5 uses of business plan

Do you REALLY need a business plan?

The top three questions that I get asked most frequently as a professional business plan writer will probably not surprise you:

• What is the purpose of a business plan – why is it really required?
• How is it going to benefit my business if I write a business plan?
• Is a business plan really that important – how can I actually use it?

Keep reading to get my take on what the most essential advantages of preparing a business plan are—and why you may (not) need to prepare one.

The importance, purpose and benefit of a business plan is in that it enables you to validate a business idea, secure funding, set strategic goals – and then take organized action on those goals by making decisions, managing resources, risk and change, while effectively communicating with stakeholders.

Let’s take a closer look at how each of the important business planning benefits can catapult your business forward:

1. Validate Your Business Idea

The process of writing your business plan will force you to ask the difficult questions about the major components of your business, including:

• External: industry, target market of prospective customers, competitive landscape
• Internal: business model, unique selling proposition, operations, marketing, finance

Business planning connects the dots to draw a big picture of the entire business.

And imagine how much time and money you would save if working through a business plan revealed that your business idea is untenable. You would be surprised how often that happens – an idea that once sounded so very promising may easily fall apart after you actually write down all the facts, details and numbers.

While you may be tempted to jump directly into start-up mode, writing a business plan is an essential first step to check the feasibility of a business before investing too much time and money into it. Business plans help to confirm that the idea you are so passionate and convinced about is solid from business point of view.

Take the time to do the necessary research and work through a proper business plan. The more you know, the higher the likelihood that your business will succeed.

2. Set and Track Goals

Successful businesses are dynamic and continuously evolve. And so are good business plans that allow you to:

• Priorities: Regularly set goals, targets (e.g., sales revenues reached), milestones (e.g. number of employees hired), performance indicators and metrics for short, mid and long term
• Accountability: Track your progress toward goals and benchmarks
• Course-correction: make changes to your business as you learn more about your market and what works and what does not
• Mission: Refer to a clear set of values to help steer your business through any times of trouble

Essentially, business plan is a blueprint and an important strategic tool that keeps you focused, motivated and accountable to keep your business on track. When used properly and consulted regularly, it can help you measure and manage what you are working so hard to create – your long-term vision.

As humans, we work better when we have clear goals we can work towards. The everyday business hustle makes it challenging to keep an eye on the strategic priorities. The business planning process serves as a useful reminder.

3. Take Action

A business plan is also a plan of action . At its core, your plan identifies where you are now, where you want your business to go, and how you will get there.

Planning out exactly how you are going to turn your vision into a successful business is perhaps the most important step between an idea and reality. Success comes not only from having a vision but working towards that vision in a systematic and organized way.

A good business plan clearly outlines specific steps necessary to turn the business objectives into reality. Think of it as a roadmap to success. The strategy and tactics need to be in alignment to make sure that your day-to-day activities lead to the achievement of your business goals.

4. Manage Resources

A business plan also provides insight on how resources required for achieving your business goals will be structured and allocated according to their strategic priority. For example:

Large Spending Decisions

• Assets: When and in what amount will the business commit resources to buy/lease new assets, such as computers or vehicles.
• Human Resources: Objectives for hiring new employees, including not only their pay but how they will help the business grow and flourish.
• Business Space: Information on costs of renting/buying space for offices, retail, manufacturing or other operations, for example when expanding to a new location.

Cash Flow It is essential that a business carefully plans and manages cash flows to ensure that there are optimal levels of cash in the bank at all times and avoid situations where the business could run out of cash and could not afford to pay its bills.

Revenues v. Expenses In addition, your business plan will compare your revenue forecasts to the budgeted costs to make sure that your financials are healthy and the business is set up for success.

5. Make Decisions

Whether you are starting a small business or expanding an existing one, a business plan is an important tool to help guide your decisions:

Sound decisions Gathering information for the business plan boosts your knowledge across many important areas of the business:

• Industry, market, customers and competitors
• Financial projections (e.g., revenue, expenses, assets, cash flow)
• Operations, technology and logistics
• Human resources (management and staff)
• Creating value for your customer through products and services

Decision-making skills The business planning process involves thorough research and critical thinking about many intertwined and complex business issues. As a result, it solidifies the decision-making skills of the business owner and builds a solid foundation for strategic planning , prioritization and sound decision making in your business. The more you understand, the better your decisions will be.

Planning Thorough planning allows you to determine the answer to some of the most critical business decisions ahead of time , prepare for anticipate problems before they arise, and ensure that any tactical solutions are in line with the overall strategy and goals.

If you do not take time to plan, you risk becoming overwhelmed by countless options and conflicting directions because you are not unclear about the mission , vision and strategy for your business.

6. Manage Risk

Some level of uncertainty is inherent in every business, but there is a lot you can do to reduce and manage the risk, starting with a business plan to uncover your weak spots.

You will need to take a realistic and pragmatic look at the hard facts and identify:

• Major risks , challenges and obstacles that you can expect on the way – so you can prepare to deal with them.
• Weaknesses in your business idea, business model and strategy – so you can fix them.
• Critical mistakes before they arise – so you can avoid them.

Essentially, the business plan is your safety net . Naturally, business plan cannot entirely eliminate risk, but it can significantly reduce it and prepare you for any challenges you may encounter.

7. Communicate Internally

Attract talent For a business to succeed, attracting talented workers and partners is of vital importance.

A business plan can be used as a communication tool to attract the right talent at all levels, from skilled staff to executive management, to work for your business by explaining the direction and growth potential of the business in a presentable format.

Align performance Sharing your business plan with all team members helps to ensure that everyone is on the same page when it comes to the long-term vision and strategy.

You need their buy-in from the beginning, because aligning your team with your priorities will increase the efficiency of your business as everyone is working towards a common goal .

If everyone on your team understands that their piece of work matters and how it fits into the big picture, they are more invested in achieving the objectives of the business.

It also makes it easier to track and communicate on your progress.

Share and explain business objectives with your management team, employees and new hires. Make selected portions of your business plan part of your new employee training.

8. Communicate Externally

Alliances If you are interested in partnerships or joint ventures, you may share selected sections of your plan with the potential business partners in order to develop new alliances.

Suppliers A business plan can play a part in attracting reliable suppliers and getting approved for business credit from suppliers. Suppliers who feel confident that your business will succeed (e.g., sales projections) will be much more likely to extend credit.

In addition, suppliers may want to ensure their products are being represented in the right way .

Professional Services Having a business plan in place allows you to easily share relevant sections with those you rely on to support the organization, including attorneys, accountants, and other professional consultants as needed, to make sure that everyone is on the same page.

Advisors Share the plan with experts and professionals who are in a position to give you valuable advice.

Landlord Some landlords and property managers require businesses to submit a business plan to be considered for a lease to prove that your business will have sufficient cash flows to pay the rent.

Customers The business plan may also function as a prospectus for potential customers, especially when it comes to large corporate accounts and exclusive customer relationships.

9. Secure Funding

If you intend to seek outside financing for your business, you are likely going to need a business plan.

Whether you are seeking debt financing (e.g. loan or credit line) from a lender (e.g., bank or financial institution) or equity capital financing from investors (e.g., venture or angel capital), a business plan can make the difference between whether or not – and how much – someone decides to invest.

Investors and financiers are always looking at the risk of default and the earning potential based on facts and figures. Understandably, anyone who is interested in supporting your business will want to check that you know what you are doing, that their money is in good hands, and that the venture is viable in the long run.

Business plans tend to be the most effective ways of proving that. A presentation may pique their interest , but they will most probably request a well-written document they can study in detail before they will be prepared to make any financial commitment.

That is why a business plan can often be the single most important document you can present to potential investors/financiers that will provide the structure and confidence that they need to make decisions about funding and supporting your company.

Be prepared to have your business plan scrutinized . Investors and financiers will conduct extensive checks and analyses to be certain that what is written in your business plan faithful representation of the truth.

10. Grow and Change

It is a very common misconception that a business plan is a static document that a new business prepares once in the start-up phase and then happily forgets about.

But businesses are not static. And neither are business plans. The business plan for any business will change over time as the company evolves and expands .

In the growth phase, an updated business plan is particularly useful for:

Raising additional capital for expansion

• Seeking financing for new assets , such as equipment or property
• Securing financing to support steady cash flows (e.g., seasonality, market downturns, timing of sale/purchase invoices)
• Forecasting to allocate resources according to strategic priority and operational needs
• Valuation (e.g., mergers & acquisitions, tax issues, transactions related to divorce, inheritance, estate planning)

Keeping the business plan updated gives established businesses better chance of getting the money they need to grow or even keep operating.

Business plan is also an excellent tool for planning an exit as it would include the strategy and timelines for a transfer to new ownership or dissolution of the company.

Also, if you ever make the decision to sell your business or position yourself for a merger or an acquisition , a strong business plan in hand is going to help you to maximize the business valuation.

Valuation is the process of establishing the worth of a business by a valuation expert who will draw on professional experience as well as a business plan that will outline what you have, what it’s worth now and how much will it likely produce in the future.

Your business is likely to be worth more to a buyer if they clearly understand your business model, your market, your assets and your overall potential to grow and scale .

Related Questions

Business plan purpose: what is the purpose of a business plan.

The purpose of a business plan is to articulate a strategy for starting a new business or growing an existing one by identifying where the business is going and how it will get there to test the viability of a business idea and maximize the chances of securing funding and achieving business goals and success.

Business Plan Benefits: What are the benefits of a business plan?

A business plan benefits businesses by serving as a strategic tool outlining the steps and resources required to achieve goals and make business ideas succeed, as well as a communication tool allowing businesses to articulate their strategy to stakeholders that support the business.

Business Plan Importance: Why is business plan important?

The importance of a business plan lies in it being a roadmap that guides the decisions of a business on the road to success, providing clarity on all aspects of its operations. This blueprint outlines the goals of the business and what exactly is needed to achieve them through effective management.

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What is a Business Plan? Definition, Tips, and Templates

Published: June 28, 2024

Years ago, I had an idea to launch a line of region-specific board games. I knew there was a market for games that celebrated local culture and heritage. I was so excited about the concept and couldn't wait to get started.

But my idea never took off. Why? Because I didn‘t have a plan. I lacked direction, missed opportunities, and ultimately, the venture never got off the ground.

And that’s exactly why a business plan is important. It cements your vision, gives you clarity, and outlines your next step.

In this post, I‘ll explain what a business plan is, the reasons why you’d need one, identify different types of business plans, and what you should include in yours.

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What is a business plan?

What is a business plan used for.

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Purposes of a Business Plan

What does a business plan need to include, types of business plans.

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A business plan is a comprehensive document that outlines a company's goals, strategies, and financial projections. It provides a detailed description of the business, including its products or services, target market, competitive landscape, and marketing and sales strategies. The plan also includes a financial section that forecasts revenue, expenses, and cash flow, as well as a funding request if the business is seeking investment.

The business plan is an undeniably critical component to getting any company off the ground. It's key to securing financing, documenting your business model, outlining your financial projections, and turning that nugget of a business idea into a reality.

The purpose of a business plan is three-fold: It summarizes the organization’s strategy in order to execute it long term, secures financing from investors, and helps forecast future business demands.

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What Is a Business Plan?

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

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

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A business plan is a document that outlines a company's goals and the strategies to achieve them. It's valuable for both startups and established companies. For startups, a well-crafted business plan is crucial for attracting potential lenders and investors. Established businesses use business plans to stay on track and aligned with their growth objectives. This article will explain the key components of an effective business plan and guidance on how to write one.

Key Takeaways

• A business plan is a document detailing a company's business activities and strategies for achieving its goals.
• Startup companies use business plans to launch their venture and to attract outside investors.
• For established companies, a business plan helps keep the executive team focused on short- and long-term objectives.
• There's no single required format for a business plan, but certain key elements are essential for most companies.

Investopedia / Ryan Oakley

Any new business should have a business plan in place before beginning operations. Banks and venture capital firms often want to see a business plan before considering making a loan or providing capital to new businesses.

Even if a company doesn't need additional funding, having a business plan helps it stay focused on its goals. Research from the University of Oregon shows that businesses with a plan are significantly more likely to secure funding than those without one. Moreover, companies with a business plan grow 30% faster than those that don't plan. According to a Harvard Business Review article, entrepreneurs who write formal plans are 16% more likely to achieve viability than those who don't.

A business plan should ideally be reviewed and updated periodically to reflect achieved goals or changes in direction. An established business moving in a new direction might even create an entirely new plan.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. It allows for careful consideration of ideas before significant investment, highlights potential obstacles to success, and provides a tool for seeking objective feedback from trusted outsiders. A business plan may also help ensure that a company’s executive team remains aligned on strategic action items and priorities.

While business plans vary widely, even among competitors in the same industry, they often share basic elements detailed below.

A well-crafted business plan is essential for attracting investors and guiding a company's strategic growth. It should address market needs and investor requirements and provide clear financial projections.

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

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

The length of a business plan can vary greatly from business to business. Regardless, gathering the basic information into a 15- to 25-page document is best. Any additional crucial elements, such as patent applications, can be referenced in the main document and included as appendices.

Common elements in many business plans include:

• Executive summary : This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services : Describe the products and services the company offers or plans to introduce. Include details on pricing, product lifespan, and unique consumer benefits. Mention production and manufacturing processes, relevant patents , proprietary technology , and research and development (R&D) information.
• Market analysis : Explain the current state of the industry and the competition. Detail where the company fits in, the types of customers it plans to target, and how it plans to capture market share from competitors.
• Marketing strategy : Outline the company's plans to attract and retain customers, including anticipated advertising and marketing campaigns. Describe the distribution channels that will be used to deliver products or services to consumers.
• Financial plans and projections : Established businesses should include financial statements, balance sheets, and other relevant financial information. New businesses should provide financial targets and estimates for the first few years. This section may also include any funding requests.

Investors want to see a clear exit strategy, expected returns, and a timeline for cashing out. It's likely a good idea to provide five-year profitability forecasts and realistic financial estimates.

2 Types of Business Plans

Business plans can vary in format, often categorized into traditional and lean startup plans. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These are detailed and lengthy, requiring more effort to create but offering comprehensive information that can be persuasive to potential investors.
• Lean startup business plans : These are concise, sometimes just one page, and focus on key elements. While they save time, companies should be ready to provide additional details if requested by investors or lenders.

Why Do Business Plans Fail?

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

How Often Should a Business Plan Be Updated?

How frequently a business plan needs to be revised will depend on its nature. Updating your business plan is crucial due to changes in external factors (market trends, competition, and regulations) and internal developments (like employee growth and new products). While a well-established business might want to review its plan once a year and make changes if necessary, a new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is ideal for quickly explaining a business, especially for new companies that don't have much information yet. Key sections may include a value proposition , major activities and advantages, resources (staff, intellectual property, and capital), partnerships, customer segments, and revenue sources.

A well-crafted business plan is crucial for any company, whether it's a startup looking for investment or an established business wanting to stay on course. It outlines goals and strategies, boosting a company's chances of securing funding and achieving growth.

As your business and the market change, update your business plan regularly. This keeps it relevant and aligned with your current goals and conditions. Think of your business plan as a living document that evolves with your company, not something carved in stone.

University of Oregon Department of Economics. " Evaluation of the Effectiveness of Business Planning Using Palo Alto's Business Plan Pro ." Eason Ding & Tim Hursey.

Bplans. " Do You Need a Business Plan? Scientific Research Says Yes ."

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

Harvard Business Review. " How to Write a Winning Business Plan ."

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

SCORE. " When and Why Should You Review Your Business Plan? "

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How to Write a Business Plan, Step by Step

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What is a business plan?

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

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

LLC Formation

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

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

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

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

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

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

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

Your business’s registered name.

Address of your business location .

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

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

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

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

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

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

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

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

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

You should include the following:

An explanation of how your product or service works.

The pricing model for your product or service.

The typical customers you serve.

Your supply chain and order fulfillment strategy.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

NerdWallet’s picks for setting up your business finances:

The best business checking accounts .

The best business credit cards .

The best accounting software .

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

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

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

Licenses and permits.

Equipment leases.

Bank statements.

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

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

How much do you need?

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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 use a Business Plan?

Business Plan Template

• Vinay Kevadia
• September 6, 2024

15 Min Read

If you’re entering the entrepreneurial world, you’ve likely been told to start with a business plan.

However, simply creating a business plan isn’t enough. The true powers of a business plan unravel when you use it actively to drive your business forward.

Whether you’re launching a business, securing funding, evaluating growth opportunities, or guiding your team— a business plan is more than just a document. It’s a versatile tool that can support almost every aspect of your business when used consistently.

Want to learn how?

Well, in this blog post, we’ll dive into more details about how to use a business plan . But before that.

Why is a business plan important?

A business plan is an important document, whether you use it for formal or internal use.

Here are a few reasons why this document is important:

• Gives you a roadmap to achieve your business goals.
• Offers a framework for making strategic decisions.
• Outlines the business goals and sets benchmarks for tracking business performance.
• Secures funding for your business by demonstrating financial sustainability.
• Helps overcome the challenges by developing mitigation strategies.
• Aligns the team members and stakeholders by facilitating clear communication.

Now, let’s understand the different use cases of a business plan to launch, grow, and fund your business.

How to use a business plan to start a business

A business plan is a quintessential document that can help you plan and launch your business. Whether you need to validate a business idea, establish your goals, or equip yourself with the understanding of a target market—a business plan helps with it all.

Here’s a more detailed overview of how a business plan can help start a business.

1. Validate your business idea

Before investing money in a business venture, you need to test the viability of your business idea.

You need answers to questions such as:

• Should I pursue this business venture?
• Who will be the target audience for my solution?
• How much sales will it make?
• What is the scope of scaling my business idea?
• How is my idea different from that of existing competitors?

A business plan can help you find answers to these critical questions.

Whether it’s the market, competitors, product offerings, expected sales, business objectives, or your finances—a business plan helps you assess each aspect of your business idea to test its overall feasibility.

Evaluating your business idea using a business plan forces you to address the gaps in your business idea.

This validation step ensures you don’t invest time and resources in an idea that may not succeed.

2. Establish business goals and mission

A business plan offers a strategic framework to transform vague business aspirations into concrete goals. It makes it easier for you to communicate what your business stands for and what it aims to achieve with a clearly defined mission statement.

A business plan helps you align the short-term goals of your business with its ultimate mission. It guides you in setting clear KPIs to help you track the progress and success of your goals.

With a well-defined mission, objectives, and value proposition, businesses tend to stay on their path.

3. Navigate market entry

Writing a business plan nudges you to understand the market space in which you will operate. It helps you determine your unique brand position and guides you to target the right set of people for your business.

A business plan details the exact steps of how you will introduce your business to the market. Whether it’s the position of your product, identifying your go-to-market strategy, strategizing the pricing, or securing the distribution channels—a business plan guides you to perfect your market launch.

To summarize, a business plan minimizes the risks associated with a new market by strategizing your market entry.

4. Plan the operations

A business plan turns your vision into an operational roadmap to help you optimize your business operations.

It helps you find answers to questions like these.

• What will be the SOP (standard operating procedure) of a business function, i.e., manufacturing, marketing, and hiring?
• Who would look after particular processes?
• How many people will you require to fulfill a task?
• Where will you perform the business activity?
• How will you ensure the quality of your services?

An operational plan outlines everything, helping you allocate the resources and establish clear workflows.

A business plan is further used to identify the gaps and bottlenecks in your operations. A regularly reviewed business plan accommodates the changing market conditions by introducing timely changes to your operations.

In short, an operational plan ensures that the business runs smoothly and is prepared to scale optimally.

5. Identify professional gaps

Even if you’re starting a business as a solopreneur, you will require the expertise of professionals to fulfill your business objectives. This is where a business plan can be of help.

Writing a business plan helps you identify the gaps in your current capacity. With this knowledge, you can determine the skills and people essential to execute your business strategy.

This can be an accountant, product developer, marketing specialist, legal head, or financial expert.

Once you identify a professional gap, a business plan can assist in onboarding the right type of people for your business. It offers you a detailed hiring and training plan to ensure everyone on the team remains aligned to a common goal.

6. Build strategic a. alliances

Entrepreneurs need to build relationships with suppliers, vendors, and other strategic partners early on to accelerate their market growth.

A business plan can help identify potential partners for your business. Besides, it can help you build valuable relationships with your potential partners by outlining the benefits and goals of the partnership for them.

When you approach someone for a partnership, they will have questions about growth, finances, business goals, and your outlook. Having a business plan handy will help you answer them confidently.

Moreover, a business plan will help evaluate the favorable terms of a strategic alliance. This knowledge can be used to guide the negotiations and get a contract that favors your business.

This excerpt by Jonathan Goldberg , the CEO of Kimberfire , demonstrates how they used a business plan to get a significant partner on board.

“ Kimberfire acquired a partnership with the World’s largest diamond manufacturer using a business plan. By clearly outlining our market strategy and growth projections we were able to demonstrate the value of a partnership that offered direct access to high-quality diamonds at competitive prices. This partnership not only bolstered our inventory but also allowed us to pass on significant savings to our customers, thereby enhancing our competitive edge.”

7. Forecast the capital requirement

Lastly, a business plan can help you understand capital requirements for your company. It helps determine the costs to start and run your business.

Such information guides you in evaluating your funding options.

By referring to your startup costs , you would know whether bootstrapping would be enough or if you would need loans and funding from investors.

These are just a few ways in which one can use a business plan to start a business. However, the use cases can be exhaustive depending on the details put into your plan.

How to use a business plan to secure funding

Most businesses may require funding from external sources to launch or grow their business.

Now, it doesn’t matter whether they secure funding through investors, banks, or grants. What’s important is that they have a business plan to prove the financial sustainability of their business.

Here’s how one can use a business plan to secure funding and convince investors:

8. Define funding needs

A business plan can help you determine the funding essential for your business. Moreover, it can also help evaluate the funding source that’s better suited for your business.

By building detailed projections for costs, expenses, sales, and cash flow, your plan helps determine the capital essential to launch or grow your business.

Additionally, a business plan can be used to justify your funding demands. A clear funding plan explains how you intend to use the investor’s money, i.e., buy new machinery, hire new staff, or expand the business operations.

This clarity demonstrates careful financial planning and builds investors’ confidence in your venture.

9. Manage fundings

Your funding plan already includes details about where you intend to use the money. However, you can now use it to create a detailed roadmap.

A well-planned business plan demonstrates how you should delegate the funding to different business departments. Additionally, it guides you in managing the secured funds efficiently by helping you set budgets, financial controls, and performance trackers.

This detailed approach assures investors that their funding is used responsibly and efficiently.

Further, as you update the plan, identify if your execution strategy requires change. If so, you can make the necessary changes and update the investors, keeping them in the loop. This will help them trust you more.

10. Support the loan application

A business plan is compulsory for everyone submitting an SBA loan application. Even private lending firms would require a business plan to make their funding decision.

A well-detailed business plan is sufficient to support your loan application. It demonstrates that you have conducted essential planning to make your business idea viable and sustainable.

A business plan answers all the questions that a lender might have to assess your creditworthiness and repayment capacity.

Questions such as:

• What will be the profitability of your business?
• What are the major cost drivers of your business?
• What will the debt-to-equity ratio be if you approach investors?
• How stable is your cash flow?
• What will the ROI and the payback period be?

Lenders can trust you more when they get essential answers backed with data.

That said, let’s understand how a business plan can drive enterprise growth.

How to use a business plan to grow your business

A business plan can be instrumental in testing different scenarios, evaluating growth opportunities, and making strategic decisions. All these help you grow your business and face the challenges efficiently.

Here’s how:

11. Guide strategic decisions

A business plan can help you make strategic decisions that align with your ultimate growth objectives.

Whether you want to launch a business at a new location, invest in new machinery, introduce a new product line, hire new employees, or onboard new technology—a business plan can help.

A business plan provides a framework to assess the risks, opportunities, and financial impact of a strategic decision on your business. It helps determine the right time to launch your growth initiative and demonstrates whether making a particular decision will be fruitful or not.

This way you won’t make a decision that can put you off your long-term goals.

12. Monitor business performance

Once you make a strategic decision, use your business plan to clarify the strategy and outline your execution plan.

A business plan can additionally assist in measuring business performance against set KPIs and performance benchmarks. Regularly evaluating these metrics allows you to identify areas that may need improvement or adjustments.

By using the business plan as a performance management tool, you can make data-driven adjustments to your approach and grow your business sustainability.

13. Adapt to market changes

A business plan isn’t set in stone. It’s a living document that adapts to changing market conditions.

It can be used to adapt your strategies based on new market data and shifts in customer preferences. Such regular updates help you remain competitive and agile in the face of changing market conditions.

Additionally, a business plan can help you develop a response to an emergency crisis.

A business plan accommodates all your strategies, milestones, metrics, tactics, and projections in one place. By using the plan as a performance dashboard, you can anticipate the changes and adjust the priorities to deal with the crisis.

Mark McShane offers a practical example of how he used a business plan to meet contingencies in his company, Cupid PR .

 “When we hit cash flow problems, we followed the financial contingency section of our plan to manage expenses and short-term funding. We were able to quickly implement the cost-saving strategies and secure a bridge loan to stabilize our finances without sacrificing growth. Business plan made it possible to respond to this challenge efficiently which gave us a 40% revenue increase the next year.”

14. Test different scenarios

A business plan can be used as a tool for scenario analysis.

As the regulatory, economic, and competitive landscape of a business evolves, you need to test and plan for different scenarios, like:

• Entry of a new competitor
• Regulatory changes
• Technological advancement
• Market demand shifts
• Natural disaster

Businesses can evaluate the financial and operational impact of these scenarios using a business plan. By using business plan forecasts as a base, they can prepare for various worst- and best-case scenarios.

Preparing for different scenarios helps you leverage the opportunities and mitigate the risks whenever they arise.

Those are quite a few ways in which a business plan can assist or facilitate growth. Entrepreneurs can find more ways to use a business plan depending on the depth that their plan covers.

How to use a business plan internally

One of the most essential uses of business plans is to guide your operations, management, and team toward the goal.

Here’s how.

15. Align team and stakeholders

A business plan is an excellent tool for aligning your team and stakeholders toward a common mission.

A well-crafted business plan documents the company’s goals, mission, KPIs, and milestones. With the basics clearly articulated, it gets easier to bring your internal team and stakeholders on the same page.

Now, you don’t need a detailed plan to convey your goals. A simple list of goals and how they contribute to your ultimate objectives is enough for internal use.

This quote from our conversation with Shawn Plummer , the CEO at the Annuity Expert , shows how he used a business plan to drive a 50% revenue increase in 2 years:

“By breaking down our growth strategy into clear, measurable goals, the business plan became more than just a document; it was a tool for uniting our team. Everyone, from marketing to operations, understood how their efforts related to our overall goals. This connection was critical to our success, resulting in a 50% revenue rise in just two years.”

16. Streamline business operations

A business plan can streamline business operations by outlining the standard operating procedures (SOPs) for different business processes. It’s further used to define the responsibilities, resource allocation, and hiring plans for your organization.

Remember, a well-crafted operations plan acts as a guidebook for your business. It details every process, responsibility, and resource essential for running a smooth operation. Referring to it can help increase efficiency, reduce waste, and enhance productivity.

Now if you’re writing a traditional plan, you’ll have a detailed section on business operations. However, if you’re writing a lean plan, we recommend building a separate internal operations plan to guide your business operations.

Simply list the business processes, create an outline, and use ChatGPT to write a business plan . Your internal use operations plan doesn’t need to follow a specific format or structure. It should just distill clarity.

17. Efficient performance reviews

A business plan outlines the KPIs and goals, offering you a benchmark to evaluate the individual performance of team members. These metrics can be used to track actual results and take appropriate actions.

A business plan helps foster the environment for continuous development by linking performance to strategic goals.

That’s a few definite ways to use business plans for internal growth and management. Internal business plans can follow any structure or format, as long as they get the task done.

How to keep your business plan relevant

As we discussed, a business plan is a living document that requires frequent updates and changes to maintain relevancy.

Ideally, one should update their business plan at least once a year to keep it useful. However, businesses in highly volatile or competitive markets should consider reviewing it quarterly.

A business plan must represent accurate market conditions. If that’s not the case, a review should incorporate new market trends into the strategy, adjust the operational realities, and revise the financials. This ensures that your plan remains relevant and realistic to help you achieve your business objectives.

Include your team members in the review process to ensure the strategies address their key concerns and align with the entire organization.

All in all, adopt a flexible planning approach to keep your plan relevant to the dynamic world.

By now, you have a thorough understanding of the different uses of a business plan. However, these use cases are only relevant if you have a realistic and actionable business plan offering a true overview of your business. Only then can you use a business plan to launch, grow, and fund your business.

Now, draft a quick business plan using the Upmetrics business planning app . Its AI planning features, business plan templates, financial forecasting assistance, and detailed guides will help you prepare a reliable business plan in no time.

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Frequently Asked Questions

What is the most common use of a business plan.

A business plan is most commonly used to secure investments from investors. Additionally, organizations use it to define strategic goals, guide business operations, and evaluate the company’s performance.

How do you use a business plan for a small business?

A business plan offers crucial help to small businesses in the following ways:

• Idea validation
• Navigating market entry
• Planning business operations
• Building strategic alliances
• Forecasting the capital requirements

How do I use a business plan to attract investors?

A business plan can be used to prove the financial sustainability of a business idea. Investors can evaluate whether their investment would offer enough ROI, profitability, and growth by referring to your in-depth business plan. When they see that you’re well-prepared to face real market situations, they feel convinced of your ability to run a business.

How often should a business plan be updated?

Ideally, you should update a business plan at least once a year. However, businesses operating in dynamic, competitive markets need more frequent reviews. This can be monthly or quarterly.

Why is it important to review a business plan over time?

A business plan offers a roadmap to achieve your business objectives. But, if not updated often, your plan won’t reflect the current market. This will make your plan irrelevant and distant from your goals. To avoid such situations, it’s important to review your plan regularly.

About the Author

Vinay Kevadiya

Vinay Kevadiya is the founder and CEO of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He enjoys sharing his insights on business planning and other relevant topics through his articles and blog posts. Read more

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15 Reasons Why You Need a Business Plan in 2024

Posted august 5, 2024 by noah parsons.

Imagine you’re going on a road trip. You know your final destination, but you haven’t figured out how to get there. 

While it might be fun to start driving and figure things out as you go, your trip will likely take longer than expected and end up costing more. But, if you take the time to look at a map and chart the best way to get to your destination—you’ll arrive on time and on budget. 

Planning for your business isn’t much different, which is why a business plan is so important to your continued success.

What is the purpose of a business plan? 

The primary purpose of a business plan is to help you figure out where you want to go with your business and how you will get there. Writing a business plan helps you set your direction and determine a winning strategy. A solid business plan will set your business up for success and help you build an unbeatable company.

If you start off without a plan, you may go down some interesting detours, but you’re unlikely to grow quickly or stick to your budget.

15 reasons why you need a business plan

“Creating a road map for my business is all well and good, but do I really need a business plan? I’d rather just get started.”

If you’re still thinking like this and decide to skip writing a business plan, you’re making a big mistake and setting yourself up to fail. Even if your business survives, without a plan, you’ll miss valuable growth opportunities and never truly be in control.

Still not convinced? Here are the critical reasons why a business plan is important for small businesses. 

1. You’re more likely to start

Documenting your business idea makes it more official. It takes rough ideas and turns them into the making of a real business. 

According to a study by the Harvard Business Review , entrepreneurs who write formal plans are 16% more likely to achieve viability than those who don’t.

Even if it’s just notes about your potential business, writing things down will make you more likely to proceed with your business. Without a plan, you can’t prove to yourself, partners, mentors, or investors that you’re serious about starting.

2. Reduce potential risks

Writing a business plan takes some of the risk out of starting a business. It helps you think through every facet of your business to determine if it can truly be viable. 

• Does your solution fit the market? Are your startup or operational costs manageable?
• Will your proposed business model actually generate sales?
• What sort of milestones would you need to hit to achieve profitability?

Your business plan can answer these startup questions .

For those already running a business, writing a plan can help you better manage ongoing risk. 

• Should you bring on a new employee?
• What does cash flow look like for your next month, quarter, or even year?
• Will you meet your milestones or do you need to change your focus?

Keep your plan up to date, review it regularly and you can easily answer these growth questions and mitigate risk.

3. Test a new business idea and prove it’s viable

When you have a new business idea, it helps to spend time thinking through all the details. 

A business plan will help you think about your:

• Target market
• How much money you’ll need to launch
• How your idea will actually work before you spend any real money

A business plan will also help you easily share your idea with other people to get input and feedback before you get started. 

There’s no need to create a detailed business plan either. 

Instead, I recommend using a one-page business plan to quickly test your ideas and determine if you have a viable business. 

4. Understand your market and build a marketing plan

No matter how good your idea is, you have to figure out who your ideal customers are and how you will get the word out to them. 

That’s where a marketing plan comes in. It can be an indispensable tool to figure out how you get your first customers as well as your thousandth customer. It can start as a simple bulleted list of potential marketing channels that expands in detail as you need it.

5. Build a better budget and a financial forecast

Without a business plan, it’s impossible to know how much money it will cost to start and run a business. You don’t just need money for your initial purchases; you need enough cash in the bank to maintain your cash runway and keep your business afloat while you get fully up and running.

When you plan, you’ll need to create your expense budget , set sales goals, and identify how much cash is needed to keep your doors open, purchase inventory, and more. 

The beauty of incorporating forecasts into your business plan is that you don’t need exact numbers to start. You can work with general assumptions and compare against competitive benchmarks to set a baseline for your business. 

As you operate and collect financial data, you can revisit your business plan and update your forecasts to generate a more accurate picture of your business’s future.

6. Attract investors and get funding

Sharing your business idea with investors requires a business plan. 

Investors may never actually ask for your full business plan, but they will certainly ask you questions that you’ll only be able to answer if you’ve taken the time to write a plan. 

At the very least, they’ll want to see your financial forecasts, so you should be prepared for this. If you pitch your business to investors, having a business plan makes it much easier to translate the right information into a pitch deck. 

In short, you’ll have all of the right information ready and available to show why your business is worth investing in.

7. Plan for different scenarios

Things rarely actually go to plan. The world is always changing, customer tastes change, and new competitors arrive. 

Having a plan allows you to experiment with different scenarios to see how changes to your business will impact your forecasts, budgets, profitability, and cash flow.

Without a business plan, you’ll be reacting blindly with no way to track if your decisions are making a real impact.

8. Attract employees

Especially if you’re a young startup company, attracting employees can be hard. Without a proven track record, why should someone take a risk to work for you? 

Having a business plan can help solve that problem. Your plan can help prospective employees understand your business strategy and growth plans so that they can feel confident joining your team. It’s also incredibly useful in determining when and if it’s feasible for you to hire more employees . 

9. Get your team on the same page

A great business strategy can only be successful if your team understands it. By documenting your strategy with a business plan, you can easily get everyone on the same page and working towards the same goals. 

It’s even better if you regularly review your plan with members of your team. Have everyone revisit your core strategy, analyze it, and explore how it impacts individual and team goals .

10. Manage your business better 

A business plan is all about setting goals for your company — both financial goals and milestones you hope to accomplish. 

When you use your business plan to manage your business, you’ll see which parts of your strategy are working and which aren’t. 

For example, you may have invested in new marketing efforts to sell one of your products, but that strategy just isn’t working out. With a business plan in hand, you’ll be able to see what’s going to plan and where you need to adjust your strategy, pivoting to new opportunities that will drive profitability.

Regular business plan reviews , ideally monthly, will help you build a strong, resilient business.

11. Effectively navigate a crisis

Having a business plan not only helps you create a roadmap for your business but also helps you navigate unforeseen events. Large-scale economic downturns, supply shortages, payment delays, cash flow problems, and any number of other issues are bound to pop up. But by leveraging your business plan, you can be prepared to face each crisis head-on.

A plan helps you assess your current situation, determine how the crisis will alter your plan, and explore what it will take to recover. 

With a little planning, you can even prepare your business for future downturns with this same process. Having the right plan and processes in place will make crisis planning easier and, ideally, recession-proof your business .

12. You’ll be ready to sell

You might decide to sell your business or position yourself for acquisition down the road. Having a solid business plan helps make the case for a higher valuation. 

Your business is likely worth more to a buyer if it’s easy for them to understand your business model, your target market, and your overall potential to grow and scale. 

Remember, if you were buying a business , you’d likely want to see their business plan and any previous documentation. So, the more organized and professional your plan is, the easier it will be for a buyer to say yes.

13. It’s easier than you think

You may be procrastinating in writing a business plan because it sounds like a lot of work. The truth is that planning is much less complicated than you think. 

Start small by writing a simple business plan you can complete in about half an hour. With the emergence of AI business plan generators , getting stuck with a blank page is a thing of the past. Just be sure that you don’t just let AI write your plan for you and keep yourself involved in the planning process.

From there, refine your plan until your idea is solid. At that point, you can invest more time in a more detailed business plan. Just start with the basics and expand from there.

14. You’ll sleep better at night

When you have a plan for your business, you have peace of mind. You know that you’ve invested the time to figure out a business model that works, and you’ve considered different financial scenarios so you can handle the unexpected. 

Plus, you have a management tool to run your business better than your competitors. 

15. Research shows that business plans work

A Journal of Management Studies study found that businesses that take the time to plan grow 30% faster than those that don’t. 

Our own 2021 small business research study found that 58% of small business owners who have or are working on a plan feel confident in their business, even amidst a crisis. 

A study in Small Business Economics found that entrepreneurs who write business plans for their ideas are 152% more likely to actually start their businesses.

There’s plenty of additional research linking business planning with success, so it’s a proven fact that you won’t waste time when you write your plan.

Why is a business plan important? Because it sets you up for success

There are plenty of reasons to write a business plan, but they all relate to one thing—increasing the likelihood of success for you and your business. 

Taking the time to plan is an investment in yourself and your business that will pay dividends, whether you’re starting a new business or taking your existing business to the next level. 

If you’ve been putting off writing a business plan, now is the time to do it. Start by downloading one of the many free business plan templates out there, or for additional guidance, invest in an online business plan builder .

No matter what business planning tool you choose, just deciding to write a business plan will set you up to build, run, and grow your business. So, don’t wait—start planning today.

What is a business plan?

A business plan is a structured document that outlines the goals, strategies, target market, and financial forecasts of a business. It serves as a roadmap for the business, detailing the steps necessary to achieve success.

Why is planning necessary?

Business planning is essential because it helps businesses set clear goals, allocate resources efficiently, identify potential challenges, and develop strategies to overcome them. It also provides a framework for decision-making and helps attract investors by demonstrating the viability of the business.

What happens if a business doesn’t plan?

Without planning, a business may lack direction and clarity, leading to inefficient use of resources, missed opportunities, and an inability to respond effectively to market changes. This can result in financial difficulties, operational challenges, and ultimately, business failure.

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12 Key Elements of a Business Plan (Top Components Explained)

Starting and running a successful business requires proper planning and execution of effective business tactics and strategies .

You need to prepare many essential business documents when starting a business for maximum success; the business plan is one such document.

When creating a business, you want to achieve business objectives and financial goals like productivity, profitability, and business growth. You need an effective business plan to help you get to your desired business destination.

Even if you are already running a business, the proper understanding and review of the key elements of a business plan help you navigate potential crises and obstacles.

This article will teach you why the business document is at the core of any successful business and its key elements you can not avoid.

Let’s get started.

Why Are Business Plans Important?

Business plans are practical steps or guidelines that usually outline what companies need to do to reach their goals. They are essential documents for any business wanting to grow and thrive in a highly-competitive business environment .

1. Proves Your Business Viability

A business plan gives companies an idea of how viable they are and what actions they need to take to grow and reach their financial targets. With a well-written and clearly defined business plan, your business is better positioned to meet its goals.

2. Guides You Throughout the Business Cycle

A business plan is not just important at the start of a business. As a business owner, you must draw up a business plan to remain relevant throughout the business cycle .

During the starting phase of your business, a business plan helps bring your ideas into reality. A solid business plan can secure funding from lenders and investors.

After successfully setting up your business, the next phase is management. Your business plan still has a role to play in this phase, as it assists in communicating your business vision to employees and external partners.

Essentially, your business plan needs to be flexible enough to adapt to changes in the needs of your business.

3. Helps You Make Better Business Decisions

As a business owner, you are involved in an endless decision-making cycle. Your business plan helps you find answers to your most crucial business decisions.

A robust business plan helps you settle your major business components before you launch your product, such as your marketing and sales strategy and competitive advantage.

4. Eliminates Big Mistakes

Many small businesses fail within their first five years for several reasons: lack of financing, stiff competition, low market need, inadequate teams, and inefficient pricing strategy.

Creating an effective plan helps you eliminate these big mistakes that lead to businesses' decline. Every business plan element is crucial for helping you avoid potential mistakes before they happen.

5. Secures Financing and Attracts Top Talents

Having an effective plan increases your chances of securing business loans. One of the essential requirements many lenders ask for to grant your loan request is your business plan.

A business plan helps investors feel confident that your business can attract a significant return on investments ( ROI ).

You can attract and retain top-quality talents with a clear business plan. It inspires your employees and keeps them aligned to achieve your strategic business goals.

Key Elements of Business Plan

Starting and running a successful business requires well-laid actions and supporting documents that better position a company to achieve its business goals and maximize success.

A business plan is a written document with relevant information detailing business objectives and how it intends to achieve its goals.

With an effective business plan, investors, lenders, and potential partners understand your organizational structure and goals, usually around profitability, productivity, and growth.

Every successful business plan is made up of key components that help solidify the efficacy of the business plan in delivering on what it was created to do.

Here are some of the components of an effective business plan.

1. Executive Summary

One of the key elements of a business plan is the executive summary. Write the executive summary as part of the concluding topics in the business plan. Creating an executive summary with all the facts and information available is easier.

In the overall business plan document, the executive summary should be at the forefront of the business plan. It helps set the tone for readers on what to expect from the business plan.

A well-written executive summary includes all vital information about the organization's operations, making it easy for a reader to understand.

The key points that need to be acted upon are highlighted in the executive summary. They should be well spelled out to make decisions easy for the management team.

A good and compelling executive summary points out a company's mission statement and a brief description of its products and services.

An executive summary summarizes a business's expected value proposition to distinct customer segments. It highlights the other key elements to be discussed during the rest of the business plan.

Including your prior experiences as an entrepreneur is a good idea in drawing up an executive summary for your business. A brief but detailed explanation of why you decided to start the business in the first place is essential.

Adding your company's mission statement in your executive summary cannot be overemphasized. It creates a culture that defines how employees and all individuals associated with your company abide when carrying out its related processes and operations.

Your executive summary should be brief and detailed to catch readers' attention and encourage them to learn more about your company.

Components of an Executive Summary

Here are some of the information that makes up an executive summary:

• The name and location of your company
• Products and services offered by your company
• Mission and vision statements
• Success factors of your business plan

2. Business Description

Your business description needs to be exciting and captivating as it is the formal introduction a reader gets about your company.

What your company aims to provide, its products and services, goals and objectives, target audience , and potential customers it plans to serve need to be highlighted in your business description.

A company description helps point out notable qualities that make your company stand out from other businesses in the industry. It details its unique strengths and the competitive advantages that give it an edge to succeed over its direct and indirect competitors.

Spell out how your business aims to deliver on the particular needs and wants of identified customers in your company description, as well as the particular industry and target market of the particular focus of the company.

Include trends and significant competitors within your particular industry in your company description. Your business description should contain what sets your company apart from other businesses and provides it with the needed competitive advantage.

In essence, if there is any area in your business plan where you need to brag about your business, your company description provides that unique opportunity as readers look to get a high-level overview.

Components of a Business Description

Your business description needs to contain these categories of information.

• Business location
• The legal structure of your business
• Summary of your business’s short and long-term goals

3. Market Analysis

The market analysis section should be solely based on analytical research as it details trends particular to the market you want to penetrate.

Graphs, spreadsheets, and histograms are handy data and statistical tools you need to utilize in your market analysis. They make it easy to understand the relationship between your current ideas and the future goals you have for the business.

All details about the target customers you plan to sell products or services should be in the market analysis section. It helps readers with a helpful overview of the market.

In your market analysis, you provide the needed data and statistics about industry and market share, the identified strengths in your company description, and compare them against other businesses in the same industry.

The market analysis section aims to define your target audience and estimate how your product or service would fare with these identified audiences.

Market analysis helps visualize a target market by researching and identifying the primary target audience of your company and detailing steps and plans based on your audience location.

Obtaining this information through market research is essential as it helps shape how your business achieves its short-term and long-term goals.

Market Analysis Factors

Here are some of the factors to be included in your market analysis.

• The geographical location of your target market
• Needs of your target market and how your products and services can meet those needs
• Demographics of your target audience

Components of the Market Analysis Section

Here is some of the information to be included in your market analysis.

• Industry description and statistics
• Demographics and profile of target customers
• Marketing data for your products and services
• Detailed evaluation of your competitors

4. Marketing Plan

A marketing plan defines how your business aims to reach its target customers, generate sales leads, and, ultimately, make sales.

Promotion is at the center of any successful marketing plan. It is a series of steps to pitch a product or service to a larger audience to generate engagement. Note that the marketing strategy for a business should not be stagnant and must evolve depending on its outcome.

Include the budgetary requirement for successfully implementing your marketing plan in this section to make it easy for readers to measure your marketing plan's impact in terms of numbers.

The information to include in your marketing plan includes marketing and promotion strategies, pricing plans and strategies , and sales proposals. You need to include how you intend to get customers to return and make repeat purchases in your business plan.

5. Sales Strategy

Sales strategy defines how you intend to get your product or service to your target customers and works hand in hand with your business marketing strategy.

Your sales strategy approach should not be complex. Break it down into simple and understandable steps to promote your product or service to target customers.

Apart from the steps to promote your product or service, define the budget you need to implement your sales strategies and the number of sales reps needed to help the business assist in direct sales.

Your sales strategy should be specific on what you need and how you intend to deliver on your sales targets, where numbers are reflected to make it easier for readers to understand and relate better.

6. Competitive Analysis

Providing transparent and honest information, even with direct and indirect competitors, defines a good business plan. Provide the reader with a clear picture of your rank against major competitors.

Identifying your competitors' weaknesses and strengths is useful in drawing up a market analysis. It is one information investors look out for when assessing business plans.

The competitive analysis section clearly defines the notable differences between your company and your competitors as measured against their strengths and weaknesses.

This section should define the following:

• Your competitors' identified advantages in the market
• How do you plan to set up your company to challenge your competitors’ advantage and gain grounds from them?
• The standout qualities that distinguish you from other companies
• Potential bottlenecks you have identified that have plagued competitors in the same industry and how you intend to overcome these bottlenecks

In your business plan, you need to prove your industry knowledge to anyone who reads your business plan. The competitive analysis section is designed for that purpose.

7. Management and Organization

Management and organization are key components of a business plan. They define its structure and how it is positioned to run.

Whether you intend to run a sole proprietorship, general or limited partnership, or corporation, the legal structure of your business needs to be clearly defined in your business plan.

Use an organizational chart that illustrates the hierarchy of operations of your company and spells out separate departments and their roles and functions in this business plan section.

The management and organization section includes profiles of advisors, board of directors, and executive team members and their roles and responsibilities in guaranteeing the company's success.

Apparent factors that influence your company's corporate culture, such as human resources requirements and legal structure, should be well defined in the management and organization section.

Defining the business's chain of command if you are not a sole proprietor is necessary. It leaves room for little or no confusion about who is in charge or responsible during business operations.

This section provides relevant information on how the management team intends to help employees maximize their strengths and address their identified weaknesses to help all quarters improve for the business's success.

8. Products and Services

This business plan section describes what a company has to offer regarding products and services to the maximum benefit and satisfaction of its target market.

Boldly spell out pending patents or copyright products and intellectual property in this section alongside costs, expected sales revenue, research and development, and competitors' advantage as an overview.

At this stage of your business plan, the reader needs to know what your business plans to produce and sell and the benefits these products offer in meeting customers' needs.

The supply network of your business product, production costs, and how you intend to sell the products are crucial components of the products and services section.

Investors are always keen on this information to help them reach a balanced assessment of if investing in your business is risky or offer benefits to them.

You need to create a link in this section on how your products or services are designed to meet the market's needs and how you intend to keep those customers and carve out a market share for your company.

Repeat purchases are the backing that a successful business relies on and measure how much customers are into what your company is offering.

This section is more like an expansion of the executive summary section. You need to analyze each product or service under the business.

9. Operating Plan

An operations plan describes how you plan to carry out your business operations and processes.

The operating plan for your business should include:

• Information about how your company plans to carry out its operations.
• The base location from which your company intends to operate.
• The number of employees to be utilized and other information about your company's operations.
• Key business processes.

This section should highlight how your organization is set up to run. You can also introduce your company's management team in this section, alongside their skills, roles, and responsibilities in the company.

The best way to introduce the company team is by drawing up an organizational chart that effectively maps out an organization's rank and chain of command.

What should be spelled out to readers when they come across this business plan section is how the business plans to operate day-in and day-out successfully.

10. Financial Projections and Assumptions

Bringing your great business ideas into reality is why business plans are important. They help create a sustainable and viable business.

The financial section of your business plan offers significant value. A business uses a financial plan to solve all its financial concerns, which usually involves startup costs, labor expenses, financial projections, and funding and investor pitches.

All key assumptions about the business finances need to be listed alongside the business financial projection, and changes to be made on the assumptions side until it balances with the projection for the business.

The financial plan should also include how the business plans to generate income and the capital expenditure budgets that tend to eat into the budget to arrive at an accurate cash flow projection for the business.

Base your financial goals and expectations on extensive market research backed with relevant financial statements for the relevant period.

Examples of financial statements you can include in the financial projections and assumptions section of your business plan include:

• Projected income statements
• Cash flow statements
• Balance sheets
• Income statements

Revealing the financial goals and potentials of the business is what the financial projection and assumption section of your business plan is all about. It needs to be purely based on facts that can be measurable and attainable.

11. Request For Funding

The request for funding section focuses on the amount of money needed to set up your business and underlying plans for raising the money required. This section includes plans for utilizing the funds for your business's operational and manufacturing processes.

When seeking funding, a reasonable timeline is required alongside it. If the need arises for additional funding to complete other business-related projects, you are not left scampering and desperate for funds.

If you do not have the funds to start up your business, then you should devote a whole section of your business plan to explaining the amount of money you need and how you plan to utilize every penny of the funds. You need to explain it in detail for a future funding request.

When an investor picks up your business plan to analyze it, with all your plans for the funds well spelled out, they are motivated to invest as they have gotten a backing guarantee from your funding request section.

Include timelines and plans for how you intend to repay the loans received in your funding request section. This addition keeps investors assured that they could recoup their investment in the business.

12. Exhibits and Appendices

Exhibits and appendices comprise the final section of your business plan and contain all supporting documents for other sections of the business plan.

Some of the documents that comprise the exhibits and appendices section includes:

• Legal documents
• Licenses and permits
• Credit histories
• Customer lists

The choice of what additional document to include in your business plan to support your statements depends mainly on the intended audience of your business plan. Hence, it is better to play it safe and not leave anything out when drawing up the appendix and exhibit section.

Supporting documentation is particularly helpful when you need funding or support for your business. This section provides investors with a clearer understanding of the research that backs the claims made in your business plan.

There are key points to include in the appendix and exhibits section of your business plan.

• The management team and other stakeholders resume
• Marketing research
• Permits and relevant legal documents
• Financial documents

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What is a business plan? Definition, Purpose, and Types

In the world of business, a well-thought-out plan is often the key to success. This plan, known as a business plan, is a comprehensive document that outlines a company’s goals, strategies , and financial projections. Whether you’re starting a new business or looking to expand an existing one, a business plan is an essential tool.

As a business plan writer and consultant , I’ve crafted over 15,000 plans for a diverse range of businesses. In this article, I’ll be sharing my wealth of experience about what a business plan is, its purpose, and the step-by-step process of creating one. By the end, you’ll have a thorough understanding of how to develop a robust business plan that can drive your business to success.

What is a business plan?

A business plan is a roadmap for your business. It outlines your goals, strategies, and how you plan to achieve them. It’s a living document that you can update as your business grows and changes.

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Purposes of a Business Plan

These are the following purpose of business plan:

• Attract investors and lenders: If you’re seeking funding for your business , a business plan is a must-have. Investors and lenders want to see that you have a clear plan for how you’ll use their money to grow your business and generate revenue.
• Get organized and stay on track: Writing a business plan forces you to think through all aspects of your business, from your target market to your marketing strategy. This can help you identify any potential challenges and opportunities early on, so you can develop a plan to address them.
• Make better decisions: A business plan can help you make better decisions about your business by providing you with a framework to evaluate different options. For example, if you’re considering launching a new product, your business plan can help you assess the potential market demand, costs, and profitability.

What are the essential components of a business plan?

Executive summary

The executive summary is the most important part of your business plan, even though it’s the last one you’ll write. It’s the first section that potential investors or lenders will read, and it may be the only one they read. The executive summary sets the stage for the rest of the document by introducing your company’s mission or vision statement, value proposition, and long-term goals.

Business description or overview

The business description section of your business plan should introduce your business to the reader in a compelling and concise way. It should include your business name, years in operation, key offerings, positioning statement, and core values (if applicable). You may also want to include a short history of your company.

Product and price

In this section, the company should describe its products or services , including pricing, product lifespan, and unique benefits to the consumer. Other relevant information could include production and manufacturing processes, patents, and proprietary technology.

Competitive analysis

Every industry has competitors, even if your business is the first of its kind or has the majority of the market share. In the competitive analysis section of your business plan, you’ll objectively assess the industry landscape to understand your business’s competitive position. A SWOT analysis is a structured way to organize this section.

Target market

Your target market section explains the core customers of your business and why they are your ideal customers. It should include demographic, psychographic, behavioral, and geographic information about your target market.

Marketing plan

Marketing plan describes how the company will attract and retain customers, including any planned advertising and marketing campaigns . It also describes how the company will distribute its products or services to consumers.

After outlining your goals, validating your business opportunity, and assessing the industry landscape, the team section of your business plan identifies who will be responsible for achieving your goals. Even if you don’t have your full team in place yet, investors will be impressed by your clear understanding of the roles that need to be filled.

Financial plan

In the financial plan section,established businesses should provide financial statements , balance sheets , and other financial data. New businesses should provide financial targets and estimates for the first few years, and may also request funding.

Funding requirements

Since one goal of a business plan is to secure funding from investors , you should include the amount of funding you need, why you need it, and how long you need it for.

• Tip: Use bullet points and numbered lists to make your plan easy to read and scannable.

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Types of business plan.

Business plans can come in many different formats, but they are often divided into two main types: traditional and lean startup. The U.S. Small Business Administration (SBA) says that the traditional business plan is the more common of the two.

Lean startup business plans

Lean startup business plans are short (as short as one page) and focus on the most important elements. They are easy to create, but companies may need to provide more information if requested by investors or lenders.

Traditional business plans

Traditional business plans are longer and more detailed than lean startup business plans, which makes them more time-consuming to create but more persuasive to potential investors. Lean startup business plans are shorter and less detailed, but companies should be prepared to provide more information if requested.

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How often should a business plan be reviewed and revised?

A business plan should be reviewed and revised at least annually, or more often if the business is experiencing significant changes. This is because the business landscape is constantly changing, and your business plan needs to reflect those changes in order to remain relevant and effective.

Here are some specific situations in which you should review and revise your business plan:

• You have launched a new product or service line.
• You have entered a new market.
• You have experienced significant changes in your customer base or competitive landscape.
• You have made changes to your management team or organizational structure.
• You have raised new funding.

What are the key elements of a lean startup business plan?

A lean startup business plan is a short and simple way for a company to explain its business, especially if it is new and does not have a lot of information yet. It can include sections on the company’s value proposition, major activities and advantages, resources, partnerships, customer segments, and revenue sources.

What are some of the reasons why business plans don't succeed?

• Unrealistic assumptions: Business plans are often based on assumptions about the market, the competition, and the company’s own capabilities. If these assumptions are unrealistic, the plan is doomed to fail.
• Lack of focus: A good business plan should be focused on a specific goal and how the company will achieve it. If the plan is too broad or tries to do too much, it is unlikely to be successful.
• Poor execution: Even the best business plan is useless if it is not executed properly. This means having the right team in place, the necessary resources, and the ability to adapt to changing circumstances.
• Unforeseen challenges:  Every business faces challenges that could not be predicted or planned for. These challenges can be anything from a natural disaster to a new competitor to a change in government regulations.

What are the benefits of having a business plan?

• It helps you to clarify your business goals and strategies.
• It can help you to attract investors and lenders.
• It can serve as a roadmap for your business as it grows and changes.
• It can help you to make better business decisions.

How to write a business plan?

There are many different ways to write a business plan, but most follow the same basic structure. Here is a step-by-step guide:

• Executive summary.
• Company description.
• Management and organization description.
• Financial projections.

How to write a business plan step by step?

Start with an executive summary, then describe your business, analyze the market, outline your products or services, detail your marketing and sales strategies, introduce your team, and provide financial projections.

Why do I need a business plan for my startup?

A business plan helps define your startup’s direction, attract investors, secure funding, and make informed decisions crucial for success.

What are the key components of a business plan?

Key components include an executive summary, business description, market analysis, products or services, marketing and sales strategy, management and team, financial projections, and funding requirements.

Can a business plan help secure funding for my business?

Yes, a well-crafted business plan demonstrates your business’s viability, the use of investment, and potential returns, making it a valuable tool for attracting investors and lenders.

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The importance of business plan: 5 key reasons.

A key part of any business is its business plan. They can help define the goals of your business and help it reach success. A good business plan can also help you develop an adequate marketing strategy. There are a number of reasons all business owners need business plans, keep reading to learn more!

Here’s What We’ll Cover:

What Is a Business Plan?

5 reasons you need a well-written business plan, how do i make a business plan, key takeaways.

A business plan contains detailed information that can help determine its success. Some of this information can include the following:

• Market analysis
• Cash flow projection
• Competitive analysis
• Financial statements and financial projections
• An operating plan

A solid business plan is a good way to attract potential investors. It can also help you display to business partners that you have a successful business growing. In a competitive landscape, a formal business plan is your key to success.

Check out all of the biggest reasons you need a good business plan below.

1. To Secure Funding

Whether you’re seeking funding from a venture capitalist or a bank, you’ll need a business plan. Business plans are the foundation of a business. They tell the parties that you’re seeking funding from whether or not you’re worth investing in. If you need any sort of outside financing, you’ll need a good business plan to secure it.

2. Set and Communicate Goals

A business plan gives you a tangible way of reviewing your business goals. Business plans revolve around the present and the future. When you establish your goals and put them in writing, you’re more likely to reach them. A strong business plan includes these goals, and allows you to communicate them to investors and employees alike.

3. Prove Viability in the Market

While many businesses are born from passion, not many will last without an effective business plan. While a business concept may seem sound, things may change once the specifics are written down. Often, people who attempt to start a business without a plan will fail. This is because they don’t take into account all of the planning and funds needed to get a business off of the ground.

Market research is a large part of the business planning process. It lets you review your potential customers, as well as the competition, in your field. By understanding both you can set price points for products or services. Sometimes, it may not make sense to start a business based on the existing competition. Other times, market research can guide you to effective marketing strategies that others lack. To have a successful business, it has to be viable. A business plan will help you determine that.

4. They Help Owners Avoid Failure

Far too often, small businesses fail. Many times, this is due to the lack of a strong business plan. There are many reasons that small businesses fail, most of which can be avoided by developing a business plan. Some of them are listed below, which can be avoided by having a business plan:

• The market doesn’t need the business’s product or service
• The business didn’t take into account the amount of capital needed
• The market is oversaturated
• The prices set by the business are too high, pushing potential customers away

Any good business plan includes information to help business owners avoid these issues.

5. Business Plans Reduce Risk

Related to the last reason, business plans help reduce risk. A well-thought-out business plan helps reduce risky decisions. They help business owners make informed decisions based on the research they conduct. Any business owner can tell you that the most important part of their job is making critical decisions. A business plan that factors in all possible situations helps make those decisions.

Luckily, there are plenty of tools available to help you create a business plan. A simple search can lead you to helpful tools, like a business plan template . These are helpful, as they let you fill in the information as you go. Many of them provide basic instructions on how to create the business plan, as well.

If you plan on starting a business, you’ll need a business plan. They’re good for a vast number of things. Business plans help owners make informed decisions, as well as set goals and secure funding. Don’t put off putting together your business plan!

If you’re in the planning stages of your business, be sure to check out our resource hub . We have plenty of valuable resources and articles for you when you’re just getting started. Check it out today!

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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

What is the purpose of a business plan?

A business plan is like a map for small business owners, showing them where to go and how to get there. Its main purposes are to help you avoid risks, keep everyone on the same page, plan finances, check if your business idea is good, make operations smoother, and adapt to changes. It's a way for small business owners to plan, communicate, and stay on track toward their goals.

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 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.

Business plan FAQs

How does having a business plan help small business owners make better decisions.

Having a business plan supports small business owners in making smarter decisions by providing a structured framework to assess all parts of their businesses. It helps you foresee potential challenges, identify opportunities, and set clear objectives. Business plans help you make decisions across the board, including market strategies, financial management, resource allocation, and growth planning.

What industry-specific issues can business plans help tackle?

Business plans can address industry-specific challenges like regulatory compliance, technological advancements, market trends, and competitive landscape. For instance, in highly regulated industries like healthcare or finance, a comprehensive business plan can outline compliance measures and risk management strategies.

How can small business owners use their business plans to pitch investors or apply for loans?

In addition to attracting investors and securing financing, small business owners can leverage their business plans during pitches or loan applications by focusing on key elements that resonate with potential stakeholders. This includes highlighting market analysis, competitive advantages, revenue projections, and scalability plans. Presenting a well-researched and data-driven business plan demonstrates credibility and makes investors or lenders feel confident about your business’s potential health and growth.

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.

Related Posts

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.

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9 Business Plan Examples to Inspire Your Own (2024)

Need support creating your business plan? Check out these business plan examples for inspiration and guidance.

Any aspiring entrepreneur researching how to start a business will likely be advised to write a business plan. But few resources provide business plan examples to really guide you through writing one of your own.

Here are some real-world and illustrative business plan examples to help you craft your business plan .

Business plan format: 9 examples

The business plan examples in this article follow this template:

• Executive summary
• Company description
• Market analysis
• Products and services
• Marketing plan
• Logistics and operations plan
• Financial plan
• Customer segmentation

1. Executive summary

Your executive summary is a page that gives a high-level overview of the rest of your business plan. While it appears at the beginning, it’s easiest to write this section last, as there are details further in the report you’ll need to include here.

In this free business plan template , the executive summary is four paragraphs and takes a little over half a page. It clearly and efficiently communicates what the business does and what it plans to do, including its business model and target customers.

2. Company description

You might repurpose your company description elsewhere, like on your About page , social media profile pages, or other properties that require a boilerplate description of your small business.

Soap brand ORRIS has a blurb on its About page that could easily be repurposed for the company description section of its business plan.

You can also go more in-depth with your company overview and include the following sections, like in this business plan example for Paw Print Post:

Business structure

This section outlines how you registered your business —as an LLC , sole proprietorship, corporation, or other business type : “Paw Print Post will operate as a sole proprietorship run by the owner, Jane Matthews.”

Nature of the business

“Paw Print Post sells unique, one-of-a-kind digitally printed cards that are customized with a pet’s unique paw prints.”

“Paw Print Post operates primarily in the pet industry and sells goods that could also be categorized as part of the greeting card industry.”

Background information

“Jane Matthews, the founder of Paw Print Post, has a long history in the pet industry and working with animals, and was recently trained as a graphic designer. She’s combining those two loves to capture a niche in the market: unique greeting cards customized with a pet’s paw prints, without needing to resort to the traditional (and messy) options of casting your pet’s prints in plaster or using pet-safe ink to have them stamp their ’signature.’”

Business objectives

“Jane will have Paw Print Post ready to launch at the Big Important Pet Expo in Toronto to get the word out among industry players and consumers alike. After two years in business, Jane aims to drive $150,000 in annual revenue from the sale of Paw Print Post’s signature greeting cards and to have expanded into two new product categories.”

“Jane Matthews is the sole full-time employee of Paw Print Post but hires contractors as needed to support her workflow and fill gaps in her skill set. Notably, Paw Print Post has a standing contract for five hours a week of virtual assistant support with Virtual Assistants Pro.”

Your mission statement may also make an appearance here. Passionfruit shares its mission statement on its company website, and it would also work well in its example business plan.

3. Market analysis

The market analysis consists of research about supply and demand , your target demographics, industry trends, and the competitive landscape. You might run a SWOT analysis and include that in your business plan. 

Here’s an example SWOT analysis for an online tailored-shirt business:

You’ll also want to do a competitive analysis as part of the market research component of your business plan. This will tell you which businesses you’re up against and give you ideas on how to differentiate your brand. A broad competitive analysis might include:

• Target customers
• Unique value proposition , or what sets the products apart
• Sales pitch
• Price points for products
• Shipping policy

4. Products and services

This section of your business plan describes your offerings—which products and services do you sell to your customers? Here’s an example for Paw Print Post that explains its line of custom greeting cards, along with details on what makes its products unique.

5. Marketing plan

It’s always a good idea to develop a marketing plan before you launch your business. Your marketing plan shows how you’ll get the word out about your business, and it’s an essential component of your business plan as well.

The Paw Print Post focuses on four Ps: price, product, promotion, and place. However, you can take a different approach with your marketing plan. Maybe you can pull from your existing marketing strategy , or maybe you break it down by the different marketing channels. Whatever approach you take, your marketing plan should describe how you intend to promote your business and offerings to potential customers.

6. Logistics and operations plan

The Paw Print Post example considered suppliers, production, facilities, equipment, shipping and fulfillment, and inventory. This includes any raw materials needed to produce the products.

7. Financial plan

The financial plan provides a breakdown of sales, revenue, profit, expenses, and other relevant financial metrics related to funding and profiting from your business.

Ecommerce brand Nature’s Candy’s financial plan breaks down predicted revenue, expenses, and net profit in graphs.

It then dives deeper into the financials to include:

• Funding needs
• Projected profit-and-loss statement
• Projected balance sheet
• Projected cash-flow statement

You can use a financial plan spreadsheet to build your own financial statements, including income statement, balance sheet, and cash-flow statement.

8. Customer segmentation

Customer segmentation means dividing your target market into groups based on specific characteristics. These characteristics can be demographics, psychographics, behavior, or geography. Your business plan will provide detailed information on each segment, like its size and growth potential, so you can show why they are valuable to your business. 

Airsign , an eco-friendly vacuum cleaner company, faced the challenge of building a sustainable business model in the competitive home appliance market. They identified three key customer personas to target:

• Design-oriented urban dwellers
• Millennials moving to suburbs
• Older consumers seeking high-quality appliances

The company utilized Shopify’s customer segmentation tools to gain insights and take action to target them. Airsign created targeted segments for specific marketing initiatives.

Put your customer data to work with Shopify’s customer segmentation

Shopify’s built-in segmentation tools help you discover insights about your customers, build segments as targeted as your marketing plans with filters based on your customers’ demographic and behavioral data, and drive sales with timely and personalized emails.

9. Appendix

The appendix provides in-depth data, research, or documentation that supports the claims and projections made in the main business plan. It includes things like market research, finance, résumés, product specs, and legal documents. 

Readers can access detailed info in the appendix, but the main plan stays focused and easy to read. Here’s an example from a fictional clothing brand called Bloom:

Appendix: Bloom Business Plan

Types of business plans, and what to include for each

This lean business plan is meant to be high level and easy to understand at a glance. You’ll want to include all of the same sections in one-page business plan, but make sure they’re truncated and summarized:

• Executive summary: truncated
• Market analysis: summarized
• Products and services: summarized
• Marketing plan: summarized
• Logistics and operations plan: summarized
• Financials: summarized

A startup business plan is for a new business. Typically, these plans are developed and shared to secure funding . As such, there’s a bigger focus on the financials, as well as on other sections that determine viability of your business idea—market research, for example:

• Market analysis: in-depth
• Financials: in-depth

Your internal business plan is meant to keep your team on the same page and aligned toward the same goal:

A strategic, or growth, business plan is a big-picture, long-term look at your business. As such, the forecasts tend to look further into the future, and growth and revenue goals may be higher. Essentially, you want to use all the sections you would in a normal business plan and build upon each:

• Market analysis: comprehensive outlook
• Products and services: for launch and expansion
• Marketing plan: comprehensive outlook
• Logistics and operations plan: comprehensive outlook
• Financials: comprehensive outlook

Feasibility

Your feasibility business plan is sort of a pre-business plan—many refer to it as simply a feasibility study. This plan essentially lays the groundwork and validates that it’s worth the effort to make a full business plan for your idea. As such, it’s mostly centered around research:

Nonprofit business plans are used to attract donors, grants, and partnerships. They focus on what their mission is, how they measure success, and how they get funded. You’ll want to include the following sections in addition to a traditional business plan:

• Organization description
• Need statement
• Programs and services
• Fundraising plan
• Partnerships and collaborations
• Impact measurement

Set yourself up for success as a business owner

Building a good business plan serves as a roadmap you can use for your ecommerce business at launch and as you reach each of your business goals. Business plans create accountability for entrepreneurs and synergy among teams, regardless of your business model .

Kickstart your ecommerce business and set yourself up for success with an intentional business planning process—and with the sample business plans above to guide your own path.

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Business plan examples FAQ

How do i write a simple business plan.

To write a simple business plan, begin with an executive summary that outlines your business and your plans. Follow this with sections detailing your company description, market analysis, organization and management structure, product or service, marketing and sales strategy, and financial projections. Each section should be concise and clearly illustrate your strategies and goals.

What is the best format to write a business plan?

The best business plan format presents your plan in a clear, organized manner, making it easier for potential investors to understand your business model and goals. Always begin with the executive summary and end with financial information or appendices for any additional data.

What are the 4 key elements of a business plan?

• Executive summary: A concise overview of the company’s mission, goals, target audience, and financial objectives.
• Business description: A description of the company’s purpose, operations, products and services, target markets, and competitive landscape.
• Market analysis: An analysis of the industry, market trends, potential customers, and competitors.
• Financial plan: A detailed description of the company’s financial forecasts and strategies.

What are the 3 main points of a business plan?

• Concept: Your concept should explain the purpose of your business and provide an overall summary of what you intend to accomplish.
• Contents: Your content should include details about the products and services you provide, your target market, and your competition.
• Cash flow: Your cash flow section should include information about your expected cash inflows and outflows, such as capital investments, operating costs, and revenue projections.

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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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Write a Business Plan: Essential Tips and Strategies for Entrepreneurs

When starting a new venture or expanding an existing one, it's crucial to write a business plan . A business plan serves as a roadmap for your company's future, outlining your goals and strategies for achieving them. It's a vital tool for attracting investors and securing funding, demonstrating your understanding of your market and industry. Additionally, a well-crafted business plan can help you identify potential challenges and opportunities, allowing you to make informed decisions.

Importance of a Business Plan

The importance of a business plan cannot be overstated. It provides clarity and direction for your business, helping you stay focused on your objectives and navigate any obstacles that may arise. A well-written business plan also serves as a valuable communication tool, allowing you to articulate your vision to potential stakeholders and partners.

Benefits When you Write a Business Plan

When you write a business plan offers numerous benefits beyond securing funding. It forces you to conduct thorough research and analysis, giving you deep insights into your market, competition, and target audience. Moreover, it helps you set realistic financial projections and milestones for measuring success.

Key Components of a Business Plan

A comprehensive business plan typically includes critical components such as an executive summary, company description, market analysis, organization and management structure, product or service line, marketing strategy, financial projections, and funding requirements.

Understanding the Basics

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To start, let's understand what is a business plan. A business plan is a written document that outlines your business's goals and how you plan to achieve them. It serves as a roadmap for your company, guiding decision-making and setting the direction for growth and success.

The purpose of a business plan is to provide a clear vision for your business and communicate that vision to potential investors, partners, and employees. It helps you articulate your strategy, identify potential challenges, and establish measurable goals.

A business plan typically includes an executive summary, company description, market analysis, organization and management structure, product or service line, marketing and sales strategy, funding request, financial projections, and an appendix with supporting documents.

Now that we've got a good grasp of why a business plan is important, let's dive into the different components that make up this crucial document. Understanding each element will help you create a comprehensive and effective business plan that sets you up for success. So, let's take a closer look at what goes into writing a business plan and how each section contributes to the overall success of your business.

Research and Analysis

Quantum Template from Strikingly

Market research is essential for business planning . It is crucial for understanding your target market, identifying customer needs, and assessing the demand for your products or services. Conducting surveys, analyzing industry reports, and gathering data on consumer behavior are crucial steps in this process.

Competition analysis involves studying your competitors' strengths and weaknesses, identifying potential threats, and finding opportunities to differentiate your business. This helps you position your products or services effectively in the market and develop strategies to gain a competitive edge.

SWOT analysis for business planning involves evaluating the strengths, weaknesses, opportunities, and threats that can impact your business. Identifying internal strengths and weaknesses as well as external opportunities and threats helps make informed decisions and develop a robust business strategy.

How to Write a Business Plan

Go For Thoughts Template from Strikingly

When you write a business plan is essential for any entrepreneur or business owner. It provides a roadmap for the future of your business and helps you communicate your vision to potential investors or partners. Creating a compelling business plan can also help you identify pitfalls and opportunities, giving you a better chance at success.

Executive Summary

The executive summary is a brief overview of your business plan, covering the key points such as your company's mission, goals, and financial projections. It should be concise yet compelling, grabbing the reader's attention and giving them a clear understanding of what your business is all about.

Company Description

In this section, you'll need to provide detailed information about your company, including its history, mission statement, and legal structure. You also highlighted what sets your company apart from others in the industry and why customers should choose your products or services over those of competitors.

Products and Services

This part of the business plan outlines what you offer customers and how it fulfills their needs or solves their problems. You'll need to describe each product or service in detail, including its features, benefits, and pricing strategy. It's important to demonstrate how your offerings provide value to potential customers clearly.

Remember that creating a business plan is not just about getting funding; it's also about setting goals for yourself and building a roadmap for future success. By carefully crafting each section of your business plan with these keywords in mind - write a business plan, how to write business plan - you can ensure that it effectively communicates the value of your business and its growth potential.

Financial Projections

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When you write a business plan, it's crucial to include financial statements and projections to demonstrate your business's financial viability. This section should include income statements, balance sheets, and cash flow statements that clearly show your company's financial health. By projecting future financial performance based on historical data and market trends, you can showcase your business's potential profitability to investors and stakeholders.

Financial Statements and Projections

In this section, you'll need to present detailed financial statements such as profit and loss, balance sheets, and cash flow projections. These documents provide an overview of your company's financial position and performance over a specific period. By including these statements in your business plan, you can give potential investors insight into how your business is expected to perform financially.

Break-even Analysis

Another essential component of financial projections is the break-even analysis, which helps you determine the point at which your total revenue equals your total costs. This analysis lets you understand how much product or service you need to sell to cover all expenses and generate profits. By including a break-even analysis in your business plan, you can demonstrate a clear understanding of your cost structure and pricing strategy.

Funding Requirements

This section outlines the funding requirements for launching or growing your business. Whether you're seeking investment from venture capitalists or applying for a small business loan, it's essential to clearly state how much funding you need and how it will be utilized within your business operations. By providing detailed information about funding requirements in your business plan, you can show potential investors that their capital will be put to good use.

Implementation and Review

After you have written your business plan, the next step is to implement it. The action plan for execution outlines the specific steps you need to take to achieve your business goals. This includes assigning responsibilities, setting deadlines, and allocating resources effectively. It's essential to have a clear roadmap for implementation to ensure that your business plan translates into real-world success.

Action Plan for Execution

Your action plan should detail the tasks that need to be completed, who will be responsible for each task, and the timeline for completion. This will help you stay organized and focused as you work towards achieving your business objectives. By breaking down larger goals into smaller actionable steps, you can make progress more manageable and trackable.

Milestones and Metrics

Setting milestones and metrics is crucial for monitoring the progress of your business plan implementation. Milestones are vital achievements or events that indicate progress toward your goals, while metrics are quantifiable measures to track performance. By establishing clear milestones and metrics, you can assess whether your business is on track and make any necessary adjustments along the way.

Regular Review and Updates

Regularly reviewing and updating your business plan is essential for keeping it relevant and effective. As your business evolves, market conditions change, or new opportunities arise, you must revisit your strategy and make necessary adjustments. By staying proactive in reviewing and updating your business plan, you can ensure that it remains a valuable tool for guiding your business toward success.

Strikingly Features for Business Planning

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Strikingly is an excellent platform for creating business plans because of its user-friendly interface and intuitive design tools. Whether you're a seasoned entrepreneur or just starting, Strikingly makes it easy to write a business plan that is both professional and visually appealing.

Using Strikingly for Creating Business Plans

In today's competitive business landscape, a well-crafted business plan is essential for outlining your vision, securing funding, and guiding your entrepreneurial journey. Strikingly, with its user-friendly platform and powerful features, empowers you to create comprehensive and professional business plans that effectively communicate your ideas.

• Executive Summary. Provide a concise overview of your business, including your mission, vision, products or services, target market, and financial projections. Strikingly's platform allows you to create a visually appealing executive summary.
• Market Analysis. Conduct thorough market research to understand your industry, target market, competitors, and trends. Strikingly's analytics tools can help you gather market data.
• Company Description. Clearly articulate your company's purpose, values, and unique selling proposition (USP). Strikingly's platform allows you to create a compelling company description.
• Products or Services. Detail your offerings, including their features, benefits, and pricing. Strikingly's e-commerce features can be used to showcase your products or services.
• Marketing and Sales Strategy. Outline your marketing and sales plan, including your target audience, marketing channels, and sales tactics. Strikingly's platform allows you to create landing pages and capture leads.
• Operations Plan. Describe your business operations, including your team, facilities, and supply chain.
• Financial Projections. Develop realistic financial projections, including income statements, balance sheets, and cash flow statements. Strikingly's integration with financial tools can help you create financial projections.
• Management Team. Introduce your management team and their qualifications. Strikingly's platform allows you to create team profiles.
• Funding Request. If seeking funding, outline your funding requirements and how the funds will be used.
• Appendix. Include supporting documents, such as resumes, permits, or licenses. Strikingly's platform allows you to upload supporting documents.

Strikingly's Advantages for Business Plan Creation

• User-Friendly Interface. Strikingly's platform is easy to use, even for those without technical expertise.
• Customizable Templates. Choose a template that aligns with your business plan's structure and create a professional presentation.
• Content Creation Tools. Easily create and edit your business plan's content, including text, images, and charts.
• Collaboration Features. Collaborate with your team members to develop and refine your business plan.
• Analytics Integration. Track your progress and measure the effectiveness of your business plan using Strikingly's analytics tools.
• Presentation Features. Create visually appealing presentations to showcase your business plan to investors or stakeholders.
• Lead Capture. Capture leads from potential investors or partners using Strikingly's lead generation forms.
• Mobile Optimization. Ensure your business plan is accessible on mobile devices, as many investors and stakeholders review plans on their smartphones or tablets.
• Scalability. As your business grows, Strikingly's platform can scale to accommodate your expanding needs.
• Customer Support. Receive assistance and support from Strikingly's dedicated customer service team.

By leveraging Strikingly's platform and following these steps, you can create a comprehensive and persuasive business plan that effectively communicates your vision and attracts the support you need to succeed. Remember, a well-crafted business plan is an essential tool for any entrepreneur.

Templates for Business Plans

Strikingly offers a variety of fully customizable business plan templates. From traditional text-based layouts to more visual, infographic-style designs, there's something for everyone. These templates provide a solid foundation and can be easily tailored to reflect your unique business concept.

Customization and Collaboration Features

One of Strikingly's standout features is its customization options, which allow you to personalize every aspect of your business plan to align with your brand identity . Additionally, the platform supports collaboration among team members or stakeholders, making it easy to gather feedback and input from others while working on your business plan.

Mannheim Template from Strikingly

As you write a business plan, remember to keep it concise and focused on your goals. Communicate your ideas effectively using clear and straightforward language. Avoid using jargon or technical terms that may confuse your audience.

When you write a business plan, it's important to highlight the unique value proposition of your business and how it will address the needs of your target market . Clearly outline your financial projections, marketing strategies, and operational plans to demonstrate the potential success of your business. Remember to regularly review and update your business plan as your company grows and evolves to ensure that it remains relevant and aligned with your goals.

Final Tips When You Write a Business Plan

Conduct thorough research and analysis to support your strategies and projections when creating a business plan. Be realistic in your financial projections and consider various scenarios to prepare for potential challenges.

Resources for Creating a Business Plan

Many online tools and templates are available to help you create a professional business plan. Look for reputable sources that offer guidance on writing different sections of the plan and examples of successful plans for reference.

After completing your business plan, it's crucial to revisit and revise it regularly to reflect changes in the market or your business environment. Track your progress and update the plan accordingly to stay aligned with your objectives.

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7 Different Types of Business Plans Explained

11 min. read

Updated April 10, 2024

Business plans go by many names: Strategic plans, traditional plans , operational plans, feasibility plans, internal plans, growth plans, and more.

Different situations call for different types of plans. 

But what makes each type of plan unique? And why should you consider one type over another?

In this article, we’ll uncover a quick process to find the right type of business plan, along with an overview of each option. 

Let’s help you find the right planning format.

• What type of business plan do you need?

The short answer is… it depends. 

Your current business stage, intended audience, and how you’ll use the plan will all impact what format works best. 

Remember, just the act of planning will improve your chances of success . It’s important to land on an option that will support your needs. Don’t get too hung up on making the right choice and delay writing your plan.

So, how do you choose?

1. Know why you need a business plan

What are you creating a business plan for ? Are you pitching to potential investors? Applying for a loan? Trying to understand if your business idea is feasible?

You may need a business plan for one or multiple reasons. What you intend to do with it will inform what type of plan you need.

For example: A more robust and detailed plan may be necessary if you seek investment . But a shorter format could be more useful and less time-consuming if you’re just testing an idea.

2. Become familiar with your options

You don’t need to become a planning expert and understand every detail about every type of plan. You just need to know the basics:

• What makes this type of plan unique?
• What are its benefits?
• What are its drawbacks?
• Which types of businesses typically use it?

By taking the time to review, you’ll understand what you’re getting into and be more likely to complete your plan. Plus, you’ll come away with a document built with your use case(s) in mind—meaning you won’t have to restart to make it a valuable tool.

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3. Start small and grow

When choosing a business plan format, a good tactic is to opt for a shorter option and build from there. You’ll save time and effort and still come away with a working business plan.

Plus, you’ll better understand what further planning you may need to do. And you won’t be starting from scratch.

Read More: How to identify the right type of plan for your business

Again, the type of business plan you need fully depends on your situation and use case. But running through this quick exercise will help you narrow down your options. 

Now let’s look at the common business plan types you can choose from.

• Traditional business plan

The traditional (or standard) business plan is an in-depth document covering every aspect of your business. It’s the most common plan type you’ll come across. 

A traditional business plan is broken up into 10 sections:

• Executive summary
• Description of products and services
• Market analysis
• Competitive analysis
• Marketing and sales plan
• Business operations
• Key milestones and metrics
• Organization and management team
• Financial plan
• Appendix 

Why use this type of plan?

A traditional business plan is best for anyone approaching specific business planning events—such as presenting a business plan to a bank or investor for funding.

A traditional plan can also be useful if you need to add more details around specific business areas. 

For example: You start as a solopreneur and don’t immediately need to define your team structure. But eventually you hit a threshold where you need more staff in order to keep growing. A great way to explore which roles you need and how they will function is by fleshing out the organization and management section .

That’s the unseen value of a more detailed plan like this. While you can follow the structure outlined above and create an in-depth plan ready for funding, you can also choose which sections to prioritize. 

Read More: How to write a traditional business plan  

• One-page plan

The one-page business plan is a simplified (but just as useful) version of a traditional business plan. It follows the same structure, but is far easier to create. It can even be used as a pitch document.

Here’s how you’ll organize information when using a one-page plan:

• Value proposition
• Market need
• Your solution
• Competition
• Target market
• Sales and marketing
• Budget and sales goals
• Team summary
• Key partners
• Funding needs

A one-page plan is faster and easier to assemble than a traditional plan. You can write a one-page plan in as little as 30 minutes . 

You’ll still cover the crucial details found in a traditional plan, but in a more manageable format.

So, if you’re exploring a business idea for the first time or updating your strategy—a one-page plan is ideal. You can review and update your entire plan in just a few minutes.

Applying for a loan with this type of plan probably wouldn’t make sense. Lenders typically want to see a more detailed plan to accurately assess potential risk. 

However, it is a great option to send to investors. 

“Investors these days are much less likely to look at a detailed plan,” says Palo Alto Software COO Noah Parsons. “An executive summary or one-page plan, pitch presentation, and financials are all a VC is likely to look at.”

Creating a more detailed plan is as much about being prepared as anything else. If you don’t dig into everything a traditional plan covers, you’ll struggle to land your pitch . 

If you don’t intend to seek funding, a one-page plan is often all you need. The key is regularly revisiting it to stay on top of your business. 

Let’s explore two unique processes to help you do that: 

Read More: How to write a one-page business plan

Lean planning process

Lean planning is a process that uses your one-page plan as a testing tool. The goal is to create a plan and immediately put it into action to see if your ideas actually work. You’ll typically be focusing on one (or all) of the following areas: 

• Strategy – What you will do
• Tactics – How you will do it
• Business Model – How you make money
• Schedule – Who is responsible and when will it happen

Why use this process?

Lean planning is best for businesses that need to move fast, test assumptions, revise, and get moving again. It’s short and simple, and meant to get everyone on the same page as quickly as possible. 

That’s why it’s so popular for startups. They don’t necessarily need a detailed plan, since they’re mostly focused on determining whether or not they have a viable business idea .

The only drawback is that this planning process is built primarily around early-stage businesses. It can be a useful tool for established businesses looking to test a strategy, but it may not be as helpful for ongoing management.

Read More: The fundamentals of lean planning

Growth planning

Growth planning is a financials-focused planning process designed to help you make quick and strategic decisions.

Again, it starts with a one-page plan outlining your strategy, tactics, business model, and schedule. The next step is to create a working financial forecast that includes projected sales, expenses, and cash flows.

From there, you run your business. 

As you go, track your actual financial performance and carve out time to compare it to your forecasts . If you spot any differences, these discrepancies may indicate problems or opportunities that call for adjusting your current strategy.

Growth planning combines the simplicity of the one-page plan and the speed of lean planning, with the power of financial forecasting. 

This makes the process useful for every business stage and even allows you to skip to the forecasting step if you already have a plan.

With growth planning, you’ll:

• Regularly revisit your financials
• Better understand how your business operates 
• Make quick and confident decisions

This process focuses on growing your business. If diving into your financials isn’t a priority right now, that’s okay. Start with a one-page plan instead, and revisit growth planning when you’re ready.

Read More: How to write a growth-oriented business plan

• Internal plan

Sometimes you just need a business plan that works as an internal management tool. 

Something to help you: 

• Set business goals
• Provide a high-level overview of operations
• Prepare to create budgets and financial projections

You don’t need an overly long and detailed business plan for this. Just a document that is easy to create, useful for developing or revisiting your strategy, and able to get everyone up to speed.

The internal plan is a great option if you’re not planning to present your plan to anyone outside your business. Especially if you’re an up-and-running business that may have created a plan previously. You might just need something simple for day-to-day use.

Read More: 8 steps to write a useful internal business plan

• 5-year business plan

Some investors or stakeholders may request a long-term plan stretching up to five years. They typically want to understand your vision for the future and see your long-term goals or milestones.  

To be honest, creating a detailed long-term business plan is typically a waste of time. There are a few exceptions:

• A long-term plan is specifically asked for
• You want to outline your long-term vision
• Real estate development
• Medical product manufacturing
• Transportation, automotive, aviation, or aerospace development

The reality is, you can’t predict what will happen in the next month, let alone the next one, three, or five years.

So, when creating a long-term plan, don’t dig too deep into the details. Focus on establishing long-term goals , annual growth targets, and aspirational milestones you’d like to hit.

Then supplement these with a more focused one-page plan that actually describes your current business, which you can use in your business right now.

Read More: How to write a five-year business plan

• Nonprofit business plan

A nonprofit business plan is not too different from a traditional plan. You should still cover all of the sections I listed above to help you build a sustainable business. 

The main differences in a nonprofit plan are tied to funding and awareness. You need to account for:

• Fundraising sources and activities.
• Alliances and partnerships.
• Promotion and outreach strategies.

You also need to set goals, track performance, and demonstrate that you have the right team to run a fiscally healthy organization. You’re just not pursuing profits, you’re trying to fulfill a mission. But you cannot serve your community if your organization isn’t financially stable.

If you can use your business plan to show that you’re a well-organized nonprofit organization, you are more likely to attract donors and convince investors to provide funding.

Read More: How to write a nonprofit business plan

Resources to help write your business plan

Don’t get too hung up on the type of business plan you choose. Remember, you can always start small and expand if you need to.

To help you do that, I recommend downloading our free one-page business plan template . It’s especially useful if you’re exploring an idea and need a quick way to document how your business will operate.

If you know you’ll pursue funding, download our free traditional business plan template . It’s already in an SBA-lender-approved format and provides detailed instructions for each section. And if you want to explore other options, check out our roundup of the 8 best business plan templates you can download for free.

Lastly, check out our library of over 550 sample business plans if you need inspiration. These can provide specific insight into what you should focus on in a given industry.

Remember, just by deciding to write a business plan, you are increasing your likelihood of success. Pick a format and start writing!

Types of business plans FAQ

Which type of planning should be done for a business?

The type of planning fully depends on your business stage and how you intend to use the plan. Generally, whatever format you choose should help you outline your strategy, business model, tactics, and timeline.

How many types of business plans are there?

There are seven common types of business plans, including: traditional, one-page, lean, growth, internal, 5-year, and nonprofit plans.

Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.

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Simple Business Plan Template (2024)

Updated: May 4, 2024, 4:37pm

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Why business plans are vital, get your free simple business plan template, how to write an effective business plan in 6 steps, frequently asked questions.

While taking many forms and serving many purposes, they all have one thing in common: business plans help you establish your goals and define the means for achieving them. Our simple business plan template covers everything you need to consider when launching a side gig, solo operation or small business. By following this step-by-step process, you might even uncover a few alternate routes to success.

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Whether you’re a first-time solopreneur or a seasoned business owner, the planning process challenges you to examine the costs and tasks involved in bringing a product or service to market. The process can also help you spot new income opportunities and hone in on the most profitable business models.

Though vital, business planning doesn’t have to be a chore. Business plans for lean startups and solopreneurs can simply outline the business concept, sales proposition, target customers and sketch out a plan of action to bring the product or service to market. However, if you’re seeking startup funding or partnership opportunities, you’ll need a write a business plan that details market research, operating costs and revenue forecasting. Whichever startup category you fall into, if you’re at square one, our simple business plan template will point you down the right path.

Copy our free simple business plan template so you can fill in the blanks as we explore each element of your business plan. Need help getting your ideas flowing? You’ll also find several startup scenario examples below.

Download free template as .docx

Whether you need a quick-launch overview or an in-depth plan for investors, any business plan should cover the six key elements outlined in our free template and explained below. The main difference in starting a small business versus an investor-funded business is the market research and operational and financial details needed to support the concept.

1. Your Mission or Vision

Start by declaring a “dream statement” for your business. You can call this your executive summary, vision statement or mission. Whatever the name, the first part of your business plan summarizes your idea by answering five questions. Keep it brief, such as an elevator pitch. You’ll expand these answers in the following sections of the simple business plan template.

• What does your business do? Are you selling products, services, information or a combination?
• Where does this happen? Will you conduct business online, in-store, via mobile means or in a specific location or environment?
• Who does your business benefit? Who is your target market and ideal customer for your concept?
• Why would potential customers care? What would make your ideal customers take notice of your business?
• How do your products and/or services outshine the competition? What would make your ideal customers choose you over a competitor?

These answers come easily if you have a solid concept for your business, but don’t worry if you get stuck. Use the rest of your plan template to brainstorm ideas and tactics. You’ll quickly find these answers and possibly new directions as you explore your ideas and options.

2. Offer and Value Proposition

This is where you detail your offer, such as selling products, providing services or both, and why anyone would care. That’s the value proposition. Specifically, you’ll expand on your answers to the first and fourth bullets from your mission/vision.

As you complete this section, you might find that exploring value propositions uncovers marketable business opportunities that you hadn’t yet considered. So spend some time brainstorming the possibilities in this section.

For example, a cottage baker startup specializing in gluten-free or keto-friendly products might be a value proposition that certain audiences care deeply about. Plus, you could expand on that value proposition by offering wedding and other special-occasion cakes that incorporate gluten-free, keto-friendly and traditional cake elements that all guests can enjoy.

3. Audience and Ideal Customer

Here is where you explore bullet point number three, who your business will benefit. Identifying your ideal customer and exploring a broader audience for your goods or services is essential in defining your sales and marketing strategies, plus it helps fine-tune what you offer.

There are many ways to research potential audiences, but a shortcut is to simply identify a problem that people have that your product or service can solve. If you start from the position of being a problem solver, it’s easy to define your audience and describe the wants and needs of your ideal customer for marketing efforts.

Using the cottage baker startup example, a problem people might have is finding fresh-baked gluten-free or keto-friendly sweets. Examining the wants and needs of these people might reveal a target audience that is health-conscious or possibly dealing with health issues and willing to spend more for hard-to-find items.

However, it’s essential to have a customer base that can support your business. You can be too specialized. For example, our baker startup can attract a broader audience and boost revenue by offering a wider selection of traditional baked goods alongside its gluten-free and keto-focused specialties.

4. Revenue Streams, Sales Channels and Marketing

Thanks to our internet-driven economy, startups have many revenue opportunities and can connect with target audiences through various channels. Revenue streams and sales channels also serve as marketing vehicles, so you can cover all three in this section.

Revenue Streams

Revenue streams are the many ways you can make money in your business. In your plan template, list how you’ll make money upon launch, plus include ideas for future expansion. The income possibilities just might surprise you.

For example, our cottage baker startup might consider these revenue streams:

• Product sales : Online, pop-up shops , wholesale and (future) in-store sales
• Affiliate income : Monetize blog and social media posts with affiliate links
• Advertising income : Reserve website space for advertising
• E-book sales : (future) Publish recipe e-books targeting gluten-free and keto-friendly dessert niches
• Video income : (future) Monetize a YouTube channel featuring how-to videos for the gluten-free and keto-friendly dessert niches
• Webinars and online classes : (future) Monetize coaching-style webinars and online classes covering specialty baking tips and techniques
• Members-only content : (future) Monetize a members-only section of the website for specialty content to complement webinars and online classes
• Franchise : (future) Monetize a specialty cottage bakery concept and sell to franchise entrepreneurs

Sales Channels

Sales channels put your revenue streams into action. This section also answers the “where will this happen” question in the second bullet of your vision.

The product sales channels for our cottage bakery example can include:

• Mobile point-of-sale (POS) : A mobile platform such as Shopify or Square POS for managing in-person sales at local farmers’ markets, fairs and festivals
• E-commerce platform : An online store such as Shopify, Square or WooCommerce for online retail sales and wholesale sales orders
• Social media channels : Facebook, Instagram and Pinterest shoppable posts and pins for online sales via social media channels
• Brick-and-mortar location : For in-store sales , once the business has grown to a point that it can support a physical location

Channels that support other income streams might include:

• Affiliate income : Blog section on the e-commerce website and affiliate partner accounts
• Advertising income : Reserved advertising spaces on the e-commerce website
• E-book sales : Amazon e-book sales via Amazon Kindle Direct Publishing
• Video income : YouTube channel with ad monetization
• Webinars and online classes : Online class and webinar platforms that support member accounts, recordings and playback
• Members-only content : Password-protected website content using membership apps such as MemberPress

Nowadays, the line between marketing and sales channels is blurred. Social media outlets, e-books, websites, blogs and videos serve as both marketing tools and income opportunities. Since most are free and those with advertising options are extremely economical, these are ideal marketing outlets for lean startups.

However, many businesses still find value in traditional advertising such as local radio, television, direct mail, newspapers and magazines. You can include these advertising costs in your simple business plan template to help build a marketing plan and budget.

5. Structure, Suppliers and Operations

This section of your simple business plan template explores how to structure and operate your business. Details include the type of business organization your startup will take, roles and responsibilities, supplier logistics and day-to-day operations. Also, include any certifications or permits needed to launch your enterprise in this section.

Our cottage baker example might use a structure and startup plan such as this:

• Business structure : Sole proprietorship with a “doing business as” (DBA) .
• Permits and certifications : County-issued food handling permit and state cottage food certification for home-based food production. Option, check into certified commercial kitchen rentals.
• Roles and responsibilities : Solopreneur, all roles and responsibilities with the owner.
• Supply chain : Bulk ingredients and food packaging via Sam’s Club, Costco, Amazon Prime with annual membership costs. Uline for shipping supplies; no membership needed.
• Day-to-day operations : Source ingredients and bake three days per week to fulfill local and online orders. Reserve time for specialty sales, wholesale partner orders and market events as needed. Ship online orders on alternating days. Update website and create marketing and affiliate blog posts on non-shipping days.

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6. Financial Forecasts

Your final task is to list forecasted business startup and ongoing costs and profit projections in your simple business plan template. Thanks to free business tools such as Square and free marketing on social media, lean startups can launch with few upfront costs. In many cases, cost of goods, shipping and packaging, business permits and printing for business cards are your only out-of-pocket expenses.

Cost Forecast

Our cottage baker’s forecasted lean startup costs might include:

Gross Profit Projections

This helps you determine the retail prices and sales volume required to keep your business running and, hopefully, earn income for yourself. Use product research to spot target retail prices for your goods, then subtract your cost of goods, such as hourly rate, raw goods and supplier costs. The total amount is your gross profit per item or service.

Here are some examples of projected gross profits for our cottage baker:

Bottom Line

Putting careful thought and detail in a business plan is always beneficial, but don’t get so bogged down in planning that you never hit the start button to launch your business . Also, remember that business plans aren’t set in stone. Markets, audiences and technologies change, and so will your goals and means of achieving them. Think of your business plan as a living document and regularly revisit, expand and restructure it as market opportunities and business growth demand.

Is there a template for a business plan?

You can copy our free business plan template and fill in the blanks or customize it in Google Docs, Microsoft Word or another word processing app. This free business plan template includes the six key elements that any entrepreneur needs to consider when launching a new business.

What does a simple business plan include?

A simple business plan is a one- to two-page overview covering six key elements that any budding entrepreneur needs to consider when launching a startup. These include your vision or mission, product or service offering, target audience, revenue streams and sales channels, structure and operations, and financial forecasts.

How can I create a free business plan template?

Start with our free business plan template that covers the six essential elements of a startup. Once downloaded, you can edit this document in Google Docs or another word processing app and add new sections or subsections to your plan template to meet your specific business plan needs.

What basic items should be included in a business plan?

When writing out a business plan, you want to make sure that you cover everything related to your concept for the business,  an analysis of the industry―including potential customers and an overview of the market for your goods or services―how you plan to execute your vision for the business, how you plan to grow the business if it becomes successful and all financial data around the business, including current cash on hand, potential investors and budget plans for the next few years.

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Krista Fabregas is a seasoned eCommerce and online content pro sharing more than 20 years of hands-on know-how with those looking to launch and grow tech-forward businesses. Her expertise includes eCommerce startups and growth, SMB operations and logistics, website platforms, payment systems, side-gig and affiliate income, and multichannel marketing. Krista holds a bachelor's degree in English from The University of Texas at Austin and held senior positions at NASA, a Fortune 100 company, and several online startups.

TechBullion

7 tips to make writing a business plan easier.

Writing a business plan is one of the most valuable things you can do as a business owner. But it can also be one of the most challenging if you’re doing it for the first time.

To help you get right to the value of having a complete business plan, here are seven simple tips that will make business plan writing easier.

1. Understand What to Include in Your Business Plan

Take the time to understand the broad structure of a business plan and what information should be included in each section. This helps you avoid writing aimlessly and gives you a checklist to mark off as you go.

To get started, here is a brief overview of the most common sections of a business plan :

• Executive Summary : Summary of the full business plan, typically covering the problem, solution, target market, team, and financial highlights.
• Products and Services : Description of what you offer, the problem it solves, and any progress or traction.
• Market Analysis : Research on your target market, its size, segments, and trends.
• Competition : Analysis of competitors and how your business compares.
• Marketing and Sales : Strategies for reaching and selling to customers.
• Operations : Overview of your operations including technology, equipment, and facilities.
• Milestones and Metrics : Key goals and performance indicators.
• Company Overview and Team : Organizational structure, company history, and team bios.
• Financial Plan : Sales, expense, and cash flow forecasts along with standard financial statements like your profit and loss, cash flow statement, and balance sheet.
• Appendix : Additional information, such as detailed financial statements, resumes, and other supporting documents.

This list is not exhaustive, so, if you need additional details, look into lengthier business plan outlines or  just go on to step two and three in this guide.

2. Consider Starting With a One-Page Business Plan

You don’t necessarily need to write a traditional business plan. If you’re exploring an idea or planning to use it as an internal tool—then a one-page business plan may be a better option.

A one-page business plan is basically a condensed version of a traditional business plan that outlines your business’s key points in a single page. It’s faster and easier to create, simpler to edit and adjust as your business evolves, and it can always be expanded into a more detailed plan later on.

And even though it’s on one page, it still works as a fully functioning business plan. You just get the benefit of starting small, focusing on the essentials.

3. Download a Business Plan Template

Using a business plan template can provide additional guidance and structure to the planning process. With the right template, you’ll get step-by-step instruction, simple fill-in-the-blank sections, and potentially even tips from entrepreneurs or planning experts.

There are plenty of free business plan templates out there, but the best will be written by experts, recently updated, and available in a format that will meet the expectations of lenders and investors. Additionally, just be sure it’s available on software like Microsoft Word or Google Docs so you can get right into using it.

4. Review Business Plan Examples

Sometimes the best thing you can do is to see what the end result can look like. So, when writing a business plan you should explore and review a handful of business plans examples. Ideally, business plan examples are created by professionals or are real-world samples from existing businesses like yoga studios .

If you can, find a sample business plan that’s from the same industry as your own business. Pay attention to the structure, how the plan is written, and what information is unique to your specific industry. You should also take time to flag anything that you don’t think is done well as something to avoid in your own plan.

Keep in mind, you should not copy and paste these examples. Use them to inspire your plan and don’t replicate it.

5. Prioritize the Sections You Already Know

There may be a preferred order for structuring your business plan, but that doesn’t mean you have to write it that way. Instead of going from beginning to end, start with the sections that you already have ideas for and know best.

This will help you avoid just staring at a blank page and actually get information down. You may even find that it makes writing other sections easier as you start thinking more and more specifically about your business.

6. Set a Time Limit

Do not spend hours at a time writing your business plan. You’ll get burnt out, make mistakes, and likely end up seriously disliking the whole process.

To avoid this, set a time limit for your writing to be between 30-minutes and an hour. This is just enough time to actually write and work through sections while making it an easy time investment to fit around your busy schedule.

Keep in mind, this may mean you don’t finish your business plan. That’s totally fine and potentially beneficial. Step away, schedule a follow up writing session, and get back to it. It may end up taking two, three, maybe even four times but you’ll still end up with a complete business plan.

7. Have Someone Review Your Business Plan

Lastly, don’t do this writing process solo. Get someone you trust, like a friend, family member, or mentor, to review your plan as you go. Have them read it and provide feedback like:

• Do you understand how my business works?
• Is the business plan clear and easy to read?
• Are there areas that are confusing, make jumps in logic, or need more explanation?

Take their feedback and apply it to your plan. If you do this before completing the plan, you may end up saving time and catch any issues before they’re prevalent throughout the entire document. If you’re concerned about the quality or not getting enough feedback, consider hiring a professional plan writer or reviewer to take a look instead.

Writing a Business Plan Doesn’t Have to Be Difficult

The hardest part about writing a business plan is getting started. But by developing a framework, knowing what you’re getting into, and finding the right support it can be a lean and effective process.

So, take one or all of these tips and start writing your business plan. You’ll be happy you did.

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Elon Musk is a Trump win away from serious federal power

• Donald Trump outlined several economic proposals during a speech at the Economic Club of New York.
• They included a plan proposed by Elon Musk to create a government-efficiency commission.
• Musk has expressed interest in helping with the commission should Trump win the election.

It looks like Elon Musk is helping shape former President Donald Trump's economic platform.

In a speech on Thursday at the Economic Club of New York, Trump discussed new economic proposals, including lowering energy prices and enforcing stricter border policies.

One of Trump's new proposals appears to take a page out of Musk's playbook: creating a government-efficiency commission that would slash what Trump considers improper government spending and regulation to address the country's inflation.

"At the suggestion of Elon Musk," Trump said, "I will create a government-efficiency commission tasked with conducting a complete financial and performance audit of the entire federal government and making recommendations for drastic reforms."

This idea partly stems from a conversation Musk and Trump recently had on Spaces, a livestream service hosted on X. Musk said he'd "be happy to help out" on a government-efficiency commission, to which Trump responded that he'd "love it" for that to happen.

On Tuesday, in a response to a post on X that said Trump was considering the Tesla CEO for a role in auditing government agencies, Musk said: "I can't wait. There is a lot of waste and needless regulation in government that needs to go."

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Musk has clashed with the government on several issues, including a Securities and Exchange Commission investigation into his purchase of Twitter .

It's unclear how big of a role Musk would actually have should Trump win the election — Trump said on "The Shawn Ryan Show" last week that Musk most likely couldn't serve in the Cabinet given that he's "running big businesses and all that."

However, Trump said on Thursday that "Elon, because he's not very busy, has agreed to head that task force," adding, "He'll be a good one to do it."

Still, Trump has favored the idea of tackling government spending. The Washington Post recently  reported  that Trump's advisors wanted to bring in corporate leaders to help identify excess spending.

While details of what Trump's commission would look like are minimal, the Post reported that Steve Moore, a former Trump advisor, said it used former President Ronald Reagan's Grace Commission as a framework. Established in 1982, that commission focused on "draining the swamp" — in other words, eliminating government inefficiency.

The commission released a report in 1984 saying that if the government followed its recommendations it could save $424 billion in three years, but Congress didn't end up adopting many of those recommendations.

Trump also described policies to address inflation and economic issues, including imposing broad tariffs on China and ensuring Social Security benefits aren't taxed.

"I am promising low taxes, low regulations, low energy costs, low interest rates, secure borders, low, low, low crime, and surging incomes for citizens of every race, religion, color, and creed," Trump said.

The event deepened Trump's ties to Musk

Musk and Trump have had a rocky relationship , though the tech titan has grown closer to the former president in recent months.

Before the 2016 election, Musk told CNBC that Trump was the wrong fit for the presidency. He later served on economic advisory councils but resigned in protest of Trump's environmental views. By 2020, the pair were growing closer as Trump expressed support for Musk amid the Tesla CEO's fight with California public-health officials over COVID-19 policies.

After purchasing Twitter in 2022, Musk signaled that he would welcome Trump back to the platform that had paved his way to the presidency but barred him in the wake of the Capitol riot. Trump and Musk exchanged barbs throughout that year, but the Tesla CEO asserted increasingly conservative views. Just before the 2022 midterm elections, Musk encouraged people to vote for Republicans .

Musk and other Silicon Valley titans initially lined up behind Gov. Ron DeSantis of Florida ahead of the 2024 GOP primary season. But after DeSantis flamed out, it became clear Trump would once again be the GOP's nominee. Musk, the world's richest man, claimed he wouldn't donate to either candidate. Later it was revealed that he had seeded millions of dollars to help set up a pro-Trump super PAC. Musk endorsed Trump after the former president survived an assassination attempt in July.

Trump has since hinted that Musk could join his administration. Musk has also teed off on Vice President Kamala Harris , sharing an AI-generated image that showed her in communist garb.

Watch: 5 ways Elon Musk shook up Twitter as CEO

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