debt, equity or a combination of both). If you are contributing some of your own funds, it is worth noting this, as it shows that you have skin in the game.

11. Appendix

This should include any information and supporting documents that will help investors and bankers gain a greater understanding of the potential of your business. Depending on your industry, you might include local permits, licenses, deeds and other legal documents; professional certifications and licenses; media clips; information on patents and other intellectual property; key customer contracts and purchase orders; and other relevant documents.

Some business owners find it helpful to develop a list of key concepts, such as the names of the company’s products and industry terms. This can be helpful if you do business in an industry that may not be familiar to the readers of the business plan.

Tips for creating an effective business plan

Use clear, simple language. It’ll be easier to win people over if your plan is easy to read. Steer clear of industry jargon, and if you must use any phrases the average adult won’t know, be sure to define them.

Emphasize what makes your business unique. Investors and bankers want to know how you will solve a problem or gap in the marketplace differently from anyone else. Make sure you’re conveying your differentiating factors.

Nail the details. An ideal business plan will be detailed and accurate. Make sure that any financial projections you make are realistic and grounded in solid market research. (If you need help in making your calculations, you can get free advice at SCORE.) Seasoned bankers and investors will quickly spot numbers that are overly optimistic.

Take time to polish it. Your final version of the plan should be neat and professional with an attractive layout and copy that has been carefully proofread.

Include professional photos. High-quality shots of your product or place of business can help make it clear why your business stands out.

Updating an existing business plan

Some business owners in rapidly growing businesses update their business plan quarterly. Others do so every six months or every year. When you update your plan make sure you consider these three things:

Are your goals still current? As you’ve tested your concept, your goals may have changed. The plan should reflect this.
Have you revised any strategies in response to feedback from the marketplace? You may have found that your offerings resonated with a different customer segment than you expected or that your advertising plan didn’t work and you need to try a different approach. Given that investors will want to see a marketing and advertising plan that works, keeping this section current will ensure you are always ready to meet with one who shows interest.
Have your staffing needs changed? If you set ambitious goals, you may need help from team members or outside consultants you did not anticipate when you first started the business. Take stock now so you can plan accordingly.

Final thoughts

Most business owners don’t follow their business plans exactly. But writing one will get you off to a much better start than simply opening your doors and hoping for the best, and it will be easier to analyze any aspects of your business that aren’t working later so you can course-correct. Ultimately, it may be one of the best investments you can make in the future of your business.

Business plan FAQs

What are common mistakes when writing a business plan.

The biggest mistake you can make when writing a business plan is creating one before the idea has been properly researched and tested. Not every idea is meant to become a business. Other common mistakes include:

Not describing your management team in a way that is appealing to investors. Simply cutting and pasting someone’s professional bio into the management section won’t do the trick. You’ll want to highlight the credentials of each team member in a way that is relevant to this business.
Failing to include financial projections — or including overly optimistic ones. Investors look at a lot of business plans and can tell quickly whether your numbers are accurate or pie in the sky. Have a good small business accountant review your numbers to make sure they are realistic.
Lack of a clear exit strategy for investors. Investors may want the option to cash out eventually and would want to know how they can go about doing that.
Slapdash presentation. Make sure to fact-check any industry statistics you cite and that any charts, graphs or images are carefully prepared and easy to read.

What are the different types of business plans?

There are a variety of styles of business plans. Here are three major types:

Traditional business plan. This is a formal document for pitching to investors based on the outline in this article. If your business is a complicated one, the plan may exceed the typical length and stretch to as many as 50 pages.

One-page business plan. This is a simplified version of a formal business plan designed to fit on one page. Typically, each section will be described in bullet points or in a chart format rather than in the narrative style of an executive summary. It can be helpful as a summary document to give to investors — or for internal use. Another variation on the one-page theme is the business model canvas .

Lean plan. This methodology for creating a business plan is ideal for a business that is evolving quickly. It is designed in a way that makes it easy to update on a regular basis. Lean business plans are usually about one page long. The SBA has provided an example of what this type of plan includes on its website.

Is the business plan for a nonprofit different from the plan for other business types?

Many elements of a business plan for a nonprofit are similar to those of a for-profit business. However, because the goal of a nonprofit is achieving its mission — rather than turning a profit — the business plan should emphasize its specific goals on that front and how it will achieve them. Many nonprofits set key performance indicators (KPIs) — numbers that they track to show they are moving the needle on their goals.

Nonprofits will generally emphasize their fundraising strategies in their business plans rather than sales strategies. The funds they raise are the lifeblood of the programs they run.

What is the difference between a business plan, a strategic plan and a marketing plan?

A strategic plan is different from the type of business plan you’ve read about here in that it emphasizes the long-term goals of the business and how your business will achieve them over the long run. A strong business plan can function as both a business plan and a strategic plan.

A marketing plan is different from a business plan in that it is focused on four main areas of the business: product (what you are selling and how you will differentiate it), price (how much your products or services will cost and why), promotion (how you will get your ideal customer to notice and buy what you are selling) and place (where you will sell your products). A thorough business plan may cover these topics, doing double duty as both a business plan and a marketing plan.

Explore more

Editable business plan workbook

Starting a new business

1 . Francis J. Green and Christian Hopp. “Research: Writing a Business Plan Makes Your Startup More Likely to Succeed.” HBR. July 14, 2017. Available online at https://hbr.org/2017/07/research-writing-a-business-plan-makes-your-startup-more-likely-to-succeed.

2 . CorpNet, “The Startup Business Plan: Why It’s Important and How You Can Create One,” June 29, 2022.

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Understand How to Use a Business Plan to Attract Talent and Investment

By Drew Moffitt • May 12, 2024

Understanding the purpose of a business plan is paramount for any entrepreneur or business owner. It lays the groundwork for successful operations and growth by defining goals, charting strategies, and preparing for financial needs. This article shows how a business plan can be your blueprint for success—structuring your vision, aligning your team, and communicating your value proposition to stakeholders and investors.

Key takeaways

A business plan is a critical strategic document that outlines long-term goals, provides direction, and is linked to faster growth in small businesses; it is vital for companies of all sizes to navigate their industry successfully.
Effective market analysis including industry, target audience, and competitor evaluations, is crucial in a business plan to guide marketing and sales strategies, adapt to customer preferences, and gain a competitive advantage.
Financial planning within a business plan involves detailed forecasts and assessments of funding needs, which are essential for informed decision-making, attracting investment, and guiding startups through their initial financial challenges.

The essence of a business plan

Business plan target with team discussion to achieve target goals with to do list task and calendar icon

A business plan is more than a formality; it’s the lifeblood of strategic vision and long-term success. It’s a strategic guide that paints a clear picture of your company’s future, outlining the vision, goals, and strategies that are the heartbeat of your entrepreneurial dreams.

Crafting this plan is not just an exercise; it’s a foundational step in the business planning process that can significantly increase the likelihood of your business’s success. It sets critical long-term goals and paves the way forward. In essence, a well-crafted business plan embodies your business concept.

Owners of small businesses, especially existing businesses, who embrace comprehensive business planning experience a remarkable 30% faster growth, a testament to the tangible benefits of meticulous strategizing and the guidance of a business consultant.

Mapping out your business journey

Consider a business plan as your company’s roadmap, a detailed chart that guides your every move and provides a refuge in times of uncertainty. It’s the tool that compels you to think through your business idea meticulously before committing significant investments, ensuring that every step you take is calculated.

Whether you’re a vibrant startup seeking funds, a well-established corporation, or a large conglomerate adapting to market changes, a good business plan is your ally in navigating the business waters. For established companies, business plans help maintain a sharp focus on both immediate tasks and distant horizons, ensuring that every member of the team knows the direction and the destination. Recognizing the importance of this tool, many entrepreneurs often find themselves thinking, “I need a business plan.”

Startups, especially the growing number working remotely , need strongly aligned team and leadership planning to ensure harmony when it comes to scripting the business plan.

Clarifying vision and strategy

Your business plan’s executive summary is the beacon that shines light on your company’s mission or vision statement, value proposition, and long-term goals, ensuring everyone from the executive team to the stakeholders is aligned and focused on core objectives. It’s a strategic document that directs long-term decisions, covering a span of three to five years, offering a bird’s-eye view of the entire business and laying out clear goals essential to avoid wasting time and resources.

The ‘Summary and Objectives’ section of your business plan acts as a clarion call, providing direction and inspiring action towards achieving those milestones. For those working remotely , it can highlight the value of the remote proposition, and their efficiency compared to traditional businesses.

The power of market analysis

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Embarking on the business journey without a thorough market analysis is like sailing without a compass. Collaboration apps like Kumospace enable you to gather data, discuss market changes and create your plans.

The analysis is the cornerstone of your business plan, laying the foundation for carving out a niche and informing all subsequent marketing and sales strategies. It’s a trifecta of industry, target market, and competitive analysis, offering a panoramic view of the business terrain.

By recognizing trends and the market’s trajectory, your business becomes equipped for:

Predictive planning
Strategic agility
Adapting strategies as customer preferences evolve
Identifying competitive advantages

This allows you to stay ahead of the curve and make informed decision-making processes for your business.

Identifying your target audience

A target market analysis is your lighthouse, confirming the existence of a viable customer base for your product or service. It’s about understanding if potential customers will purchase at a price that fuels your business’s prosperity. By identifying who your customers truly are, you gain insights into their preferences, behaviors, and demographics, ensuring that every marketing dollar spent is a targeted arrow aimed at hearts ready to embrace your offerings.

Evaluating competitors and industry dynamics

Competitive analysis is the reconnaissance mission that informs you where your business stands in the grand scheme of the industry. It involves gathering intelligence on competitors’ sizes, market shares, and financial strengths, and crafting a map that reveals your competitive landscape. By understanding the dynamics of your industry, you can anticipate challenges and tailor your business plan to circumvent potential threats, ensuring a journey that’s as smooth as possible.

Financial planning and projections

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Financial planning is the rudder that steers your business toward fiscal prudence and stability. It encompasses the contemplation of:

Funding costs
Operating expenses
Projected income
Crafting a financial summary that lays bare your business’s economic reality

By dissecting the core financial statements - the Balance Sheet, Income Statement, and Cash Flow Statement - you gain a comprehensive understanding of your business’s financial health, which is indispensable for informed decision-making.

Estimating costs and revenue streams

Technology today offers sophisticated tools that help visualize and forecast expenses over time, sharpening the precision of your financial predictions. Automated procurement tools are the allies that aid you in identifying cost-saving opportunities, contributing to more accurate future cost projections.

For startups, financial projections are a beacon, guiding them through the rocky shoals of capital needs and focusing less on other elements like marketing or company culture at the outset. Resource planning is the linchpin in your business plan for budgeting purposes, ensuring that your financial resources are managed efficiently, and teams operate within parameters to meet or exceed goals.

Determining funding needs

When it comes to sourcing capital, your business plan is the golden ticket, revealing to investors and lenders the treasure map of how their capital will be deployed to ensure your business thrives.

Banks and venture capital firms often regard a business plan as a litmus test, gauging the potential of their investments and lending opportunities. A formal business plan reflects serious commitment, and it is your declaration of dedication, not just to potential investors but to yourself as the architect of your business’s destiny.

For the new venture, raising capital provides a crystal-clear direction, helps cast a net to attract investors, and is the drumbeat that maintains business momentum. To calculate the necessary funding, determining the exact amount needed and how it will be allocated is crucial for effective capital utilization.

Crafting a winning marketing strategy

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A winning marketing strategy is the wind in your sails, aligning your marketing activities with the overarching business objectives and ensuring a smooth journey toward your destination. It’s about fine-tuning the actionable steps of your marketing tactics, which must be crystal clear in your marketing plan to avoid drifting aimlessly.

A well-articulated marketing strategy enhances your business’s understanding of its customers and polishes the lens through which you communicate your value proposition. Organized marketing teams, armed with clear marketing strategies, are the explorers who are most likely to find success in their campaigns.

Positioning Your Brand

Brand positioning is the flag you plant that tells the world who you are and what you stand for. It’s an essential part of your business plan that can significantly impact customer perception and loyalty. You achieve it by crafting clear value propositions and maintaining consistent brand messaging that resonates with your audience.

By understanding the demographics, income ranges, education, occupation, location, lifestyle, and purchasing motivations of your customers, you can hone your brand positioning strategies to create a lasting impression.

Selecting the right marketing tactics

Selecting the right marketing tactics requires a deep dive into your target audience's psyche and discerning the channels they frequent. Your marketing strategy, which includes choosing the appropriate tactics, should reflect your brand’s position, singing in harmony with your target audience’s needs while aligning with your company’s goals and budget.

Building a strong team

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A strong team is the crew that propels your ship forward, and building such a team is pivotal for any successful business. A business plan infused with passion and a clear vision can attract high-quality employees and inspire management and staff long after the hiring process is complete. It serves as a strategic roadmap for staffing needs, ensuring there is a clear plan for when to recruit and train new team members to avoid personnel shortages and guarantee smooth operations during expansion periods.

Attracting top talent

A well-developed business plan acts as a beacon to potential top talent, showcasing the company’s anticipated future and overarching goals, which are critical in attracting individuals looking for vision and growth. Top talent is drawn to companies with a compelling vision of success, effectively communicated through a detailed and strategic business plan.

The CEO’s commitment to the business plan and ability to articulate its realization lend reassurance to skilled individuals, influencing their decision to join a company that aligns with their aspirations and professional goals.

Aligning team goals and objectives

By sharing the business plan with team members, you ensure that everyone is rowing in the same direction towards the same objectives, fostering unity and purpose within the team. A business plan serves as a compass, clearly outlining the company’s objectives and enabling each team member to navigate their role toward a shared destination.

Engaging and empowering employees is crucial to achieving the strategic changes and objectives set forth in the business plan.

Adapting to change and growth

Business planning blueprint stock illustration

Change is the sea upon which businesses sail, and adapting to it is essential for maintaining a competitive edge and supporting business growth. Your business plan should evolve to reflect accomplished goals or shifts in company direction, ensuring the capability to respond to market shifts and seize new business opportunities. You can ensure your company remains agile and competitive by staying open to new business ideas.

A strategic plan that contemplates possible market scenarios and integrates technological advancements empowers businesses to adapt swiftly, preserving their competitive edge.

Embracing market shifts and opportunities

Embracing market shifts and opportunities is about cultivating a culture that views change as a chance to thrive, enhancing adaptability and resilience within the organization. Promoting agility and flexibility in the organizational structure allows for a quicker response to market changes, ensuring that your business is not left behind in the wake of industry evolution.

Regularly revising the business plan keeps a company in step with customer demand and market dynamics, fostering a readiness to pivot and provide more details when needed, especially in a lean startup environment.

Planning for expansion and scaling up

When charting a course for expansion and scaling up, it’s essential to tailor your business plan to address new challenges and opportunities that arise, with updated sales forecasts and financial projections guiding the allocation of resources and growth strategy.

For example, a business plan for acquisition should include cost estimations, integration schedules, and management requirements to ensure seamless growth and addition to the current operations.

As our journey through the anatomy of a business plan concludes, it’s clear that this document is much more than a set of written pages. It manifests your vision, a treasure map to untold success, and a strategic companion in the ever-evolving business landscape. From clarifying your entrepreneurial vision to outlining comprehensive market analyses, ensuring financial stability, crafting a winning marketing strategy, and building a formidable team to adapting to growth and change, the business plan stands as your navigator.

Let this be the wind that fills your sails, pushing you to set forth on your business voyage with a well-crafted business plan in hand. May it guide you to new horizons and inspire the confidence to pursue the success that awaits. Happy sailing!

Frequently Asked Questions

Why is a business plan important for new businesses .

A business plan is important for new businesses as it provides a strategic guide for the company's vision, goals, and strategies, and helps attract investors and raise capital. It serves as a roadmap for success.

How does a business plan help in market analysis?

A business plan helps in market analysis by identifying profitable niches, informing marketing strategies, and providing insights into industry trends and competitive advantages.

What role does financial planning play in a business plan?

Financial planning in a business plan is essential for estimating costs, projecting income, and ensuring financial stability by managing resources effectively.

How can a business plan attract top talent?

By presenting a clear and compelling vision of the company's future and indicating a commitment to growth and success, a business plan can attract top talent who are seeking meaningful opportunities. This is a key factor for attracting skilled individuals. Using innovative tools like Kumospace for collaboration can also help a startup stand out.

In what ways can a business plan be adapted for growth?

To adapt a business plan for growth, it's important to customize it to address new challenges and opportunities, update sales forecasts, and lay out financial projections to guide expansion effectively.

Transform the way your team works from anywhere.

A virtual office in Kumospace lets teams thrive together by doing their best work no matter where they are geographically.

Drew leads marketing at Kumospace. Prior to joining Kumospace, he spent his career founding and operating businesses. His work has been featured in over 50 publications. Outside of work, Drew is an avid skier and sailor. A wholehearted extrovert, he organizes VentureSails, a series of networking events for founders and tech investors.

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8 Steps to Securing Funding for Your New Business

So, you’ve got a great business idea but you don’t have the funds you need to make it a reality. We spoke to Indy Goraya, former investor at BGF , and now, business coach at ActionCoach , for his advice on securing funding for a new business.

You’ll firstly need to have a solid business plan to help decide how you’ll fund your business as this will affect how you structure and run everything.

Your business plan should include various elements , such as details of your marketing strategy (and other growth strategies), an analysis of your competitors, a development plan of your products or services, an assessment of target addressable markets, a team overview and operational and financial information.

Once you have a strong business plan ready to go, it’s time to start exploring your funding options.

Here are 8 important steps to help you secure the funding you need to kickstart your business.

1. Work out how much funding you’ll need

It may seem obvious but your business plan won’t be complete without a cohesive understanding of how much funding you need to enable you to launch or grow your business. Spend time working out your forecasts, KPIs and financial strategy – you will be quizzed in depth on this by anyone who is considering giving you investment. Assessing how much capital to raise requires an understanding of the company’s forecast financial performance, including those initiatives that funding will be used to accelerate. The business plan must include the use of funds, such as new hires, acquisitions, marketing, investment in technology, new premises, etc. If cash does not dip into negative territory, then funding may not be required at all, and it may be possible to fund the intended growth profile through cash and retained profits.

With these assumptions included, the cash flow will illustrate the amount of cash required, equal to the lowest negative balance. Add an appropriate amount of headroom to this figure as a safety net and then you can calculate the total funding requirement:

Funding Requirement (£) = Largest Negative Cash Balance (£) + Appropriate Headroom (£)

The British Business Bank go into more detail on areas to consider when determining how much funding you will need in this useful guide . You may need to get rough quotes from other companies who would be involved in supporting and offering services to your business (e.g website design agency, app development company, etc.)

2. Review your brand identity

Having a clear and visual brand identity will ensure you are in the best position to launch your business once you have secured funding, but it will also help you to communicate your vision to potential investors. This could be the key to securing funding or not, so consider using the expertise of a marketing agency or a freelancer if you don’t have the design skills in-house.

3. Determine whether self-funding is viable

Bootstrapping, or self-funding, is a combination of your own personal savings along with help from family and friends. Self-funding will mean you retain complete control over your business, but you will also be taking on all the risk, so be realistic and cautious with what you can afford. Understand that withdrawing from pension funds is often not advised as it could hinder your retirement age and will mean you are hit with a tax bill of 55% on what you withdrew – speak to a financial advisor before making a decision like this.

4. Secure venture capital from investors

Investors, either angel investors or investment companies, give funding to people looking to start or grow an existing business.

If going down the investor route, it is important to be aware that you will need to give up some portion of the control and ownership of your company in exchange for your funding, often in the form of shares in the company or with the expectation of financial return. Some investors will want to have an active position in your company, which may be in the form of a board member who helps to determine and review company goals or a business coach who helps you to achieve your potential through training and development.

You will need to approach the right investors for your business. Investment firm, Midven – one of Digital Glue’s clients – supports SMEs requiring up to £1m of investment in an initial fundraising round. Other VC firms may invest earlier than SME status, at the ideation stage of your company – for example, Simsan actively invest in pre-seed & seed startups.

Investors invest in companies with high-growth potential as they take greater risks – if the business fails, they lose their money (unlike a bank loan where the debt must still be paid back). They therefore seek higher returns to account for the additional risk.

5. Look into crowdfunding

Crowdfunding is a way of raising funds for your business through a wide group of people, AKA crowdfunders. They contribute financially to your business and, in return, expect a product or service from you, e.g. a crowdfunder who contributes to a new camera brand might expect a new camera once the fund has been raised and production is underway; a crowdfunder who contributes to a new events company might expect to be invited to their events .

Crowdfunding is a popular option for businesses seeking funds as you get to retain full control of your company, but if the business fails, you are mostly under no obligation to repay your crowdfunders (though this is not necessarily always the case so do check the terms and conditions of the crowdfunding platform you use).

6. Consider a business loan

To retain complete control of your business, you may want to apply for a business loan through a bank.

Most banks will expect you to have a strong business plan, a breakdown of your expenses – think set up costs, staffing costs, R&D costs, software management tools, web development, etc. – and your financial projections for the next three to five years. Knowing this will help you determine how much funding you’ll need (see step one) and also help the bank feel confident in giving you the loan. Be sure to check out various banks to ensure you get the best loan terms.

7. Research government grants and loans

There are a number of government grants and loans that may be applicable to help launch and grow your business. Through the ‘Start Up Loan’ scheme, you can apply for a loan of £500 to £25k to help start your business if you live in the UK, are over 18 and you have (or plan to start) a UK-based business that has been trading for less than 2 years. Do note that this is not a business loan, it is an unsecured personal loan, with an interest rate of 6% per year which must be repaid over a period of one to five years.

Another option which may be applicable depending on the type of business you are setting up is to seek a government grant through Innovate UK . They provide grants to businesses who are looking to develop innovative solutions, supporting the development of new approaches, across a range of technologies, in all sectors and industries. These include advanced manufacturing, artificial intelligence, digital, electronics, bioscience and advanced computing. You can find out more about the funds they are distributing here .

8. Hire in a business coach

To give your business the best possible chance of raising finance, consider hiring a coach who has sector experience and can guide you through the process. In many cases, the ability to secure funding to pursue your growth plans will enable you to achieve your personal and business goals, so it is important to give yourself the best possible chance to achieve this.

Having a coach or advisor on hand who can leverage their experience could be extremely valuable and save you a lot of time and clarity. An obstacle most entrepreneurs face when raising finance is managing the toll it has on their bandwidth, as they navigate growing and running the business at the same time. It’s no surprise that business performance does normally take a hit during a fundraise as the attention of the business owner is focused elsewhere.

A good business coach will be able to help guide you through the fundraising process. Following a successful raise, having them stay on board will give you the best possible chance of then executing your business plan.

There are many business coaches in the UK but it’s important to assess them and understand their experiences to ensure it has maximum impact on your business – e.g. Indy Goraya at ActionCOACH Birmingham , who has experience advising and investing in businesses, and now operates as a business coach.

With so many options available to help you launch and grow your business, it is essential to take time to work out which funding route is best for you. To do this, make sure your business plan and brand identity are strong. If you need support with the latter, we’d love to help – just drop us an email .

To read more exclusive tips and industry news, head to DG Insights now.

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Run » business financing, a practical guide to funding your small business with business loans and beyond.

Here’s a detailed guide on how to fund your business, whether you’re just beginning or you have a few years under your belt.

Business lender shaking hands with entrepreneur

Whether you’re just starting your business or growing an existing one, there are a multitude of options for small business funding to help meet the needs of your unique situation. To help you understand how to fund a small business, this guide will detail startup necessities, outline funding options, and walk through what to consider when selecting a funding option.

Startup necessities

You should go into seeking funding for a new business armed with some information. First, decide what’s on your "need" list and what’s on your "it can wait" list. Pose the question this way: What is the bare minimum required you need to get your venture off the ground?

At the same time, you can’t skimp on the necessities. This will, of course, be a major investment. So, if — when thinking through your new business venture — you put something on the "it can wait" list, check with other areas that may be affected if that area doesn’t get funded.

Here are some common business expenses and the questions surrounding them to consider before trying to secure funding:

Payroll — How many employees do you have, what are you paying them, and how many employees will you have in the next six months? Startup and small businesses don’t always stay small, so think about how many people you will need to start, but also how many you may need before you start making a profit. Also, consider how you’re going to pay yourself. As the founder of the small business, you need to live, too.
Insurance — Is your business prepared if disaster strikes? Will you be offering health insurance to your employees ?
Licensing, permits, and taxes — Doing business costs money and you want to make sure you won’t be running into any legal trouble. How much capital do you need to cover licenses, permits, and taxes?
Rent and utilities — If you’re moving your business into a physical space, make sure you can afford your lease and utility costs to keep things running. Make sure you clearly understand the terms of a commercial lease before signing a contract.
Equipment — Do you need computers, phones, machinery, or other forms of equipment? Is renting or leasing equipment a possibility? Can you get equipment used? How much personal protective equipment (PPE) do you need to buy to protect worker and/or customer health?
Inventory and upcoming orders — Do you have enough raw product to make your business continue to operate? If you don’t, should you be investing in more?
Advertising and website — You have to let people know you exist, and this doesn’t happen without advertising and a good website. Perhaps you will buy social media ads , rent billboards, put an ad in a local magazine, or optimize your site for the best search engine results. All of this costs money.
All the extras — Will you or your employees need to travel? Are there consultants in your field you should pay for some advice? Will you need a lawyer on retainer or to handle any sort of small business matter such as obtaining a copyright or trademark?

[Read more: How to Sell Products and Services on Social Media ]

Types of small business funding

There is no "right" way to fund your business, whether you’re looking for startup funding or to maintain or grow your existing business. Some types of funding work better for different stages of your business, and sometimes the right answer might be a combination of funding types.

Here are some common ways to fund your business:

Traditional loans

If you are a new business, you might not have a credit history. In that case, traditional lenders will look at your personal credit when deciding whether to give you a loan. Your credit history is the track record of how promptly you pay your bills and is used to determine how risky it is to lend to you. Traditional lenders, like banks, are cautious with their money. If your credit score is below 680, there may not be many options for you in the traditional lending arena. On the other hand, if your business is more established (two or more years in operation) and you have good credit and at least $100,000 a year in revenue, you’ll probably find very good interest rates from a traditional lender.

Online lenders

If your credit score isn’t up to par or you don’t have much time in business, you might look at popular online lenders for a loan. According to a recent Small Business Credit Survey by the Federal Reserve , 22% of the businesses surveyed applied for funds through online lenders.

Personal loans

If you have a new business but your personal credit score is high, you might consider taking out a personal loan for funding. Be aware, though, that if your business fails, this will seriously impact your personal credit.

Microlenders

As the name suggests, a microloan is a very small loan , typically of less than $50,000 given out by individuals rather than traditional lending institutions. These loans may also be offered through government organizations such as the Small Business Administration (SBA) or nonprofits. If you don’t need to borrow a lot of money, this could be a good direction.

Self-funding

You might be surprised by what you can do on a limited budget. Bootstrapping your own business can pay off down the road if you want to apply for a loan because it shows perseverance and dedication. The big question is whether you can afford to invest your own money and if it’s enough to accomplish your goals.

Are you involved in your local entrepreneurial community? It can be a good place to find people willing to invest in your business and ideas . Diligently research any investors and venture capitalists and work to come to an agreement on a term sheet about your business arrangement.

Crowdfunding

Crowdfunding will require you to pitch your business idea online through popular sites such as Kickstarter or Indiegogo to get upfront pledges to fund the business or product. However, you have to know how to market yourself and be savvy with web content for these options to work.

Friends and family

This can be a risky way to fund a business, but if you treat the situation professionally, it might work out. Friends or family helping to fund your business should earn interest or equity in the company and should be given monthly payments. Paperwork should still be drawn up.

Invoice factoring

When a business sells its outstanding invoices to a factoring company, it is called invoice factoring . An invoice factoring company quickly repays the business a percentage of what the invoice is worth, usually between 75% and 90%. Once the full invoice is paid, the factoring company pays your business the remainder of the invoice while subtracting its factoring charge and a factoring fee. This isn’t a loan, but it can help companies cover cash flow issues. Because it isn’t a loan, whether a factoring company will work with your small business or not is not as dependent on your credit score, but rather on the credit scores of your clients who the company will be depending on to pay in a timely fashion.

Small business grants to consider

Many government entities, corporations, and nonprofits offer money for people to launch or grow small businesses. Some small business grants are open to any small business while others are targeted to specific demographics, like businesses owned by minorities , women , or veterans. The website Grants.gov also serves as the largest database for federal grant opportunities.

Government grants

Government grants are available for small businesses at the federal, state, and local levels for a variety of different business types and circumstances. A few examples of government grants include:

U.S. Department of Commerce Minority Business Development Agency (MBDA): MDBA loans and targeted grants are designed to help minority-owned businesses grow.
Farmers Market Promotion Program: Businesses in the agricultural sector can benefit from the Farmers Market Promotion Program , which aims to increase applicable marketplaces and manufacturer-to-consumer products. These businesses can receive educational resources, training, and financial support.
Small Business Innovation Research Program (SBIR): The SBIR Program provides grants to small businesses with the ability to perform federal research for the potential to curate profit-oriented goods and services.

There is no "right" way to fund your business, whether you’re looking for startup funding or to maintain or grow your existing business.

General small business grants

Nonprofit and larger corporations offer grant opportunities and other funding options to small businesses based on their eligibility and industry. Here are a few general small business grants to consider:

Business Warrior: Business Warrior’s mission is to provide small businesses with direct access to capital at low-interest rates and with short approval times.
GoFundMe Small Business Relief Fund: GoFundMe assists qualifying small businesses that were negatively impacted by the COVID-19 pandemic by matching $500 grants to those that raise the same amount in a GoFundMe campaign.
Dream Big Awards: The U.S. Chamber of Commerce’s annual Dream Big Awards seek to recognize small businesses across the country that have helped to grow the overall economy. Small businesses can submit their application for the chance to win a $25,000 grand prize during the Chamber’s Big Week for Small Business.

Industry-specific grants

Businesses with a specific niche or operating in a specialized industry can benefit from industry-specific grants. These grants aren’t open to all small businesses and you must carefully consider the requirements and eligibility guidelines before applying. A couple of examples of industry-specific grants include:

Etsy Emergency Relief Fund: Etsy sellers may be eligible for relief funding thanks to CERF+, a nonprofit organization that provides support and preparation resources to artists during emergencies and disasters. This program grants up to $2,500 to Etsy sellers who have been through a natural disaster.
Jobber Grants Program: This program is meant for businesses in the home service field, such as landscaping or pool servicing. The Jobber Grants Program provides grants between $2,500 and $15,000.

Diversity business grants

Diversity business grants are programs that seek to elevate minorities and other underrepresented communities by providing financial resources, mentorships, and networking opportunities. Here are some examples of diversity business grants:

Amazon’s Black Business Accelerator Program: The Black Business Accelerator Program is designed to benefit Black sellers on Amazon. It offers advice, resources, mentorship opportunities, and financial and promotional support. Eligible sellers receive access to cash grant opportunities, advertising credits, money towards startup costs, and more.
Amber Grant Foundation: Founded in 1998, the Amber Grant Foundation seeks to support women entrepreneurs by awarding a $10,000 grant each month and a $25,000 grant each December. Grant winners are chosen based on the applicant’s story and vision for their business.
Black Founder Startup Grant: Backed by the SoGal Foundation, this program awards up to $10,000 in grants to Black and multiracial women and nonbinary entrepreneurs. The Black Founder Startup Grant program accepts applications year-round.

Ways to make your business attractive to investors and lenders

Write a business plan.

Writing a robust business plan is a good way to present your small business to banks and potential investors. It should include your personal story and be able to convey your passion for your small business.

The business plan will require you to do a fair amount of market research and convey that you understand the industry you are entering and the direction in which you want to take your business. Back up your financial projections with data. A business plan should also include a clear business model as well as a marketing plan.

[Read more: How to Write a Business Plan ]

Build your credit score

Before you apply for funding from a traditional lender or even some online lenders, it is crucial you know your business credit score as well as your personal credit score. If they aren’t up to snuff, take steps to raise them such as by paying down debt or removing any incorrect derogatory items. You can even take it one step further by opening a business credit card. When you use the card each month and pay off the balance by the due date, you’re building your business credit, which increases your credit score. This is especially helpful if you’re a new business owner looking to build a credit score quickly.

Crunch the numbers

At the end of the day, investors take a chance on businesses they hope can make them a return on their investment. Creditors, on the other hand, may want to see how your business is profiting financially before they provide you with a loan. To instill confidence in investors and creditors, it’s important to crunch the numbers in your business.

Crunching the numbers means displaying your business’s financial track record including where the business currently stands in terms of cash flow and the level of debt you've accumulated. If your business is new, lay out a clear plan of how you’re going to complete your financial goals and when investors can expect to see a return on investment in your business.

Craft a narrative

Investors are used to hearing pitches from hopeful business owners filled with hard data, metrics, and business analytics. While these details are critical to any successful pitch, they’re not the only factors that can sway an investor in favor of your business. Investors are humans, too, and are interested in the story behind the business you are pitching.

Come up with a strong narrative that will explain how you came up with your business idea, what drives you in your business, the impact you intend your business to have on the world, and more. The more compelling the narrative, the greater the chance investors will feel compelled to take a chance on your business.

Create a clear investment structure

Before investing in your business, investors want to know you have a clear layout of the investment structure. For example, legal ramifications, including possible liability exposure, can play a factor in their decision on whether or not to invest. Would the investor be a shareholder or partner? If so, would they be able to make business decisions alongside the business owner?

It’s also important to create a stockholder’s agreement that lays out each owner’s rights and obligations, including if the owner wants to sell, if the business shuts down, and other issues. Once you have a clear investment structure, it’s time to negotiate all the details with your investors.

[Read more: Best Tips From Famous Investors ]

Selecting a route to fund your business

Answering questions about your business and how you plan to use the financing is a good way to know which direction to take to fund your business. You should be able to answer the following:

How much money do you need, and what do you need it for?
How much debt can you afford to take on?
What is your preferred method of borrowing money?
Are there any changes you need to make to be eligible for that type of funding?
Do you have a good personal credit score?
How long have you been in business?
What are your revenues?
Do you have any collateral?
Do your story and business idea seem like something you could take to an investor?
Have you established a solid enough business plan to talk to an investor or a traditional bank?

The goal of any type of funding should be to benefit your business, not saddle you with debt. So, it’s wise to choose a funding type that best fits your financial needs and will help you reach your business goals.

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.

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 .

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9 Ways to Use Your Business Plan It's not just for financing--your business plan can help you spot future success or failure, attract suppliers and employees, and more.

Sep 27, 2005

Editor's note: This article was excerpted from Business Plans Made Easy , a guide to creating a high-impact business plan.

The process of writing a business plan helps you take a thorough, careful and comprehensive look at the most important facets of your business, including the contexts in which it operates. Just raising questions can sometimes lead to a solution, or at least ensure that if conditions change you won't be forced to make decisions hastily. The ongoing "what if this or that happens?" inherent in the planning process keeps you alert. In other words, the planning process itself makes you a far more capable manager than you would be without it. For many, this is a more valuable result than securing funding.

In many ways, writing a business plan is an end in itself. The process will teach you a lot about your business that you are unlikely to learn by any other process. You'll spot future trouble areas, identify opportunities, and help your organization run smoothly, simply through the act of writing a plan.

Evaluating a New Venture Lisa Angowski Rogak is an entrepreneur who started several newsletters in much the same way. She devised a plan focusing on marketing strategy and cash flow projections to see if she could come up with a way to sell the newsletters while keeping her bills paid. She then prepared a sample issue to be used in a direct mail and publicity campaign. "Planning is the key to the success of your newsletter," says Rogak, whose latest venture is Williams Hill Publishing. "It's the single most important thing you can do to ensure the success of your newsletter."

That's the kind of encouragement that helps entrepreneurs persevere, whether they have an existing concern that's hitting a rough spot or a startup concept that nobody else seems to believe in. Numbers can lie, of course, and nobody can create a spreadsheet that really tells the future. But evaluating financial data is to entrepreneurship what evaluating lab results is to a medical doctor. If your vital signs are good, odds are your future will be as well

But what if the odds don't look so favorable? What if the first pass through your cash flow projection or income pro formas contains more red than a fire station paint locker? Sure, you can go back and look for an error or an overly pessimistic or conservative assumption. You can even try altering a few of the inevitable numbers that you really have no way of estimating accurately to see where the pressure points are, if nothing else.

But what if you do that, even pushing your alterations past the point of credibility, and your plan still doesn't make sense? Well, in that case, you've probably done yourself the really big favor of finding out something isn't going to work before you sink your money into it. Nobody knows exactly how often this happens, but it's safe to say that a lot of businesses are never attempted because the plan convincingly says that they shouldn't be.

Is that bad? Well, it may feel bad. But think how much worse you would feel if you went ahead with the venture, and things turned out as the plan forecast. Business planning is a powerful tool for evaluating the feasibility of business ventures. Use it.

It would be a shame to keep the benefits of a well-done plan to yourself. And you shouldn't. You can use your plan to find funding. But a good plan can also help sell your products, services, and your whole company to prospects and suppliers. Furthermore, a plan is a valuable tool for communicating your visions, goals and objectives to other managers and key employees in your firm.

Selling with Your Plan As a rule, your business plan is only likely to be required in the later stages of being selected as a supplier. Let the customer's process decide when or if you'll present your plan. As an added benefit, working your way through the early stages of vendor selection will give you a chance to rework your plan, if necessary, to stress the areas you've learned are more important to your potential customer. Informing Suppliers and Customers Increasingly, companies large and small have been trying to trim the number of suppliers and customers they deal with and develop deeper and stronger relationships with the ones they keep. An essential part of this is getting to know more about existing and prospective vendors and clients. So don't be surprised if one day, when you're trying to set up a new supplier relationship or pitch a deal to a big company, the person you're negotiating with asks to see your business plan.

Why do suppliers care about business plans? Suppliers only want to sell to people who can pay, which is one important reason a new supplier is likely to want to see your business plan before taking a big order. Remember, if a supplier is selling to you on credit--letting you take delivery of goods and pay for them later--that supplier is, in effect, your creditor. Suppliers who sell for other than cash on delivery have the same legitimate interest in your business's strategy and soundness as does a banker.

Say a supplier's analysis of customer records shows it has a knack for developing long-term profitable relationships with moderate-sized companies that emphasize excellent service, price at a premium level, and provide only the best merchandise. Business plans provide all the information such a company will need to find and clone its best customers. So if a supplier asks to see your plan, be willing to share it. It could be the start of a long and mutually beneficial relationship.

Customers are likely to be concerned about how well your respective strategies fit with theirs. For instance, say your mission statement says that you intend to produce the best-in-the-world example of your product no matter what the cost. Your customer, meanwhile, is a high-volume, low-price reseller of the type of products you make. Even if your offering fits the customer's need this time, odds are good that the relationship won't work out over the long haul. If, on the other hand, a look at your business plan reveals that your companies share the same kind of strategies and have similar objectives in type if not scope, it's an encouraging sign.

Managing With Your Plan

The spread of the open-book management theory means a lot more employees are seeing their companies' business plans than ever before. When employees get the key information managers are using to make decisions, they understand management better and make better decisions themselves, and efficiency and profitability often increase as a result.

Many companies hold annual meetings at which they present and discuss an edited version of their business plan to all employees. Others provide new hires with their business plan-type information as part of their indoctrination in company culture. Both are effective approaches. You can also use bulletin boards or company newsletters to publish smaller sections of your plan, such as your mission statement or some details of financial objectives and how you're progressing.

One drawback to using a plan to help inform and manage your employees is that many won't understand it. Some firms provide employees with rudimentary training in matters like how to read a financial report before they hand out the company's plans. Often this training is done by the CEO and can take considerable time. But don't be afraid to share details of your business plan with employees. They may turn out to understand it better than you.

Monitoring Your Business's Performance Using a business plan to monitor your performance has many benefits. If your cash flow is running much shorter than projected at the moment, even though you're not currently in trouble, that information may help you to spot disaster before it occurs. By comparing plan projections with actual results, you gain a deeper understanding of your business's pressure points or the components of your operation that have the most effect on results.

Spotting trouble early. A teenager taking driver's education is told to look through the rear window of the car in front to try to see the brake lights on the vehicle ahead of that one. The idea is that if the novice driver waits until the car immediately ahead slams on the brakes, it may be too late to stop. Looking forward, past the immediate future, helps traffic move more smoothly and averts countless accidents.

The same principle applies in business planning. You don't have to be a wizard to get some solid hints about the future beyond tomorrow, especially when it comes to the operations of your own business. You can look at virtually any page of your business plan and find an important concept or number describing some expected future event that, if it turns out to be diverging from reality, may hint at future trouble.

Say your profit margins are shrinking slowly but steadily and seemingly irreversibly. If you can see that within a few months your declining margins will push your break-even point too high to live with, you can take action now to fix the problem. You may need to add a new, higher-margin product; get rid of an old one; or begin marketing to a more profitable clientele. All these moves, and many more you could take, have a good chance of working if your careful comparison of plan projections with actual results warns you of impending danger. Wait until the last minute, and you could be peeling yourself off the windshield.

Understanding pressure points. Not all tips that come from comparing plans with results have to do with avoiding danger. Some help you identify profit opportunities. Others may show how seemingly minor tweaks can produce outsized improvements in sales or profitability. For example, the plan for a one-person professional service business indicated that rising sales were not, in general, accompanied by rising costs. Fixed items such as office rent and insurance stayed the same, and even semivariable costs such as phone bills went up only slightly. The bulk of any extra business went straight to the bottom line, showing up as profit improvement. But one cost that didn't seem especially variable went up sharply as business volume climbed. That was the number of transactions.

Ordinarily this would be a given and not necessarily a matter of grave concern. A large enterprise could absorb these costs, but for this single professional, however, added paperwork came at a very high cost--her own time. As a part of checking her plan against results, she noticed this unexpected increase in transactions and calculated that she spent around an hour on paperwork for each transaction no matter how large or small. She realized that one of the most important pressure points in her business was related to the size of a transaction. By refusing small engagements and seeking clients who could offer big jobs, she would reduce the amount of time spent on otherwise unproductive paperwork and increase the time she could spend completing client requirements.

Ultimately, she was able to trim what had been 100 annual transactions down to 75, while increasing the amount of her dollar revenue. The result was a free 25 hours to spend working on more business or just vacationing. If you can see and relieve a pressure point like that, you can really keep your business from boiling over.

There are few things to equal the sensation of filling in all the numbers on a cash flow projection, hitting the recalculate button, and scrolling to the bottom of your spreadsheet to see what the future holds. If the news is good and you see a steady string of positive cash balances across the bottom row, you know that, assuming your data is good and your assumptions reasonable, your business has a good chance of making it.

Do the Numbers Add Up?

Many businesses fail because of events that are impossible to foresee. If you'd begun a car dealership specializing in yacht-sized gas guzzlers right before the Arab oil embargo in the 1970s, you would be in the same position as a driver heading at 100 miles per hour into a brick wall--through no fault of your own. The same might go for a software startup that comes out with a new program just before Microsoft unveils a top-secret, long-term development effort to create something that does the same job for a lot less money.

It's probably not a bad idea, as part of your business planning process, to try to include some information in your business plan about the activities or intentions of the potential embargos and Microsofts. If nothing else, crafting a scenario in which the unthinkably awful occurs may help you to deal with it if it does. But some things are just wild cards and can't be predicted. For these you just have to trust the luck of the draw.

So what numbers have to add up? Certainly you have to be selling your products and services at a profit that will let you sustain the business long term. You'll also have to have a financial structure, including payables and receivables systems and financing, that will keep you from running out of cash even once. If you have investors who want to sell the company someday, you may need a plan with a big number in the field for shareholders' equity on the projected balance sheet.

When you're asking yourself whether the numbers add up, keep the needs of your business and your business partners, if you have any, in mind. Even if it looks like it'll take an air strike to keep your business from getting started, you don't want to do it if the numbers say that long-term it's headed nowhere.

Attracting Good People It takes money to make money, sure, but it also takes people to make a company, that is, unless you're a one-person company. Sometimes even then a plan can be an important part of your effort to attract the best partners, employees, suppliers and customers to you.

Prospective partners. Partners are like any other investors, and it would be a rare one who would come on board without some kind of plan. Partners want to know your basic business concept, the market and your strategy for attacking it; who else is on your team; what your financial performance, strengths and needs are; and what's in it for them. Luckily, these are exactly the same questions a business plan is designed to address, so you're likely to please even a demanding prospective partner by simply showing him or her a well-prepared plan. The one difference is a plan probably won't contain the details of a partnership agreement. And you'll need one of these to spell out the conditions of your partnership, no matter how well you and your prospective partner know, understand and trust one another.
Prospective employees. Although employees may not be making cash contributions to your business, they're making an investment of something equally important--their own irreplaceable time. The kinds of employees you probably want are careful, thorough, good at assessing problems and risks, and unwilling to leap into hazardous waters. As it happens, these are just the kind of people who are going to want to see a written plan of your business before they come on board.

Now, it's not going to be necessary, if you're running a restaurant, to show your full business plan to every waitperson or assistant dishwasher who fills out a job application. It's the most desirable employees--the talented technologists, the well-connected salespeople, the inspired creative types, and the grizzled, seen-it-all managers--who are most likely to feel they can and should demand to see details of your plan before they cast their lot with you.

So even if you don't show your plan to more than a few prospective employees, when you need it, you may really need it bad. Make sure you're ready when a promising but inquisitive job candidate shows up at your doorstep. Another thing, as we've pointed out, not all businesses have plans. So by having one, you'll be making yourself a more desirable employer.

Plan for the Possibility of Failure

There's no point in planning for failure, but there is a point in writing a business plan that's willing to admit the possibility of failure. It's only natural to create a plan that will describe a roaring success, but you have to be careful not to present an overly optimistic view, especially of such elements as sales, costs and profit margins.

It's tempting to noodle around with the numbers until you come up with the desired result. And if you only make small changes here and there, it may seem all right. What difference does it make? Say you increase your projected market share by 1 percent here, reduce expected costs by 2 percent there, and lower your estimate of required startup capital by a few percentage points as well.

A number of similarly small changes, in sum, can make a big difference in the bottom line of your plan and turn what otherwise looks like a loser into a projected winner. But don't be seduced. You may be asking for investments from friends and family you care about as well as putting your own life savings into the enterprise. Arm's-length investors' feelings may not be so important, but if you mislead them in your plan, you may open yourself up to accusation of misrepresentation.

Looking at things in your plan through rose-colored glasses may even doom your business to failure if it causes you to seek insufficient startup capital, underprice your product or service or expect unrealistically rapid growth. Temper your enthusiasm. If your plan indicates that the business idea isn't sound, by all means look for errors. But don't make the mistake of skewing your plan to fit an idea that isn't sound.

Update Your Plan Writing a business plan is one of those skills that improves with practice. The first one or two times you create one, you may feel a little unsure of yourself and even less certain that what you're doing has value.

If you go on to start several ventures during your career, you'll naturally write several business plans, and each one will be better than the last. It's likely as well that with better planning skills will come improved business skills, boosting the odds that each successive company you start will do better than the one before.

But there's no reason that only serial entrepreneurs should get the benefit of regular business planning sessions. If you start just one company or even if you never start a company at all, you can and should be constantly honing your business planning skills by updating and rewriting your business plan.

Updating a plan is normally easier than starting from scratch. Instead of trying to figure out what your basic business concept is, you only have to decide whether it's changing. Instead of wondering where you'll find the current market research you need, you just have to go back to the original source for updated figures. You'll usually be able to reuse the financial formulas, spreadsheets, management biographies and other more or less evergreen contents of your plan.

It's important, however, that a plan update not be a mechanical task, limited to plugging in the most recent sales figures. Take the time to challenge some of the core assumptions of your prior plan to see if they still hold up. Have profit margins been higher than you expected? Then start planning how to make the most of any extra cash you generate. Is your new retail store unit not performing as well as others or you expected? Then now's the time to figure out why. Has competition for your new product arisen sooner than you guessed? Take a look at other products with an eye to seeing if they are also more vulnerable than you think.

In large corporations with strict planning routines requiring annual, semiannual and quarterly plans and plan updates, managers spend at least part of their time working on or thinking about a new plan or plan update. All that information flowing up to senior managers in the form of plans helps keep the brass informed. It helps those in the trenches, too. It's a fact that everybody is judged by past performance. And the best way to ensure that a year from now you'll be looking back on your performance with satisfaction and pride is to plan now and often.

Here are eight reasons to think about updating your plan. If one applies to you, it's time for an update.

A new financial period is about to begin. You may update your plan annually, quarterly or even monthly if your industry is fast changing.
You need financing, or additional financing. Lenders and other financiers need an updated plan to make financing decisions.
Significant markets change. Shifting client tastes, consolidation trends among customers and altered regulatory climates can trigger a need for plan updates.
New or stronger competitors are looking to your customers for their growth.
Your firm develops or is about to develop a new product, technology, service or skill. If your business has changed a lot since you wrote your plan, it's time for an update.
You have had a change in management. New managers should get fresh information.
Your company has crossed a threshold, such as moving out of your home office, reaching $1 million in sales or employing 100 people.
Your old plan doesn't seem to reflect reality anymore. Maybe you did a poor job last time; maybe things have just changed faster than you expected. But if your plan seems irrelevant, redo it.

David H. Bangs has been working with small-business owners for more than 20 years and is the author of 11 small-business books.

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How to secure funding for your business

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Starting a business is an exciting and challenging journey. One of the biggest hurdles to overcome is securing the funding needed to get your idea off the ground. Without a solid financial foundation, it can be difficult to bring your vision to life and achieve success. But, don't worry! With a little bit of planning and effort, securing funding for your business can become a lot more manageable. In this article, we'll explore some of the best strategies for securing funding and help you find the resources you need to get your business off the ground. So, if you're ready to turn your business dream into a reality, let's get started!

Understanding your funding options

"Understanding your funding options" is a crucial step in securing funding for your business. It means knowing the different sources of funding that are available to you, and which ones are the best fit for your specific business needs. There are several options to choose from, including loans, investments, grants, and personal savings, just to name a few. By understanding your options, you'll be able to determine which type of funding is best suited for your business and make informed decisions that will help you secure the financing you need to grow and succeed.

Additionally, by knowing your options, you'll be able to tailor your pitch and strategy to appeal to each potential source of funding, improving your chances of success. In short, taking the time to understand your funding options is a key step towards securing the financing you need to make your business a success.

Creating a solid business plan

"Creating a solid business plan" is a critical component of securing funding for your business. A business plan is a comprehensive document that outlines your company's goals, strategies, and projections for the future . It is essential for securing funding because it helps potential investors, lenders, and grant providers understand your business, and how you plan to achieve your goals. Also, remember that efficient donor management is crucial in securing funds. For this, you can lean on technology like Virtuous Software, a leader in the field of nonprofit CRM . This tool will enable you to create more responsive donor experiences and grow giving, hence, enhancing your funding possibilities. Using a robust tool like Virtuous to manage, track, and analyze your donor interactions can be a game-changer in your quest for funding.

A solid business plan should include information on your target market, competitive landscape, marketing strategy, financial projections, and operational plans, among other things. It should be well-researched and provide a clear and concise overview of your business and its potential for success. In many cases, potential investors and lenders will not consider funding your business unless you have a solid business plan in place.

Creating a business plan takes time and effort, but it is well worth it in the long run. You may consider hiring professional business plan writers to do it for you. Having a professionally written plan not only helps you secure funding, but it also serves as a roadmap for your business and can help keep you on track as you work towards your goals. So, if you're serious about securing funding for your business, make sure to take the time to create a solid business plan that showcases your vision and potential for success.

Building a strong network

"Building a strong network" is an important aspect of securing funding for your business. Your network can include family, friends, business associates, mentors, and industry experts, among others. The key is to build relationships with people who can provide you with valuable information, support, and resources as you work to secure funding for your business.

Having a strong network can help you stay informed about the latest trends, industry developments, and funding opportunities . They can also provide you with valuable insights and advice, and introduce you to potential investors and lenders. Additionally, having a strong network can help you build credibility and increase your visibility in your industry, making it easier to secure funding and build your business.

Building a strong network takes time and effort, but it is a worthwhile investment in your business's future. Start by attending industry events, networking with other entrepreneurs and business owners, and reaching out to people who can help you achieve your goals. Make sure to be genuine, professional, and willing to offer your own help and resources in return. With a strong network of supportive and knowledgeable individuals behind you, securing funding for your business will become much more manageable.

Preparing a compelling pitch

"Preparing a compelling pitch" is a crucial step in securing funding for your business. A pitch is a brief presentation that showcases your business idea, its potential for success, and your plans for growth. Your pitch should be concise, well-structured, and easy to understand. The goal is to convince potential investors, lenders, or grant providers that your business is worth supporting.

When preparing your pitch, make sure to highlight the unique features and benefits of your product or service, and explain why your business is well-positioned to succeed in your target market. Discuss your financial projections, marketing strategy , and any other information that will help potential investors see the potential of your business.

It's also important to be well-prepared and confident when delivering your pitch. Practice in front of friends, family, or business associates to get feedback and fine-tune your presentation. Make sure to dress professionally and be articulate and enthusiastic about your business.

Having a compelling pitch can make all the difference when it comes to securing funding for your business. By taking the time to prepare a clear and convincing pitch, you'll increase your chances of securing the financing you need to bring your vision to life.

Seeking government grants and loans

"Seeking government grants and loans" is one option for securing funding for your business. Government grants and loans are financial awards that are provided by the government to support companies that meet specific criteria. These programs are designed to help companies grow, create jobs, and stimulate the economy .

Grants are usually provided to companies that are involved in research and development, innovation, or other areas that are deemed to have a positive impact on society. They are typically non-repayable, meaning that they do not have to be paid back. Loans, on the other hand, are provided at a lower interest rate than commercial loans and must be repaid.

To be considered for government grants and loans, you will typically need to submit a detailed application that includes information about your business, its goals, and its plans for growth. The application process can be competitive, so it's important to have a solid business plan, a well-researched proposal, and a clear understanding of the criteria for the specific grants or loans you are seeking.

If your business meets the eligibility criteria, seeking government grants and loans can be an excellent way to secure funding for your business. However, it's important to remember that government funding programs can be complex, and the application process can be lengthy, so it's important to do your research and plan ahead to increase your chances of success.

Crowdfunding for early stage startups

"Crowdfunding" is a modern method of securing funding for early stage startups, especially those that are still in their ideation or development stage. Crowdfunding involves raising small amounts of money from a large number of people, typically through an online platform. It's a way for startups to bypass traditional funding sources and instead access a large network of potential investors, customers, and supporters.

With crowdfunding, startups can reach a global audience and showcase their products or services to a large number of potential customers. The money raised through crowdfunding can be used to develop prototypes, launch new products, or grow the business.

To be successful with crowdfunding, it's important to have a clear and compelling pitch that showcases your business idea, its potential for success, and the value it will bring to customers. You should also have a solid marketing plan to reach your target audience and build support for your campaign.

It's also important to have a well-structured rewards program for your backers, offering perks and incentives that are commensurate with the level of investment. This can help you build a loyal customer base and create a sense of community around your business.

Overall, crowdfunding can be a valuable source of funding for early stage startups, but it's important to approach it with a strategic plan and a clear understanding of the crowdfunding process. With the right preparation and approach, crowdfunding can be a powerful tool for securing funding and growing your business.

Applying for a business loan from banks or alternative lenders

"Applying for a business loan from banks or alternative lenders" is a common method of securing funding for small companies. A business loan is a type of financing that provides a lump sum of money to a business, which must be repaid over time, usually with interest.

Banks and alternative lenders are two of the most common sources of business loans in the era of open banking. Banks, as traditional financial institutions that embrace open banking, offer a variety of loan products, including term loans, lines of credit, and more. Alternative lenders, such as online lenders and peer-to-peer lenders, also leverage open banking to provide more flexible lending options, faster funding times, and often serve companies that may not qualify for bank loans.

To apply for a business loan, you will typically need to provide the lender with information about your business, its financials, and its plans for growth. This information is used to assess the risk of lending to your business and determine whether you are eligible for a loan. The lender will also consider your credit history, your collateral, and other factors when deciding whether to approve your loan application.

When applying for a business loan, it's important to have a clear understanding of your business's financial situation and to present accurate, up-to-date financial information to the lender. You should also have a solid business plan that demonstrates the potential for success and the ability to repay the loan.

In conclusion, applying for a business loan from banks or alternative lenders can be a valuable source of funding for your business, but it's important to approach the process with care and preparation. By working with a reputable lender and presenting a strong case for your business, you can secure the financing you need to grow and succeed.

Partnering with investors or venture capitalists

"Partnering with investors or venture capitalists" is another method of securing funding for your business. Investors and venture capitalists are individuals or organizations that provide funding in exchange for an ownership stake in your business. This type of funding is often used by early-stage startups that need large amounts of capital to grow quickly.

Investors and venture capitalists bring more than just funding to the table. They often have industry expertise, connections, and a wealth of experience in growing successful companies. Working with an investor or venture capitalist can provide valuable mentorship and help your business reach new heights.

To secure investment from an investor or venture capitalist, you need to have a solid business plan that demonstrates your business's potential for growth and success. You should also be able to articulate a clear vision for your business and show that you have the team and the skills to execute on that vision.

When presenting your business plan to investors or venture capitalists, it's important to be well prepared, professional, and confident. You should have a clear understanding of your business's financials and be able to articulate your plans for revenue growth, customer acquisition, and other key metrics.

It's also important to be aware of the terms of the investment, including the ownership structure, the terms of repayment, and the rights and responsibilities of each party. You should carefully review the terms of any investment agreement to ensure that it is in line with your goals and protects your interests.

Overall, partnering with investors or venture capitalists can be a valuable source of funding for your business, but it's important to approach the process with care and preparation. By working with reputable investors and presenting a compelling case for your business, you can secure the funding you need to grow and succeed.

Utilizing personal savings and assets

"Utilizing personal savings and assets" is a common method of securing funding for a small business. Many entrepreneurs start their companies using their own personal savings, such as their savings account, investment portfolios, or retirement funds. This method of funding is attractive because it allows you to retain control of your business and avoid the costs and obligations associated with traditional lending or investment options.

However, it's important to be aware of the risks involved in using personal savings and assets to fund your business. By using your personal resources, you may be putting your personal financial security at risk, and if your business fails, you may be unable to recover your lost funds.

To minimize the risk of using personal savings and assets, it's important to have a solid business plan in place that outlines your goals, strategies, and financial projections. You should also have a clear understanding of your business's financial situation, including its current and future cash flow, to ensure that you have enough personal resources to sustain your business through the ups and downs of the early years.

Additionally, it's important to be mindful of the tax implications of using personal savings and assets for your business. You may need to consult with a tax professional to understand the tax implications of using your personal savings and assets for your business, and to determine whether it makes sense for your specific situation.

In conclusion, utilizing personal savings and assets can be a useful way of securing funding for your business, but it's important to approach the process with care and preparation. By having a solid business plan and understanding the risks involved, you can minimize the impact of using your personal resources on your financial security and increase your chances of success. For a different perspective, you might also want to compare invoice discounting , another financing option that businesses often consider.

Negotiating terms and conditions of funding

"Negotiating the terms and conditions of funding" is an important step in securing funding for your business. Whether you are seeking a loan, investment, or any other form of financing, it's important to ensure that the terms and conditions of the funding align with your business goals and are fair to both you and the funder.

Negotiating the terms of funding involves understanding the key elements of the financing agreement, such as the amount of funding, the interest rate, the repayment terms, and the equity structure, if applicable. You should be prepared to discuss these elements with the funder and to explain why you believe the terms are reasonable and fair.

To negotiate the best terms and conditions for your business, it's important to have a clear understanding of your business's financial situation and your goals for the future. You should also be prepared to explain why you need the funding and how you plan to use it to grow your business.

It's also important to be aware of the funder's goals and priorities. For example, a lender may be more focused on securing the loan, while an investor may be more focused on the potential return on investment. Understanding the funder's priorities can help you tailor your pitch and negotiate the terms that are most favorable to both parties.

Finally, it's important to have a clear understanding of the legal and regulatory requirements that apply to your business and the funding agreement. You may need to consult with a lawyer or other professional to ensure that the agreement is legally sound and protects your interests.

In conclusion, negotiating the terms and conditions of funding is a critical step in securing funding for your business. By being well-prepared, understanding the funder's goals, and having a clear understanding of the legal and regulatory requirements, you can increase your chances of securing funding on terms that are favorable to your business.

Wrapping up

Securing funding for your business is a crucial step in growing and expanding your business. Whether you are starting a new business or looking to expand an existing one, there are several funding options available to you, each with its own set of pros and cons.

To secure funding, you will need to have a solid understanding of your funding options, including government grants and loans, crowdfunding, business loans from banks or alternative lenders, and partnering with investors or venture capitalists. Additionally, you will need to create a solid business plan that outlines your goals, strategies, and financial projections, and prepare a compelling pitch to present to potential funders.

It's also important to build a strong network of contacts, including business advisors, investors, and other entrepreneurs, who can provide you with support and advice as you seek funding. Finally, be prepared to negotiate the terms and conditions of the funding agreement to ensure that the terms are favorable to your business and align with your goals.

In conclusion, securing funding for your business requires careful planning and preparation. By understanding your funding options, creating a solid business plan, building a strong network, and negotiating favorable terms, you can increase your chances of securing the funding you need to grow and succeed.

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How to Start a Small Business in 10 Steps

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Learn how to start a small business from scratch with expert guidance. Get essential tips and steps for launching your dream journey successfully.

Brett Grossfeld

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Do you have a killer idea that you think would be perfect for launching a small business? If you believe what you see on TikTok, becoming an entrepreneur is just about as easy as posting a 30-second video. But in the real world, launching a small business can be a bit more challenging.

Starting a small business may seem daunting, but if you ask those same business owners if it’s worth the risk — few would trade the opportunity to shape their own destiny.

But where to start? Thankfully, you don’t need to have everything figured out before going out on your own. Successful small business owners are constantly learning from their mistakes — and improving their ideas and dreams along the way.

If you’re ready to take the leap and become a small business owner, keep reading.

Here’s what you’ll learn:

What is a small business, how much does it cost to start a small business, how to start a small business in 10 steps, what do you need to start a small business, start small — but think big.

Small businesses are generally defined by the U.S. Small Business Administration (SBA) as independent operations having fewer than 200 employees. And the majority of small businesses in the United States have fewer than five employees, according to the U.S. Census Bureau .

But the number — or lack — of employees doesn’t necessarily define a “small business.” A business’s size can also be determined by the number of sales, the range of individual business locations, and other factors.

Along with size requirements, the SBA considers a company to be small if it’s:

Independently owned and operated
Not dominant in its field
Physically located and operated in the U.S. (or a U.S. territory)

If your company meets the SBA’s definition of a small business, many government programs offer resources and local assistance for you to turn your dreams into reality.

Start Your Small Business With Big Things

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If you’re skilled in a certain trade — say, bookkeeping — you can launch a business with almost no money . But if your idea needs to be fleshed out and developed by researchers, scientists, and engineers, your startup costs can run into the hundreds of thousands of dollars and beyond. But most startup costs fall somewhere in the middle.

Factors that influence cost

A sole proprietor working from home is going to have very different startup costs than a Silicon Valley startup flush with venture capital funds. But it doesn’t matter if you have $1,000 or $1 million to launch your small business — you’ll need to have a budget.

Are you moving the clutter out of your garage to make room for a desk? Or are you going to hire an architect to remodel a warehouse space in a trendy neighborhood? Obviously, both businesses are going to have wildly different expenses.

Think about your budget and what you can afford to get started. And it’s good to assume that unexpected expenses will pop up along the way — especially in your first year of business.

What kinds of costs to expect

The SBA has a worksheet that will help you calculate typical expenses for a small business, including one-time expenses such as:

Rent : This includes security deposit, first month’s rent and utilities. If you’re working from home, you can deduct a percentage of your rent or mortgage on your taxes .
Improvement costs: Anything that you might spend on your physical place of business to make it suitable for work.
Inventory : If you’re selling a product, you’ll need goods to keep up with customer demand.
Employees : This includes payroll, payroll taxes, and health insurance.
Professional services: Accountants, lawyers, and consultants will all need to be paid
Supplies : Think office supplies, such as paper and pencils, and operating supplies, like computers and printers.
Marketing: Business cards, stationery, flyers, and advertising all fall under this category.
Miscellaneous : This includes licenses, permits, legal fees, signage, technology, and accounting software. Everything else — liability insurance, repairs, maintenance, and dues.

The most difficult part of starting a small business is committing to your vision. It’s easier if you break down the process into small, achievable goals. Here are 10 steps that will get you on your way:

1. Do your research

If you don’t do basic market research before you launch your business, you may be down for the count before you even get started. Ask neighbors, friends, and even your barista if they would be interested in your product or service — and ask how much they’d be willing to pay for it.

Conduct competitor research, local and global searches, and even offer surveys to consumers to see what the need versus want ratio is.

2. Write a business plan

A business plan is your roadmap; it helps guide you as you start and grow your company. If you need capital to get started, most investors will want to review a business plan before they commit to any financing.

To organize your ideas, download and fill out a business plan template . A well-written business plan provides clarity, confirms the math, and helps you establish goals so your business has the best chance of success.

3. Choose a business name

Finding the perfect brand name is a vital step in launching a new business. But hiring a professional naming company doesn’t come cheap — it can cost as much as $100,000 , according to Fast Company.

If that’s outside your budget, there are countless AI-powered business name generators available online, and Fiverr has entrepreneurs who will help brainstorm business names for three figures or less.

4. Decide on your location

Take a look at the taxes, zoning laws, and regulations in your location. You may find that operating your business in a different location could offer financial advantages. Review the fees, costs, and tax benefits of each state to see which location makes the most sense for your business . A strategic move may put you ahead of the game before you even open the doors.

5. Get your finances in order

Startup costs discourage many would-be entrepreneurs, but the reality is that many successful businesses got started with little more than a vision, discipline, and hard work. However, if you really need cash for that newly opened business bank account, here are four ways of getting that money:

Self-funding: If you have the means, you may use your own earnings to kickstart your business or see out financial counsel to work it into your budget.
Outside investors: For a stake in your company, relatives or venture capitalists may be willing to invest in your business.
Small business loans: If you want to keep full ownership of your business, a small business loan may be the way to go.
Crowdfunding: If you’re feeling creative and confident, try sites such as Kickstarter or GoFundMe to generate capital.

6. Take care of the legal stuff

Register your business in the state where it was formed — and make sure that you’re set up to pay state income and unemployment tax. Review whether your local municipality requires filing for a license or permit to operate your business.

To satisfy Uncle Sam, apply for an EIN from the IRS . Confirm that no one else is using your business name by contacting your state filing office or online database. Some business structures require using a doing business as (DBA) name, and you may be required to open a business bank account.

7. Develop a marketing plan

Once you have a terrific name for your company locked down, you’ll want to create an online presence for your business. Be consistent on your social media channels , ideally creating accounts on the channels — meeting them online where they are.

Develop a website that’s intuitive and filled with all the information your customers need. Your marketing may also include advertising campaigns and public relations.

8. Set up your CRM software

To enhance your marketing efforts and grow your small business, try customer relationship management ( CRM) for Small Business . This will be your solution for storing and managing prospect and customer information such as contact information, accounts, leads, and sales opportunities — all in one single source of truth.

With Salesforce’s Starter Suite , you can start in minutes and easily manage your marketing, sales, and customer service as your business scales.

9. Launch your product or service

Congratulations: You’ve done all the hard work and you’re ready to introduce your product to the world. Make sure to announce your launch on social media — and consider throwing a media-friendly bash to celebrate.

10. Keep your customers happy

When you use CRM software, you can keep track and personalize support for all your customers. And happy customers are good for business — 80% of them say the experience a company provides is just as important as its products or services .

The United States has more than 33 million small businesses, according to the U.S. Chamber of Commerce , and that number represents 99.9% of all U.S. businesses. And most of those small businesses started the same way — with an entrepreneur and an idea. But it takes more than just a dream to launch a small business.

So, where to start?

It’s time to take some notes. First, start outlining your business plan. If you’re stuck, ask yourself these four questions when developing your plan :

Goals : What do you need to accomplish to achieve your vision?
Methods : What are the steps you need to follow to get you there?
Measurements : How will you determine when each objective has been met?
Obstacles : What could throw you off course along the way?

Once you’ve written a business plan and are feeling confident, you’re ready to establish:

A name for your business

A great business name should succinctly identify your company and its audience. Brainstorm and get feedback from friends, family, and potential customers. And before you fall in love with your new company name, make sure that an established business in your industry isn’t already using that name.

A location for your business

Choosing where to conduct business is one of the most important decisions you can make for your small business. While staying close to home may be your first instinct, a change of venue may prove to be financially advantageous.

A business structure

For tax purposes and protection of personal assets, you need to choose a business structure that offers the right balance of legal protections and benefits. Common business structures include sole proprietorship, partnership, limited liability company (LLC), corporation, and cooperative.

A legal presence

If you want personal liability protection, legal protection, and tax benefits for your company, you’ll need to register your business with state and local governments.

Federal and state tax ID numbers

Your Employer Identification Number (EIN) works like a personal Social Security number, but for your business. You need an EIN to pay state and federal taxes for your company.

Licenses and permits

Whether your business needs to apply — and pay for — licenses and permits depends on your business activities, location, and government rules. Review regulations from city, state, and federal agencies.

A business bank account

Opening up a bank account exclusively for business use will help keep your personal finances separate, making life easier at tax time. There are several banks that will allow you to open a business checking account with a zero balance, but traditionally banks will require an opening deposit of anywhere from $1,000 to $25,000.

Start-up funds

Even if you open a business checking account with a zero balance, you’re going to want to have some funds to cover basic operating expenses. The SBA offers guidance on obtaining funding for your small business, including loans, grants, and investors.

Starting a new business may feel like a gamble, but business insurance will help you cover your bet. The right insurance policy will help protect you against accidents, natural disasters, and lawsuits.

You should also consider:

Customer relationship management

A CRM platform keeps your customer data organized and provides the foundation to build connected customer experiences (that can be made even better through artificial intelligence). Starting with a suite of sales, service, marketing, and commerce tools is easy.

Invoice and billing software

While it is possible to keep track of your financial records on a traditional paper ledger, modern invoice and billing software makes the process much, much easier.

A graphic designer

A well-designed logo can make or break a business. The Nike “swoosh” was created by a graphic design student — and the $35 Nike initially spent paid for itself many times over.

Many small businesses exist with just a presence on social media, but having a professionally designed website adds legitimacy to your business.

Marketing experts

Like graphic design, marketing expenses are costs that many small business owners initially want to avoid. But strategically investing in a marketing campaign can be a boon for a small business that wants to make noise in a crowded marketplace.

A Human Resources department

Once your business grows to a certain size, it’s time to create a human resources (HR) department — or, at least, to hire an HR professional. This professional can focus on things such as labor law compliance, employee recruitment, employee engagement and development, and compensation and benefits management while you manage your business.

An assistant

For most small businesses starting out, hiring an assistant to perform administrative and clerical duties is something of a luxury. If your budget is tight, consider a virtual assistant .

What are some popular small business ideas?

If you have a unique idea for a small business, great. But some of the best small business ideas build on your strengths and experience. What do you love to do? What lights you up when you are helping the community? Do you have a pull to do something more?

What are the odds that my small business will succeed?

Starting a small business is no guarantee of success. Approximately 80% of small businesses survive their first year, according to the Bureau of Labor Statistics. The survival rate decreases to 50% after five years and 30% after 10 years.

What are some Fortune 500 companies that started small?

Not all big companies started with millions of dollars in venture capital. Some of America’s biggest brand names had far more modest beginnings . Apple famously got started in a Silicon Valley garage, while Mattel was building dollhouse furniture from picture frame scraps in its early days.

What are the most business-friendly states?

Before setting up shop in New York or California, consider launching your small business in North Dakota, Indiana, Arkansas, South Dakota, or North Carolina. These states offer the best conditions to start a business , according to Forbes Advisor.

What can I deduct for my small business at tax time?

(Almost) everyone knows that you can deduct entertainment and travel expenses as a small business owner. But you can also deduct software subscriptions, office furniture, and interest on small business loans, according to NerdWallet .

Taking the leap to start your own small business is just the first step on your entrepreneurial path. But you’re in good company. Nearly half of all U.S. employees are employed by a small business — and more than 80% of those small businesses are solo ventures , according to Forbes Advisor. There’s no better time than the present to start turning your dreams into reality.

Want to grow your new small business? Sign up for a Salesforce free trial .

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10 Tips for Efficiently Managing Your Small Business Finances from Day One

E arly in the pandemic, it was clear that the world was about to change. One thing that shifted was the number of people who began going into business for themselves. In 2023 alone, a record-breaking 5,481,437 new businesses were formed. Each new business owner may feel as though they have about a million things to get done, but when it comes to setting up business finances, there are only 10 they need to concentrate on.

1. Have a financial plan

It's nearly impossible to run a small business without a plan outlining how you plan to handle your finances. This includes everything from invoicing and taxes to purchasing and inventory.

Read more: we researched free tax software and put together a list of the best options here

Your business plan doesn't have to be set in stone. Just make sure you have an idea -- based on what you know now -- of how you would like to handle your business's finances. You can always refine your plan as you become more familiar with how it all works.

2. Come up with a budget

Just as you create a household budget, create a business budget you can stick with. Again, this plan is likely to change as you learn how much money your business takes in and pays out each month. But it's still important to have a general idea of what to expect.

3. Prioritize tax payments

No budget is complete until tax payments have been factored in. Most businesses submit estimated tax payments quarterly, based on their earnings for that quarter. Failing to make quarterly payments can lead to penalties at tax time. To keep it simple, you can set up regular tax payments and budget for it as a standard operating expense.

4. Plan how you're going to bill

Will customers need to pay as soon as they purchase a product or service, or will they have 30, 60, or 90 days to pay? Understanding your cash flow will help you develop a more accurate budget.

5. Track cash flow

Cash flow is what keeps your business afloat. Make sure you have enough money coming in to pay the bills going out. Proper cash flow is crucial to your business running smoothly.

6. Borrow carefully

If you don't currently have enough money in a personal savings account to get your business off the ground, you may need to borrow money. While there's nothing wrong with taking on debt to start a business, the less you borrow, the less stress you'll have to pay it back.

7. Automate whenever possible

As a business owner, you can expect to be busy. Automating tasks can save you time that can be better spent elsewhere in your business. For example, accounting software can save you hours every month.

As your business gets off the ground, take time to learn more about the kinds of automation services that you can use.

8. Be prepared to grow

Your business requires two things to thrive: determination and a willingness to invest. For example, rather than giving yourself a raise or allowing profits to build up, consider investing some of that money back into the operation to help it grow.

That may mean offering a greater number of goods and services or expanding your territory. It may also mean putting more employees on payroll or improving your business's infrastructure.

9. Continue to keep track

No matter how many business operations you've automated or how much you trust the people you've put in charge of accounts and finances, set time aside to go over the books in depth at least once a week. Sit down with your favorite drink and dive into the numbers. Doing so is the best way to spot waste or discrepancies. After all, it's your business, and you're ultimately responsible for whatever happens.

10. Keep your eyes on the future

Even if you're in the first few months of operation, consider what you want your business to look like several years down the road. Do you want the business to be larger and more diversified? Do you hope to operate from a new facility? Are you noticing any broader trends that may impact your business? Keeping one foot in the present and one in the future gives you a better chance of being ready for whatever comes your way.

Owning a business is not easy, but few things are more satisfying. The steps you take from day one can help determine your experiences as a business owner.

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10 Tips for Efficiently Managing Your Small Business Finances from Day One

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Exit Planning

Secure your company’s future: 4 steps for CEOs to create a successful exit plan

1. Timeline

The further in advance a CEO can begin to plot their transition, the better. What activities are required six months out are much more expedited than when a CEO first considers retiring.

Either way, leaders should have a plan detailing when to identify their successor and how long they will need to offboard. The timeline should factor in whether the new CEO will be an internal promotion, which will require some degree of training and development, or an external hire, which will require a search and onboarding process.

2. Communication strategy

Next, leaders need to begin considering their plan for communicating this news throughout the organization. The changing of leaders can be unsettling; employees may feel anxious about the unknown of “starting over” with a new leader.

How the news is communicated — both in terms of the existing leader leaving and the new leader coming in — is a very delicate matter. It’s critical to have already thought of answers to anticipated employee questions. Each contributor, regardless of level or title, should know how this change will impact them and their role.

3. Knowledge transfer

Once the transition is initiated, there is a lot of work to be done. CEOs are charged with helping their predecessor understand the organization as it stands today — challenges, opportunities, weaknesses and strengths — and assimilate to the organization’s culture.

While the new CEO may ultimately determine they want to make changes, it is the current CEO’s job to help establish some degree of continuity. Some CEOs stay on as a board member or in an advisory role for a while after leaving to help oversee a smooth transition.

4. Personal plan

While CEOs are often very busy planning this transition, they must pause and fine-tune their next steps. Some may find it helpful to build in a time for reflection before making any big decisions post-exit.

As the Baby Boomer generation begins to leave the workplace at historic levels, many may be grappling with whether they are ready to dive into retirement head-first, consult part-time, mentor or join advisory boards.

Either way, CEOS need to contemplate their next move, just as much as they consider the future of their company.

Transitions, when done poorly, can leave an organization without direction, relying on a new leader to establish a sense of culture. They can break down trust and result in a mass exodus.

An exit plan is a mission-critical consideration with the power to ramp the company up for its next chapter and create a lasting legacy. Every leader should remember: A transition isn’t complete at 5:00 p.m. on the CEO’s last day — it’s only final once the organization is smoothly moving in the right direction under new leadership.

This article first appeared in Inc.

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Tags: Best Practices , exit planning , exit strategy

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COMMENTS

Write your business plan
A good business plan guides you through each stage of starting and managing your business. You'll use your business plan as a roadmap for how to structure, run, and grow your new business. It's a way to think through the key elements of your business. Business plans can help you get funding or bring on new business partners.
How To Write A Business Plan (2024 Guide)
Describe Your Services or Products. The business plan should have a section that explains the services or products that you're offering. This is the part where you can also describe how they fit ...
How To Write a Business Plan
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 ...
How to Write Your Business Plan to Secure Funding
Step 5: Write out your sales plan. Here are a couple of steps you'll want to take to outline your sales plan. Have some branding ideas on hand: These might include a company name, logo, color ...
5 reasons you need a business plan
Here are 5 reasons why you need a business plan: 1. It will help you steer your business as you start and grow. Think of a business plan as a GPS to get your business going. A good business plan guides you through each stage of starting and managing your business. You'll use your business plan like a GPS for how to structure, run, and grow ...
Business Plan: What it Is, How to Write One
Learn about the best business plan software. 1. Write an executive summary. This is your elevator pitch. It should include a mission statement, a brief description of the products or services your ...
How To Make A Business Plan: Step By Step Guide
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.
How to Write a Business Plan in 9 Steps (+ Template and Examples)
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.
Business Plan: What It Is + How to Write One
A business plan is a written document that defines your business goals and the tactics to achieve those goals. A business plan typically explores the competitive landscape of an industry, analyzes a market and different customer segments within it, describes the products and services, lists business strategies for success, and outlines ...
How To Write A Business Plan To Secure Funding
There are a few key sections to include in your requests for funding. First, clearly state how much total funding you need, as well as the timeframe over which the funds will be used. Instead of grabbing a random number, give a detailed explanation of why and how the funds will be used. Also, outline any specific terms and conditions you need.
What Is A Business Plan
If you're starting a business, you need a business plan. It's a strategic roadmap that not only helps you but also gives your key stakeholders, investors, lenders, and other business partners an idea of what your business is capable of and where it's headed. One of the many reasons why businesses fail is due to a lack of proper planning.
The importance of a business plan
To outline the importance of business plans and make the process sound less daunting, here are 10 reasons why you need one for your small business. 1. To help you with critical decisions. The primary importance of a business plan is that they help you make better decisions. Entrepreneurship is often an endless exercise in decision making and ...
How to Write a Business Plan in 2023: Step by Step Guide
The following will take you to online business plan guides and templates for specific countries. United States Small Business Administration (SBA) - The "write your business plan page" includes traditional and lean startup business plan formats, three downloadable sample business plans, a template, and a step-by-step build a business plan ...
How to Write a Business Plan for a Small Business
3. Business goals and vision. Explain what you hope to achieve in the business (your vision) as well as its mission and value proposition. Most founders judge success by the size to which they grow the business using measures such as revenue or number of employees. Your goals may not be solely financial.
Understand How to Use a Business Plan to Attract Talent and Investment
Understanding the purpose of a business plan is paramount for any entrepreneur or business owner. It lays the groundwork for successful operations and growth by defining goals, charting strategies, and preparing for financial needs. This article shows how a business plan can be your blueprint for success—structuring your vision, aligning your ...
Do I Really Need A Business Plan For My New Business?
2. A business plan helps you secure funding, if needed. Whether you plan on bootstrapping your business or seeking funding from investors, having a comprehensive business plan is essential ...
8 Steps to Securing Funding for Your New Business
Once you have a strong business plan ready to go, it's time to start exploring your funding options. Here are 8 important steps to help you secure the funding you need to kickstart your business. 1. Work out how much funding you'll need. It may seem obvious but your business plan won't be complete without a cohesive understanding of how ...
How to Fund Your Business
Friends and family. This can be a risky way to fund a business, but if you treat the situation professionally, it might work out. Friends or family helping to fund your business should earn interest or equity in the company and should be given monthly payments. Paperwork should still be drawn up.
9 Ways to Use Your Business Plan
Temper your enthusiasm. If your plan indicates that the business idea isn't sound, by all means look for errors. But don't make the mistake of skewing your plan to fit an idea that isn't sound ...
How to secure funding for your business
Creating a solid business plan "Creating a solid business plan" is a critical component of securing funding for your business. A business plan is a comprehensive document that outlines your company's goals, strategies, and projections for the future.It is essential for securing funding because it helps potential investors, lenders, and grant providers understand your business, and how you plan ...
5 Simple Ways To Secure Financing For Your Startup
1. Evaluate Your Financial Standing. If you're starting a business, you have to be prepared to invest in yourself — financially, physically, and emotionally. But as a rule of thumb, you should ...
Business Plan Flashcards
Why does a business plan help your business? -A business plan makes you think about all aspects of your business. -It may help you secure financing for your business. -Helps you communicate your ideas to others. -A business plan can serve as a tool for managing your business. List the 5 Basic Elements of a Business Plan with a small description.
10 steps to start your business
Conduct market research. Market research will tell you if there's an opportunity to turn your idea into a successful business. It's a way to gather information about potential customers and businesses already operating in your area. Use that information to find a competitive advantage for your business. Learn more about conducting market ...
Start a Small Business With These 10 Steps
To organize your ideas, download and fill out a business plan template. A well-written business plan provides clarity, confirms the math, and helps you establish goals so your business has the best chance of success. 3. Choose a business name. Finding the perfect brand name is a vital step in launching a new business.
10 Tips for Efficiently Managing Your Small Business Finances ...
5. Track cash flow. Cash flow is what keeps your business afloat. Make sure you have enough money coming in to pay the bills going out. Proper cash flow is crucial to your business running ...
List of Monthly Expenses for Small Business
This can help in accurately accounting for business expenses and potentially qualifying for home office tax deductions. 2. Utilities for Business. Utilities such as electricity, water, and internet for business usually cost between $200 and $1,000 per month. This depends on usage and location.
T-Mobile for Business: Wireless & Business Solutions
Get up to $10,000 when you add 10 lines on our best Unlimited plan. That's $1,000 per line when you bring your own phone or get a new one from us. No trade, no hassle. $1,000 per line credit: With 36 monthly bill credits for new accounts that add at least 10 lines on Business Unlimited Edge. $1,000 per line device credit: With 24 monthly bill ...
4 Steps for CEOs to Create an Exit Plan
It can also increase retention, maintain productivity and eliminate potential vulnerabilities. To optimize an exit plan, CEOs should consider four factors, in order: 1. Timeline. The further in advance a CEO can begin to plot their transition, the better. What activities are required six months out are much more expedited than when a CEO first ...
Biz Plan Basics
Biz Plan Basics Business plans aren't simply tools to present to a banker for a loan. They can certainly help secure capital (loans from banks or relatives, or equity in investments from outsiders), but their value is much greater. Creating a thoughtful - and living and breathing - business plan, one that grows and changes with your business, can help you track your progress, check ...

How To Write a Business Plan

Table of contents

Step 1: Write your executive summary

Step 2: Do your market research homework

Step 3: Set your business goals and objectives

Step 4: Plan your business strategy

Step 5: Describe your product or service

Step 6: Crunch the numbers

Step 7: Finalize your business plan

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The takeaway

Related content

You’re our first priority. Every time.

How to Write a Business Plan, Step by Step

What is a business plan?

How much do you need?

How to make a business plan

Table of Contents

What is a business plan?

Business plan vs. business model canvas

Why is a business plan important?

Helps to define the business goals and objectives

Guides decision-making

Attracts investors and secures funding

Identifies potential challenges and risks

Provides a basis for measuring success

How to make a business plan step by step

1. Create an executive summary

2. Write your company description

3. Conduct a market analysis

4. Describe your products and services

5. Design a marketing and sales strategy

6. Determine budget and financial projections

7. Set the organization and management structure

8. Make an action plan

Types of business plans

Startup business plan

Strategic business plan

Operational business plan

Growth-business plan

One-page business plan

Best practices for how to make a good business plan

Use a template

Be practical

Be specific

Be thorough with your research

Get input from others

Review and revise regularly

Create a winning business plan to chart your path to success

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

What Do You Need A Business Plan For?

1. Secure Funds

2. Monitor Business Growth

3. Measure Business Success

4. Document Your Marketing Strategies

How to Write a Business Plan Step-by-Step

2. Add Your Company Overview

Business Objectives

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

Market Analysis

Competitive Analysis

4. Define Your Business and Management Structure

Management Team

Key Questions to Answer When Structuring Your Management Team

Additional Tips for Writing the Management Structure Section

Organizational Chart

5. Describe Your Product and Service Offering

What to Focus On When Describing the Benefits, Lifecycle, and Production Process of Your Products or Services

Tips for Writing the Products or Services Section of Your Business Plan

Key Questions to Answer When Writing your Products and Services Section

6. Show and Explain Your Marketing and Sales Plan

Outline Your Business’ Unique Selling Proposition (USP)

Target Market and Target Audience

Creating a Smart Marketing and Sales Plan

Your Positioning Statement

Social Media

Strategic Alliances

Steps Involved in Creating a Marketing and Sales Plan

Key Questions to Answer When Writing Your Marketing and Sales Plan