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How To Write A Business Plan (2024 Guide)

Updated: Apr 17, 2024, 11:59am

Table of Contents

Brainstorm an executive summary, create a company description, brainstorm your business goals, describe your services or products, conduct market research, create financial plans, bottom line, frequently asked questions.

Every business starts with a vision, which is distilled and communicated through a business plan. In addition to your high-level hopes and dreams, a strong business plan outlines short-term and long-term goals, budget and whatever else you might need to get started. In this guide, we’ll walk you through how to write a business plan that you can stick to and help guide your operations as you get started.

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Drafting the Summary

An executive summary is an extremely important first step in your business. You have to be able to put the basic facts of your business in an elevator pitch-style sentence to grab investors’ attention and keep their interest. This should communicate your business’s name, what the products or services you’re selling are and what marketplace you’re entering.

Ask for Help

When drafting the executive summary, you should have a few different options. Enlist a few thought partners to review your executive summary possibilities to determine which one is best.

After you have the executive summary in place, you can work on the company description, which contains more specific information. In the description, you’ll need to include your business’s registered name , your business address and any key employees involved in the business. 

The business description should also include the structure of your business, such as sole proprietorship , limited liability company (LLC) , partnership or corporation. This is the time to specify how much of an ownership stake everyone has in the company. Finally, include a section that outlines the history of the company and how it has evolved over time.

Wherever you are on the business journey, you return to your goals and assess where you are in meeting your in-progress targets and setting new goals to work toward.

Numbers-based Goals

Goals can cover a variety of sections of your business. Financial and profit goals are a given for when you’re establishing your business, but there are other goals to take into account as well with regard to brand awareness and growth. For example, you might want to hit a certain number of followers across social channels or raise your engagement rates.

Another goal could be to attract new investors or find grants if you’re a nonprofit business. If you’re looking to grow, you’ll want to set revenue targets to make that happen as well.

Intangible Goals

Goals unrelated to traceable numbers are important as well. These can include seeing your business’s advertisement reach the general public or receiving a terrific client review. These goals are important for the direction you take your business and the direction you want it to go in the future.

The business plan should have a section that explains the services or products that you’re offering. This is the part where you can also describe how they fit in the current market or are providing something necessary or entirely new. If you have any patents or trademarks, this is where you can include those too.

If you have any visual aids, they should be included here as well. This would also be a good place to include pricing strategy and explain your materials.

This is the part of the business plan where you can explain your expertise and different approach in greater depth. Show how what you’re offering is vital to the market and fills an important gap.

You can also situate your business in your industry and compare it to other ones and how you have a competitive advantage in the marketplace.

Other than financial goals, you want to have a budget and set your planned weekly, monthly and annual spending. There are several different costs to consider, such as operational costs.

Business Operations Costs

Rent for your business is the first big cost to factor into your budget. If your business is remote, the cost that replaces rent will be the software that maintains your virtual operations.

Marketing and sales costs should be next on your list. Devoting money to making sure people know about your business is as important as making sure it functions.

Other Costs

Although you can’t anticipate disasters, there are likely to be unanticipated costs that come up at some point in your business’s existence. It’s important to factor these possible costs into your financial plans so you’re not caught totally unaware.

Business plans are important for businesses of all sizes so that you can define where your business is and where you want it to go. Growing your business requires a vision, and giving yourself a roadmap in the form of a business plan will set you up for success.

How do I write a simple business plan?

When you’re working on a business plan, make sure you have as much information as possible so that you can simplify it to the most relevant information. A simple business plan still needs all of the parts included in this article, but you can be very clear and direct.

What are some common mistakes in a business plan?

The most common mistakes in a business plan are common writing issues like grammar errors or misspellings. It’s important to be clear in your sentence structure and proofread your business plan before sending it to any investors or partners.

What basic items should be included in a business plan?

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

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Resource Planning For Your Business Plan

Identifying the resources you need to grow your business

Why Is Resource Planning Important

How to start resource planning, the bottom line, frequently asked questions (faqs).

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A business plan helps you organize your goals and growth plans for your business. Identifying business resources you'll be starting your business with already, and accounting for the resources you'll need to acquire after launching the business, is a crucial step in business planning.

Key Takeaways

• A business plan helps you organize your goals and growth plans for your business.
• Resource planning help you account for resources you have, plan for resources you need and ways to optimize their use
• You can plan for physical, people and technical resources in your business plan

Resource planning help you account for resources you have, plan for resources you need and ways to optimize their use. Among other things, even the most simple business plans are designed to walk you through the activity of describing every source and the exact dollar amount of your initial equity capital, as well as account for the equipment necessary to produce your products or services.

It can be difficult to accurately estimate your future resource needs, which is why this startup mistake is one of the most frequent contributors to young businesses running out of cash early on.

A very important section in your business plan is about the finances of your business, and that includes how much you hope to spend on resources you need to acquire and maintenance expenses on assets you own. Your plans for obtaining the necessary personnel, equipment, and cash to meet your capital expenses will need to be detailed throughout your business plan.

You may need financing from a bank or investors or will invest your personal savings in the business, and resource planning will come in handy for that too.

Resource allocation plans are what your potential investors and business partners are going to need to see before jumping on board with your new company.

There are different types of resources and you need to budget and plan for them accordingly. In describing each of the resources that you have and need for your business to reach profitability, position each of them in terms of the value it will bring to the company, both in the near term and down the road.

To figure out exactly which resources your business is going to need, and account for those in your business planning process, ask yourself these two crucial questions:

• Does starting and growing your business require having staff on hand? If your business relies upon output from people other than yourself and your business partners, you're going to need to allocate resources for hiring staff at fair market rates. 
• What type of equipment or fixed assets will your business need to get going? If your business is dependent upon purchasing or leasing equipment or other fixed assets like retail and office space, these are major considerations as you plan out your resource allocation.

Physical Assets

Depending on the nature of your business, you may have varying need for physical assets. However, in all likelihood you'd need some sort of office furniture and definitely some computers. Physical assets could also include office space, storefronts, manufacturing facilities and equipment necessary for your business. For example, if you own a baked good business, baking equipment like mixers and ovens would be physical assets you'd need to plan for.

Personnel and People

There are different types of people that can be a part of your business. People you hire, for example, can be employees or independent contractors and there are different cost implications for your business depending on whether you hire the former or the latter.

Investing in skills and capacities for people in your business is also an important part of resource planning.

How about mentors, key advisors, supplier connections, and other intangible resources for your business? These types of relationships whose value to your business can be immense, also need to be accounted for within your business plan as they'll have a very large impact on the future growth of your company.

Think of the massively positive effect your company would experience if you had a friend or family member that was a decision-maker at a large company who'd be your perfect first customer. It would undoubtedly be one of your key strategies for driving the early growth of your company. So, as you're planning your resource allocation, you'd naturally be spending in areas that make your young business more appealing to the target customers you want to serve.

Technical Resources

It is a good time to evaluate your technical resources and requirements as well. Some businesses rely more heavily on technology or intellectual property than others. Technology-dependent companies will need a strong IT network to get started. If building your own website won't be any trouble, then that's one major cost you'll be able to avoid as you get started with your company. Otherwise, you may need to allocate for web design, development, and other website-related expenses.

Regardless of your situation, don't be intimidated by the upfront costs of starting a business. Instead, keep in mind that in today's age, your product or service will only be as good as the technology that supports it, and if you buy or build low-grade gear, you’ll probably have to replace it in a few years anyway.

Clearly, there are a lot of different expenses to take into account as you allocate the resources for your new business. However, forcing yourself to go through this activity in extreme detail while building your business plan will save you a lot of headaches and potential failures in the future.

What are assets and resources in a business plan?

Resources can be anything that helps you operate or run your business. Assets are a type of resources that help you achieve you business. Assets can be cash, or physical assets such as equipment or intangible assets such as the brand of your business. In a business plan, you talk about the resources you have and the resources you need to acquire to help your business grow. You also account for your assets on your balance sheet. A strong balance sheet presented in your business plan can be appealing to potential investors.

Which components of a business plan are most useful to attract investors?

Each section of a business plan is important to potential investors. An executive summary gives your investors an elevator pitch to your business. Company description explains to them how your business is solving a market need, while market analysis shows investors you understand your industry and competition. Sections on organization, product details and marketing plans dig deeper into your vision for your business and how its organized. And the financial information component helps them see if you idea is worth putting their money into.

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

By Joe Weller | October 11, 2021

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

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

What Is a Business Plan?

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

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

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

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

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

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

Business Plan Steps

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

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

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

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

Do I Need a Simple or Detailed Plan?

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

How to Choose the Right Plan for Your Business

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

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

Is the Order of Your Business Plan Important?

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

The Difference Between Traditional and Lean Business Plans

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

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

How to Write a Business Plan Step by Step

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

Step 1: Executive Summary

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

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

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

Step 2: Description of Business

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

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

Step 3: Market Analysis

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

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

Step 4: Competitive Analysis

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

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

Step 5: Description of Organizational Management

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

Step 6: Description of Products or Services

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

Questions to answer in this section are as follows:

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

Step 7: Marketing Plan

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

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

Step 8: Sales Plan

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

Start by answering the following questions:

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

Step 9: Funding Details (or Request for Funding)

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

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

Step 10: Financial Projections

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

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

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

Business Plan Template

Download Business Plan Template

Microsoft Excel | Smartsheet

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

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

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

How to Write a Simple Business Plan

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

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

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

Simple Business Plan Template

Download Simple Business Plan Template

Microsoft Excel |  Microsoft Word | Adobe PDF  | Smartsheet

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

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

How to Write a Business Plan for a Lean Startup

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

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

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

Lean Business Plan Template for Startups

Download Lean Business Plan Template for Startups

Microsoft Word | Adobe PDF

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

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

How to Write a Business Plan for a Loan

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

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

Download free financial templates to support your business plan.

Tips for Writing a Business Plan

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

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

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

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

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

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

Resources for Writing a Business Plan

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

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

How a Business Plan Helps to Grow Your Business

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

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

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What is a business plan?

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

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

ZenBusiness

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

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

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

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

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

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

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

Your business’s registered name.

Address of your business location .

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

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

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

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

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

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

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

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

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

You should include the following:

An explanation of how your product or service works.

The pricing model for your product or service.

The typical customers you serve.

Your supply chain and order fulfillment strategy.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

NerdWallet’s picks for setting up your business finances:

The best business checking accounts .

The best business credit cards .

The best accounting software .

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

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

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

Licenses and permits.

Equipment leases.

Bank statements.

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

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

How much do you need?

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.

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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.

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How to Build a Detailed Business Plan That Stands Out [Free Template]

Updated: March 29, 2022

Published: March 11, 2022

While starting a company may seem easier now than ever before, entrepreneurs have an uphill battle from the moment they start a business. And without a clear, actionable business plan for selling, marketing, finances, and operations, you're almost destined to face significant challenges.

This is why crafting a business plan is an essential step in the entrepreneurial process.

In this post, we'll walk you through the process of filling out your business plan template, like this free, editable version :

Download a free, editable one-page business plan template.

We know that when looking at a blank page on a laptop screen, the idea of writing your business plan can seem impossible. However, it's a mandatory step to take if you want to turn your business dreams into a reality.

That's why we've crafted a business plan template for you to download and use to build your new company. You can download it here for free . It contains prompts for all of the essential parts of a business plan, all of which are elaborated on, below.

This way, you'll be able to show them how organized and well-thought-out your business idea is, and provide them with answers to whatever questions they may have.

Free Business Plan Template

The essential document for starting a business -- custom built for your needs.

• Outline your idea.
• Pitch to investors.
• Secure funding.
• Get to work!

You're all set!

Click this link to access this resource at any time.

Building a Successful Business Plan

In the next section, we'll cover the components of a business plan , such as an executive summary and company description. But before we get to that, let's talk about key elements that should serve as building blocks for your plan.

For some entrepreneurs, the thought of writing a business plan sounds like a chore — a necessary means to an end. But that's a bad take.

A solid business plan is a blueprint for success . It's key to securing financing, presenting your business, outlining your financial projections, and turning that nugget of a business idea into a reality.

At the core, your business plan should answer two questions: why your business and why now?

Investors want to know why your business is entering the market, i.e. what problem it's solving and how it's different from what's currently out there. They also want to know why now is the right time for your type of product or service.

At a minimum, your plan should:

• Be more realistic than idealistic: Too often, business plans focus too much on how things could be instead of how they are. While having a vision is important, your plan needs to be rooted in research and data.
• Legitimize your business idea : If an idea fails on paper, it's a signal to go back to the drawing board. In doing so, you avoid losing precious time or money chasing an unrealistic idea.
• Position your business for funding: To get your business off the ground, chances are you'll need financial backing. Even with a solid business idea, investors, lenders, and banks still need convincing. An effective business plan will outline how much money you need, where it's going, what targets you will hit, and how you plan to repay any debts.
• Lay the foundation: Investors focus on risk – if anything looks shaky, it could be a dealbreaker. Ideally, your business plan will lay down the foundation for how you'll operate your business — from operational needs to financial projections and goals.
• Communicate your needs: It's nearly impossible to communicate your needs if you don't know what they are first. Of course, a business’ needs are always changing — but your plan should give you a well-rounded view of how your business will work in the short and long term.

So back to the question of why and why now – consider three things:

• Your industry – How does your product or service fit within your industry? Are you targeting a specific niche? Where do you see the industry going in the next five to 10 years?
• Your target audience – Who are you targeting? What challenges are they facing? How will your product or service help them in their daily lives?
• Your unique selling proposition (USP) – What sets you apart from your competitors? Is it your product/service features? Your company values? Price?

Once you know the answers to these questions, you'll be equipped to answer the question: why your business and why now.

How to Build a Business Plan

• Executive Summary
• Company and Business Description
• Product and Services Line
• Market Analysis
• Marketing Plan
• Legal Notes
• Financial Considerations

Featured Resource: Free Business Plan Template

1. cover page.

Your business plan should be prefaced with an eye-catching cover page. This means including a high-resolution image of your company logo, followed by your company's name, address, and phone number.

Since this business plan will likely change hands and be seen by multiple investors, you should also provide your own name, role in the business, and email address on the cover page.

At the bottom of this page, you can also add a confidentiality statement to protect against the disclosure of your business details.

The statement can read as follows: " This document contains confidential and proprietary information created by [your company name]. When receiving this document, you agree to keep its content confidential and may only reproduce and/or share it with express written permission of [your company name] ."

Remember to keep your cover page simple and concise — and save the important details for other sections.

Why it matters: First impressions are everything, and a clean cover page is the first step in the right direction.

Example of a Cover Page

2. Executive Summary

The executive summary of your business plan provides a one- to two-page overview of your business and highlights the most crucial pieces of your plan, such as your short-term and long-term goals.

The executive summary is essentially a boiled-down version of your entire business plan, so remember to keep this section to the point and filled only with essential information.

Typically, this brief section includes:

• A mission statement.
• The company's history and leadership model.
• An overview of competitive advantage(s).
• Financial projections.
• Company goals.
• An ask from potential investors.

Why it matters: The executive summary is known as the make-or-break section of a business plan. It influences whether investors turn the page or not — so effectively summarizing your business and the problem it hopes to solve is a must.

Think of the Summary as a written elevator pitch (with more detail). While your business plan provides the nitty-gritty details, your Summary describes — in a compelling but matter-of-fact language — the highlights of your plan. If it's too vague, complicated, or fuzzy, you may need to scrap it and start again.

Example of an Executive Summary Introduction

"The future looks bright for North Side Chicago, particularly the Rock Hill Neighborhood. A number of high-end commercial and residential developments are well on their way, along with two new condo developments in nearby neighborhoods.

While the completion of these developments will increase the population within the neighborhood and stimulate the economy, the area lacks an upscale restaurant where residents and visitors can enjoy fine food and drink. Jay Street Lounge and Restaurant will provide such a place."

3. Company & Business Description

In this section, provide a more thorough description of what your company is and why it exists.

The bulk of the writing in this section should be about your company's purpose – covering what the business will be selling, identifying the target market, and laying out a path to success.

In this portion of your business plan, you can also elaborate on your company's:

• Mission statement
• Core values
• Team and organizational structure

Why it matters: Investors look for great structures and teams in addition to great ideas. This section gives an overview of your businesses' ethos. It's the perfect opportunity to set your business apart from the competition — such as your team's expertise, your unique work culture, and your competitive advantage.

Example of a Values/Mission Statement

"Jay Street Lounge and Restaurant will be the go-to place for people to get a drink or bite in an elegant, upscale atmosphere. The mission is to be North Side's leading restaurant, with the best tasting food and the highest quality service."

3. Product & Services Line

Here's where you'll cover the makeup of your business's product and/or services line. You should provide each product or service's name, its purpose, and a description of how it works (if appropriate). If you own any patents, copyrights, or trademarks, it's essential to include this info too.

Next, add some color to your sales strategy by outlining your pricing model and mark-up amounts.

If you're selling tangible products, you should also explain production and costs, and how you expect these factors to change as you scale.

Why it matters: This section contains the real meat of your business plan. It sets the stage for the problem you hope to solve, your solution, and how your said solution fits in the market.

There's no one-size-fits-all formula for this section. For instance, one plan may delve into its ability to market in a more cost-effective way than the competition, whereas another plan focuses on its key products and their unique features and benefits.

Regardless of your angle, it's critical to convey how your offerings will differ from the competition.

Example of a Product/Service Offering

"The menu at Jay Street Lounge and Restaurant will focus on Moroccan cuisine. The stars of the menu (our specialties) are the Moroccan dishes, such as eggplant zaalouk, seafood bastilla, tagine, and chickpea stew. For those who enjoy American dishes, there will also be a variety of options, from burger sliders and flatbread pizza to grilled steak and salads.

The food at Jay Street will have premium pricing to match its upscale atmosphere. During the summer months, the restaurant will have extra seating on the patio where clients can enjoy a special summer menu. We will be open on all days of the week."

4. Market Analysis

It helps to reference your market research documentation in this section, like a Porter's Five Forces Analysis or a SWOT Analysis ( templates for those are available here ). You can also include them in your appendix.

If your company already has buyer personas, you should include them here as well. If not, you can create them right now using the Make My Persona Tool .

Why it matters: Having an awesome product is, well, awesome — but it isn't enough. Just as important, there must be a market for it.

This section allows you to dig deeper into your market, which segments you want to target, and why. The "why" here is important, since targeting the right segment is critical for the success and growth of your business.

It's easy to get lost (or overwhelmed) in a sea of endless data. For your business plan, narrow your focus by answering the following questions:

• What is my market? In other words, who are my customers?
• What segments of the market do I want to target?
• What's the size of my target market?
• Is my market likely to grow?
• How can I increase my market share over time?

Example of a Market Analysis

"Jay Street Lounge and Restaurant will target locals who live and work within the Rock Hill Neighborhood and the greater North Side Chicago area. We will also target the tourists who flock to the many tourist attractions and colleges on the North Side.

We will specifically focus on young to middle-aged adults with an income of $40,000 to $80,000 who are looking for an upscale experience. The general demographics of our target market are women between 20 to 50 years old.

A unique and varied Moroccan-American menu, along with our unique upscale atmosphere, differentiates us from competitors in the area. Jay Street will also set itself apart through its commitment to high-quality food, service, design, and atmosphere."

5. Marketing Plan

Unlike the market analysis section, your marketing plan section should be an explanation of the tactical approach to reaching your aforementioned target audience. List your advertising channels, organic marketing methods, messaging, budget, and any relevant promotional tactics.

If your company has a fully fleshed-out marketing plan, you can attach it in the appendix of your business plan. If not, download this free marketing plan template to outline your strategy.

Free Marketing Plan Template

Outline your company's marketing strategy in one simple, coherent plan.

• Pre-Sectioned Template
• Completely Customizable
• Example Prompts
• Professionally Designed

Why it matters: Marketing is what puts your product in front of your customers. It's not just advertising — it's an investment in your business.

Throwing money into random marketing channels is a haphazard approach, which is why it's essential to do the legwork to create a solid marketing plan.

Here's some good news — by this point, you should have a solid understanding of your target market. Now, it's time to determine how you'll reach them.

Example of a Marketing Plan Overview

"Our marketing strategy will focus on three main initiatives:

• Social media marketing. We will grow and expand our Facebook and Instagram following through targeted social media ads.
• Website initiatives. Our website will attract potential visitors by offering updated menus and a calendar of events.
• Promotional events. Jay Street will have one special theme night per week to attract new clients."

6. Sales Plan

It doesn't matter if your sales department is an office full of business development representatives (BDR) or a dozen stores with your products on their shelves.

The point is: All sales plans are different, so you should clearly outline yours here. Common talking points include your:

• Sales team structure, and why this structure was chosen.
• Sales channels.
• Sales tools, software, and resources.
• Prospecting strategy.
• Sales goals and budget.

Like with your marketing plan, it might make sense to attach your completed sales plan to the appendix of your business plan. You can download a template for building your sales plan here .

Why it matters: Among other things, investors are interested in the scalability of your business — which is why growth strategies are a critical part of your business plan.

Your sales plan should describe your plan to attract customers, retain them (if applicable), and, ultimately, grow your business. Be sure to outline what you plan to do given your existing resources and what results you expect from your work.

Example of a Sales Plan Overview

"The most important goal is to ensure financial success for Jay Street Lounge and Restaurant. We believe we can achieve this by offering excellent food, entertainment, and service to our clients.

We are not a low-cost dining option in the area. Instead, the food will have premium pricing to match its upscale feel. The strategy is to give Jay Street a perception of elegance through its food, entertainment, and excellent service."

7. Legal Notes

Your investors may want to know the legal structure of your business, as that could directly impact the risk of their investments. For example, if you're looking for business partners to engage in a non-corporation or LLC partnership, this means they could be on the line for more than their actual investment.

Because this clarification is often needed, explain if you are and/or plan to become a sole proprietor, partnership, corporation, LLC, or other.

You should also outline the steps you have taken (or will need to take) to operate legally. This includes licenses, permits, registrations, and insurance.

The last thing your investor wants to hear after they've sent you a big chunk of change is that you're operating without proper approval from the local, state, or federal government.

Why it matters: The last thing your investor wants to hear after they've sent you a big chunk of change is that you're operating without proper approval from the local, state, or federal government.

Example of Legal Notes

"Jay Street Lounge and Restaurant is up-to-date on all restaurant licenses and health permits. Our business name and logo are registered trademarks, presenting the possibility of expanding locally."

8. Financial Considerations

Ultimately, investors want to know two things:

• When they will earn their money back.
• When they will start seeing returns on their initial investment.

That said, be clear, calculated, and convincing in this section. It should cover:

• Startup costs.
• Sales forecasts for the next several months/quarters.
• Break-even analysis for time and dollars.
• Projected profit and loss (P&L) statement.

Facts and figures are key here, so be as specific as possible with each line item and projection. In addition, explain the "why" behind each of these sections.

However, keep in mind that information overload is a risk, especially when it comes to data. So, if you have pages upon pages of charts and spreadsheets for this section, distill them into a page or two and include the rest of the sheets in the appendix. This section should only focus on key data points.

Why it matters: One of the most important aspects of becoming "investor ready" is knowing your numbers. More importantly, you need to understand how those numbers will enhance your business.

While it's easy to write a number down on paper, it's more important to understand (and communicate) why you need capital, where it's going, and that your evaluation makes sense.

Example of Financial Projections

"Based on our knowledge and experience in the restaurant industry, we have come up with projections for the business.

Starting with an expenditure of $400,000 in year 1, we forecast sales of $1,500,000 and $2,800,000 for years two and three. We expect to achieve a net profit of 15% by year three."

9. Appendix

A detailed and well-developed business plan can range anywhere from 20 to 50 pages, with some even reaching upward of 80.

In many cases, the appendix is the longest section. Why? Because it includes the supportive materials mentioned in previous sections. To avoid disrupting the flow of the business plan with visuals, charts, and spreadsheets, business owners usually add them in the last section, i.e. the appendix.

Aside from what we've already mentioned – marketing plan, sales plan, department budgets, financial documents – you may also want to attach the following in the appendix:

• Marketing materials
• Market research data
• Licensing documentation
• Branding assets
• Floor plans for your location
• Mockups of your product
• Renderings of your office space or location design

Adding these pieces to the appendix enriches the reader's understanding of your business and proves you've put the work into your business plan without distracting from the main points throughout the plan.

Why it matters: An appendix helps the reader do their due diligence. It contains everything they need to support your business plan.

Keep in mind, however, that an appendix is typically necessary only if you're seeking financing or looking to attract business partners.

Use a Business Plan Template to Get Started

Writing a business plan shouldn't be an insurmountable roadblock to starting a business. Unfortunately, for all too many, it is.

That's why we recommend using our free business plan template. Pre-filled with detailed section prompts for all of the topics in this blog post, we're confident this template will get your business plan started in the right direction.

Editor's note: This post was originally published in June 2017 and has been updated for comprehensiveness.

Don't forget to share this post!

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

May 24, 2021

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

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

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

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

What Is a Business Plan?

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

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

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

Get a Business Idea

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

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

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

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

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

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

Conduct Market Analysis

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

Product and Service Demand

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

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

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

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

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

Identify Demographics of Target Market

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

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

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

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

How to Write a Business Plan

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

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

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

SWOT Analysis

• Competitor Data
• Competitive Analysis
• Marketing Expenses Strategy 

Pricing Strategy

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

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

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

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

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

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

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

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

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

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

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

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

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

Mike told us,

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

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

It consists of three basic parts:

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

Example of an informal executive summary 

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

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

What should I include in an executive summary for investors?

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

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

Successful business plan examples

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

Here’s the interview with the owner of Urbanity:

When to write an executive summary?

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

What mistakes do people make when writing an executive summary?

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

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

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

How to Write a Business Plan Step 4. Company Description

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

• Mission statement
• Philosophy and vision
• Company goals

Target market

• Legal structure

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

Mission Statement

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

Company Philosophy and Vision

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

What makes your company different?

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

Examples of core values

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

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

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

What is a vision statement?

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

Example vision statements

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

A world without Alzheimer’s Disease and other dementia.

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

Business Goals

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

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

How far in advance should a business plan?

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

Example of great business goals

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

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

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

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

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

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

Industry resources

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

• Trade Associations
• Federal Reserve
• Bureau of Labor Statistics

Legal Structure

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

• Sole proprietorships
• Limited Liability Companies (LLC)

Partnerships

Corporations.

• Franchises.

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

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

• Sole Proprietorship

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

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

Limited Liability Company (LLC)

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

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

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

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

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

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

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

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

Questions to answer about your products and services

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

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

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

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

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

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

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

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

SWOT Examples

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

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

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

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

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

Include Competitor Data in Your Business Plan

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

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

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

Marketing Strategy

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

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

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

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

Advertising Strategy

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

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

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

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

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

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

Some common pricing strategies are:

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

HubSpot has a great calculator and blog on pricing strategies.

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

Distribution Plan

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

Supply Chain Examples

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

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

Examples of Supply Chains

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

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

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

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

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

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

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

Quality Control

• Legal environment

Let’s look at each for some insight.

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

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

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

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

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

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

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

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

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

Legal Environment

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

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

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

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

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

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

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

How to Write a Business Plan Step 8. Financial Statements 

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

Provide All Financial Income from an Existing Business

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

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

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

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

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

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

Financial Projections For A Startup Business Plan

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

Mike gave the following advice in his interview:

Financial Forecasting Mistakes

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Ways to get funding for a small business

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

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

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

How funding will be used

When asking for business financing make sure to include:

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

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

How to Write a Business Plan Resources

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

• Sample plan

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

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

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

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

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

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

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

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

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How to Sell a Business: The Ultimate Guide (2024)

• Define the exit strategy
• Prepare financial statements
• Get an independent business valuation
• Increase the business value of your small business
• Market to potential buyers
• Negotiate terms and sell your business
• Transition period

Step 1: Define the Exit Strategy

• Type of business
• Business structure
• Working with a broker vs. without a broker
• Who will take control of the business after I sell my business?

Type of Business

Business structure.

• Partnership
• Corporation
• Comparison of business structures (need to remake chart)

Broker Sales or Private Sales

Selling your small business with a broker.

How Do I Sell My Business Without a Broker?

Who will take control after selling your business.

• Employee Buyouts.
• Plan to sell to a related person upon retirement.
• A competitor approaches you about merging the businesses.

Step 2: Prepare Company Financial Statements

• Tax returns for last 7 years (or the start of business)
• Supplier agreements
• Business licenses and insurance documents
• Proof of intellectual property rights/ownership
• Documentation of all debts and liabilities
• Documentation of all assets
• Anything else you think the buyer might want to know

Step 3: Get an Independent Business Valuation

Valuations Formulas to Know Before You Sell Your Business

• Asset Valuation

Price to Sales Ratio

• Discounted Cash Flow

Asset Valuation Model

Price to earnings ratio, discounted cashflow method.

• Sales and growth
• Cost of capital (inflation assumption of 3% plus the interest rate on a loan)
• Income taxes
• Changes in inventory, accounts payable and accounts receivable
• Investment income
• Depreciation

Step 4: Increase Business Value Before Sale

• Documenting plan going forward like you aren't selling
• Improve financial positions and profit margin.
• Pay attention to the market

Documenting Plan Going Forward Like You Aren't Selling

Improve financial positions and profit margins, pay attention to the market, step 5: market to potential buyers.

• Business brokers
• Online business marketplaces, like UpFlip’s marketplace
• Sell to a top employee
• Sell to a competitor
• Newspaper / online ads
• Ask your social network
• Commercial realtors
• Trade associations
• You're franchisor if you are a franchise.
• Add "Small business for sale near me" in the metadata of posts and images online to trigger results during searches.
• Sell to someone you know.
• Have a third party help you.
• Use digital platforms to sell the business

Sell to Someone you Know

Have a third-party help you, use digital platforms.

Step 6: Negotiate Terms and Sale of Business

• Liabilities
• Period of Time You'll Stay During transition

Period of Time to Stay on after Transition

• Period of time you’ll stay on
• Roles during transition
• Pay during transition

Step 7: Transition Period

How to Start a $60K/Month Dog Boarding Business (2024)

Step 1: Learn more about pet boarding

What is dog boarding?

Learn the lingo, trade organizations, other international and national organizations.

• The International Boarding & Pet Services Association (IBPSA)
• National Association of Professional Pet Sitters (NAPPS)
• National Dog Groomers Association of America (NDGAA)

Publications

Certification.

Step 2: Pick up some training and experience

Technical abilities.

• Pet safe cleaning and sanitation to limit the spread of disease
• Breed knowledge to understand their various needs
• Grooming, such as nail clipping, brushing, and bathing

Soft skills

• Clear communication because owners love their pets and want to talk about them!
• Patience because you will need to learn and adapt to many personalities, both human and pet.
• Empathy because you'll be caring for someone's best buddy, often considered a family member.

Reference material

• Work for a boarding business.
• Walk dogs or pet sit with apps like Rover.com or Wag .
• Work in a related field, such as for a veterinarian, groomer, or animal shelter.
• Watch pets for friends and family.
• Take a pet first-aid class, like the one offered by Metro Dog .

Pets at home are OK, but not enough

• Physically handle different breeds and sizes of dogs.
• Deal with various personalities and behaviors.
• Properly feed, medicate, and groom them.
• Know how to recognize issues that require you to call a veterinarian or the owner.

Step 3: Decide what type of animal boarding business is right for you

At-home kennels, pet sitting and dog walking.

Housesitting

Investigate how to start a dog kennel, start a doggy daycare at a veterinarian's office, include cats and other pets, step 4: write a dog boarding business plan.

Sniff out the market

Be specific.

• Additional services you might provide
• Answering the question, "Are there kennels in my area?"
• The best location for starting a dog kennel 
• Financial projections and costs, especially as the business grows
• Pet boarding kennel insurance to provide adequate coverage
• Regulations for being a pet boarding business owner
• The unique competitive advantage of your professional dog kennel

Be flexible

Step 5: choose the right name for your pet care business, have fun, but leave some wiggle room, hang a tag with a brand.

Gobble up a dot com

What if i buy an existing business, chew on a bit of feedback, registration, step 6: what is legally required to start a dog daycare business, licenses and permits, regulations, step 7: select a location, how much does it cost to build a dog boarding facility.

• Can I find a dog boarding business for sale in the area where I want to do business?
• Is there commercial leasing for a pet boarding business near me?
• What's the proximity to similar boarding facilities?
• What are the area's demographics, and how do they compare to my targeted customer base?
• Is this location the right size for the services I want to offer?
• Should I buy a  business for sale ?
• What utilities and infrastructure are needed?
• What are the zoning laws for my type of business?

A quick note about leasing a commercial property

Designing a kennel or at-home location, step 8: hire the right people.

• Obtain an Employer Identification Number (EIN) from the IRS.
• Keep employment tax records per this guide provided by the IRS.
• Pay federal unemployment tax.
• Hang Workplace Posters in a visible spot.

Step 9: Stock your boarding facility with equipment and supplies

• Hands-free leash and waist pack
• Pet first-aid kit
• Treats and water

Brick-and-mortar

Overnight boarding, indoor and outdoor spaces, cleaning and sanitizing, step 10: incorporate safety protocols for boarding kennels.

Meet and greet

• Americans with Disabilities Act (ADA) compliance
• General things that can go wrong and how to handle them
• Regular inspections for safety issues
• Working conditions per Occupational Safety and Health Administration (OSHA) requirements

Step 11: Get the right insurance

• Commercial property insurance
• Commercial umbrella insurance
• Commercial auto insurance
• Home-based business insurance

Step 12: Handle your kenneling costs and revenue with a sound financial plan

Bank account

• Angel investor or venture capitalist
• Credit cards
• Crowdfunding
• Government programs
• Home equity loan
• Personal funding
• Loans from friends or family
• Loans from a lending institution
• Rollover for business startups (ROBS)

How much is dog boarding?

Step 13: kick-off a sales and marketing campaign, know your customer, partnerships and specials, establish a logo and brand identity.

• Tone - Are you professional, casual, or funny?
• Values - What’s important, and how will you communicate it?
• Blog - Because 81% of readers trust the information.

Digital marketing

Printed marketing collateral, direct contact, professional appearance as a walking advertisement for your business, media outlets, step 14: establish sound business processes for daily operations.

• Establish operational processes.
• Create customer-facing materials.
• Deploy new products and services.
• Work through the ideal and alternative paths of daily processes.

Key processes to document

• Acclimating new pet guests
• Answering pet parents’ questions and concerns
• Handling incidents
• Laying out the facility
• Keeping people and pets separate and secure
• Processing payments and reconciling accounts
• Running the back office and providing administrative support
• Sanitizing on a schedule and performing the related activities
• Scheduling exercise, feeding, and grooming

• Emergencies
• Hours of operation
• Health conditions and medications
• Pick up and drop off
• Weather events
• Vaccinations

People will always need pet care, so go out and do it!

Now that you know what it will take to open your very own dog boarding business, what's your next step.

• Am I the right person to own a pet boarding business?
• Do I have what it takes to handle customers and their concerns?
• How can I ensure my facility is profitable?
• Do I still want to be a dog daycare business owner?

How to Start a $1M/Month Tow Truck Business

Did you know that 69 million vehicles need to be towed each year?

That’s nearly 190K people who call up a towing business every day.

We talked to Vanice and Vincent Serrano, founders of ASAP Towing, to find out how to start a tow truck business that makes more than $10M each year. They provide insights on how towing services make money, how to hire employees, how to become a tow truck driver, and more.

[su_note note_color="#dbeafc"] We’ll share insights, strategies, and tips. Click on one of the links below to learn more about starting a tow truck business, or just continue reading.

Tow Truck Business Case Study: ASAP Towing

Learn about the towing industry, step #1. identify your target market, step #2. research local regulations, step #3. create a tow truck business plan, step #4. consider a startup loan, step #5. register your business, step #6. open a business bank account, step #7. get tow truck business insurance, step #8. get the required licenses and permits, step #9. buy equipment and tools, step #10. develop and implement a marketing strategy, step #11. provide great customer service, frequently asked questions, hiring tips, top towing influencers.

• Conclusion [/su_note]

Vincent grew up working in auto repair shops owned by his dad, but he wanted to have a business to call his own. They already owned a tow truck and had land, so they decided to start a new tow truck company.

The business venture was mostly Vanice and one employee during its first year. About 18 months in, Vincent had to quit his day job and work at ASAP full time because it was making $250K per year.

The local tow truck company offers towing services for breakdowns, lockouts, accidents, impounds, and more. Check out our interview with Vincent and Vanice below.

Before we discuss how to start a towing company, it’s important to learn all about towing and how the industry operates. We’ll discuss:

• The cost to start a tow truck business
• The amount towing vehicles makes
• Industry profit margins
• Major players
• Industry outlook
• Legal requirements
• How to get a tow truck driver license

How much does it cost to start a tow truck business?

Vincent told us starting your own towing company requires around $10,000 to get a truck, licenses, and towing equipment. We’ll discuss individual costs more in other sections.

How much do tow truck drivers make?

As of January 26, 2024, the average salary for a U.S.-based tow truck driver is $44,198, with a range of $38,820–$50,211, and an average hourly rate of $18.54.

You’ll normally want to pay yourself this salary in addition to some profits from the business when you are an owner-operator.

Your location, experience, employer, skills, and education may impact the pay for tow truck driver jobs. Some drivers will also get bonuses and tips.

According to Indeed , the tow truck driver salary is highest in the following cities:

• Milwaukee, WI
• Sacramento, CA
• Los Angeles, CA
• Las Vegas, NV

How much profit can a towing business make?

Transportation businesses normally make 30.59% gross margins and 5.91% net margins. Some people who own towing companies make up to 33.65% profit, which means that the Serranos are likely bringing in somewhere between $700K and $4 million in profits.

Who are the major players in the towing business?

Because many tow truck businesses are privately held companies, it is difficult to find accurate revenue numbers for the largest towing businesses. Along with ASAP Towing, some other large tow truck businesses include:

• United Road Towing : Dun & Bradstreet (D&B) estimates United Road Towing’s annual revenue to be $99M .
• Jamie Davis Towing : ZoomInfo estimates annual revenue is under $5M for this towing company.
• Certified Towing: Revenue is estimated at $1M , according to D&B .

What is the towing industry’s outlook?

IBIS World values the U.S. towing industry at $12.5B and expects it to grow around 2.9% in 2024. They expect it to continue growing at a faster rate after inflation settles down.

Any industry that exceeds the GDP growth in the U.S. is a great one to enter as a business owner.

What are the requirements for a tow company?

Before starting a tow truck company, you will need various tools, permits, and licenses. Consult your local small business office, the DMV, or a lawyer who specializes in tow truck businesses.

A tow trucking company will normally need:

• Drivers with class B driver’s licenses
• Business structure as a limited liability company (LLC) or corporation
• Comprehensive auto insurance with uninsured motorist insurance and higher limits than the state minimum (no less than $250K, but $1M is better)
• Business insurance
• High physical damage insurance
• An oversized vehicle permit (depending on what you will be towing)
• Indictment management permit (if towing without consent)

How to Get a Tow Truck License

To drive a truck with below a 26,000-pound towing capacity, you only need a regular driver’s license. You’ll need a commercial driver’s license (CDL) for anything bigger.

That means you’ll need to take a CDL course, which takes about a month. Then you’ll need to pass the DMV test.

Next, we’ll look at how to start a tow truck business.

How to Start a Tow Truck Business

Starting a tow truck business requires special considerations because of the nature of dealing with vehicular accidents and repossessions. You’ll want to follow the process below to start a successful towing business:

1. Identify your target market. 2. Research local regulations. 3. Create a business plan. 4. Consider a startup loan. 5. Register your business. 6. Get the required licenses and permits.

7. Buy equipment and tools. 8. Develop a marketing strategy. 9. Get liability insurance. 10. Open a business bank account. 11. Provide excellent customer service.

Keep reading to learn how to start a towing business.

Tow truck companies use multiple business strategies to bring in revenue. An indispensable strategy is identifying your target market. Potential customers include:

• Insurance companies: Companies like AAA and Roadside America need towing and roadside assistance for their customers.
• Government agencies: These entities impound cars and need someone to tow them. Not that there may be minimum truck requirements.
• Banks and lenders: Repossession services work with banks and lenders. Learn more about repo laws on the American Recovery Agency website .
• Motorists: Towing businesses can also work with civilians to tow vehicles when they break down or are otherwise immovable.
• Subcontracting: Many businesses outsource their towing needs.
• Automotive companies: A towing business might also work with car dealerships and auto auctions to deliver cars to dealerships or customers.

Every towing business needs to understand the local, state, and federal laws that the automobile towing industry operates under. Make sure to check the regulations for all levels of government based on the towing services you provide.

A tow truck operator will normally be governed by federal law in two scenarios:

• Maximum towing capacity for different types of trucks
• Interstate commerce laws, which come into play when commercial vehicles cross state lines

States and local governments will often have laws and regulations that govern the tow truck industry, including minimum tow truck insurance and CDL requirements.

You don’t have to write a towing business plan, but it won’t hurt. It will help you keep track of how your towing company is progressing toward its goals. Tow truck business plans should follow a process similar to this:

• Find customers.
• Get your permits and licenses to drive a tow truck.
• Start your company.
• Buy a tow truck.
• Start towing vehicles.
• Follow a marketing plan to take on more work.
• Buy more trucks.

Download our business plan template, then check out our interview with Mike Andes on how to write a business plan below:

Starting a towing business isn’t cheap. With the cost of a flatbed truck, tow truck insurance, commercial auto insurance, and small business insurance, you can expect to spend $10K to start a towing company. Other sites estimate the tow truck business startup cost can range from $62 to $2M .

• Personal funds or assets
• A loan from family or friends
• Funds from a business partner
• Home equity loans
• Business loans ( Check out our partners .)

The Small Business Administration (SBA) offers free courses on financing options and funding programs . For info on using personal funds to start a business, check out this article from The Hartford .

Registering a tow truck business will require you to:

• Choose a business name: You’ll want a tow truck business name that is available as a website domain name, social media handle, and registered business name with your secretary of state and the U.S. Patent and Trademark Office. Check domain availability on GoDaddy .
• Create a business structure: You’ll want to get either an LLC or a corporation when starting a tow company. You do not want to get a sole proprietorship because it will expose your personal assets to a lawsuit if you get in a wreck with the tow truck.
• Apply for an EIN: An employer identification number (EIN) is required to file taxes for business entities on the IRS website. It is also used to associate employee payroll taxes with the correct company.
• Acquire a sales tax permit: Most states have a sales tax, and you need to adhere to their requirements. This blog isn’t the place to discuss the permits for all 50 states, but Avalara has a guide on sales tax permits . Check it out.
• Labor law posters: All employers must display workplace posters that signal they’re following labor laws. You can download them from the Department of Justice website . You must also follow all hiring laws.
• Unemployment Insurance (UI): You’ll have to pay about $420 per employee on a federal level plus any state UI. Check the U.S. Chamber of Commerce for more information.

Having an open bank account for your business is crucial to keeping your personal finances and tow truck business finances separate. If you have a limited liability company or a corporation, you’ll also need it to get business loans and personal liability protection.

If you have a business bank account, you can also get a business credit card and potentially commercial truck financing.

You’ll want a variety of insurance policies when you own tow trucks. You’ll want:

• Auto liability insurance: covers the vehicle owner if one of their tow truck drivers gets in a wreck
• Uninsured motorist insurance: covers your flatbed truck and your employee if an uninsured driver hits the vehicle
• Workers compensation insurance: covers the medical fees and lost work if employees get hurt or killed on the job

When you own tow truck company assets, you’ll also want various types of business insurance, like general liability, a business owner's policy, and commercial property insurance. Try Simply Business to get quotes from many of the best business insurance companies.

As stated, tow trucks may require you to apply for additional permits and licenses. We suggest anyone who wants to tow vehicles reach out to a local business law attorney to verify that they have complied with all laws and regulations.

One of the major business expenses for a successful towing company is the cost of flatbed trucks for hauling wrecked vehicles. Some of the places you can find the different types of tow trucks include:

• A bank repoed tow truck sale
• Auto auctions
• Failing tow truck businesses
• Commercial Truck Trader

You’ll want to focus on marketing when starting a tow truck business. Vincent suggests using the following marketing for tow trucks:

Instagram and Facebook

• Videos platforms

Launch a Website

Creating a website helps people get the information they need about the services you offer, how much they cost, and where your business is located.

Some services you might list on your website include:

• Roadside assistance
• Repossession services
• Impounding and storage
• Vehicle auctions
• Heavy-duty towing services

Tow places should optimize their website for search engines for search engines. For example, adding a Google Map location to their website’s footer can help it show up higher on Google.

Vincent told us he has one company that does his videos, another that does search engine optimization, and a third that does social media. You can find all-encompassing services, as well.

Your business budget should include some expenses for advertising on Google. Vincent told us:

[su_quote] ”We’re spending a little over $1,000 per month on Google right now.” [/su_quote]

Vincent told us that he is fairly new to Instagram, but it is starting to provide some returns. He said he has found success on Facebook.

Like many business owners, Vincent is starting to get into video marketing.

When you start a tow truck business, you can create videos about the common types of calls a tow operator gets. You can also explain how to do things like change a battery, replace a tire, and what to do in an accident—but make sure not to give any legal advice.

How much should a towing business spend on marketing?

Established tow truck companies should spend between 2% and 10% of desired revenue on marketing, depending on whether they are marketing their towing business to businesses or consumers. Business-to-consumer companies normally spend more on marketing.

According to entrepreneur Thomas Minieri , new companies should spend up to 20% of their target revenue on marketing to help them grow faster. You will normally want to spend between 15% and 20% of your budget on advertising costs.

Despite the suggestions, many small business owners spend much less on marketing. For instance, both Kenneth and Vanice spend less than 1% of their revenue on marketing.

Tow companies need to provide great customer service. Whether you’re towing for law enforcement, a business, or people in need of repairs, you should try to be compassionate.

Towing companies often provide emergency roadside assistance, but some partner with other businesses to transport vehicles that are (often unintentionally) parked illegally. When someone gets their car towed, remember they may not have known that their car was parked improperly.

Now that you know how to start a tow truck business, let’s look at some frequently asked questions about the industry.

We’ll start with the question on everyone’s mind:

How much do tow trucks cost?

There are a few different types of trucks:

• Flatbed tow truck for sale
• Ramp trucks for sale
• Wrecker truck for sale
• Integrated tow truck for sale

In most cases, expect to spend $25K or more.

How can I start a successful tow truck business with no money?

You have to start somewhere. Kenneth suggested the following solutions:

• Can you finance?
• Can you get a lease on a truck?
• Can you ask friends and family?

He also told us:

[su_quote] I went looking for a loan so I could buy a tow truck and found out that you can’t get a loan to start a business unless you’ve been in business for two years.

I wound up going into it on a lease, rent to own. The truck sold for $50,000. By the time I’m done paying for the truck, it’ll be $106,000. [/su_quote]

He went on to say:

[su_quote] The benefit of leasing is you can get into a vehicle with a limited amount of money. The downfall of it is, if you don’t find the right leasing company, you’re gonna be paying them to double whatever the original amount was. So do a little diligence and find out. If they say there’s no puny penalty for prepayment, make sure that the amount is going to be adjusted. [/su_quote]

There are more ways to fund a towing company.

Common funding paths include:

• Personal funds or personal assets

The SBA offers free courses on financing options and funding programs . For info on using personal funds to start a business, check out this article from The Hartford .

Running the tow truck company is what you will spend most of your time doing. This includes aspects like hiring employees, helping customers, keeping inventory in stock, accounting, and payroll.

Kenneth had a lot to say about hiring drivers. He said the most important aspects of drivers are:

• Do they have the required licensing?
• Do they stay in communication with the owner?
• Do they have mechanical experience, or are they willing to learn?

Without the required licensing, they won’t be able to earn money. But the other aspects are more important to focus on for the bigger picture. Here’s what he had to say about communication:

[su_quote] [An employee is valuable] when they stay in contact with you and they keep you aware of what’s going on with your vehicle. If they’re having any problems, just tell me what your problem is. And I will give you the answer, ’cause my job is to help you. [/su_quote]

He also emphasized the importance of being mechanically inclined:

[su_quote] I’ve hired three people in the last month. I had to fire one quick because I explained to ’em, you know, the truck needs maintenance. I can’t be driving 16 hours a day and work on my truck, your truck, and everybody else’s truck.

It’s just not gonna happen. You have to take care of the truck. So, if you don’t know how to be a car mechanic, that probably is a tough spot to begin with.

I’m even willing to teach you what you need to know. I don’t have a problem with that because we succeed together as a team or we fail as a team. [/su_quote]

Find out what other people in the industry are doing:

• Jamie Davis Towing: Check out his YouTube Channel
• Get Hooked: A towing industry Podcast

We’ve covered how to start a tow truck company; now it’s your turn to get the licenses and permits, find some customers, get a truck, and start towing.

If you’ve already started one, what has been the most challenging part of starting an independent towing service?

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

February 02, 2023 | 14 minute read

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

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

What is a business plan?

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

Why are business plans important?

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

What questions should a business plan answer?

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

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

How to write a business plan in 11 steps

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

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

1. Executive summary

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

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

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

2. Business overview

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

3. Business goals and vision

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

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

4. Management and organization

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

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

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

5. Service or product line

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

6. Market/industry analysis

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

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

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

7. Sales and marketing

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

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

8. Financials

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

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

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

9. Financial projections

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

10. Funding request

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

11. Appendix

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

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

Tips for creating an effective business plan

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

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

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

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

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

Updating an existing business plan

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

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

Final thoughts

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

Business plan FAQs

What are common mistakes when writing a business plan.

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

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

What are the different types of business plans?

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

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

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

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

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

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

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

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

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

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

Explore more

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Starting a new business

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

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

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What is resource management? A guide to getting started

Resource management is the process of planning and scheduling your team’s resources and activities—essentially anything that helps you complete a project. Developing a resource management plan can give you visibility into team member workloads. Learn how to manage resources and improve team performance.

Making sure your team doesn’t feel overworked or underutilized is a challenge you’ll often face as a leader. It's easy to lose sight of your team's workload and bandwidth. That’s where resource management comes in. 

Developing a resource management plan can give you consistent visibility into your team’s workload. It allows you to balance all your resources effectively and to see the full picture of how your team will achieve its goals.

What is resource management?

Resource management is the process of planning out and scheduling your team’s resources to optimize utilization and ensure project success. A resource can include everything from equipment and financial funds to tech tools and employee bandwidth—basically, anything that helps you complete a project.

When you’re deciding how to manage or assign your team’s resources, consider a few questions:

What is the availability of each resource?

What are the timelines for each activity?

How many resources will be required to accomplish each activity?

Who is the best person to accomplish the activity effectively?

Effectively managing your resources ensures every project is well-equipped and every team member is appropriately allocated, paving the way for successful project completion.

How to effectively manage your team’s workload

Learn how to leverage work management to distribute work more effectively.

Why is resource management important?

Resource management allows you to make sure your team members are confident with the amount of work on their plate and equipped with the tools they need to accomplish each task. When resource management is done right, you’re empowering your team to produce high-quality work at a sustainable rate. 

Benefits of resource management

Let’s dig a little deeper into why resource management is critical to your team’s success. With effective resource management, you can:

Distribute work appropriately , ensuring all your team members are appropriately staffed—not overworked or underutilized.  

Spot potential resourcing problems in real-time and adjust accordingly, preventing staffing issues from impacting progress on projects.

Give your team clarity around their responsibilities and the responsibilities of their team members, limiting misunderstandings and promoting accountability. 

Set realistic project goals , reducing the likelihood of missing important milestones and increasing the chances of on-time project completion.

Enhance your team's profitability by optimizing resource utilization and ensuring projects are completed efficiently and within budget.

Improve future resource planning by drawing on the knowledge gained to better estimate and forecast bandwidth for upcoming projects.

Resource management techniques

Leveraging resource management techniques is all about finding the smartest ways to use your team's skills and resources. Let’s explore a few common types of resource management methods.

Resource allocation

Resource allocation is more than just allocating resources to tasks and projects; it's the process of choosing the best resource based on the project team’s skills and capacity. After all, good resource management isn’t just about making sure you have enough resources; it’s about making sure you have the right resources for the right projects. Resource allocation can help you achieve this by strategically matching your team's strengths, capabilities, and resource capacity to the specific demands of each project.

Resource utilization

Resource utilization involves using tools like utilization reports and time tracking software to identify your team’s capacity over a specific period of time. It’s a capacity planning technique that allows you to identify whether project resources are being underutilized or overallocated, so you can better manage workloads.

Resource forecasting

Resource forecasting is a resource management process that involves proactively predicting the resource requirements for future projects and initiatives. You can identify these needs by relying on past trends and project metrics, as well as your team’s current capacity and the needs of upcoming projects. Resource forecasting is typically done during the project planning stage and can help with risk management by identifying potential resource bottlenecks or gaps in your team's availability in advance.

Resource leveling

Resource leveling is a resource management solution designed to combat shortages or overallocation by leveraging underutilized resources. For example, this might mean shifting work from one team member’s plate to another who has similar skills and additional capacity. Or, it could mean taking advantage of skill sets that typically aren’t utilized, like having a website content writer create social copy.

Types of resource management

Effective resource management is pivotal in steering any organization toward its goals. This process involves a strategic approach to managing various essential resources. 

Here, we focus on three fundamental types: human, financial, and material resources. Each category plays a unique role in the broader spectrum of resource planning and is a crucial component of any resource management plan.

Human resource management (work resources)

Human resource management is the strategic approach to managing a company's most valuable assets—its employees. This involves not just recruiting and hiring but also integrating workflow and automation tools to streamline training, performance assessments, and career development planning.

Example: A software company might enhance its human resource management by using workflow automation to efficiently align its workforce with emerging technology trends. This ensures that developers are systematically trained in the latest programming languages and Agile methodologies. By automating parts of the training and development process, the company can quickly adapt to changes in the fast-paced tech industry.

Financial resource management (cost resources)

Financial resource management is the process of planning, organizing, directing, and controlling financial activities such as procurement and utilization of funds. It involves making smart decisions about allocating financial resources to various projects or departments. 

Example: Consider a multinational corporation that allocates budgets across different regions, taking into account local market conditions, operational costs, pricing strategies, and revenue projections. This strategic financial management helps to ensure high-priority initiatives receive the necessary funding and resources to thrive. These resources, such as consulting or other professional services, are instances of tactical spending that are helpful but not the main purpose of budgetary allocation.

Material resource management (material assets) 

Material resource management involves the efficient planning, sourcing, and utilization of physical resources required for business operations. It encompasses inventory management, purchasing, and supply chain optimization to support the entire project lifecycle, from initial planning to final delivery. 

Example: A manufacturing firm may use material resource management to ensure a steady supply of raw materials like metals and plastics. By doing so, the firm can avoid production delays and cost overruns, thereby maintaining product quality and meeting customer delivery timelines.

5 step resource management plan

A comprehensive resource management plan is essential for any organization looking to optimize its resources effectively. This plan involves a series of steps that ensure resources are deployed efficiently and comply with both the project lifecycle and overarching business goals. 

Below are the five key steps in developing a solid resource management plan.

Step 1: Resource planning and budgeting

The first step in effective resource management involves detailed resource planning and budgeting. This process includes forecasting resource requirements and matching them to the available budget. 

Example: A tech startup, XYZ Software, begins its journey by planning resources for its innovative project management software. They forecast the demand for qualified software engineers and marketers, set aside money for cloud infrastructure, and make sure their financial resources are distributed effectively between development and marketing.

Step 2: Identify resources (capacity planning)

Identifying the right resources is make-or-break for any project's success. This step, often referred to as capacity planning , involves understanding the availability and skills of your workforce, as well as the physical and financial resources at your disposal. It’s about decision-makers being able to match the right resources with the right tasks, ensuring that your human, financial, and material resources are aligned with your project's needs.

Example: XYZ Software conducts a thorough analysis of its team's skills and identifies the need for additional software engineers with expertise in cloud computing. The company also assesses its current financial resources to ensure sufficient funding is available for these new hires.

Step 3: Allocate resources

Once resources are identified, the next step is their effective allocation. This involves assigning resources to various tasks and projects based on their availability and suitability. Resource allocation ensures that every project gets the necessary resources without overburdening any single aspect of the business.

Example: XYZ Software allocates its existing team to initial development phases, while the newly hired cloud experts are tasked with building the cloud infrastructure. Financial resources are allocated to ensure both teams have the necessary tools and software licenses.

Step 4: Resource tracking

Tracking resources throughout the project lifecycle is essential for ensuring that everything is proceeding as planned. This involves monitoring the usage of resources, assessing if they are meeting the project's requirements, and making adjustments as needed. Effective resource tracking helps in identifying potential shortages or surpluses early, allowing for timely corrective actions.

Example: As XYZ Software's project progresses, they use project management software to track the time and resources spent on each aspect of the project. By doing so, they are able to make adjustments in real time by identifying areas where resources might be overutilized or underutilized.

Step 5: Resource optimization

The final step in the resource management plan is optimization. This involves analyzing the performance and usage of resources and making necessary adjustments to improve efficiency. 

Resource optimization might include implementing automation tools to streamline processes or revising strategies based on performance data. Using resources as efficiently as possible is the aim, which will help the organization succeed as a whole.

Example: After launching the first version of their software, XYZ Software reviews their resource usage data. They realize that automating certain testing processes can free up developer time. This enables the team to focus more on critical tasks, thereby optimizing their use of human resources for future updates.

10 resource management best practices

Follow these ten best practices to boost your team’s productivity, hit project goals, and achieve a balanced team workload. 

Use a work management platform to streamline the planning process and ensure consistent, efficient allocation of resources across projects. While traditional resource management tools, like Gantt charts or spreadsheets, are useful ways to track capacity, their limited scope can’t match the extensive capabilities offered by a comprehensive work management platform. 

Measure available resources by gauging team capacity and necessary tools. This will help you ensure realistic resource allocation and avoid rescheduling issues.

Set start and end dates so you get a realistic timeframe for how long each task will take and set realistic expectations for your team. 

Know your employees’ skill sets so you can determine the best resourcing for each task. 

Set clear, accessible project goals to help you prioritize your team's work and drive high-impact work forward.

Help your team increase their utilization rate by automating routine, low-impact tasks so your team can focus on actionable, strategic, and billable work. 

Adjust resources as necessary because tasks, project timelines, and priorities change.

Keep some team bandwidth open for new work or priorities that might come up. 

Check in on your team to ensure each team member feels their work volume is fair and achievable. 

Connect your resource management plan to your operational plan in order to effectively manage your team's time and align daily tasks with strategic objectives. 

Manage your resources more effectively with a work management platform

To ensure you’re allocating resources effectively and aligning them to your wider organizational goals, use a work management platform. By centralizing project details and team capabilities in one platform, you can ensure efficiency, clarity, and alignment at every project stage.

Resource management FAQs

Have more resource management questions? We’ve got answers.

What is a resource management plan?

A resource management plan can help you manage and assign every type of resource you need for your project. An effective plan outlines the specific resources (including human resources, financial resources, technical resources, and physical resources) and activities necessary during the course of a project or initiative. 

Why is creating and implementing a resource management plan important? 

A resource management plan will guide you by giving a holistic view of all of a project’s moving pieces: budget, staffing and workload requirements, and tech stack limitations—allowing you to easily manage, schedule, and assign every resource while maximizing resource availability. Learning how to manage resources will empower you (and your team) to run projects effectively.

Should I create a resource management plan for my project?

The short answer is yes. Resource management in project management isn’t just a nice-to-have. It’s a must-have to support your team and prevent burnout. The benefits of resource scheduling far outweigh the time it takes. 

The number of projects your team can handle, along with the quality of each, depends on it. As a project leader, resource management is your opportunity to optimize efficiency, prevent overwork, and effectively manage your team’s workload.

What is a resource management plan template?

A resource management template is a reusable guide that helps you manage team bandwidth over the course of a project. It shows you everything your team is working on—so you can see how full everyone’s plate is, if they can take on additional work, or if they need help to get project tasks done by the deadline. Thanks to your template, you don’t have to waste time setting up a resource management plan for every new project. Instead, you can just copy the template, fill it in, and start working.

What are the steps to creating a resource management plan? 

To create an effective resource management plan, leverage a tool like a work management platform, which will give you easy insight into what everyone on your team is working on, what resources are available, and how to prevent team burnout. Then, follow these steps:

Define the project’s goals to gain clarity on what each project entails and make it easier to know what resources you need and how to assign them. 

Align on the project scope by meeting with project stakeholders to define how much time and resources you should dedicate to the initiative. That will give you the best sense of the project plan and help you decide what resources are best suited for the job.

Identify the types of resources you’ll need —such as bandwidth, equipment, software, and project budget—so you can then identify what resources you have available.

Identify available resources by checking each resource you previously needed against what you have already available. Depending on the project scope, you might have to adjust your resource level and deprioritize other work to avoid putting too much on your team’s plate.

Kick off your project by clearly communicating the resource plan to your team, ensuring everyone understands their roles and the resources at their disposal.

Periodically check in on project progress to see how the project is progressing and whether you need to make adjustments to your resourcing strategy.

Related resources

3 visual project management layouts (and how to use them)

Grant management: A nonprofit’s guide

Everything you need to know about waterfall project management

Smooth product launches are simpler than you think

Discussing Key Resources and Risk Exposure in Your Farm Business Plan

• Margaret Lippsmeyer, Michael Langemeier , and Michael Boehlje
• Center for Commercial Agriculture
• Purdue University

Introduction

Developing a business plan for your farm helps align day-to-day operations with overarching business goals.  In this article, we explore the importance of assessing current business resources and exposure to risk while creating a business plan.  We provide discussion on risks to your business’s key resources, a framework to evaluate the strength of your farm’s resource base, and an outline of how to craft an effective business plan.  These topics link back to our previous articles on integrated risk management (Lippsmeyer, Langemeier, and Boehlje, 2024a) and key resources (Lippsmeyer, Langemeier, and Boehlje, 2024b) where we discussed how macroeconomic factors and other external shocks can influence timing and effectiveness of investments in key business resources.

Assessing Resources

Availability and strength of key resources—including financial, physical, human, organizational, and information technology—should shape your business objectives and determine an effective business plan.  Business objectives and business plans should focus on strengthening your farm’s key resource base.  This resource base acts as a foundation for potential farm expansion, or ability to withstand shocks or stresses in the business environment.  Evaluating key resources is a critical initial step in business planning, ensuring you have accurate benchmarks for your business’s resources.  These benchmarks help to identify which key resources to leverage and which need to be strengthened.

In the next sections we discuss different types of key resources and major risks associated with each.  In addition to this discussion, Figure 1 poses a series of questions which can be used to assess the strength of your farm’s key resources.  These questions are intended to pinpoint potential shortcomings in a farm’s resource base, thereby assisting in the development of a business plan that addresses resources needing improvement.  Figure 2 illustrates risk exposure by resource category.

Figure 1. Assessing Strength of Business Resources

Adapted from Olsen (2007)

Organizational Resources

Organizational resources are the glue which binds together physical, financial, human resources, and information technology, giving direction and meaning to a farming operation.  Organizational resources include business reputation, core values, operational structures, and systems, and play a vital role in differentiating your farm from competitors.  For example, most operations can effectively produce yellow corn, but consistent product quality, reliable logistics, trustworthy relationships with input suppliers and product distributors are ways in which your organizational resources may yield a competitive advantage.

Many risks associated with organizational resources are considered strategic risks.  Strategic risks are caused by external shocks or stresses which create a misalignment between a farm’s business strategy and available resources and capabilities (Lippsmeyer, et al., 2023).  These risks lack off-the-shelf risk mitigation strategies, making them particularly threatening for businesses.  Risks to organizational resources exemplify strategic risk: coming from a variety of sources, are known to cause brand erosion, tarnish reputation, obscure business strategy, and lack effective tools to mitigate these risks.

Adverse weather conditions reducing crop yield is often categorized as a production risk.  However, if as a consequence your operation fails to fulfill a sales contract, the risk becomes a strategic risk, impacting your business’s reputation.  Although distributors may have alternative sources to compensate for your shortfall, your farm’s reliability in meeting contractual obligations could come under scrutiny.  This could adversely affect your future prospects of securing contracts with the same distributor.

Brand erosion and loss of reputation frequently relate to three factors: price, timeliness, and quality.  Balancing a competitive price and product quality is a challenge which impacts a farm’s ability to maintain a positive reputation and retain customers.  Moreover, perceptions of certain farming practices (i.e., production using certain chemicals or hormone treatments), negative publicity, or increases in competition may also contribute to brand erosion and reputation loss.

The clarity of a business strategy is another component of strategic risk.  Business strategy may become compromised due to complexities of relationships between operators, employees, and outside parties; or through attempts to expand to seize economies of scope.  For example, business strategy may become unclear during periods of high employee turnover or when a business expands into new market channels.  Periods high turbulence, when structure, goals, and values become unclear, are when resilience is most necessary.  Operational resilience can serve as a dynamic buffer, enabling quick adaptation to internal and external pressures, and sufficient slack resources to provide leeway while maneuvering through unforeseen challenges (Lippsmeyer and Langemeier, 2023).

Information Technology

Information technology draws parallels between the collection and use of farm data to the concept of ‘surveillance capital’ used to enhance social media platforms (Lippsmeyer, Langemeier, and Boehlje, 2024b).  In the context of production agriculture, information technology provides data-driven insights, helping producers identify operational inefficiencies, and assisting in on farm decision-making.  The effectiveness of this resource is highly dependent on data collection, organization, and ability to accurately analyze the data and draw correct interpretations.

A common risk associated with information technology is data security.  Whether it is financial data collected by a lender, input supplier data, or your farm production data, there are significant concerns about how to protect data from being stolen or accessed without permission.  Strategies to limit data accessibility include user authentication to ensure only authorized users can access your farm records, data encryption for sending sensitive information, and access control limits to restrict who can view, modify, or delete data.  In the age of increasing data collection and use, it is critical to read and fully understand contracts with equipment or information technology companies prior to signing away rights, and subsequently, knowing how to revoke access if necessary.

Risks relating to information technology span beyond data security.  Often even if data collection and storage is done in a secure manner, there remain difficulties or limitations associated with data processing.  This poses potential issues of uninformed or ill-informed farm decisions if incorrect conclusions are drawn from analysis, despite best efforts to use data driven insights.

Financial Resources

Financial resources include cash, investments, equity, and receivables, all of which provide liquidity to fund business expenses and updates to physical resources.  Sufficient financial resources ensure farming operations can pursue new opportunities when they arise and have ability to weather through unexpected periods of high input costs or low market prices.  Risks to financial resources include limited access to debt or equity capital and insufficient liquidity.  Without the availability of financial resources, the ability to grow or seize new opportunities is significantly constrained, if not entirely unfeasible.

Physical Resources

Physical resources include land, machinery, buildings, and inventories.  These assets are characterized by significant initial investment, continual need for maintenance, and a lack of liquidity relative to financial resources.  Assessments of physical resources may vary based on the type of farming operation and the type of resource but generally take into account the resource’s useful life, initial level of investment, quality of maintenance, and salvage value.  For example, maintaining land resources may involve soil testing, use of fertilizers to improve nutrient content, or use of cover crops to prevent erosion.  While other physical resources like planters and combines need much more frequent maintenance and replacement after exhaustion of their useful life.

One of the major risks related to physical resources is inefficient use (i.e., low utilization rates).  Inefficient use of machinery or storage facilities results in higher than necessary production costs.  However, inefficient use may be justified in some scenarios.  While inefficient use of physical resources is undesirable in the long run, for an operation that plans to grow, having some degree of slack may increase flexibility.

Other risks include improper care and overuse of a resource.  These risks are often attributed to poor management or lack of investment due to ownership structure – for example, producers who rent versus own machinery or farm ground are typically more hesitant to make major investments because there is no guarantee they will reap the future benefit from the investment.

Inventories are the final physical resource we will address.  Inventories, particularly stored crops, present unique risks including contamination with aflatoxin, insect infestation, or fire in storage bins from inadequate drying procedures.  Inventories are the most liquid physical resource for farming operations, typically being sold within one year of harvest, and often used to supplement financial resources.

Human Resources

There are two varieties of human resources we will discuss: those internal to an operation and those which are external.  Internal human resources include employees, management, company owners, as well as the relationships, knowledge, and competencies of each.  These resources have extensive operational and industry knowledge which is built through time.  Prior research shows experience displays positive relationships with profitability and financial efficiency (Vanhuyse, Bailey, and Tranter, 2021).  Lippsmeyer, Langemeier, and Boehlje (2024b), discuss the importance of human resources and provide strategies for how to attract and retain quality employees.  Risks relating to internal human resources include talent shortages, insufficient workforce, employee retention, and lack of experience.  Losing employees incurs significant operational costs, both directly (due to insufficient labor availability) and indirectly (due to loss of tacit operational knowledge) (Spender and Grant, 1996).

External human resources include customer relations, interactions with and knowledge of suppliers.  These relationships are more challenging to control due to their indirect connection with a business, yet remain critical for success.  Risks relating to customer relations include losses of long-term customers and related market opportunities.  Often these risks are closely related to product quality, pricing, and timeliness, as well as organizational resources.  If customers perceive you as an unreliable supplier, relationships will deteriorate quickly.  Maintaining consistent product quality, efficient logistics, knowledgeable employees, and quality service are all strategies businesses use to encourage longevity of reliable customer relationships (Claycomb and Martin, 2001).

Supplier risks include untimely deliveries, varying quality of inputs, and excessive or unexpected costs.  These factors have the potential to influence quality or price of a product, potentially reflecting poorly on your business.  Careful and frequent evaluation is necessary to decide which suppliers to continue doing business with, how to set and maintain input standards, and strategies to reward suppliers for desirable behaviors.

Setting Business Objectives

Obtainable business objectives are a critical part of every good farm business plan, so a direct path can be plotted from current performance levels to improved performance where objectives are met.  Objectives may vary by enterprise, but likely revolve around improving quality standards, profitability metrics, and timeliness.

Objectives may include achieving specific quality benchmarks for products, retaining a specific proportion of contract agreements from year to year, ensuring a given percentage of deliveries are completed on time, or having management take part in strategy, business, or leadership improvement workshops.  Objectives relating to information technology include learning to collect and store yield data, or developing systems to analyze the impact of different inputs on crop health.  Objectives for financial resources include achieving specific financial ratio benchmarks, paying off high-interest lines of credit, or saving to invest in a new piece of machinery.  Objectives to enhance and maintain human resources might involve hiring additional staff, offering career development opportunities, or offering incentives for loyal customers.

Developing A Business Plan

Using Figure 1, we encourage you to evaluate each of your farm’s key resources to help pinpoint any weaknesses in your resource base and subsequently identify areas in your operation needing improvement.  Business plans should begin by identifying strengths or weaknesses of current resources, assessing the implications of relative strengths (or weaknesses) in achieving business objectives, and then focus on setting up step by step plans to achieve those objectives.

Once your business plan has been created, considerations also need to be made for the timing of major organizational changes or substantial investments.  Both external shocks (e.g., macroeconomic uncertainties) and available operational slack must be considered to identify optimal timing to improve your resource base (Lippsmeyer, Langemeier, and Boehlje, 2024b).

In order to identify actions effective in making change, regular evaluations with consistent standards must be used to assess resource strength and progress made towards achieving objectives.  Continually assessing strengths and weaknesses of key resources and identifying potential improvements can prevent businesses from developing a ‘needs-based strategy’ which waits for major issues to arise, then scrambles to control damage.

Conclusions

This article has provided a discussion of key resources and risks associated with each.  By considering the strengths and weaknesses of your resource base, combined with the appropriate timing for investments, you will be better equipped to develop an effective business plan.  Using the tools provided in this article, we prompt you to critically assess your farm’s key resources and develop a business plan which progresses from your current resource base to achieving business objectives.

Claycomb, C. and C.L. Martin, C. L. (2001). “Building Customer Relationships: An Inventory of Service Providers' Objectives and Practices.” Marketing Intelligence & Planning, 19 (6). https://doi.org/10.1108/EUM0000000006109

Lippsmeyer, M. and M. Langemeier. (2023). “ Agility and Absorption Capacity .”  farmdoc daily (13):75, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, April 24.

Lippsmeyer, M., M. Langemeier, J. Mintert, and N. Thompson.  (2023). “ Resilience to Strategic Risk .”  farmdoc daily (13):115, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, June 23.

Lippsmeyer, M., M. Langemeier, and M. Boehlje.  (2024a). “ Integrated Risk Management: Developing an Asset-Based Business Strategy .”  farmdoc daily (14):54, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, March 18.

Lippsmeyer, M., M. Langemeier, and M. Boehlje.  (2024b). “ Key Resources Determining the Future of the Farm .”  farmdoc daily (14):60, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, March 27.

Olsen, E. (2007). Assessing Your Business and Its Capabilities. In Strategic Planning for Dummies (pp. 121-140). Indianapolis: Wiley Publishing, Inc.

Spender, J., and R. Grand, R. (1996). Knowledge and the Firm: Overview. Strategic Management. https://doi.org/10.1002/smj.4250171103

Vanhuyse, F., A. Bailey, and R. Tranter. (2021). "Management Practices and the Financial Performance of Farms." Agricultural Finance Review, 81(3) . https://doi.org/10.1108/AFR-08-2020-0126

Disclaimer: We request all readers, electronic media and others follow our citation guidelines when re-posting articles from farmdoc daily . Guidelines are available here . The farmdoc daily website falls under University of Illinois copyright and intellectual property rights. For a detailed statement, please see the University of Illinois Copyright Information and Policies here .

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Business Analysis Techniques

Introduction.

There are many techniques that Business Analyst's employ to do their job. With different techniques being available for different purposes in different situations.  The goal of this section of the wiki is to eventually provide:

• A fairly comprehensive list of techniques of use to Business Analysts
• A brief description for each of those techniques (the more info the better, but starting small)
• Tips for when, how, and why to use each technique
• Links to other resources on the web (blog posts, articles, papers, etc) where you can find out more about the technique

The amount of content for different entries may vary significantly, depending on whether users add to the wiki entry for that technique, and whether it is a commonly used technique.

What do I mean by Technique ?

For purposes of this wiki, I am defining a Technique as a specific action or set of actions that is used by a Business Analyst to help deal with issues of scope, elicitation, documentation, analysis, and verification.

I want to try and separate Techniques from Skills which I see as more general capabilities or knowledge sets of the Business Analyst.  As an example, I would say that facilitation is a Skill, while Brainstorming or running Joint Application Development (JAD) sessions are specific Techniques that supplement the Skill.  Because Skills are more generic to BA's in general, I have them in the Career section of the wiki.

Technique Categories and List

Each technique has it's own page, but I have attempted to group them below by usage. Any technique that is not a link below is a placeholder for a future page.

General Analysis Techniques

• Class Modelling
• Mind Mapping

Data Analysis Techniques

• Data Dictionary
• Data Flow Diagrams

Decision and Rules Techniques

• Business Rule Analysis
• Decision Models
• Decision Tables
• Decision Trees

Elicitation Techniques

• Concept Map
• Document Analysis
• Feature Tree
• Focus Groups
• Interface Analysis
• JAD Sessions
• Observation
• Problem Statements
• Prototyping
• Requirements Workshops
• Storyboarding
• Surveys and Questionnaires
• Use Case Diagrams
• User Stories

Enterprise Analysis Techniques

• Benchmarking
• Context Diagrams
• Feasibility Analysis
• Force Field Analysis
• Futures Wheel
• Organizational Modeling
• PEST Analysis
• SWOT Analysis
• Value Stream Mapping
• VMOST Analysis

Features and Functional Analysis Techniques

• Decomposition - Functional and Otherwise

Prioritization Techniques

• Category Assignment Prioritization
• Cumulative Voting Prioritization
• Hierarchical Cumulative Voting Prioritization
• Hierarchical MoSCoW Prioritization
• Kano Model Prioritization
• Matrix Prioritization
• MoSCoW Prioritization

Problem Solving and Ideation Techniques

• Affinity Diagram
• Brainstorming

Process Analysis Techniques

• Activity Diagram
• Business Process Modeling
• Sequence Diagram

Project Analysis and Scoping Techniques

• In/Out List
• Investment Logic Mapping
• Scope Analysis

Root Cause Analysis

• Fishbone Diagram

Stakeholder Management Techniques

• Responsibility Matrices: RACI, RASCI, and More
• Stakeholder Communications Matrix
• Stakeholder Maps
• Stakeholder Onion Diagram
• Stakeholder Radar Diagram
• Stakeholder Role Matrix
• Stakeholder Salience Diagram

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Business plan template: There's an easier way to get your business plan done.

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Example business plan format

Before you start exploring our library of business plan examples, it's worth taking the time to understand the traditional business plan format . You'll find that the plans in this library and most investor-approved business plans will include the following sections:

Executive summary

The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally only one to two pages. You should also plan to write this section last after you've written your full business plan.

Your executive summary should include a summary of the problem you are solving, a description of your product or service, an overview of your target market, a brief description of your team, a summary of your financials, and your funding requirements (if you are raising money).

Products & services

The products & services chapter of your business plan is where the real meat of your plan lives. It includes information about the problem that you're solving, your solution, and any traction that proves that it truly meets the need you identified.

This is your chance to explain why you're in business and that people care about what you offer. It needs to go beyond a simple product or service description and get to the heart of why your business works and benefits your customers.

Market analysis

Conducting a market analysis ensures that you fully understand the market that you're entering and who you'll be selling to. This section is where you will showcase all of the information about your potential customers. You'll cover your target market as well as information about the growth of your market and your industry. Focus on outlining why the market you're entering is viable and creating a realistic persona for your ideal customer base.

Competition

Part of defining your opportunity is determining what your competitive advantage may be. To do this effectively you need to get to know your competitors just as well as your target customers. Every business will have competition, if you don't then you're either in a very young industry or there's a good reason no one is pursuing this specific venture.

To succeed, you want to be sure you know who your competitors are, how they operate, necessary financial benchmarks, and how you're business will be positioned. Start by identifying who your competitors are or will be during your market research. Then leverage competitive analysis tools like the competitive matrix and positioning map to solidify where your business stands in relation to the competition.

Marketing & sales

The marketing and sales plan section of your business plan details how you plan to reach your target market segments. You'll address how you plan on selling to those target markets, what your pricing plan is, and what types of activities and partnerships you need to make your business a success.

The operations section covers the day-to-day workflows for your business to deliver your product or service. What's included here fully depends on the type of business. Typically you can expect to add details on your business location, sourcing and fulfillment, use of technology, and any partnerships or agreements that are in place.

Milestones & metrics

The milestones section is where you lay out strategic milestones to reach your business goals.

A good milestone clearly lays out the parameters of the task at hand and sets expectations for its execution. You'll want to include a description of the task, a proposed due date, who is responsible, and eventually a budget that's attached. You don't need extensive project planning in this section, just key milestones that you want to hit and when you plan to hit them.

You should also discuss key metrics, which are the numbers you will track to determine your success. Some common data points worth tracking include conversion rates, customer acquisition costs, profit, etc.

Company & team

Use this section to describe your current team and who you need to hire. If you intend to pursue funding, you'll need to highlight the relevant experience of your team members. Basically, this is where you prove that this is the right team to successfully start and grow the business. You will also need to provide a quick overview of your legal structure and history if you're already up and running.

Financial projections

Your financial plan should include a sales and revenue forecast, profit and loss statement, cash flow statement, and a balance sheet. You may not have established financials of any kind at this stage. Not to worry, rather than getting all of the details ironed out, focus on making projections and strategic forecasts for your business. You can always update your financial statements as you begin operations and start bringing in actual accounting data.

Now, if you intend to pitch to investors or submit a loan application, you'll also need a "use of funds" report in this section. This outlines how you intend to leverage any funding for your business and how much you're looking to acquire. Like the rest of your financials, this can always be updated later on.

The appendix isn't a required element of your business plan. However, it is a useful place to add any charts, tables, definitions, legal notes, or other critical information that supports your plan. These are often lengthier or out-of-place information that simply didn't work naturally into the structure of your plan. You'll notice that in these business plan examples, the appendix mainly includes extended financial statements.

Types of business plans explained

While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. To get the most out of your plan, it's best to find a format that suits your needs. Here are a few common business plan types worth considering.

Traditional business plan

The tried-and-true traditional business plan is a formal document meant to be used for external purposes. Typically this is the type of plan you'll need when applying for funding or pitching to investors. It can also be used when training or hiring employees, working with vendors, or in any other situation where the full details of your business must be understood by another individual.

Business model canvas

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

The structure ditches a linear format in favor of a cell-based template. It encourages you to build connections between every element of your business. It's faster to write out and update, and much easier for you, your team, and anyone else to visualize your business operations.

One-page business plan

The true middle ground between the business model canvas and a traditional business plan is the one-page business plan . This format is a simplified version of the traditional plan that focuses on the core aspects of your business.

By starting with a one-page plan , you give yourself a minimal document to build from. You'll typically stick with bullet points and single sentences making it much easier to elaborate or expand sections into a longer-form business plan.

Growth planning

Growth planning is more than a specific type of business plan. It's a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, forecast, review, and refine based on your performance.

It holds all of the benefits of the single-page plan, including the potential to complete it in as little as 27 minutes . However, it's even easier to convert into a more detailed plan thanks to how heavily it's tied to your financials. The overall goal of growth planning isn't to just produce documents that you use once and shelve. Instead, the growth planning process helps you build a healthier company that thrives in times of growth and remain stable through times of crisis.

It's faster, keeps your plan concise, and ensures that your plan is always up-to-date.

Download a free sample business plan template

Ready to start writing your own plan but aren't sure where to start? Download our free business plan template that's been updated for 2024.

This simple, modern, investor-approved business plan template is designed to make planning easy. It's a proven format that has helped over 1 million businesses write business plans for bank loans, funding pitches, business expansion, and even business sales. It includes additional instructions for how to write each section and is formatted to be SBA-lender approved. All you need to do is fill in the blanks.

How to use an example business plan to help you write your own

How do you know what elements need to be included in your business plan, especially if you've never written one before? Looking at examples can help you visualize what a full, traditional plan looks like, so you know what you're aiming for before you get started. Here's how to get the most out of a sample business plan.

Choose a business plan example from a similar type of company

You don't need to find an example business plan that's an exact fit for your business. Your business location, target market, and even your particular product or service may not match up exactly with the plans in our gallery. But, you don't need an exact match for it to be helpful. Instead, look for a plan that's related to the type of business you're starting.

For example, if you want to start a vegetarian restaurant, a plan for a steakhouse can be a great match. While the specifics of your actual startup will differ, the elements you'd want to include in your restaurant's business plan are likely to be very similar.

Use a business plan example as a guide

Every startup and small business is unique, so you'll want to avoid copying an example business plan word for word. It just won't be as helpful, since each business is unique. You want your plan to be a useful tool for starting a business —and getting funding if you need it.

One of the key benefits of writing a business plan is simply going through the process. When you sit down to write, you'll naturally think through important pieces, like your startup costs, your target market , and any market analysis or research you'll need to do to be successful.

You'll also look at where you stand among your competition (and everyone has competition), and lay out your goals and the milestones you'll need to meet. Looking at an example business plan's financials section can be helpful because you can see what should be included, but take them with a grain of salt. Don't assume that financial projections for a sample company will fit your own small business.

If you're looking for more resources to help you get started, our business planning guide is a good place to start. You can also download our free business plan template .

Think of business planning as a process, instead of a document

Think about business planning as something you do often , rather than a document you create once and never look at again. If you take the time to write a plan that really fits your own company, it will be a better, more useful tool to grow your business. It should also make it easier to share your vision and strategy so everyone on your team is on the same page.

Adjust your plan regularly to use it as a business management tool

Keep in mind that businesses that use their plan as a management tool to help run their business grow 30 percent faster than those businesses that don't. For that to be true for your company, you'll think of a part of your business planning process as tracking your actual results against your financial forecast on a regular basis.

If things are going well, your plan will help you think about how you can re-invest in your business. If you find that you're not meeting goals, you might need to adjust your budgets or your sales forecast. Either way, tracking your progress compared to your plan can help you adjust quickly when you identify challenges and opportunities—it's one of the most powerful things you can do to grow your business.

Prepare to pitch your business

If you're planning to pitch your business to investors or seek out any funding, you'll need a pitch deck to accompany your business plan. A pitch deck is designed to inform people about your business. You want your pitch deck to be short and easy to follow, so it's best to keep your presentation under 20 slides.

Your pitch deck and pitch presentation are likely some of the first things that an investor will see to learn more about your company. So, you need to be informative and pique their interest. Luckily, just like you can leverage an example business plan template to write your plan, we also have a gallery of over 50 pitch decks for you to reference.

With this gallery, you have the option to view specific industry pitches or get inspired by real-world pitch deck examples.

Ready to get started?

Now that you know how to use an example business plan to help you write a plan for your business, it's time to find the right one.

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