what is a smart business plan

• Product overview
• All features
• App integrations

CAPABILITIES

• project icon Project management
• Project views
• Custom fields
• Status updates
• goal icon Goals and reporting
• Reporting dashboards
• workflow icon Workflows and automation
• portfolio icon Resource management
• Time tracking
• my-task icon Admin and security
• Admin console
• asana-intelligence icon Asana Intelligence
• list icon Personal
• premium icon Starter
• briefcase icon Advanced
• Goal management
• Organizational planning
• Campaign management
• Creative production
• Content calendars
• Marketing strategic planning
• Resource planning
• Project intake
• Product launches
• Employee onboarding
• View all uses arrow-right icon
• Project plans
• Team goals & objectives
• Team continuity
• Meeting agenda
• View all templates arrow-right icon
• Work management resources Discover best practices, watch webinars, get insights
• What's new Learn about the latest and greatest from Asana
• Customer stories See how the world's best organizations drive work innovation with Asana
• Help Center Get lots of tips, tricks, and advice to get the most from Asana
• Asana Academy Sign up for interactive courses and webinars to learn Asana
• Developers Learn more about building apps on the Asana platform
• Community programs Connect with and learn from Asana customers around the world
• Events Find out about upcoming events near you
• Partners Learn more about our partner programs
• Support Need help? Contact the Asana support team
• Asana for nonprofits Get more information on our nonprofit discount program, and apply.

Featured Reads

• What are SMART goals? Examples and temp ...

What are SMART goals? Examples and templates

Vague goals that lack clarity are often left undone, even if they have great potential. Transform fuzzy objectives into attainable goals with the SMART goals framework. SMART is an acronym for specific, measurable, achievable, realistic, and time-bound. In this article, we'll dive into why each element of the SMART goals acronym is essential and how to apply them to your own goals.

But hitting an ambitious goal isn’t just about reaching for the stars—you also need a path to get there. That’s where SMART goal setting comes in. With SMART, you can make sure every goal—from project goals all the way to larger company objectives—has everything you need to achieve it. Here’s how.

What are SMART goals?

So, what are SMART goals? Fundamentally, SMART goals are a way of setting objectives that are clear, trackable, and achievable. The SMART goals acronym stands for five crucial qualities your goals should have: 

Measurable 

Achievable 

When you're deliberating the meaning of SMART goals, think of them as a tool to transform lofty resolutions into a concrete roadmap. The SMART goals acronym can help you build a blueprint for success in personal and professional settings alike.

How to write SMART goals

Writing SMART goals is all about breaking down your objectives into smaller, more manageable components that are easy to track and achieve. Here's a simple step-by-step guide to make the goal-setting process a breeze.

Keep in mind that you’re setting your SMART goal to attain a specific objective—not a broad one. You don’t just want any initiative to succeed; you want your specific project to succeed. To make sure you can achieve them, make sure your goals are specific to what you’re working on.

For example, instead of creating a goal to raise more money, you might create a goal to raise $20,000 by the end of the year. This is much more specific and gives you a roadmap to work off of. In this case, you can break down how much you need to raise each day to hit your goal and then create an action plan that enables you to hit that number every day.

The “M” in SMART stands for measurable, which helps you evaluate the success or failure of your project. Your goals should have some sort of objective way to measure them—whether that’s a deadline, a number, a percent change, or some other measurable element.

One way to do this is with benchmarks. Benchmarks show you what’s “normal” for specific, recurring scenarios in your company, so you know what to expect. Using standardized benchmarks, you can set more relevant goals that are easier to measure. For example, let’s say you have a benchmark showing that you have three new marketing campaigns each year to help you hit key performance indicators . You can then use that benchmark to set measurable goals to track progress for both the launches and their related KPIs.

You don’t want your goals to be easy to achieve, but you also want to make sure you’re setting goals that you could, conceivably, hit. Achievable says that your goals shouldn't be totally outside the realm of possibility. Ask yourself this question: Is the goal within your project scope ? If not, it’s not Achievable.

For example, let’s say you want to learn to speak Spanish in order to be competitive in your field. If you’ve never spoken a word of Spanish before, you can’t expect to be fluent by next month. That simply isn’t an achievable goal. However, you could set a goal to learn from your foreign language app for 20 minutes every day. By establishing a consistent practice, you can set a more achievable goal.

What about stretch goals—are those achievable?

Stretch goals are goals that are purposefully challenging. For example, if you usually get 30,000 monthly visitors to your website, a stretch goal would be to get 50,000 monthly visitors. That’s a big increase! But this stretch goal is still within the realm of possibility. Make sure you make your stretch goals ambitious, not impossible—like aiming to go from 30,000 monthly visitors to 300,000 monthly visitors, for example.

The “A” and “R” of SMART are closely related. In addition to setting attainable goals, you also want to set Realistic ones. For example, maybe a goal is achievable, but getting there would require every team member to work overtime for six weeks straight. Even though it might be an achievable goal, it’s not a realistic one. Make sure yours is both by creating a clear resource management plan .

Using our attainable goal example of learning to speak Spanish, the goal of setting 20 minutes aside each day to practice Spanish is both realistic and achievable. On the other hand, a goal to practice speaking Spanish for two hours every day is probably not realistic for most working adults, even though it’s technically achievable.

Your SMART goal should have an end date. Without a time limit, your project could drag on, have unclear success metrics , and suffer from scope creep . Deadlines provide a sense of urgency so that short-term tasks don’t drag into long-term goals unnecessarily. If you haven’t already, make sure you outline a clear project timeline .

Deadlines are crucial to implementing goals, since they pretty much force you to take action. If you want to have more focus time at work, you can decide to set a goal to only check your email for 30 minutes every day. But without a deadline, it’s easy to brush it off. Imagine instead if you set a goal to only check your email for 30 minutes every day for one week—now, it starts to feel more attainable.

SMART goals pros and cons

Making sure your important goals have all of the SMART components might be more time-consuming than setting regular goals, but the value you get from SMART goals outweighs the additional time spent on the goal-setting process. Goals shouldn’t be something you set and forget—they’re a key part of your project planning process. When setting SMART goals, here’s what you and your team can expect.

Pros of SMART goals

Clear communication and alignment. When your project team knows exactly what they’re working towards, they’re more motivated and aligned as a team. Team members who know how their individual work contributes to broader company goals are 2X as motivated as their counterparts. Setting and sharing SMART goals can help you boost your entire team’s motivation.

Clarity towards project success. Have you ever gotten to the end of a project and not really known if you hit your project goals or not? SMART goals help you set clear goals, so you can avoid vague or confusing goal language.

Clear roadmap and finish line. With SMART goals, you know exactly what you want to achieve and when you expect to achieve it. You’ve verified that these goals are realistic and achievable. And you know you’ll be able to measure them to see if you hit them or not.

Trackable metrics. When you finish your project, SMART goals help you evaluate its success. Don’t beat yourself up if you don’t achieve it. In fact, at Asana, we aim to hit about 70% of our goals. That way, we know we’re setting challenging—but possible—goals. Whether you hit your goal or not, SMART goals can help you evaluate your goal, and you can learn from that.

Effective resource allocation. SMART goals make it easier for managers to distribute necessary resources efficiently, whether that's staff, budget, or even time.

Motivation and career development. When goals are achievable and relevant, it boosts team morale. It also creates opportunities for individual career development, as team members may need to acquire a new skill to meet their objectives.

Cons of SMART Goals

Oversimplification. Although the SMART goal framework can be incredibly effective for clarifying objectives, it may also lead to the oversimplification of more intricate, multilayered goals. If your goal is complicated, consider breaking it down into smaller sub-goals before using the SMART framework.

Short-term focus. The emphasis on time-based objectives might discourage more visionary planning, especially around the long-term mission of your business. If this applies to your situation, try creating a vision statement instead. 

Potential to hinder creativity. SMART goals can box you in. Their strict guidelines make you zero in on specific tasks, leaving little room for unexpected, game-changing ideas.

Possibility for a narrow focus. Adopting a SMART objectives approach could lead to tunnel vision, causing team members to lose sight of the organization's broader strategic goals. To avoid this, make sure to connect your SMART goals back to larger organizational objectives —so it’s clear why they matter and how they’re contributing to business success. 

Resource intensive. Smaller teams might feel a bit overwhelmed by the need for measurable outcomes. This is because tracking those metrics often requires investing time and money in specialized analytics tools. 

5 SMART goals examples

Ready to get started? Before you write your own, take a look at these five examples of SMART goals to see how each one aligns with the SMART criteria.

1.  Business goal

Example: Produce at least three different types of large-scale marketing assets (e.g. ebook, webinar, videos, sales one- or two-pagers) per month for Q1.

Why it’s SMART: This business goal is specific (large-scale marketing assets) , measurable (three different types) , achievable and realistic (this depends on how many project team members there are, but we can assume there are enough to cover the three assets per month), and time-bound (per month for Q1) .

2. Team goal

Example: The product team will partner on five cross-functional projects focused on usability testing, customer surveys, customer marketing, or research and development during the first half of FY22.

Why it’s SMART: This goal is specific (projects focused on usability testing, customer surveys, customer marketing, or research and development) , measurable (five cross-functional projects) , achievable (five projects in six months), realistic (the project spans the entire product team), and time-bound (during the first half of FY22) .

3. Professional goal

Example: During 2021, I will develop my management skills through mentorship, with at least two mentees from either our company Employee Resource Groups or my alumni network.

Why it’s SMART: This goal is specific (management skills through mentorship) , measurable (at least two mentees) , achievable and realistic (this person has given themselves two different avenues through which to find mentees), and time-bound (during 2021) .

4. Personal goal

Example: I will train to run the March San Diego half marathon in less than two hours.

Why it’s SMART: This goal is specific (San Diego half marathon) , measurable (in less than two hours) , achievable (two hours is an ambitious but doable pace for most runners with proper training), realistic (this person has established they will train in preparation for the half marathon), and time-bound (March) .

5. Nonprofit goal

Example: We will provide 100 hours of free tutoring for middle school students in math and history during the month of February.

Why it’s SMART: This goal is specific (tutoring for middle school students in math and history) , measurable (100 hours) , achievable and realistic (depending on the amount of volunteers the nonprofit has), and time-bound (during the month of February) .

6 steps to make your goal SMART

When you’re ready to set your own SMART goal, kick things off by jotting down your project objective in a sentence or two. Then fine-tune it with each of the five SMART attributes. 

To make the goal-setting process smoother, you can use this SMART goals template to get some hands-on practice in setting your SMART objectives.

1. Initial goal:   Write down whatever your initial goal is. Don’t worry about it not being completely SMART—we’ll get to that later in the template.

Example: I want to improve our company brand on social media.

2. Make it Specific:   Does your goal define exactly what you want to do? If not, re-work the language to make it specific to your particular project.

Example, continued: Improve our company brand on Instagram with company-specific hashtags.

3. Make it Measurable:   Have you established how you’ll measure your goal once your project is complete? If not, add a way to measure success or failure at the end of your project.

Example, continued: Develop company-specific hashtags to generate 1,000 new Instagram followers.

4. Make it Achievable:   Is your goal something you can achieve, given your project scope? Make sure this specific goal falls within your project capabilities.

Example, continued: Develop and use company-specific hashtags, in conjunction with popular hashtags in our industry, to generate 1,000 new Instagram followers.

5. Make it Realistic:   Can your project team reasonably hit your goal? Even if it’s a stretch goal, make sure this is something you can accomplish with your resources.

Example, continued: Post once daily on Instagram, and ensure every post has a mixture of company-specific hashtags and popular hashtags in our industry in order to generate 1,000 new Instagram followers.

6. Make it Time-bound:   When will you achieve your goal? Make sure you clarify your target date or time frame in your SMART goal.

Example, continued: Post every workday on Instagram for the first half of FY22. Ensure every post has a mixture of company-specific hashtags and popular hashtags in our industry in order to generate 1,000 new Instagram followers by June 30th.

What to do after creating your SMART goals

Do you track your goals in emails, meetings, or spreadsheets? If so, you’re not alone. According to the Asana Goals Report , 53% of businesses track their goals via email, 36% track them in spreadsheets, and 31% track them in in-person meetings.

The challenge with tracking your goals is finding a way to connect your goals with your team’s daily work. You’ve taken all of this time to create a SMART goal—keeping it front of mind can help you make sure you achieve it. At Asana, we believe goals should be closely connected to the work they’re, well, connected to. Here’s how you can do that:

1. Share your SMART goals with project stakeholders and team members

At the start of the project, make sure you surface your SMART goals to everyone involved in the work. Your SMART goals should guide your whole team as you work on project deliverables, so you know exactly whether or not you hit your project objectives.

The best way to do that is with a work management tool like Asana. That way, your team has a central source of truth with all information in the same place—from your daily work all the way to your project’s goals. Instead of hiding your goals in docs, decks, and other hard-to-find places, connect them to your daily work so everyone is motivated, focused, and on the same page.

2. Check in on progress regularly

In addition to sharing your SMART goals with your team at the beginning of your project, make sure you periodically measure the progress you’ve made towards your goal. You don’t want to work on the project and then find, at the very end of the work, that you’ve missed your goals. You’ve worked hard to set specific, measurable goals for a reason—you can use them as your north star, and course correct during your project if necessary.

The best way to regularly check in on your SMART goals is to send weekly project status updates . Status updates are a great way for you to highlight the important work your team did, any upcoming milestones, and whether or not you’re on track.

3. Evaluate your success

SMART goals bring clarity to your goal-setting process—so you can gauge exactly whether or not you hit your project goals. If you did, it’s time to celebrate! And even if you didn’t, having such clear goals—and checking in on your goals regularly—can help you best identify what went wrong and where you can do better next time.

Remember, not hitting your goals doesn’t mean your project was a total failure. You may have purposefully set a stretch goal to challenge yourself or your team. Even if you didn’t set a stretch goal, it’s more important to calmly evaluate why you missed your target rather than pretend it didn’t happen. That way, you can learn from your mistakes and bring those learnings with you the next time you set SMART goals.

Set smarter goals

SMART goals can help your team succeed by bringing clarity into the goal-setting and project management processes. When your team has clarity and is moving in the same direction, they’re more likely to be motivated and to know what work to prioritize.

Visualizing and tracking your goals both makes them easier to measure and achieve. In Asana, you can set, track, and report on your SMART goals all in one space. With the ability to connect with everyone on your team and share with stakeholders, you can coordinate everything you need to achieve your most ambitious goals.

SMART goals FAQ

What does the smart goals acronym stand for.

The SMART goals acronym stands for Specific, Measurable, Attainable, Relevant, and Time-bound. George T. Doran popularized this framework, which offers a methodical approach to setting goal-specific objectives. By following the SMART acronym, you're more likely to set specific goals that are both effective and achievable.

What are the 5 SMART goals

The 5 SMART goals refer to the five criteria that any SMART objective should meet. These are:

Specific: Clearly defined objectives that spell out what you aim to achieve.

Measurable: Quantifiable goals that allow you to track your progress.

Attainable: Goals that are challenging yet achievable, ensuring you're not setting yourself up for failure.

Relevant: Objectives that align with your broader aims and values.

Time-bound: Goals that come with a deadline promote effective time management.

How do I write a SMART goal?

To write a SMART goal, begin by defining what you specifically want to accomplish. Next, determine how you'll measure success and ensure that your objective is attainable. Make sure the goal is relevant to your broader life or career ambitions. Finally, add a timeframe to create a sense of urgency. A well-crafted SMART goal might look like this: "I want to increase my LinkedIn network by 200 connections within the next three months."

What are the best SMART goals?

The best SMART goals are those that are closely aligned with your own or your organization's broader aims, serving as stepping stones toward your ultimate goal. They should challenge you while still being achievable. These goals should be easily measurable and promote effective time management, allowing you to allocate resources wisely. For example, if career development is a priority, an excellent SMART goal could be "to complete an advanced course in digital marketing within the next six months."

Related resources

What is management by objectives (MBO)?

7 steps to complete a social media audit (with template)

How to accomplish big things with long-term goals

What are objectives and key results (OKRs)?

SMART Business Goals: Definition, Examples, Benefits, and Drawbacks

In a way, business success is just the realization of every goal that you set over time. With every goal that is accomplished, you are taking steps toward what you ultimately want to achieve as an entrepreneur or business owner. However, there are many ways to accomplish those goals. Some ways are better than others. One of the better ways is by setting SMART goals. We’ll take a look at what SMART goals are, their advantages and disadvantages, and some examples in this article.

What are SMART Business Goals?

 SMART  business goals   stand out as a framework that ensures goals are effective and achievable. SMART is an acronym that stands for Specific, Measurable, Achievable, Relevant, and Time-bound. Each element of the SMART framework plays a crucial role in goal setting, making it a widely adopted strategy in various industries.

The “s’ in the smart acronym stands for Specific. This means that your goals should be clear so you know exactly what needs to be accomplished. This can eliminate any vagueness. The clearer the goal the more likely you will be to focus on it and the strategy needed to accomplish it. For a goal to be specific, it should answer the key questions: What needs to be accomplished? Who is involved? Where will it take place?

Your goals need to be able to be tracked and measured. This means that your  goals should be quantitative  so you can measure if you are on track or not. Think of it as the numbers for your goal. For example, a measurable goal could be increasing sales by 20% within the next quarter.

You should set  realistic goals  if you want to accomplish them. Your goals should be something you and your team feel are achievable. If they are not, you could get discouraged or lose motivation if you miss milestones.

Goals should also be relevant to your business’s mission and values. You don’t want to set goals that you can hit but really don’t contribute much to the growth of your business. For example, if you have a business that sells to other businesses (b2b), you may not benefit from having a goal of reaching 10,000 followers on Instagram.

SMART goals should have a deadline. Think of them as an expiration date. Without knowing the cutoff point, it will be hard to know if you are succeeding or failing. By having an end date or time for your business goals you can motivate you to take more action to reach your goal.

Benefits of Using SMART Goals

One of the reasons why it seems SMART goals are a go-to method for goal setting is because there are a lot of benefits to setting your goals this way. First off, because your goals are specific, it gives you clarity and allows you to focus more intently. When goals are specific, you become less likely to get distracted by other things that seem important but are not in line with your goals.

Also, since you are able to track your goals, you may maintain motivation in the process. If you’ve created a measurable goal, you will be able to monitor exactly where you are en route to your destination. That can help avoid the feeling of not knowing how much more ground you have to make to hit your targets.

Another benefit is that, since your goals are realistic, you are not setting yourself up for failure. It is important to set  goals that stretch you . However, setting goals that are too lofty makes it harder to bounce back if you don’t reach them. But, when you use SMART to set realistic goals, you are getting a boost of confidence by logging some wins for you and your team. 

The sense of urgency SMART goals create helps in prioritizing tasks and managing time. When there is a clear deadline, there tends to be less procrastination and more focus. Not only that, because your goals are relevant to what the business is trying to accomplish, you feel a sense of purpose when pursuing those goals.

Drawbacks of Using SMART Goals

While the SMART goal method is a great way to go, it’s not a magic bullet. There are some drawbacks to setting your goals this way. If you’re serious about reaching your goals, understanding these limitations is crucial.

One of the first problems that can arise is due to the time-bound aspect. When there is a deadline, the focus could switch too much on short-term gains. If you’re not careful, the goal accomplishment process can seem more transactional. It can also be tempting to take shortcuts to reach the goal. 

Another issue that can come up is the way the method is highly structured. If the method is followed too closely, you may limit your flexibility and creativity. This is because you may have blinders on while focusing on your goals that you miss opportunities or stay in a well-defined lane.

One last downside of this is the opportunity cost of setting your goals too low. While it is important to not set goals that are too high, setting goals that are attainable, but too easy won’t help your business long-term. For example, you can set a goal of a 10% revenue increase because you know you can get there without much issue. However, you and your team may be capable of making that increase 30%. Since you set the goals too low to attain them, you may have missed out on 20% more revenue.

Examples of SMART Goals

Now let’s take a look at a few examples of SMART goals for business. These will give you some insight into what a SMART goal should look like and why it makes sense to set goals this way.

Example 1: Increasing Sales Revenue by 15% over the next quarter

This goal is Specific as it clearly shows what the company wants to achieve- a 15% increase in sales revenue. It is Measurable through the quantifiable target of 15%. It’s achievable as long as the company has the resources to pull it off. The goal is relevant because the revenue would directly contribute to the company’s growth and profitability. Finally, it is Time-bound with a clear deadline of one quarter.

Example 2: All team members to complete the course and pass the certification exam within six months.

This is an example of  goals set for employees .  The goal is specific because it states what the goal is for everyone to complete a course and pass an exam. This is something that can be easily tracked so it is measurable. If the certification goal is something that will help the business and is typically attainable in less than a year, then the goal also is achievable, relevant, and time-bound.

Example 3: Reduce operational costs by 10% over the next 12 months.

One last example that shows the same format. Operational costs are certainly relevant to any business’s goals. A 10% reduction is also something that is attainable for most businesses. Depending on the type of business, doing that within a year is time-bound and is most likely very realistic.

At the end of the day, your most important   business goals should grow  your business in some way. Using the SMART method, you create a potential to narrow down which goals will do that. Also, the method will give you a better opportunity to reach those goals.

Understanding Cascading Goals and How to Set Them

6 Types of Business Goals You Should Understand

How To Set Business Goals

Like this article? Get updates by email and get our eBook for FREE

GET PREMIUM CONTENT AND UPDATES FOR FREE !

Ralph is the Managing Editor at StartUp Mindset. The StartUp Mindset team consists of dedicated individuals and is designed to help new, seasoned, and aspiring entrepreneurs succeed.

Recent Posts

Dos and Don’ts of Starting a Business With Friends

The Ethics of Link Building: How to Stay on Google’s Good Side

The Impact of AI on Software Development

5 Ways to Use Chat GPT for Marketing

Strategic approaches to enhance online visibility through ppc, related posts, popular posts.

21 Different Types of Business Models With Examples

100 Best Business Ideas that You Can Start this Year

Who is shark tank guest anne wojcicki, recognizing opportunity as an entrepreneur.

Pingback: SMART Business Goals: Definition, Examples, Benefits, and Drawbacks – Austin Rotter

Pingback: SMART Business Goals: Definition, Examples, Benefits, and Drawbacks – Joseph Odierno Buffalo

• Grow Your Business
• Leading Your Team
• Find Your Way
• Business Models
• Social Media
• Entrepreneurial Lifestyle
• Your Mindset
• Our Writing Team
• Get “The Fast Growing Startup” Ebook Free
• Advertise With StartUp Mindset
• The Part-Time Entrepreneur

Work Life is Atlassian’s flagship publication dedicated to unleashing the potential of every team through real-life advice, inspiring stories, and thoughtful perspectives from leaders around the world.

Contributing Writer

Work Futurist

Senior Quantitative Researcher, People Insights

Principal Writer

How to write SMART goals

It’s easier to succeed when you have clearly defined objectives that are based in reality.

Get stories about tech and teams in your inbox

5-second summary

• Teams often fall short of meeting their goals due to a lack of consensus on the definition of success.
• SMART goals use a specific set of criteria to help ensure that objectives are clearly defined and attainable within a certain timeframe.
• Working through each step of creating a SMART goal can reveal instances where priorities and resources are out of alignment.

Meet Jane. She’s a product manager at a mid-sized tech company – let’s call it Techfirm, Inc. Jane has been tasked with increasing usage of Techfirm’s mobile app.

She knows she’ll need all hands on deck to make this happen, but when Jane has set team-wide goals in the past, they’ve quickly fallen off track. Nobody seemed to have a clear understanding of what success should look like; progress wasn’t monitored closely enough, and inevitably, that important objective slipped to the back burner (before toppling off the stove entirely).

That’s why, this time around, Jane plans to leverage SMART goals for setting an action plan and staying the course.

Want to get started right now?

Use our template to define the different components of your SMART goal.

What are SMART goals?

The SMART in SMART goals stands for Specific, Measurable, Achievable, Relevant, and Time-Bound.

Defining these parameters as they pertain to your goal helps ensure that your objectives are attainable within a certain time frame. This approach eliminates generalities and guesswork, sets a clear timeline, and makes it easier to track progress and identify missed milestones.

An example of a SMART-goal statement might look like this: Our goal is to [quantifiable objective] by [timeframe or deadline]. [Key players or teams] will accomplish this goal by [what steps you’ll take to achieve the goal]. Accomplishing this goal will [result or benefit].

Let’s use Jane’s objective to work through each component.

S: Specific

In order for a goal to be effective, it needs to be specific. A specific goal answers questions like:

• What needs to be accomplished?
• Who’s responsible for it?
• What steps need to be taken to achieve it?

Thinking through these questions helps get to the heart of what you’re aiming for. Here’s an example of a specific goal Jane might come up with:

Grow the number of monthly users of Techfirm’s mobile app by optimizing our app-store listing and creating targeted social media campaigns.

M: Measurable

Don’t underestimate the outsized impact of short-term goals

Specificity is a solid start, but quantifying your goals (that is, making sure they’re measurable) makes it easier to track progress and know when you’ve reached the finish line.

Jane and her product team want to grow the number of their mobile app users – but by how much? If they get even one new signup, that’s technically positive growth – so does that mean they’re done? Same goes for their strategy – how many platforms will they advertise on? 

To make this SMART objective more impactful, Jane should incorporate measurable, trackable benchmarks.

Increase the number of monthly users of Techfirm’s mobile app by 1,000 by optimizing our app-store listing and creating targeted social media campaigns for four social media platforms: Facebook, Twitter, Instagram, and LinkedIn.

A: Achievable

This is the point in the process when you give yourself a serious reality check. Goals should be realistic –  not  pedestals from which you inevitably tumble. Ask yourself: is your objective something your team can reasonably accomplish?

Jane might look at her goal and realize that, given her small team and their heavy workload, creating ad campaigns for four social platforms might be biting off more than they can chew. She decides to scale back to the three social networks where she’s most likely to find new clients.

Increase the number of monthly users of Techfirm’s mobile app by 1,000 by optimizing our app-store listing and creating targeted social media campaigns for three social media platforms: Facebook, Twitter, and Instagram.

Safeguarding the achievability of your goal is much easier when you’re the one setting it. However, that’s not always the case. When goals are handed down from elsewhere, make sure to communicate any restraints you may be working under. Even if you can’t shift the end goal, at least you can make your position (and any potential roadblocks) known up-front.

R: Relevant

Here’s where you need to think about the big picture. Why are you setting the goal that you’re setting? Jane knows that the app is a huge driver of customer loyalty, and that an uptick in their app usage could mean big things for the company’s bottom-line revenue goals. Now she revises her statement to reflect that context.

Grow the number of monthly users of Techfirm’s mobile app by 1,000 by optimizing our app-store listing and creating targeted social media campaigns for three social media platforms: Facebook, Twitter, and Instagram. Because mobile users tend to use our product longer, growing our app usage will ultimately increase profitability.

T: Time-bound

To properly measure success, you and your team need to be on the same page about when a goal has been reached. What’s your time horizon? When will the team start creating and implementing the tasks they’ve identified? When will they finish?

SMART goals should have time-related parameters built in, so everybody knows how to stay on track within a designated time frame.

When Jane incorporates those dates, her SMART goal is complete.

Grow the number of monthly users of Techfirm’s mobile app by 1,000 within Q1 of 2022. This will be accomplished by optimizing our app-store listing and creating targeted social media campaigns, which will begin running in February 2022, on three social media platforms: Facebook, Twitter, and Instagram. Since mobile is our primary point of conversion for paid-customer signups, growing our app usage will ultimately increase sales.

Knowing how to set goals using the SMART framework can help you succeed in setting and attaining goals, no matter how large or small.

Get stories like this in your inbox

Advice, stories, and expertise about work life today.

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

By Joe Weller | October 11, 2021

• Share on Facebook
• Share on LinkedIn

Link copied

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

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

What Is a Business Plan?

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

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

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

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

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

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

Business Plan Steps

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

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

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

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

Do I Need a Simple or Detailed Plan?

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

How to Choose the Right Plan for Your Business

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

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

Is the Order of Your Business Plan Important?

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

The Difference Between Traditional and Lean Business Plans

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

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

How to Write a Business Plan Step by Step

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

Step 1: Executive Summary

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

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

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

Step 2: Description of Business

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

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

Step 3: Market Analysis

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

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

Step 4: Competitive Analysis

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

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

Step 5: Description of Organizational Management

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

Step 6: Description of Products or Services

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

Questions to answer in this section are as follows:

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

Step 7: Marketing Plan

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

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

Step 8: Sales Plan

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

Start by answering the following questions:

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

Step 9: Funding Details (or Request for Funding)

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

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

Step 10: Financial Projections

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

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

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

Business Plan Template

Download Business Plan Template

Microsoft Excel | Smartsheet

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

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

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

How to Write a Simple Business Plan

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

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

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

Simple Business Plan Template

Download Simple Business Plan Template

Microsoft Excel |  Microsoft Word | Adobe PDF  | Smartsheet

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

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

How to Write a Business Plan for a Lean Startup

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

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

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

Lean Business Plan Template for Startups

Download Lean Business Plan Template for Startups

Microsoft Word | Adobe PDF

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

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

How to Write a Business Plan for a Loan

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

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

Download free financial templates to support your business plan.

Tips for Writing a Business Plan

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

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

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

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

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

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

Resources for Writing a Business Plan

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

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

How a Business Plan Helps to Grow Your Business

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

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

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

Empower your people to go above and beyond with a flexible platform designed to match the needs of your team — and adapt as those needs change. 

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

When teams have clarity into the work getting done, there’s no telling how much more they can accomplish in the same amount of time.  Try Smartsheet for free, today.

Discover why over 90% of Fortune 100 companies trust Smartsheet to get work done.

How to make a business plan

Table of Contents

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

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

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

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

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

What is a business plan?

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

Products or services

Target market

Competitors

Marketing and sales strategies

Financial plan

Management team

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

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

Business plan vs. business model canvas

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

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

Key partnerships

Key activities

Key propositions

Customer relationships

Customer segments

Key resources

Cost structure

Revenue streams

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

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

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

Why is a business plan important?

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

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

Helps to define the business goals and objectives

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

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

Guides decision-making

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

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

Attracts investors and secures funding

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

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

Identifies potential challenges and risks

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

Is there enough demand for my product or service?

Will I have enough capital to start my business?

Is the market oversaturated with too many competitors?

What will happen if my marketing strategy is ineffective?

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

Provides a basis for measuring success

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

Are we where we want to be at this point?

Did we achieve our goals?

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

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

How to make a business plan step by step

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

1. Create an executive summary

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

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

2. Write your company description

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

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

3. Conduct a market analysis

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

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

What does the current market look like?

Who are your competitors?

What are they offering?

What will give you a competitive advantage?

Who is your target market?

What are they looking for and why?

How will your product or service satisfy a need?

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

4. Describe your products and services

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

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

5. Design a marketing and sales strategy

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

Pricing strategy

Advertising and promotional tactics

Sales channels

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

6. Determine budget and financial projections

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

Some details to include in this section are:

Startup costs

Revenue projections

Profit and loss statement

Funding you have received or plan to receive

Strategy for raising funds

7. Set the organization and management structure

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

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

8. Make an action plan

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

Types of business plans

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

Startup business plan

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

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

Strategic business plan

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

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

Operational business plan

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

Organizational structure

Staffing plan

Production plan

Quality control

Inventory management

Supply chain

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

Growth-business plan

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

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

One-page business plan

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

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

Best practices for how to make a good business plan

Here are some additional tips for creating a business plan:

Use a template

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

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

Be practical

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

Be specific

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

Be thorough with your research

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

Get input from others

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

Review and revise regularly

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

Create a winning business plan to chart your path to success

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

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

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

Get on board in seconds

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

tableau.com is not available in your region.

Setting SMART Goals for Your Small Business

With goals that are specific, measurable, achievable, relevant, and timely, you can take the steps needed for long‑term success.

With goals that are specific, measurable, achievable, relevant, and timely, you can take the steps needed for long-term success.

According to the U.S. Small Business Administration , only about half of new small businesses survive for 5 years, and only one-third make it to 10 years. To stand the test of time, it’s important to set goals for your business that are specific, measurable, achievable, relevant, and timely—in other words, goals that are SMART.

Small businesses tend to interact with their audience more directly, and on fewer fronts than corporations. Although you may have fewer resources, small businesses have many advantages if used wisely. Creating SMART goals to connect with your audience can make all the difference.

What are SMART goals?

The SMART acronym stands for goals that are specific, measurable, achievable, relevant, and timely. The SMART goal system is impactful for business marketing strategies, project management and overall growth, because it encourages you to look into your market and evaluate how your business stacks up. It provides a model to identify strengths, track progress and room for improvement.

Here’s a more detailed SMART goals definition:

Having a clear, specific outcome in mind is key to making a SMART goal. Making a specific goal means that you can narrow your focus—whether this is on marketing, data collection, sales, or customer relationship management—and get a concise picture of exactly what you want to achieve and thus, what steps you should take to accomplish this goal.

When you set goals, it’s important to make sure you know what metrics you will use to evaluate whether and when you’ve met your goal.

Measurable goals and objectives can be quantitative, like how many returns or outputs you receive or produce; or they can be qualitative, based on the quality of those same returns or outputs.

It’s important to prioritize achievability when you set business goals. This isn’t to say you shouldn’t dream big, but a goal that you can take feasible steps towards will tell you more about the nature of your business, the way you run it, your customers, and the goal itself, rather than working towards something outside your capacity. By defining achievable goals, you’re also allowing yourself to experiment with what works best for reaching this goal, based on your measurements.

Relevancy, in the case of SMART business goals, refers to the pertinent characteristics of your business. Most businesses want to attract a bigger audience and increase their revenue, of course, but relevant goals help you identify what you will do specifically to grow your business.

If you run an online magazine, for example, a relevant and timebound goal is to increase the number of monthly subscribers by 25% this quarter. Subscribers are relevant to the success of your business, and thus the goal meets SMART criteria.

Having a timeframe for when you want to achieve your goal makes the process of planning and executing clearer and more organized. A deadline can be a powerful motivator, and it will help your team work together towards a clear finish line and better time management. Plus, working towards timely goals can give you insight into a certain time of year or the seasonality of your business, which might inform future goals.

Why are SMART Goals Important?

Why is being SMART important, and where does it factor into your small business plan ? SMART goals enable small business owners to take actionable steps towards improvement, measure outcomes, and ultimately achieve scalable success.

Vague goals (like, “Find more customers”), can leave you at a loss when it comes to implementing changes to your current marketing campaigns or business models. Vague goals can also leave business owners feeling over-extended without a clear focus, or unsatisfied without substantial evidence of achievement.

Actionable, achievable goals that are relevant, timebound, and have measurable outcomes are crucial for surviving the inception years of your new business. They can lead to sustainable growth and innovation throughout the life of your company or your career development.

How to set SMART goals

You can start writing your own SMART goals in a few ways:

• Use the SMART acronym as an outline. Write down a goal, then break down how the goal is specific, measurable, achievable, relevant, and timely. Provide details about your goal for each letter in the acronym. You can use a list format, a flow chart, or an outline—whatever keeps your thoughts organized and helps in reaching this goal.
• Use a past/present/future question model. Ask yourself questions like: What have I already done? What is the current outcome? Where do I want to be at the end of this month/quarter/year? Although this model prompts you to look to the future, make sure to keep the goal timely and focused.
• Use marketing software data. Marketing software can provide a foundation to set SMART goals. By collecting your current campaign reports and analytics all in one place, you can start writing your SMART goals based on the quantitative data you’ve already collected. Remember, the data itself is only a starting point; its usefulness is determined by what you do with it.

Use this SMART goal framework that will help you to define a better action plan with the steps you'll need to take, resources necessary to get there and milestones to track progress along the way. With SMART goals, you're more likely to achieve your goal efficiently and effectively.

SMART goal examples

What is a SMART goal? Let’s imagine a small business with the impressive goal of becoming completely carbon neutral or reaching net zero emissions. The goal is laudable, but how will the company achieve it? One step toward that objective might feature the SMART goal of switching 50% of plastic packaging materials to compostable packaging materials by the end of the quarter.

The goal is actionable and brings the company closer to its overall goal of operating as a carbon-neutral entity. Compostable packaging alone won’t get the company to complete carbon-neutral status. Still, it will help get the company closer to that end goal, and it’s an excellent selling point on the company website and sales literature.

Below we’ve listed a few more examples where we take some common small business goals and make them SMART:

• “Build more customers” vs. “Secure 6 new business accounts before the end of the quarter.” Six is specific, securing new accounts is relevant to the ultimate goal of the business, having a quantitative goal correlates to measurable success, it’s small enough to be achievable, and “end of the quarter” is timely.
• “Make more profits” vs. “Increase revenue 10% each quarter until the end of the fiscal year.” 10% is a specific, measurable amount that’s relevant to the goal of increasing overall profits. It puts “increase revenue” into achievable terms, and using quarters of the fiscal year is a timely measurement.
• “Be more present online” vs. “Increase unique blog views by increasing social media marketing content over the next month.” Unique views are a specific audience metric that is captured by your website or marketing platform, increasing social media marketing is measurable quantitatively, and it’s an achievable, actionable item, while “over the next month” is timely.

SMART business goals are about building focus, deepening relationships with your audience, achieving your goals and improving your strategies as you grow. By using the SMART framework, you can improve your business operations, project management and start achieving the goals that matter most.

You can also write SMART goals for personal use, whether you want to improve your career development or achieve goals outside of your professional life. Using the SMART goal framework can organize the process and provide structure before you begin any projects for your small business.

Start setting SMART goals with Mailchimp

Mailchimp helps your company manage customer relationships , generate leads , and grow your small business with an all-in-one marketing platform for email campaigns, content management, and data analysis. Create and achieve your SMART goals by leveraging marketing tools from Mailchimp.

Frequently asked questions

When should i set smart goals.

SMART goals are best set when the company aims to achieve a particular objective or milestone. By taking advantage of SMART goal setting from the get-go, your company can increase productivity, increase profits, and improve client or employee retention.

What is the value of creating SMART goals?

SMART goals take the vagueness out of company operations and help the organization reach its yearly goals with precision. SMART goals can improve resource allocation, time management, and employee morale.

SMART goals help business owners figure out where their teams are succeeding or when they need additional guidance. Grow your small business using achievable SMART goals that will add up to greater success over time.

What are good SMART goals?

In order to set good SMART goals, you must determine what you hope to achieve in the long run, either as an organization or professional.

Learning how to write SMART goals requires creating goals that meet every letter of the acronym. Below are some SMART goal examples that you can use as inspiration:

• Grow the company Instagram page by gaining 100 followers over the next 6 months.
• Find a qualified graphic design intern by the end of the quarter by creating job listings on at least three unique career sites.
• Strengthen the sales team by ensuring that at least 80% of salespeople in your organization complete an inbound sales training by the end of the quarter.

Related Topics

• Partnerships
• Team Dynamics
• Lead & Manage
• Create Multichannel Campaigns
• Navigate Crisis

• Search Search Please fill out this field.
• Building Your Business
• Becoming an Owner
• Business Plans

5 Elements of a SMART Business Goal

Darrell Zahorsky is an expert in search engine optimization (SEO) and marketing. He has worked for companies and clients such as Blackberry, ADP, and Subway.

Image by Katie Kerpel © The Balance 2019

Every successful business has clearly set and articulated goals to attain specific objectives. Yet, in the world of small business, many businesses lack a focused goal. “Get more business” is a typical reply of small business owners when asked of future plans. Any self-respecting CEO would be tossed out of a shareholder meeting for uttering a vague response.

Whether you have a 50-employee company or an empire of one, your business success depends on your ability to set and achieve goals. Put your business on the fast-track by applying the principles of SMART goal setting .

SMART is an acronym for the 5 elements of specific, measurable, achievable, relevant, and time-based goals. It’s a simple tool used by businesses to go beyond the realm of fuzzy goal-setting into an actionable plan for results.

Great goals are well-defined and focused. “Obtain two new billion dollar corporate clients in the Boston property insurance market” is more meaningful to mobilize your team than “Get more business.” Ryan Blair, The Goals Guy eloquently states, "Focus creates a powerful force: goal power . The moment you focus on a goal, your goal becomes a magnet, pulling you and your resources toward it. The more focused your energies, the more power you generate."  

A goal without a measurable outcome is like a sports competition without a scoreboard or scorekeeper. Numbers are an essential part of business. Put concrete numbers in your goals to know if you’re on track. A goal white board posted in your office can help as a daily reminder to keep yourself and your employee focused on the targeted results you want to attain.

Far too often, small businesses can set goals beyond reach. No one has ever built a billion dollar business overnight. Venture capitalists and angel investors discard countless business plans of companies with outlandish goals. Dream big and aim for the stars but keep one foot firmly based in reality. Check with your industry association to get a handle on realistic growth in your industry to set SMART goals.

Achievable business goals are based on the current conditions and realities of the business climate. You may desire to have your best year in business or increase revenue by 50%, but if a recession is looming and three new competitors opened in your market, then your goals aren’t relevant to the realities of the market.

Business goals and objectives just don’t get done when there's no time frame tied to the goal-setting process. Whether your business goal is to increase revenue by 20% or find 5 new clients, choose a time-frame to accomplish your goal.

Once your business goals are SMART , break down each goal into a specific set of tasks and activities to accomplish your goals. It’s important to periodically review your goals and make adjustments if necessary. Goal setting for your small business is an essential tool for success. Remember in the end to be SMART.

University of California. " SMART Goals: A How to Guide, " Page 3. Accessed April 28, 2020.

Gary Ryan Power. " Goals: The 10 Rules for Achieving Success, " Page 85. Sourcebooks, Inc., 2013.

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

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

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

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

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

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

Let’s get started.

What Do You Need A Business Plan For?

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

1. Secure Funds

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

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

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

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

2. Monitor Business Growth

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

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

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

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

3. Measure Business Success

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

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

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

4. Document Your Marketing Strategies

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

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

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

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

How to Write a Business Plan Step-by-Step

1. create your executive summary.

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

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

A good executive summary should do the following:

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

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

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

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

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

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

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

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

2. Add Your Company Overview

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

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

Your company overview should contain the following:

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

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

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

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

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

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

• Mission Statement

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

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

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

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

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

Business Objectives

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

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

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

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

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

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

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

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

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

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

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

Market Analysis

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

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

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

• Market Research

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

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

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

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

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

How to Quantify Your Target Market

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

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

What Does a Good Market Analysis Entail?

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

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

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

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

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

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

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

Competitive Analysis

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

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

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

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

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

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

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

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

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

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

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

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

Direct vs Indirect Competition

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

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

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

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

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

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

Factors that Differentiate Your Business from the Competition

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

1. Cost Leadership

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

A common practice among businesses looking to enter into a market where there are dominant players is to use free trials or pricing to attract as many customers as possible to their offer.

2. Product Differentiation

Your product or service should have a unique selling proposition (USP) that your competitors do not have or do not stress in their marketing.

Part of the marketing strategy should involve making your products unique and different from your competitors. It does not have to be different from your competitors, it can be the addition to a feature or benefit that your competitors do not currently have.

3. Market Segmentation

As a new business seeking to break into an industry, you will gain more success from focusing on a specific niche or target market, and not the whole industry.

If your competitors are focused on a general need or target market, you can differentiate yourself from them by having a small and hyper-targeted audience. For example, if your competitors are selling men’s clothes in their online stores , you can sell hoodies for men.

4. Define Your Business and Management Structure

The next step in your business plan is your business and management structure. It is the section where you describe the legal structure of your business and the team running it.

Your business is only as good as the management team that runs it, while the management team can only strive when there is a proper business and management structure in place.

If your company is a sole proprietor or a limited liability company (LLC), a general or limited partnership, or a C or an S corporation, state it clearly in this section.

Use an organizational chart to show the management structure in your business. Clearly show who is in charge of what area in your company. It is where you show how each key manager or team leader’s unique experience can contribute immensely to the success of your company. You can also opt to add the resumes and CVs of the key players in your company.

The business and management structure section should show who the owner is, and other owners of the businesses (if the business has other owners). For businesses or companies with multiple owners, include the percent ownership of the various owners and clearly show the extent of each others’ involvement in the company.

Investors want to know who is behind the company and the team running it to determine if it has the right management to achieve its set goals.

Management Team

The management team section is where you show that you have the right team in place to successfully execute the business operations and ideas. Take time to create the management structure for your business. Think about all the important roles and responsibilities that you need managers for to grow your business.

Include brief bios of each key team member and ensure you highlight only the relevant information that is needed. If your team members have background industry experience or have held top positions for other companies and achieved success while filling that role, highlight it in this section.

A common mistake that many startups make is assigning C-level titles such as (CMO and CEO) to everyone on their team. It is unrealistic for a small business to have those titles. While it may look good on paper for the ego of your team members, it can prevent investors from investing in your business.

Instead of building an unrealistic management structure that does not fit your business reality, it is best to allow business titles to grow as the business grows. Starting everyone at the top leaves no room for future change or growth, which is bad for productivity.

Your management team does not have to be complete before you start writing your business plan. You can have a complete business plan even when there are managerial positions that are empty and need filling.

If you have management gaps in your team, simply show the gaps and indicate you are searching for the right candidates for the role(s). Investors do not expect you to have a full management team when you are just starting your business.

Key Questions to Answer When Structuring Your Management Team

• Who are the key leaders?
• What experiences, skills, and educational backgrounds do you expect your key leaders to have?
• Do your key leaders have industry experience?
• What positions will they fill and what duties will they perform in those positions?
• What level of authority do the key leaders have and what are their responsibilities?
• What is the salary for the various management positions that will attract the ideal candidates?

Additional Tips for Writing the Management Structure Section

1. Avoid Adding ‘Ghost’ Names to Your Management Team

There is always that temptation to include a ‘ghost’ name to your management team to attract and influence investors to invest in your business. Although the presence of these celebrity management team members may attract the attention of investors, it can cause your business to lose any credibility if you get found out.

Seasoned investors will investigate further the members of your management team before committing fully to your business If they find out that the celebrity name used does not play any actual role in your business, they will not invest and may write you off as dishonest.

2. Focus on Credentials But Pay Extra Attention to the Roles

Investors want to know the experience that your key team members have to determine if they can successfully reach the company’s growth and financial goals.

While it is an excellent boost for your key management team to have the right credentials, you also want to pay extra attention to the roles they will play in your company.

Organizational Chart

Adding an organizational chart in this section of your business plan is not necessary, you can do it in your business plan’s appendix.

If you are exploring funding options, it is not uncommon to get asked for your organizational chart. The function of an organizational chart goes beyond raising money, you can also use it as a useful planning tool for your business.

An organizational chart can help you identify how best to structure your management team for maximum productivity and point you towards key roles you need to fill in the future.

You can use the organizational chart to show your company’s internal management structure such as the roles and responsibilities of your management team, and relationships that exist between them.

5. Describe Your Product and Service Offering

In your business plan, you have to describe what you sell or the service you plan to offer. It is the next step after defining your business and management structure. The products and services section is where you sell the benefits of your business.

Here you have to explain how your product or service will benefit your customers and describe your product lifecycle. It is also the section where you write down your plans for intellectual property like patent filings and copyrighting.

The research and development that you are undertaking for your product or service need to be explained in detail in this section. However, do not get too technical, sell the general idea and its benefits.

If you have any diagrams or intricate designs of your product or service, do not include them in the products and services section. Instead, leave them for the addendum page. Also, if you are leaving out diagrams or designs for the addendum, ensure you add this phrase “For more detail, visit the addendum Page #.”

Your product and service section in your business plan should include the following:

• A detailed explanation that clearly shows how your product or service works.
• The pricing model for your product or service.
• Your business’ sales and distribution strategy.
• The ideal customers that want your product or service.
• The benefits of your products and services.
• Reason(s) why your product or service is a better alternative to what your competitors are currently offering in the market.
• Plans for filling the orders you receive
• If you have current or pending patents, copyrights, and trademarks for your product or service, you can also discuss them in this section.

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

In the products and services section, you have to distill the benefits, lifecycle, and production process of your products and services.

When describing the benefits of your products or services, here are some key factors to focus on.

• Unique features
• Translating the unique features into benefits
• The emotional, psychological, and practical payoffs to attract customers
• Intellectual property rights or any patents

When describing the product life cycle of your products or services, here are some key factors to focus on.

• Upsells, cross-sells, and down-sells
• Time between purchases
• Plans for research and development.

When describing the production process for your products or services, you need to think about the following:

• The creation of new or existing products and services.
• The sources for the raw materials or components you need for production.
• Assembling the products
• Maintaining quality control
• Supply-chain logistics (receiving the raw materials and delivering the finished products)
• The day-to-day management of the production processes, bookkeeping, and inventory.

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

1. Avoid Technical Descriptions and Industry Buzzwords

The products and services section of your business plan should clearly describe the products and services that your company provides. However, it is not a section to include technical jargons that anyone outside your industry will not understand.

A good practice is to remove highly detailed or technical descriptions in favor of simple terms. Industry buzzwords are not necessary, if there are simpler terms you can use, then use them. If you plan to use your business plan to source funds, making the product or service section so technical will do you no favors.

2. Describe How Your Products or Services Differ from Your Competitors

When potential investors look at your business plan, they want to know how the products and services you are offering differ from that of your competition. Differentiating your products or services from your competition in a way that makes your solution more attractive is critical.

If you are going the innovative path and there is no market currently for your product or service, you need to describe in this section why the market needs your product or service.

For example, overnight delivery was a niche business that only a few companies were participating in. Federal Express (FedEx) had to show in its business plan that there was a large opportunity for that service and they justified why the market needed that service.

3. Long or Short Products or Services Section

Should your products or services section be short? Does the long products or services section attract more investors?

There are no straightforward answers to these questions. Whether your products or services section should be long or relatively short depends on the nature of your business.

If your business is product-focused, then automatically you need to use more space to describe the details of your products. However, if the product your business sells is a commodity item that relies on competitive pricing or other pricing strategies, you do not have to use up so much space to provide significant details about the product.

Likewise, if you are selling a commodity that is available in numerous outlets, then you do not have to spend time on writing a long products or services section.

The key to the success of your business is most likely the effectiveness of your marketing strategies compared to your competitors. Use more space to address that section.

If you are creating a new product or service that the market does not know about, your products or services section can be lengthy. The reason why is because you need to explain everything about the product or service such as the nature of the product, its use case, and values.

A short products or services section for an innovative product or service will not give the readers enough information to properly evaluate your business.

4. Describe Your Relationships with Vendors or Suppliers

Your business will rely on vendors or suppliers to supply raw materials or the components needed to make your products. In your products and services section, describe your relationships with your vendors and suppliers fully.

Avoid the mistake of relying on only one supplier or vendor. If that supplier or vendor fails to supply or goes out of business, you can easily face supply problems and struggle to meet your demands. Plan to set up multiple vendor or supplier relationships for better business stability.

5. Your Primary Goal Is to Convince Your Readers

The primary goal of your business plan is to convince your readers that your business is viable and to create a guide for your business to follow. It applies to the products and services section.

When drafting this section, think like the reader. See your reader as someone who has no idea about your products and services. You are using the products and services section to provide the needed information to help your reader understand your products and services. As a result, you have to be clear and to the point.

While you want to educate your readers about your products or services, you also do not want to bore them with lots of technical details. Show your products and services and not your fancy choice of words.

Your products and services section should provide the answer to the “what” question for your business. You and your management team may run the business, but it is your products and services that are the lifeblood of the business.

Key Questions to Answer When Writing your Products and Services Section

Answering these questions can help you write your products and services section quickly and in a way that will appeal to your readers.

• Are your products existing on the market or are they still in the development stage?
• What is your timeline for adding new products and services to the market?
• What are the positives that make your products and services different from your competitors?
• Do your products and services have any competitive advantage that your competitors’ products and services do not currently have?
• Do your products or services have any competitive disadvantages that you need to overcome to compete with your competitors? If your answer is yes, state how you plan to overcome them,
• How much does it cost to produce your products or services? How much do you plan to sell it for?
• What is the price for your products and services compared to your competitors? Is pricing an issue?
• What are your operating costs and will it be low enough for you to compete with your competitors and still take home a reasonable profit margin?
• What is your plan for acquiring your products? Are you involved in the production of your products or services?
• Are you the manufacturer and produce all the components you need to create your products? Do you assemble your products by using components supplied by other manufacturers? Do you purchase your products directly from suppliers or wholesalers?
• Do you have a steady supply of products that you need to start your business? (If your business is yet to kick-off)
• How do you plan to distribute your products or services to the market?

You can also hint at the marketing or promotion plans you have for your products or services such as how you plan to build awareness or retain customers. The next section is where you can go fully into details about your business’s marketing and sales plan.

6. Show and Explain Your Marketing and Sales Plan

Providing great products and services is wonderful, but it means nothing if you do not have a marketing and sales plan to inform your customers about them. Your marketing and sales plan is critical to the success of your business.

The sales and marketing section is where you show and offer a detailed explanation of your marketing and sales plan and how you plan to execute it. It covers your pricing plan, proposed advertising and promotion activities, activities and partnerships you need to make your business a success, and the benefits of your products and services.

There are several ways you can approach your marketing and sales strategy. Ideally, your marketing and sales strategy has to fit the unique needs of your business.

In this section, you describe how the plans your business has for attracting and retaining customers, and the exact process for making a sale happen. It is essential to thoroughly describe your complete marketing and sales plans because you are still going to reference this section when you are making financial projections for your business.

Outline Your Business’ Unique Selling Proposition (USP)

The sales and marketing section is where you outline your business’s unique selling proposition (USP). When you are developing your unique selling proposition, think about the strongest reasons why people should buy from you over your competition. That reason(s) is most likely a good fit to serve as your unique selling proposition (USP).

Target Market and Target Audience

Plans on how to get your products or services to your target market and how to get your target audience to buy them go into this section. You also highlight the strengths of your business here, particularly what sets them apart from your competition.

Before you start writing your marketing and sales plan, you need to have properly defined your target audience and fleshed out your buyer persona. If you do not first understand the individual you are marketing to, your marketing and sales plan will lack any substance and easily fall.

Creating a Smart Marketing and Sales Plan

Marketing your products and services is an investment that requires you to spend money. Like any other investment, you have to generate a good return on investment (ROI) to justify using that marketing and sales plan. Good marketing and sales plans bring in high sales and profits to your company.

Avoid spending money on unproductive marketing channels. Do your research and find out the best marketing and sales plan that works best for your company.

Your marketing and sales plan can be broken into different parts: your positioning statement, pricing, promotion, packaging, advertising, public relations, content marketing, social media, and strategic alliances.

Your Positioning Statement

Your positioning statement is the first part of your marketing and sales plan. It refers to the way you present your company to your customers.

Are you the premium solution, the low-price solution, or are you the intermediary between the two extremes in the market? What do you offer that your competitors do not that can give you leverage in the market?

Before you start writing your positioning statement, you need to spend some time evaluating the current market conditions. Here are some questions that can help you to evaluate the market

• What are the unique features or benefits that you offer that your competitors lack?
• What are your customers’ primary needs and wants?
• Why should a customer choose you over your competition? How do you plan to differentiate yourself from the competition?
• How does your company’s solution compare with other solutions in the market?

After answering these questions, then you can start writing your positioning statement. Your positioning statement does not have to be in-depth or too long.

All you need to explain with your positioning statement are two focus areas. The first is the position of your company within the competitive landscape. The other focus area is the core value proposition that sets your company apart from other alternatives that your ideal customer might consider.

Here is a simple template you can use to develop a positioning statement.

For [description of target market] who [need of target market], [product or service] [how it meets the need]. Unlike [top competition], it [most essential distinguishing feature].

For example, let’s create the positioning statement for fictional accounting software and QuickBooks alternative , TBooks.

“For small business owners who need accounting services, TBooks is an accounting software that helps small businesses handle their small business bookkeeping basics quickly and easily. Unlike Wave, TBooks gives small businesses access to live sessions with top accountants.”

You can edit this positioning statement sample and fill it with your business details.

After writing your positioning statement, the next step is the pricing of your offerings. The overall positioning strategy you set in your positioning statement will often determine how you price your products or services.

Pricing is a powerful tool that sends a strong message to your customers. Failure to get your pricing strategy right can make or mar your business. If you are targeting a low-income audience, setting a premium price can result in low sales.

You can use pricing to communicate your positioning to your customers. For example, if you are offering a product at a premium price, you are sending a message to your customers that the product belongs to the premium category.

Basic Rules to Follow When Pricing Your Offering

Setting a price for your offering involves more than just putting a price tag on it. Deciding on the right pricing for your offering requires following some basic rules. They include covering your costs, primary and secondary profit center pricing, and matching the market rate.

• Covering Your Costs: The price you set for your products or service should be more than it costs you to produce and deliver them. Every business has the same goal, to make a profit. Depending on the strategy you want to use, there are exceptions to this rule. However, the vast majority of businesses follow this rule.
• Primary and Secondary Profit Center Pricing: When a company sets its price above the cost of production, it is making that product its primary profit center. A company can also decide not to make its initial price its primary profit center by selling below or at even with its production cost. It rather depends on the support product or even maintenance that is associated with the initial purchase to make its profit. The initial price thus became its secondary profit center.
• Matching the Market Rate: A good rule to follow when pricing your products or services is to match your pricing with consumer demand and expectations. If you price your products or services beyond the price your customer perceives as the ideal price range, you may end up with no customers. Pricing your products too low below what your customer perceives as the ideal price range may lead to them undervaluing your offering.

Pricing Strategy

Your pricing strategy influences the price of your offering. There are several pricing strategies available for you to choose from when examining the right pricing strategy for your business. They include cost-plus pricing, market-based pricing, value pricing, and more.

• Cost-plus Pricing: This strategy is one of the simplest and oldest pricing strategies. Here you consider the cost of producing a unit of your product and then add a profit to it to arrive at your market price. It is an effective pricing strategy for manufacturers because it helps them cover their initial costs. Another name for the cost-plus pricing strategy is the markup pricing strategy.
• Market-based Pricing: This pricing strategy analyses the market including competitors’ pricing and then sets a price based on what the market is expecting. With this pricing strategy, you can either set your price at the low-end or high-end of the market.
• Value Pricing: This pricing strategy involves setting a price based on the value you are providing to your customer. When adopting a value-based pricing strategy, you have to set a price that your customers are willing to pay. Service-based businesses such as small business insurance providers , luxury goods sellers, and the fashion industry use this pricing strategy.

After carefully sorting out your positioning statement and pricing, the next item to look at is your promotional strategy. Your promotional strategy explains how you plan on communicating with your customers and prospects.

As a business, you must measure all your costs, including the cost of your promotions. You also want to measure how much sales your promotions bring for your business to determine its usefulness. Promotional strategies or programs that do not lead to profit need to be removed.

There are different types of promotional strategies you can adopt for your business, they include advertising, public relations, and content marketing.

Advertising

Your business plan should include your advertising plan which can be found in the marketing and sales plan section. You need to include an overview of your advertising plans such as the areas you plan to spend money on to advertise your business and offers.

Ensure that you make it clear in this section if your business will be advertising online or using the more traditional offline media, or the combination of both online and offline media. You can also include the advertising medium you want to use to raise awareness about your business and offers.

Some common online advertising mediums you can use include social media ads, landing pages, sales pages, SEO, Pay-Per-Click, emails, Google Ads, and others. Some common traditional and offline advertising mediums include word of mouth, radios, direct mail, televisions, flyers, billboards, posters, and others.

A key component of your advertising strategy is how you plan to measure the effectiveness and success of your advertising campaign. There is no point in sticking with an advertising plan or medium that does not produce results for your business in the long run.

Public Relations

A great way to reach your customers is to get the media to cover your business or product. Publicity, especially good ones, should be a part of your marketing and sales plan. In this section, show your plans for getting prominent reviews of your product from reputable publications and sources.

Your business needs that exposure to grow. If public relations is a crucial part of your promotional strategy, provide details about your public relations plan here.

Content Marketing

Content marketing is a popular promotional strategy used by businesses to inform and attract their customers. It is about teaching and educating your prospects on various topics of interest in your niche, it does not just involve informing them about the benefits and features of the products and services you have,

Businesses publish content usually for free where they provide useful information, tips, and advice so that their target market can be made aware of the importance of their products and services. Content marketing strategies seek to nurture prospects into buyers over time by simply providing value.

Your company can create a blog where it will be publishing content for its target market. You will need to use the best website builder such as Wix and Squarespace and the best web hosting services such as Bluehost, Hostinger, and other Bluehost alternatives to create a functional blog or website.

If content marketing is a crucial part of your promotional strategy (as it should be), detail your plans under promotions.

Including high-quality images of the packaging of your product in your business plan is a lovely idea. You can add the images of the packaging of that product in the marketing and sales plan section. If you are not selling a product, then you do not need to include any worry about the physical packaging of your product.

When organizing the packaging section of your business plan, you can answer the following questions to make maximum use of this section.

• Is your choice of packaging consistent with your positioning strategy?
• What key value proposition does your packaging communicate? (It should reflect the key value proposition of your business)
• How does your packaging compare to that of your competitors?

Social Media

Your 21st-century business needs to have a good social media presence. Not having one is leaving out opportunities for growth and reaching out to your prospect.

You do not have to join the thousands of social media platforms out there. What you need to do is join the ones that your customers are active on and be active there.

Businesses use social media to provide information about their products such as promotions, discounts, the benefits of their products, and content on their blogs.

Social media is also a platform for engaging with your customers and getting feedback about your products or services. Make no mistake, more and more of your prospects are using social media channels to find more information about companies.

You need to consider the social media channels you want to prioritize your business (prioritize the ones your customers are active in) and your branding plans in this section.

Strategic Alliances

If your company plans to work closely with other companies as part of your sales and marketing plan, include it in this section. Prove details about those partnerships in your business plan if you have already established them.

Strategic alliances can be beneficial for all parties involved including your company. Working closely with another company in the form of a partnership can provide access to a different target market segment for your company.

The company you are partnering with may also gain access to your target market or simply offer a new product or service (that of your company) to its customers.

Mutually beneficial partnerships can cover the weaknesses of one company with the strength of another. You should consider strategic alliances with companies that sell complimentary products to yours. For example, if you provide printers, you can partner with a company that produces ink since the customers that buy printers from you will also need inks for printing.

Steps Involved in Creating a Marketing and Sales Plan

1. Focus on Your Target Market

Identify who your customers are, the market you want to target. Then determine the best ways to get your products or services to your potential customers.

2. Evaluate Your Competition

One of the goals of having a marketing plan is to distinguish yourself from your competition. You cannot stand out from them without first knowing them in and out.

You can know your competitors by gathering information about their products, pricing, service, and advertising campaigns.

These questions can help you know your competition.

• What makes your competition successful?
• What are their weaknesses?
• What are customers saying about your competition?

3. Consider Your Brand

Customers' perception of your brand has a strong impact on your sales. Your marketing and sales plan should seek to bolster the image of your brand. Before you start marketing your business, think about the message you want to pass across about your business and your products and services.

4. Focus on Benefits

The majority of your customers do not view your product in terms of features, what they want to know is the benefits and solutions your product offers. Think about the problems your product solves and the benefits it delivers, and use it to create the right sales and marketing message.

Your marketing plan should focus on what you want your customer to get instead of what you provide. Identify those benefits in your marketing and sales plan.

5. Focus on Differentiation

Your marketing and sales plan should look for a unique angle they can take that differentiates your business from the competition, even if the products offered are similar. Some good areas of differentiation you can use are your benefits, pricing, and features.

Key Questions to Answer When Writing Your Marketing and Sales Plan

• What is your company’s budget for sales and marketing campaigns?
• What key metrics will you use to determine if your marketing plans are successful?
• What are your alternatives if your initial marketing efforts do not succeed?
• Who are the sales representatives you need to promote your products or services?
• What are the marketing and sales channels you plan to use? How do you plan to get your products in front of your ideal customers?
• Where will you sell your products?

You may want to include samples of marketing materials you plan to use such as print ads, website descriptions, and social media ads. While it is not compulsory to include these samples, it can help you better communicate your marketing and sales plan and objectives.

The purpose of the marketing and sales section is to answer this question “How will you reach your customers?” If you cannot convincingly provide an answer to this question, you need to rework your marketing and sales section.

7. Clearly Show Your Funding Request

If you are writing your business plan to ask for funding from investors or financial institutions, the funding request section is where you will outline your funding requirements. The funding request section should answer the question ‘How much money will your business need in the near future (3 to 5 years)?’

A good funding request section will clearly outline and explain the amount of funding your business needs over the next five years. You need to know the amount of money your business needs to make an accurate funding request.

Also, when writing your funding request, provide details of how the funds will be used over the period. Specify if you want to use the funds to buy raw materials or machinery, pay salaries, pay for advertisements, and cover specific bills such as rent and electricity.

In addition to explaining what you want to use the funds requested for, you need to clearly state the projected return on investment (ROI) . Investors and creditors want to know if your business can generate profit for them if they put funds into it.

Ensure you do not inflate the figures and stay as realistic as possible. Investors and financial institutions you are seeking funds from will do their research before investing money in your business.

If you are not sure of an exact number to request from, you can use some range of numbers as rough estimates. Add a best-case scenario and a work-case scenario to your funding request. Also, include a description of your strategic future financial plans such as selling your business or paying off debts.

Funding Request: Debt or Equity?

When making your funding request, specify the type of funding you want. Do you want debt or equity? Draw out the terms that will be applicable for the funding, and the length of time the funding request will cover.

Case for Equity

If your new business has not yet started generating profits, you are most likely preparing to sell equity in your business to raise capital at the early stage. Equity here refers to ownership. In this case, you are selling a portion of your company to raise capital.

Although this method of raising capital for your business does not put your business in debt, keep in mind that an equity owner may expect to play a key role in company decisions even if he does not hold a major stake in the company.

Most equity sales for startups are usually private transactions . If you are making a funding request by offering equity in exchange for funding, let the investor know that they will be paid a dividend (a share of the company’s profit). Also, let the investor know the process for selling their equity in your business.

Case for Debt

You may decide not to offer equity in exchange for funds, instead, you make a funding request with the promise to pay back the money borrowed at the agreed time frame.

When making a funding request with an agreement to pay back, note that you will have to repay your creditors both the principal amount borrowed and the interest on it. Financial institutions offer this type of funding for businesses.

Large companies combine both equity and debt in their capital structure. When drafting your business plan, decide if you want to offer both or one over the other.

Before you sell equity in exchange for funding in your business, consider if you are willing to accept not being in total control of your business. Also, before you seek loans in your funding request section, ensure that the terms of repayment are favorable.

You should set a clear timeline in your funding request so that potential investors and creditors can know what you are expecting. Some investors and creditors may agree to your funding request and then delay payment for longer than 30 days, meanwhile, your business needs an immediate cash injection to operate efficiently.

Additional Tips for Writing the Funding Request Section of your Business Plan

The funding request section is not necessary for every business, it is only needed by businesses who plan to use their business plan to secure funding.

If you are adding the funding request section to your business plan, provide an itemized summary of how you plan to use the funds requested. Hiring a lawyer, accountant, or other professionals may be necessary for the proper development of this section.

You should also gather and use financial statements that add credibility and support to your funding requests. Ensure that the financial statements you use should include your projected financial data such as projected cash flows, forecast statements, and expenditure budgets.

If you are an existing business, include all historical financial statements such as cash flow statements, balance sheets and income statements .

Provide monthly and quarterly financial statements for a year. If your business has records that date back beyond the one-year mark, add the yearly statements of those years. These documents are for the appendix section of your business plan.

8. Detail Your Financial Plan, Metrics, and Projections

If you used the funding request section in your business plan, supplement it with a financial plan, metrics, and projections. This section paints a picture of the past performance of your business and then goes ahead to make an informed projection about its future.

The goal of this section is to convince readers that your business is going to be a financial success. It outlines your business plan to generate enough profit to repay the loan (with interest if applicable) and to generate a decent return on investment for investors.

If you have an existing business already in operation, use this section to demonstrate stability through finance. This section should include your cash flow statements, balance sheets, and income statements covering the last three to five years. If your business has some acceptable collateral that you can use to acquire loans, list it in the financial plan, metrics, and projection section.

Apart from current financial statements, this section should also contain a prospective financial outlook that spans the next five years. Include forecasted income statements, cash flow statements, balance sheets, and capital expenditure budget.

If your business is new and is not yet generating profit, use clear and realistic projections to show the potentials of your business.

When drafting this section, research industry norms and the performance of comparable businesses. Your financial projections should cover at least five years. State the logic behind your financial projections. Remember you can always make adjustments to this section as the variables change.

The financial plan, metrics, and projection section create a baseline which your business can either exceed or fail to reach. If your business fails to reach your projections in this section, you need to understand why it failed.

Investors and loan managers spend a lot of time going through the financial plan, metrics, and projection section compared to other parts of the business plan. Ensure you spend time creating credible financial analyses for your business in this section.

Many entrepreneurs find this section daunting to write. You do not need a business degree to create a solid financial forecast for your business. Business finances, especially for startups, are not as complicated as they seem. There are several online tools and templates that make writing this section so much easier.

Use Graphs and Charts

The financial plan, metrics, and projection section is a great place to use graphs and charts to tell the financial story of your business. Charts and images make it easier to communicate your finances.

Accuracy in this section is key, ensure you carefully analyze your past financial statements properly before making financial projects.

Address the Risk Factors and Show Realistic Financial Projections

Keep your financial plan, metrics, and projection realistic. It is okay to be optimistic in your financial projection, however, you have to justify it.

You should also address the various risk factors associated with your business in this section. Investors want to know the potential risks involved, show them. You should also show your plans for mitigating those risks.

What You Should In The Financial Plan, Metrics, and Projection Section of Your Business Plan

The financial plan, metrics, and projection section of your business plan should have monthly sales and revenue forecasts for the first year. It should also include annual projections that cover 3 to 5 years.

A three-year projection is a basic requirement to have in your business plan. However, some investors may request a five-year forecast.

Your business plan should include the following financial statements: sales forecast, personnel plan, income statement, income statement, cash flow statement, balance sheet, and an exit strategy.

1. Sales Forecast

Sales forecast refers to your projections about the number of sales your business is going to record over the next few years. It is typically broken into several rows, with each row assigned to a core product or service that your business is offering.

One common mistake people make in their business plan is to break down the sales forecast section into long details. A sales forecast should forecast the high-level details.

For example, if you are forecasting sales for a payroll software provider, you could break down your forecast into target market segments or subscription categories.

Your sales forecast section should also have a corresponding row for each sales row to cover the direct cost or Cost of Goods Sold (COGS). The objective of these rows is to show the expenses that your business incurs in making and delivering your product or service.

Note that your Cost of Goods Sold (COGS) should only cover those direct costs incurred when making your products. Other indirect expenses such as insurance, salaries, payroll tax, and rent should not be included.

For example, the Cost of Goods Sold (COGS) for a restaurant is the cost of ingredients while for a consulting company it will be the cost of paper and other presentation materials.

2. Personnel Plan

The personnel plan section is where you provide details about the payment plan for your employees. For a small business, you can easily list every position in your company and how much you plan to pay in the personnel plan.

However, for larger businesses, you have to break the personnel plan into functional groups such as sales and marketing.

The personnel plan will also include the cost of an employee beyond salary, commonly referred to as the employee burden. These costs include insurance, payroll taxes , and other essential costs incurred monthly as a result of having employees on your payroll.

3. Income Statement

The income statement section shows if your business is making a profit or taking a loss. Another name for the income statement is the profit and loss (P&L). It takes data from your sales forecast and personnel plan and adds other ongoing expenses you incur while running your business.

Every business plan should have an income statement. It subtracts your business expenses from its earnings to show if your business is generating profit or incurring losses.

The income statement has the following items: sales, Cost of Goods Sold (COGS), gross margin, operating expenses, total operating expenses, operating income , total expenses, and net profit.

• Sales refer to the revenue your business generates from selling its products or services. Other names for sales are income or revenue.
• Cost of Goods Sold (COGS) refers to the total cost of selling your products. Other names for COGS are direct costs or cost of sales. Manufacturing businesses use the Costs of Goods Manufactured (COGM) .
• Gross Margin is the figure you get when you subtract your COGS from your sales. In your income statement, you can express it as a percentage of total sales (Gross margin / Sales = Gross Margin Percent).
• Operating Expenses refer to all the expenses you incur from running your business. It exempts the COGS because it stands alone as a core part of your income statement. You also have to exclude taxes, depreciation, and amortization. Your operating expenses include salaries, marketing expenses, research and development (R&D) expenses, and other expenses.
• Total Operating Expenses refers to the sum of all your operating expenses including those exemptions named above under operating expenses.
• Operating Income refers to earnings before interest, taxes, depreciation, and amortization. It is simply known as the acronym EBITDA (earnings before interest, taxes, depreciation, and amortization). Calculating your operating income is simple, all you need to do is to subtract your COGS and total operating expenses from your sales.
• Total Expenses refer to the sum of your operating expenses and your business’ interest, taxes, depreciation, and amortization.
• Net profit shows whether your business has made a profit or taken a loss during a given timeframe.

4. Cash Flow Statement

The cash flow statement tracks the money you have in the bank at any given point. It is often confused with the income statement or the profit and loss statement. They are both different types of financial statements. The income statement calculates your profits and losses while the cash flow statement shows you how much you have in the bank.

5. Balance Sheet

The balance sheet is a financial statement that provides an overview of the financial health of your business. It contains information about the assets and liabilities of your company, and owner’s or shareholders’ equity.

You can get the net worth of your company by subtracting your company’s liabilities from its assets.

6. Exit Strategy

The exit strategy refers to a probable plan for selling your business either to the public in an IPO or to another company. It is the last thing you include in the financial plan, metrics, and projection section.

You can choose to omit the exit strategy from your business plan if you plan to maintain full ownership of your business and do not plan on seeking angel investment or virtual capitalist (VC) funding.

Investors may want to know what your exit plan is. They invest in your business to get a good return on investment.

Your exit strategy does not have to include long and boring details. Ensure you identify some interested parties who may be interested in buying the company if it becomes a success.

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

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

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

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

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

9. Add an Appendix to Your Business Plan

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

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

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

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

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

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

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

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

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

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

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

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

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

Tips and Strategies for Writing a Convincing Business Plan

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

1. Know Your Audience

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

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

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

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

2. Get Inspiration from People

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

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

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

3. Avoid Being Over Optimistic

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

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

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

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

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

4. Keep it Simple and Short

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

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

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

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

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

5. Make an Outline and Follow Through

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

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

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

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

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

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

6. Ask a Professional to Proofread

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

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

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

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

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

1. hubspot's one-page business plan.

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

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

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

2. Bplan’s Free Business Plan Template

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

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

3. HubSpot's Downloadable Business Plan Template

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

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

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

4. Business Plan by My Own Business Institute

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

The comprehensive template consists of a whopping 15 sections.

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

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

5. Score's Business Plan Template for Startups

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

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

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

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

6. Minimalist Architecture Business Plan Template by Venngage

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

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

7. Small Business Administration Free Business Plan Template

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

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

• Executive Summary
• Company Description
• Service Line
• Marketing and Sales

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

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

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

9. PandaDoc’s Free Business Plan Template

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

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

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

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

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

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

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

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

Alternatives to the Traditional Business Plan

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

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

Business Model Canvas (BMC)

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

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

Segments of the Business Model Canvas

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

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

Lean Canvas

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

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

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

Startup Pitch Deck

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

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

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

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

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

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

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

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

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

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

Business Plan FAQ

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

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

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

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

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

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

Exlore Further

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

Was This Article Helpful?

Martin luenendonk.

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

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

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

You’re our first priority. Every time.

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

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

How to Write a Business Plan, Step by Step

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

What is a business plan?

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

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

ZenBusiness

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

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

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

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

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

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

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

Your business’s registered name.

Address of your business location .

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

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

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

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

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

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

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

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

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

You should include the following:

An explanation of how your product or service works.

The pricing model for your product or service.

The typical customers you serve.

Your supply chain and order fulfillment strategy.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

NerdWallet’s picks for setting up your business finances:

The best business checking accounts .

The best business credit cards .

The best accounting software .

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

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

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

Licenses and permits.

Equipment leases.

Bank statements.

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

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

How much do you need?

with Fundera by NerdWallet

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

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

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

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

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

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

On a similar note...

Find small-business financing

Compare multiple lenders that fit your business

• Starting a Business

Our Top Picks

• Best Small Business Loans
• Best Business Internet Service
• Best Online Payroll Service
• Best Business Phone Systems

Our In-Depth Reviews

• OnPay Payroll Review
• ADP Payroll Review
• Ooma Office Review
• RingCentral Review

Explore More

• Business Solutions
• Entrepreneurship
• Franchising
• Best Accounting Software
• Best Merchant Services Providers
• Best Credit Card Processors
• Best Mobile Credit Card Processors
• Clover Review
• Merchant One Review
• QuickBooks Online Review
• Xero Accounting Review
• Financial Solutions

Human Resources

• Best Human Resources Outsourcing Services
• Best Time and Attendance Software
• Best PEO Services
• Best Business Employee Retirement Plans
• Bambee Review
• Rippling HR Software Review
• TriNet Review
• Gusto Payroll Review
• HR Solutions

Marketing and Sales

• Best Text Message Marketing Services
• Best CRM Software
• Best Email Marketing Services
• Best Website Builders
• Textedly Review
• Salesforce Review
• EZ Texting Review
• Textline Review
• Business Intelligence
• Marketing Solutions
• Marketing Strategy
• Public Relations
• Social Media
• Best GPS Fleet Management Software
• Best POS Systems
• Best Employee Monitoring Software
• Best Document Management Software
• Verizon Connect Fleet GPS Review
• Zoom Review
• Samsara Review
• Zoho CRM Review
• Technology Solutions

Business Basics

• 4 Simple Steps to Valuing Your Small Business
• How to Write a Business Growth Plan
• 12 Business Skills You Need to Master
• How to Start a One-Person Business
• FreshBooks vs. QuickBooks Comparison
• Salesforce CRM vs. Zoho CRM
• RingCentral vs. Zoom Comparison
• 10 Ways to Generate More Sales Leads

5 Tips for Setting SMART Goals in Your Business Plan

Give your business goals clarity, structure and guidelines.

Table of Contents

Goals and dreams have crucial differences. Dreams are wishes and fantasies; for example, many of us long to be rich, famous, more successful, happier and healthier. In contrast, goals put your dreams on a deadline and require actionable steps toward achievement. 

As with personal goals, you have a greater chance of achieving business goals when you work within a structure that sets you up for success. We’ll explore the SMART goals system and how you can apply this goal-achievement method to your business. 

What are SMART goals?

SMART is an acronym for specific, measurable, attainable, relevant and time-based. The SMART goals framework is a way to stay on target and achieve your goals more systematically. 

The process includes the following components:

• Making your goal specific
• Quantifying your goal 
• Ensuring your goal is attainable, reasonable and realistic
• Hitching your goal to a deadline

An example of a SMART goal is to add 600 Instagram followers within 90 days.

How to incorporate SMART goals into your business plan

Here’s a look at each SMART goal element, along with implementation examples you can apply to your business. 

1. Make goals specific.

A specific goal clearly states what will be achieved, by whom, where and when (and sometimes why).

For example, let’s say you’re a wedding planner. Here’s how a non-SMART goal compares with a SMART goal in specificity: 

• Non-SMART goal: Market my business in Toronto.
• SMART goal : Start a monthly networking group for women on event planning in Toronto. Set a monthly attendance goal of 20 women, with two attendees per month signing up for my “How to plan your wedding without stress” workshop.

2. Make goals measurable.

Measuring your goal means evaluating the results and the milestones you must hit on the way. When you measure, you assess if you’re on the right track to achieve your goal by asking these questions:

For example, let’s say your goal is to increase sales to $96,000 per year. To measure your goal, you could take the following actions:

• Set a milestone target of $8,000 in sales each month. 
• Create a process that focuses on achieving $8,000 per month (adding up to $96,000 for the year). 
• Check your sales totals monthly to evaluate if you’re reaching your goal. 

Measuring draws your focus, helping you boost your odds of achieving your goal. One good way to measure is to have a dashboard arranged by month. For example, you could use a chart like this:

3. Make goals attainable.

Ensure that your goals are achievable. If you believe you can reach the goal, you’ll be more likely to do so. Setting unreachable goals is a mistake because you’re setting yourself up for failure. 

Setting attainable goals is also essential for team goal setting and can boost employee engagement . If you set unrealistic goals for your team, your team members won’t fully engage in the project. They need to be fully on board for the project to succeed. Everyone on the team should share in the goal setting so they own the goal and know it’s attainable. 

4. Make goals relevant.

Goals tend to fall into two categories: short-term and long-term. It’s essential to understand how both goal types fit your organizational or personal vision, mission and purpose.

It’s tempting to set a goal because it’s easy or sounds great, only to find out later that it is of no long-term importance to what you want to achieve as an individual or an organization.

5. Make goals time-based.

Setting a deadline attaches a time frame to your goals. A deadline can be an excellent motivator. For example, let’s say you want to run a marathon in a year. A time-based goal would look something like this:

Set up a system to get yourself marathon-ready in a year.

• Run twice a week for three months, gradually increasing your distance.
• Run three times a week for three months, gradually increasing your distance.
• Be ready for a half-marathon by the six-month mark. 
• Increase your frequency and distance over the next six months. 
• Be ready for the marathon in 12 months. 

Time-based goals help you avoid procrastination because your process offers incentives as you meet smaller achievements along the way. 

Why use SMART goals?

SMART goals allow you to chart a course and stay organized when reaching personal or professional goals. You’re more likely to succeed because you’re less likely to get overwhelmed and abandon your goal entirely. 

In a business setting, particularly, SMART goals provide teams with clarity, structure and guidelines. Here are a few reasons to use SMART goals in business:

• Setting specific goals provides accountability. Accountability helps ensure goals are achieved. For example, if your goal involves reducing customer complaints by a specific amount, your customer service manager should be the point person for the initiative and have some accountability for the goal’s success.
• Measurable goals help you refine strategies. When your goals are measurable, you can gauge your success — or how close you came to it. Tracking metrics and key performance indicators allows you to compare the efficacy of various strategies and use only the most successful ones in the future.
• Achievable goals boost morale. When you set achievable goals, employee morale is raised and your team is less likely to experience employee burnout and frustration. Employees are set up for success, helping you build an empowered employee culture .
• Relevant goals propel company growth. Goals are useless if they don’t contribute to overall business success. Find goals that help move the organization forward. Relevant goals can include meeting financial metrics, like increased profitability, and more general goals, like reducing business expenses , limiting waste and increasing recycling.
• Time-based goals provide accountability and urgency. Goals with deadlines are extremely motivating. A timetable brings a goal to life. Achieving time-based goals allows you to set new goals after your initial goals are met.

With SMART goals, you and your team know what success entails and can measure it within a project’s framework. Everyone knows the steps they must take to achieve their goals. With ambiguity gone and a direction mapped, SMART goals set up your team for success.  

How to identify and reach your goals

It’s crucial to set a goal that matches your personal or professional vision. After you set the goal, focus on a process that makes your goal achievable. Here are some steps to follow.

1. Identify your goal.

If you are unable to set a SMART goal, it’s usually because you need to clarify exactly what you want to accomplish within a set period. It’s inadvisable to skip the process of SMART goal setting and just “go for it.” You have a greater chance of success when you analyze your goals and match them to your vision.

To save time, prevent disappointment and avoid costly mistakes, perform the following exercise when you implement SMART goals.

What are your goals? Writing down your goals helps to clarify your thinking. Can you stretch yourself both personally and professionally by setting three goals in each area.

2. Determine what is reasonable. 

Because SMART goals are attainable and time-based, you must ensure you set a reasonable goal. For example, if your goal is to increase sales by 30 percent in a year but you have been successful in increasing sales by only 10 percent a year in the past, consider extending the period to two years or reducing the amount to 15 percent for one year. That way, you’re improving on previous years without being overly ambitious.

Also, examine the resources at your disposal. In the previous example, a 30 percent increase in one year might be attainable if you just received a cash infusion that you can put toward marketing expenses. Or, maybe you’ve recently made an acquisition or added to your sales team , making a once-ambitious goal more reasonable.

3. Focus on essential metrics. 

When you’re ensuring that your goals are relevant, specific and measurable, carefully determine which metrics to use. For example, you may want a better digital marketing return on investment (ROI) from your social media marketing . In this case, follower counts and engagement levels (likes, shares, comments) are appropriate metrics. If you have a relatively small number of followers, you may want to focus on follower counts. But if you have many followers who don’t contribute to sales, you should focus on engagement metrics.

It’s not enough to mindlessly pursue your goal; you must keep the overall business benefit in mind. In the previous example, if you wanted to grow your followers on social media, you could buy followers and seemingly accomplish that goal. However, this would not help you boost your social media marketing ROI, because most of those people would not engage with your company or become paying customers.

4. Identify and implement tactics to meet your goal.

Once you’ve set a goal, develop a system to achieve it. For example, if you want to write a book in one year and you’re not an author, you may feel overwhelmed. 

Instead, try writing 250 words per day. Don’t agonize over what you are writing — just write. At that rate, if you write five days per week (260 days per year), you will have 65,000 words in a year, or approximately a 250-page paperback.

Business goals work the same way. Set the goal, and then find a system to help you reach it. For example, when setting a sales goal, you may want to focus on consistently achieving 10 quotes per month with a 50 percent success rate.

Get Weekly 5-Minute Business Advice

B. newsletter is your digest of bite-sized news, thought & brand leadership, and entertainment. All in one email.

Our mission is to help you take your team, your business and your career to the next level. Whether you're here for product recommendations, research or career advice, we're happy you're here!

How to Create a Strategic Plan With SMART Goals

• October 3, 2019

The key to growth in a manufacturing business is to set goals for the results you would like to see. A business cannot succeed unless everyone has a clear understanding of what they are working toward.

If you are hoping to accomplish LEAN Manufacturing , you will want to incorporate realistic and effective goals. At MANTEC, our experts can help your business develop SMART goals to improve your ROI. In management, achieving SMART goals can help drive results and productivity.

What is The SMART Business Model?

SMART strategic planning is a management process that helps facilities stay on track toward goal achievement. In other words, a SMART implementation plan involves setting objectives for workers, systems and production lines that would lead to benefits such as efficiency or waste reduction. The “SMART” acronym stands for specific, measurable, achievable, relevant and time-bound efforts. Using the SMART principles, facilities can start accomplishing their strategic planning goals.

1. Specific

The first stage of “SMART” goal planning is to focus your attention on what exactly you want to accomplish. Set goals that are specific and will elaborate on a general idea. If you say you want to “increase sales revenue,” rephrase your thought process to include how you will make it happen.

Using who, what, when, where and why questions will make your mission more specific to share with other employees. The following specific goal serves as an official game plan for a manufacturing business:

• I want to increase sales revenue by 30% this year by using the sales team to reach more clients.

2. Measurable

A goal that is measurable uses metrics to record progress. Never just assume that your efforts are working when you can provide tangible evidence of success. Decide what data you can track to better decide if your efforts are on schedule.

Manufacturing businesses can determine success by measuring data points, such as:

• Accuracy rates
• Revenue or income
• Customer satisfaction reports
• Turnaround times

3. Achievable

Goals must be achievable based on current skills, resources and knowledge. Achievable goals can still challenge your team, but it is important to set goals that are not destined for failure.

If you set a goal and it is hard to see how you will accomplish it, you probably need to re-evaluate this stage of the goal-setting process.

4. Relevant

SMART goal planning will consider the importance of the results you are after. Are your goals going to benefit the entire organization and align with its morals? Relevant objectives are worthwhile, beneficial and applicable.

5. Time-Bound

Choose an end-date for your business efforts. This portion of the SMART planning process should factor into each part of the “SMART” acronym. Timelines for completion enable you to create positive motivation for keeping improvements on schedule.

Deadlines might be different for each part of your manufacturing team. However, setting up periodic reviews across your timeline is great for making sure efforts are in line.

Get Your Free Process Improvement Guide

Setting Objectives in Manufacturing Strategic Planning

SMART goals are pivotal for the manufacturing industry as managers can encourage employees, get teams on the same page and see results. Begin necessary change by implementing goals for teams and see how employees adapt to your new organizational structure. LEAN Manufacturing is possible for your facility when you unite your entire company through a shared SMART goal.

Smart Planning Model Benefits

A well-communicated mission can provide your business with the following benefits:

• Waste reduction
• Increase in employee productivity
• Increase in sales revenue
• Less standing inventory

Contact MANTEC for Consulting Services

MANTEC wants to help manufacturing businesses increase their return on investments. We are the best resource center for manufacturing companies in South Central Pennsylvania. Our experts provide ongoing support for efforts behind pricing and customer satisfaction.

Give us a call or Contact MANTEC today for more information about our consulting and traditional services.

Related Posts

In the highly competitive and ever-evolving food manufacturing industry, growth is not just about creating…

In the fast-paced world of manufacturing, staying ahead often means embracing change. Soon, the only…

In the dynamic landscape of business, achieving and maintaining an International Organization for Standardization (ISO)…

How to Set Smart Business Goals for Your Small Business

Colette Broomhead

8 min. read

Updated October 29, 2023

There’s nothing like the start of a new year to get us all goal setting like crazy. I don’t know about you, but I can count the number of New Year’s Resolutions that I’ve made and actually kept past January on the fingers of, well, one finger!

So why is it that we find goals so exciting to make, but so difficult to actually achieve?

Well, there are a number of reasons but mostly, it’s because the goals we set just aren’t smart .

• What is a SMART goal?

Yep, you’ve guessed it, this is another of those business acronyms that we all love so much. In a nutshell, your business goals should be:

Let’s break that down so you’re ready to set the smartest of SMART goals for your business this year.

• How to make your business goals specific

It’s easy to say things like “this year, I’m going to increase my revenue,” or “I’m going to build a following on Facebook.”

Perhaps you’re after more website traffic or you want to grow brand visibility. These are all worthy aspirations to have for your business, but they’re not specific.

How will you know when you’ve achieved them?

So let’s take another look, but this time our goals will be a little more defined:

• “I’m going to increase my revenue by 20 percent” would work, or “my revenue goal for 2020 is $100,000.”
• “I’m going to build a following of 5,000 likes on my Facebook page.”
• “I’m going to increase my website traffic to 5000 per month.”

See what a difference that makes?

Of course, plucking numbers from nowhere may seem more specific but is no more helpful unless the goals you choose are relevant to your current business performance and forecasts.

For example, if your current Facebook likes are at 1000 and your rate of growth is 50 new likes per month, then it would be feasible to set a goal of building your following to 5000 over the next six months. This stretches you, by exceeding your current rate of growth but isn’t an impossible target to achieve.

When your goals are specific, you know what success looks like and can measure it.

Brought to you by

Create a professional business plan

Using ai and step-by-step instructions.

Secure funding

Validate ideas

Build a strategy

• How to make your business goals measurable

Speaking of measuring it, there is no point in setting goals if you’re not able to track your progress and review your results. If you’ve made your targets specific, then you’ll already have given yourself some clear measurables, but the real skill comes in identifying the not so obvious metrics which help you to spot problem areas in your strategy and to improve them.

Let’s look at one of our examples again:

• Goal: Increase my website traffic to 5000 views per month
• Metric: Monthly views

So there we have a specific goal and a pretty obvious metric.

This metric will tell you if you have hit your goal or not, but you can also set smaller milestones which will allow you to track your progress—maybe you look at your website performance once a week so you get a sense of whether you’re heading in the right direction. This helps you to identify problems along the way so that you can tweak your strategy accordingly.

What else could you measure to help you monitor your progress?

How about monthly traffic by channel? That is to say, looking at the different places your traffic comes from, such as social media, search and so on.

By breaking down our metrics even further, we can see which channels are performing well and those which are falling short of our target and in need of some further development.

Another great advantage of setting measurable goals is that it keeps us focused on measuring the right things and stops us from becoming obsessed with those vanity metrics that we all love so much, but which often have very little to do with our actual business goals!

Lastly, when it comes to setting measurable goals, you need to know how to measure them. Make sure you have tools in place such as Google Analytics, which will allow you to view your data quickly and easily. The last thing you want is to waste time each month in manually measuring your results.

• How to make your business goals achievable

Your business goals and your business vision should be aligned, but they aren’t necessarily the same—especially when you’re just starting out.

Your dream may be to build a multi-million dollar company with global reach and impact; the reality for this year is probably going to be quite different.

Challenge yourself, but don’t set yourself up to fail by creating goals which are so out of reach, you have no hope of achieving them. Nothing is more demoralizing, and it will make you more likely to quit before you’ve even started.

How do you know what’s achievable? That can be tricky when your business is still new and you don’t have previous results to look back on. It’s not impossible though and your “aim” will get better with time.

If you don’t have past performance to use as a compass then use the information that you do have. Spend time researching your industry and doing a market analysis . You could also conduct a SWOT analysis which focuses on your current Strengths, Weaknesses, Opportunities, and Threats. The more research you can use to inform your decision making, the more accurate your goal setting is likely to be.

Stretch and comfort

This may sound spookily like the tagline for an underwear commercial, but I promise I’m still talking about your business goals!

You see, there are arguments to say that SMART goals don’t allow for stretching and challenging yourself and honestly, I disagree. Why not set your “comfort” goals (those which you feel pretty confident about) and alongside those you can also set yourself some stretch targets which may feel scarier but will push you to be innovative and focused.

• How to make your business goals relevant

Remember those vanity metrics that I mentioned earlier on? Well, those are the types of shiny object goals that can sometimes blind us to what’s really important in our business.

There is one very useful question you can ask yourself for each of your business goals in order to discover if it’s truly relevant or just something you think you “ought” to be going, something everyone else is doing or just something that will make you feel good about yourself.

That question is  “why?”

Let’s look again at that goal to increase Facebook likes.

So before it gets added to our official business goals, we’ll consider why we want to grow our Facebook following:

• “Because it shows my business is popular, right?”
• “Because XYZ have a trillion likes and I want to be more like them.”
• “Because I like spending time on Facebook!”

I could go on, but you see where I’m going with this. None of these reasons are relevant to your overall business purpose and vision, are they?

So, how about:

• “Because I want to increase my brand visibility on Facebook.”
• “My ideal clients mainly use Facebook so I want to increase my reach there.”
• “Community building is a key focus this year and Facebook is a great place to do that.”

Aha! Now these seem like more strategic and business-focused reasons to include increasing Facebook likes as a goal.

• How to make your business goals time-based

Well, this is the easy part (although still a part that gets missed all too often!). You know what goals you want to achieve, how you’re going to measure them and why they’re important to your business. Now, you just need to add a timescale.

Are you going to increase your Facebook likes by 5000 per month or per year?

As you can imagine, this is a pretty vital distinction to make! Not only does adding a timescale make your goals more specific and measurable, but it also helps when it comes to planning your time and creating your strategy.

Give your goals timescales, but also remember to set milestones too. This will allow you monitor your progress and review your strategy where necessary.

• Why SMART goals are just the start

So now you know how to create goals for your business that will get you off to the perfect start this year. Hurrah!

What happens next is up to you. You can do what we all do so often and let those goals gather dust for the rest of the year, lost and forgotten.

Or,  you can use them to shape your planning, to align all your business activities and manage your time. That’s what goals are meant for.

Your next step is to plan how  you will achieve them, to create lists of projects and tasks that will need to be completed and to break down your year into quarters, months, weeks—and yes, even days.

But that’s a whole different post!

Colette Broomhead is a startup strategist and helps people who want to quit their 9 to 5 and create an online business doing what they love. That's exactly what she did after a 13 year corporate career, working in marketing and CRM for a FTSE30 company.

Table of Contents

Related Articles

6 Min. Read

How to Write and Develop an Action Plan for Your Small Business

4 Min. Read

12 Tips for Choosing Effective KPIs

5 Min. Read

7 Ways to Set Team Goals (That Actually Work)

The Bplans Newsletter

The Bplans Weekly

Subscribe now for weekly advice and free downloadable resources to help start and grow your business.

We care about your privacy. See our privacy policy .

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

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

No thanks, I prefer writing 40-page documents.

Discover the world’s #1 plan building software

What are SMART goals? A guide with examples and templates

Master the art of setting SMART goals with OpenBlend's guide to SMART objectives. Learn what the acronym stands for and how to create effective, motivating performance goals and objectives (with examples and a worksheet!)

What is a SMART goal?

You may have recently perused our engaging blog about employee performance goals, where we delved into the subtleties of   setting proper objectives , and shed light on some widely acclaimed methodologies for establishing performance targets. Standing out amongst these is the   SMART   objectives model.

SMART is an acronym representing   S pecific,   M easurable,   A chievable,   R ealistic, and   T imebound elements, though over time, alternative interpretations for some of these words have been adopted. The model was first crafted by George T. Doran in 1981, pinpointing five attributes that make an objective truly 'SMART'.

Fast forward to the present day, and the SMART goal-setting framework and methodology is utilised by businesses of all sizes, from all corners of the globe. It’s a straightforward yet highly effective model that, when implemented appropriately, aids managers in setting explicit goals that lay out precisely what is to be achieved and when.

Let’s delve into each of the five criteria:

Start with specificity

At OpenBlend, we stand by the principle that an excellent goal is a detailed one - and we’re committed to purging ambiguity from employee targets. For this reason, we're quite taken with the specificity ingrained in SMART objectives. It eliminates vague notions and the room for guesswork.

What makes specific goals so attractive? They equip the employee with a lucid understanding of what is to be achieved, and the steps required to reach the desired outcome.

Let’s differentiate between a specific objective and a vague one:

✅ Boost inbound sales leads by 15% over the next six months by organising and hosting three prospect events in May, July, and September

❌ Enhance sales leads by orchestrating more events

Examples of SMART goals: Measurability matters

SMART. goals also serve as a critical measure of performance. For this to work, they need to be quantifiable.

A measurable objective outlines the evidence that will later indicate whether or not the goal has been realised. It also enables progress tracking over time, painting a clear picture of advancement, which motivates the employee and keeps them focused on the end goal.

Due to this, SMART objectives should always be quantifiable or at the bare minimum, provide an indicator for success. They should respond to queries like ‘How much?’, ‘How many?’ and ‘How will we know when the goal has been realised?’

Here’s a sample SMART objective that’s measurable, followed by one that fails to quantify success:

✅ Complete three training sessions to enhance your knowledge and comprehension of the marketing planning process

❌ Improve your grasp and understanding of the marketing planning process

At OpenBlend, we champion measuring impact over input. The reason? Focusing on the latter accentuates management over experience - a key driver for engagement and motivation that lies at the heart of top performance.

Discover more on   crafting, discussing, and tracking goals and priorities with Performance Objectives   from OpenBlend.

Achievable yet aspirational

SMART objectives also need to be attainable.

Unreachable goals won't just set your employees up for failure; they’ll also lead to demotivation and instigate a negative working environment. Therefore, your goals should be ambitious but within the realm of possibility.

For example, here’s a goal that is both aspirational yet feasible:

✅ Improve the department’s customer satisfaction score from 82% to 88% over the next six months

Setting such a target provides an end goal that's motivational yet within reach, provided the right resources and training are supplied.

Achievable shouldn’t mean   easily   attainable, though. In fact, many organisations that use SMART have swapped ‘achievable’ for ‘aspirational’ to encourage goal-setting that stretches the employee, albeit within the parameters of what’s possible. 

So how can managers ensure the goals they’re setting are achievable? One of the easiest and most effective ways is to ‘test’ the goal against the following questions:

• Can the employee accomplish the objective based on potential constraints?
• Do they have the requisite resources available to them?
• Do they have the necessary power and influence to achieve the goal?

Achievable versus unachievable

✅ Leverage your media connections to build brand awareness for company X by securing three pieces of coverage over the next two months

❌ Get the CEO of company X on the front page of the Financial Times by the end of the month

Let’s be realistic (and relevant!)

The SMART framework also states that performance goals must be realistic - a point closely tied to, but subtly different from, achievability. Here’s how we interpret the distinction at OpenBlend:

Achievable:   does the individual have the ability (knowledge, skill, and access to what they need) to achieve the goal?

Realistic:   considering circumstances surrounding the individual -  i.e. existing and projected day-to-day workload, personal commitments, and proposed time frame, is it realistically possible to achieve the goal or does the aspiration need to be dialled back? 

In more recent years, the ‘R’ in SMART has also taken on a second but all-important meaning: relevance. 

• Is the goal relevant to the employee and their job role?
• Is it going to help develop them in a way that will support their performance and career progression?
• Is the goal aligned with company values and will it support the achievement of wider business objectives?

At OpenBlend, we’re big advocates for the evolving emphasis on ‘relevance’ because it can support more collaborative goal-setting. The question is not simply whether the   manager   thinks the goal is relevant, but whether the   employee   also considers it to be relevant within the context of their job role and development needs. That warrants a two-way discussion, which supports improved communication, better objectives, and better overall outcomes. 

Here’s an example of a goal that is both relevant and realistic: 

✅ Develop your event management skills by shadowing an event manager over the next three months in order to support your readiness for the new event manager role. 

...and one that that is neither realistic nor relevant:

❌ Host 50 events within the next month to learn more about event management (a goal set for “Sarah” who is actually much more interested in digital marketing than events). 

‘T’ is for time-bound

To help employees prioritise tasks in the right way, and to further support motivation, every SMART objective should be time-bound.  

According to the   Chartered Institute of Management (CMI)   assigning deadlines to employee goals can create a useful sense of urgency; help the employee to focus their attention on the things that matter most; and prompt them into positive action. 

Let’s look at a time-bound goal versus a never-ending goal: 

✅ Increase qualified marketing leads by 10% by running an additional four direct marketing campaigns by the end of Q3 2021

❌ Generate 30 more sales leads through direct mail campaigns.

Relevance in SMART Goals

Your SMART objectives must be relevant, linking back to the broader organisational goals and the employee’s role and career aspirations.

Irrelevant goals can lead to disinterest and lack of engagement among employees, negating the whole purpose of setting them in the first place. Therefore, always ensure that your goals are strategically aligned with the bigger picture.

For example,

✅ To expand our market share, enhance your social media marketing skills by attending two industry conferences this year and applying new techniques learned to our campaign strategy

This goal is related to the individual's career development and the company's objective of market expansion.

Timeliness is paramount

Last but by no means least, SMART. objectives must be time-bound.

Employees can plan their tasks and manage their time effectively with a clearly defined timeline. It also introduces a sense of urgency, helping to prevent tasks from dragging on indefinitely.

For instance, here’s an example of a time-bound SMART. goal:

✅ Conduct a comprehensive review and update of the company’s data protection policy over the next three months

Adding an extra layer: SMART er goals

While the original SMART acronym has served organisations well, some have added a few extra letters to the mix, creating SMART.E.R goals.

The two additional letters stand for Evaluated and Reviewed. This recognises the need to continuously review and assess goals as circumstances and strategies change over time.

At OpenBlend, we provide the tools needed to write SMART.E.R goals and carry out regular check-ins, ensuring that your objectives remain aligned with your business needs and personal ambitions.

SMART.E.R goals go beyond the widely recognised SMART goal-setting framework. In addition to being Specific, Measurable, Achievable, Relevant, and Time-bound, SMART.E.R goals emphasise the importance of Evaluation and Review. This expanded approach ensures that employee and organisational goals remain aligned and adaptable, enabling continuous improvement and success. By following the SMART.E.R model, organisations can establish clear and effective objectives that drive performance and foster a culture of ongoing growth.

It's essential to note that drafting SMART objectives is merely the beginning. The most crucial part is implementing the objectives effectively, tracking progress, providing timely feedback, and making adjustments as required.

A summary of SMART benefits

When applied in the right way, SMART provides a simple to use and highly effective goal-setting methodology that delivers multiple people and business benefits, including:

• Increased clarity and the elimination of vagueness
• Improved employee engagement and motivation 
• The ability to continually track employee progress
• Support with task prioritisation
• Applicability to employees working in any industry sector or company size

SMART: criticisms and considerations

But are there any drawbacks to consider? 

The short answer is yes, potentially. 

Common criticisms include a lack of flexibility, which makes SMART less suitable for long-term goal-setting. This is a risk that can be mitigated however if the goal is regularly re-visited to ensure it remains relevant to both the employee and the organisation. Likewise, by breaking long term goals down into bite-size pieces, with each time-bound ‘chunk’ forming a key part of the journey to the end goal, SMART can in fact work well for long-term goals.

There’s also a stress factor to consider when it comes to SMART. Time-bound objectives are designed to motivate and engage people, but if deadlines are not realistic, the employee can find themselves in a stress-inducing situation where they’re struggling to stay on track and becoming increasingly demotivated. For this reason, it’s essential that manager and employee agree on a deadline that both parties consider to be reasonable and achievable.

A final critique points to the way in which SMART goals are structured in line with identified milestones - an approach that some say has the potential to stifle creativity and reduce innovation. To avoid this, organisations need to build an open company culture that celebrates innovation and gives employees the autonomy to explore new ideas, even if they’re not relevant to the achievement of their goals.

How to get the best out of SMART

Adopt a ‘Write, Review and Refine’ approach. Once you’ve written a SMART objective, take a step back and review it critically. Is it focused on the thing that matters most? Will it create the desired impact? Imagine someone is assessing the success of that goal and ask yourself: does it make sense and is it SMART enough? If not, keep refining.

Run workshops that encourage team members and managers to become skilled in SMART by:

Reviewing existing objectives and making them SMART (specific, measurable, achievable, relevant and timebound)

Designing performance goals and objectives from scratch and then collectively reviewing them to refine and improve

Make sure the goal passes the “...in order to” test:

This should be included as part of the objective itself...here’s an example: Develop your prioritisation skills   in order to   manage the three concurrent projects starting in Q3, delivering business results to agreed timelines while maintaining a “Capability to Manage Stress rating of +/=Amber”.

In closing, remember that SMART objectives are just one of the many ways to set and manage objectives. Choosing a method that best fits your organisation's culture, structure, and strategic goals is essential. Whether it's SMART, SMARTer, OKRs (Objectives and Key Results) or MBOs (Management By Objectives), the right approach will always be one that helps you realise your desired outcomes, boosts customer satisfaction, and increases market share.

To learn more about   SMART goal-setting   and how OpenBlend’s   performance management tool   can help, contact our team to book a demo.

Browse the latest resources

What are employee performance objectives guide, template and examples.

What are employee performance objectives and how do goal-setting frameworks like the GROW model and SMART impact performance? Download the guide and...

A guide to supporting an employee with anxiety

Read OpenBlend's guide to managing anxiety in the workplace and discover the tips for supporting employees with anxiety effectively.

The guide to good 1:1 conversations

Great managers have impactful 1:1 conversations that are essential to unlocking great performance. This guide explains how managers can harness the...

Tour Our Service

Welcome to inniAccounts, the award-winning accountancy service for contractors, consultants and freelancers.

Switch to inniAccounts from another accountant, quickly and easily

If you're new to contracting, we'll get you up and running

A complete service from professional accountants

First-class personal support from our friendly team

Our award-winning real-time app makes running your business a breeze

Helping you get outside, and stay outside IR35

Automated payroll and real-time dividend tools

Future-proofed for HMRC's upcoming tax changes

Help & Advice

Exclusive resources and tools to help your contracting business thrive outside IR35.

Expert guides on everything from starting out as a contractor to optimising your taxes

Over 250 expert-authored articles and tips to help you get the most from your limited company

Explore our brilliant free guides to deepen your IR35 knowledge and shape up your working practices

Our brilliant blog full of news and updates for consultants & contractors

We're passionate about the fair treatment of contractors, consultants and freelancers.

Founded by contractors for contractors. Learn more about inniAccounts' journey

8 reasons to choose inniAccounts

Meet some of our brilliant clients

Say hello to the dedicated team behind inniAccounts

Explore our current vacancies and get a feel for life at inniAccounts

Writing a SMART business plan

For some, writing a business plan is as dull as it gets. for others, it’s first on the list of things to do when starting out on your own. one thing is for sure, having a smart business plan helps you to focus on delivering results that will keep you in business..

Your plan needn’t be an ultra-detailed 100-page tome. It just needs to outline goals that are Specific , Measurable , Attainable , Relevant and Time-bound . You can find literally hundreds of templates and guides for writing your plan but what contractor and consultant-specific things should you be thinking about?

Why write a business plan at all?

It can be tempting to think that you don’t need a business plan if you’re not trying to raise capital to start your business – as a contractor or consultant you can hit the ground running with little capital behind you, but it is worth taking some time to assess the level of risk your career move represents. Risk is assessed in terms of what’s important for you to cover due to your personal circumstances. The business plan should aim to ensure you cover the risks for a specified period of time. Think of it as a living route map of:

• What you need to achieve,
• How you are going to achieve it,
• How you know you’ve achieved it, and
• When you need to review progress and the overall plan.

A business plan should be a living document you refer to and update regularly. That way, it keeps pace with your career, aspirations and circumstances.

Developing and maintaining a business plan

1. where to start with your business plan.

Dream big then think in detail. When you’re thinking for starting out as a contractor, take some time to really think about what you want to get out of the next step in your career and what you need to do to make it happen.

a) What do I need? – Your financial obligations

Before taking the first steps in becoming a contractor or consultant assess what you need to achieve financially to cover the basics that are important to you. Take a look at the example risks below. Risks are outgoings and timely requirements that are tied to the financial risk. This enables you to understand your break-even point and the cash cushion you need should there be a gap in contracts/earnings.

Example outgoings & risks

• Living expenses
• Pension provision
• Private healthcare and other ‘employee benefits’ you want to retain
• Expected business outgoings
• Holiday/time off
• Personal development
• Other outgoings.

The risks are outgoings in the main but provision for the future around the amount of time off you want, when you want to retire and estimating potential down-time are all important. 

It is prudent to build up a cash cushion that can cover an unexpected three months’ gap in earnings. That way, if you can’t work for a period of time, you are able to cover the necessities.

b) What’s out there? – The market

You have a good idea of what’s out there in terms of opportunities. Working out your market rate and what that means for your break-even point will ensure that you can be realistic about the time you need to put in each month/year to cover the risks in the previous section. You’ll be able to make an informed choice on what contracts to accept and flex the amount of time you need to spend at work based on the rate applied to the contract.

Identify your route to market – look at what agencies you want to target or avenues to explore to secure contracts/projects. How are you going to approach them and build solid relationships to ensure a steady pipeline of work? Take a look at our article ‘ The value of agencies ’ for more information on this.

c) What’s the big picture? – Where you want to be

Where do you want to be in one year, five years, and ten years? What does your life look like running your own business as a contractor or consultant? By focusing on what you want to achieve, you can understand your motivations and translate these into achievable goals.

2. Writing a SMART plan

A good rule of thumb is to pick three main goals. These stem from the three areas above and should cover the basics of what you need to achieve. The goals need to be specific and measurable, outlining what success looks like – be as detailed as you can about what success means to you.

An example goal for contractors and consultants

Most contractors and consultants start by covering costs/financial risks. By working out what your break-even point is you can be really specific about how much you need to earn each month on average, and what this looks like in reality based on how you want to work throughout the year. The goal could look like this:

I want to earn an average of £x per month, working x days per month/ x months per year.

Smaller specific sub-goals can flow from the main goals. This is where detailed planning should form more relevant and achievable goals that can be time-bound and measurable.

Review your goals and if they aren’t specific, measurable, achievable, relevant and time-bound rewrite them. The goals you write now aren’t permanent – think about the short to medium-term. That way, you can focus on what you need to do now while working towards the bigger picture. The plan is a working document so when you review it, goals can evolve and move with your aspirations.

Take each goal and map out how you are going to achieve it. Again make the tasks SMART – that way you can measure your progress.

3. Review, evolve and plan ahead

A business plan is a living document. Set review dates to check your progress against the goals and targets you set. This enables you to take action when results slip or the direction of your business isn’t in line with your longer-term goals.

When reviewing progress against your goals, look at moving things forward by adding to your goals as key milestones or achievements are reached. New challenges keep us fresh and ensure that your business and career moves forward.

Diarise reviews. It may sound obvious but it’s easy to put reviewing your business plan on the back burner in favour of running the business and becoming engrossed in the contracts. Take time to monitor your performance once a month against the plan and take a more strategic view once a quarter – for the business development pipeline to keep work coming through, personal development and the longer-term strategic direction of your career. Perform a full review every year – take a clean-slate approach each year when reassessing your personal goals and map this against your existing business plan.

Regular reviews ensure that your business remains on track and that your business plan evolves with your career aspirations and work-life balance. What is a perfect fit today may feel restrictive next year. For ideas of where contracting could take you, take a look at our ‘ what’s your grand plan ’ article.

Our top tips for drafting a business plan

• Keep your goals SMART – Specific, Measurable, Achievable, Relevant and Time-bound.
• Keep it simple – three big goals supported by clear targeted actions to get you there.
• Keep it personal – templates and examples are great but your plan needs to be something you will use and refer to. It needs to be quick to review progress against and simple to update. It needs to outline what you want to get out of working for yourself for the next few months, year and the longer-term.
• Keep it fresh – review your progress against the plan regularly, embrace change – if it no longer fits; change it.

Our five favourite sources for more business plan ideas

• https://www.gov.uk/starting-up-a-business is the Government website that provides help and support tools for new businesses across the UK. It has geographic support to get you started and links to funding options.
• http://www.virginstartup.org/about/ is the not-for-profit Virgin company for Entrepreneurs. It offers support and advice for start-ups and companies under 1 year old in the UK. The site has tools, tips and advice from a world-leading brand and start-up experts.
• http://www.contractoruk.com/calculators/ Contractor UK is an invaluable website for all contractors; their business calculator section is great for understanding start-up costs to take home pay.
• http://www.entrepreneur.com/businessplan/index.html is a great site for inspiration and advice from some of the most influential business leaders of our time. It also has practical tips on how to write your business plan.
• Your business bank’s website. The biggest business banks all have great help tools and articles on their websites. They also have in house experts that can provide help and support to new business customers.

How to start contracting or consulting

Contact inniaccounts.

0800 033 7827

Calling from overseas

+441332 460 010

Joining / sales

[email protected]

[email protected]

General enquiries

[email protected]

Head Office

1 Derwent Business Centre Clarke Street Derby DE1 2BU

How to Start a Small Business in 10 Steps

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

Brett Grossfeld

Share article.

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

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

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

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

Here’s what you’ll learn:

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

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

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

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

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

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

Start Your Small Business With Big Things

Grow Your SMB All In One Platform

DEMO: See For Yourself For Free With Starter Suite

Build Your SMB Marketing Strategy With This Free Guide

TRAILHEAD: Starter Suite Quick Look

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

Factors that influence cost

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

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

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

What kinds of costs to expect

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

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

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

1. Do your research

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

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

2. Write a business plan

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

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

3. Choose a business name

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

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

4. Decide on your location

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

5. Get your finances in order

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

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

6. Take care of the legal stuff

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

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

7. Develop a marketing plan

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

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

8. Set up your CRM software

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

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

9. Launch your product or service

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

10. Keep your customers happy

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

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

So, where to start?

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

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

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

A name for your business

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

A location for your business

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

A business structure

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

A legal presence

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

Federal and state tax ID numbers

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

Licenses and permits

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

A business bank account

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

Start-up funds

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

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

You should also consider:

Customer relationship management

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

Invoice and billing software

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

A graphic designer

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

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

Marketing experts

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

A Human Resources department

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

An assistant

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

What are some popular small business ideas?

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

What are the odds that my small business will succeed?

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

What are some Fortune 500 companies that started small?

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

What are the most business-friendly states?

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

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

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

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

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

Just For You

What Is Project Management? (A Comprehensive Guide)

Generative AI Regulations – What They Could Mean For Your Business

Explore related content by topic

• Future of Work
• Salesforce CMS
• Small Business
• B2B Commerce
• Best Practices
• Sales Strategy
• Sales Fundamentals

Brett Grossfeld is a Product Marketing Manager supporting Salesforce's CRM, data, and AI tools. He's written for multiple websites across various industries and interests, including tech, wellness, and modern customer experiences.

Get the latest articles in your inbox.

What Is ERP? (A Beginners Guide)

How To Write a Business Plan in 9 Steps

AI For Small Business is Here — Get Ready With These Tips 

How to Write a Business Proposal for Small Businesses

Digital Marketing for Small Business: Here’s How You Can Do It

27 Top Sales Influencers You Should Follow in 2024

What Is an SMB and What Do You Need to Know to Be Successful?

4 Ways Your Contact Center Can Get Started With Generative AI

360 Highlights

Yes, I would like to receive the Salesforce 360 Highlights newsletter as well as marketing emails regarding Salesforce products, services, and events. I can unsubscribe at any time.

By registering, you confirm that you agree to the processing of your personal data by Salesforce as described in the Privacy Statement .

Thanks, you're subscribed!

New to Salesforce?

• What is Salesforce?
• Best CRM software
• Explore all products
• What is cloud computing
• Customer success
• Product pricing

About Salesforce

• Salesforce.org
• Sustainability

Popular Links

• Salesforce Mobile
• AppExchange
• CRM software
• Salesforce LIVE
• Salesforce for startups
• América Latina (Español)
• Brasil (Português)
• Canada (English)
• Canada (Français)
• United States (English)

Europe, Middle East, and Africa

• España (Español)
• Deutschland (Deutsch)
• France (Français)
• Italia (Italiano)
• Nederland (Nederlands)
• Sverige (Svenska)
• United Kingdom (English)
• All other countries (English)

Asia Pacific

• Australia (English)
• India (English)
• Malaysia (English)
• ประเทศไทย (ไทย)

© Copyright 2024 Salesforce, Inc. All rights reserved.  Various trademarks held by their respective owners. Salesforce, Inc. Salesforce Tower, 415 Mission Street, 3rd Floor, San Francisco, CA 94105, United States

You are using an outdated browser. Please upgrade your browser .

Designing a Comprehensive Compensation Plan

Written by Salary.com Staff

May 26, 2024

Having a good compensation plan is important for any company. Offering good pay, along with benefits and bonuses, affects how motivated and happy employees are and how well they do their job.

In this article, learn the crucial parts of a great compensation plan, why it is essential for businesses, and how to create one that matches the goals and values of a company.

Compensation Plans: What They Are and Why They Matter

Compensation plans are what companies use to decide how they will reward their employees. These plans cover everything from salaries to bonuses to benefits, outlining what employees get in return for their efforts.

These plans are important for both companies and employees. For companies, a good plan helps them attract and retain top talent. When companies offer competitive pay and perks, they become desirable workplaces where the best people want to work. On the other hand, a solid compensation plan keeps employees happy and motivated. Employees that feel valued and well-compensated are more likely to put in their best effort, feel satisfied with their jobs, and stick around longer.

Essential Elements of a Great Compensation Plan

Creating a compensation plan that works for everyone involves understanding its key components. Here are the building blocks of an effective plan:

• Base Salary

Employees receive a base salary for their job.  It must be fair based on industry and market standards and must match the employee's skills, experience, and responsibilities .

• Incentives and Bonuses

Incentives and bonuses are extra rewards given to employees when they achieve certain goals or targets at work. These are rewards for doing exceptional work, making significant sales, or for helping the company succeed financially.

Benefits are the extra perks given by companies to help employees feel good and happy at work. These can be health insurance plans, retirement plans, paid vacation time, and chances for career growth.

• Recognition Programs

These are ways to recognize employees ’outstanding performance. They can be giving awards for excellent work or publicly celebrating achievements.

A compensation plan that includes fair pay, bonuses, perks, and employee recognition, keeps employees happy and eager to work.  More than that, it helps the company establish a good reputation and do better by creating a positive workplace and retaining top-tier employees.

Steps in Crafting a Compensation Plan

Creating a compensation plan requires careful consideration and planning. Here are the key steps to follow in developing an effective plan:

• Define Organizational Goals

To establish an effective compensation plan, it is crucial to understand what the organization aims to achieve. Understanding the organization’s goals involves looking into its mission, strategic objectives, and values. By identifying key performance indicators (KPIs) that align with these goals, such as sales targets or customer satisfaction metrics, companies can make a plan that encourages employees to help the company succeed.

• Conduct Market Research

Knowing what is happening in the industry and how other companies pay their employees is crucial to create an effective compensation plan. By looking at market data, companies can see whether their pay is fair and competitive. Such an important step helps them attract and keep skilled people.

• Determine Pay Structure

Building a clear and transparent pay structure is a foundation to a successful compensation plan. This structure must encompass various components such as base salary, incentives, bonuses, and benefits. It is important to make sure that everyone gets fair treatment and that their pay matches up with their experience and skills. Making sure that everyone's pay equates to what they do helps keep employees happy and motivated.

• Communicate and Implement

Effective communication is a key to the successful implementation of a compensation plan. Being clear and honest about how compensation is decided builds trust with employees. After explaining the details, it is important to follow through and ensure fair treatment for everyone. Keep an eye on how things are going and make changes when needed to keep up with the industry and market demands. This helps make sure the compensation plan keeps supporting the company's goals and employees are motivated to do their best.

By following these steps, companies can create a comprehensive and effective compensation plan that attracts, retains, and motivates their employees, driving overall business success.

Achieving Business Goals with Smart Compensation Plans

To succeed as a company, it is crucial to have a good compensation plan as it helps attract, retain, and motivate top talent. Through fair pay, bonuses, benefits, and recognition, companies can ensure that their employees stay engaged and satisfied, leading to a successful and thriving business in the long run.

Download the 2018 Turnover Report:

Download our 2018 Turnover Report to compare your organization's turnover rate with averages in your industry and geographic region. View national and regional numbers by industry for voluntary and total turnover, as well as five-year trends.

Download our white paper to further understand how organizations across the country are using market data, internal analytics, and strategic communication to establish an equitable pay structure.

Insights You Need to Get It Right

TAGS: CEO/CFO , Compensation Conscience , Human Resources

It's easy to get started.

• Qingdao Haier-stock
• News for Qingdao Haier

EQS-CMS: Haier Smart Home Co.,Ltd.: Announcement on 2024 H-Share Core Employee Stock Ownership Plan

1912043  27.05.2024 CET/CEST

Qingdao Haier News MORE

Related stocks.