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

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

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

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

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

Let’s get started.

What Do You Need A Business Plan For?

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

1. Secure Funds

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

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

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

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

2. Monitor Business Growth

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

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

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

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

3. Measure Business Success

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

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

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

4. Document Your Marketing Strategies

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

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

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

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

How to Write a Business Plan Step-by-Step

1. create your executive summary.

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

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

A good executive summary should do the following:

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

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

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

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

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

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

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

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

2. Add Your Company Overview

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

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

Your company overview should contain the following:

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

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

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

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

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

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

• Mission Statement

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

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

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

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

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

Business Objectives

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

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

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

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

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

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

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

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

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

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

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

Market Analysis

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

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

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

• Market Research

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

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

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

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

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

How to Quantify Your Target Market

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

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

What Does a Good Market Analysis Entail?

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

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

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

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

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

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

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

Competitive Analysis

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

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

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

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

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

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

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

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

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

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

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

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

Direct vs Indirect Competition

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

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

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

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

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

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

Factors that Differentiate Your Business from the Competition

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

1. Cost Leadership

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

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

2. Product Differentiation

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

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

3. Market Segmentation

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

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

4. Define Your Business and Management Structure

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

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

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

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

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

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

Management Team

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

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

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

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

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

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

Key Questions to Answer When Structuring Your Management Team

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

Additional Tips for Writing the Management Structure Section

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

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

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

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

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

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

Organizational Chart

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

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

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

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

5. Describe Your Product and Service Offering

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1. Avoid Technical Descriptions and Industry Buzzwords

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

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

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

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

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

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

3. Long or Short Products or Services Section

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

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

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

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

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

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

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

4. Describe Your Relationships with Vendors or Suppliers

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

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

5. Your Primary Goal Is to Convince Your Readers

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

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

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

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

Key Questions to Answer When Writing your Products and Services Section

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

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

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

6. Show and Explain Your Marketing and Sales Plan

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

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

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

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

Outline Your Business’ Unique Selling Proposition (USP)

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

Target Market and Target Audience

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

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

Creating a Smart Marketing and Sales Plan

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

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

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

Your Positioning Statement

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Basic Rules to Follow When Pricing Your Offering

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

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

Pricing Strategy

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

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

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

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

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

Advertising

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

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

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

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

Public Relations

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

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

Content Marketing

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

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

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

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

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

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

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

Social Media

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

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

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

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

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

Strategic Alliances

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

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

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

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

Steps Involved in Creating a Marketing and Sales Plan

1. Focus on Your Target Market

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

2. Evaluate Your Competition

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

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

These questions can help you know your competition.

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

3. Consider Your Brand

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

4. Focus on Benefits

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

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

5. Focus on Differentiation

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

Key Questions to Answer When Writing Your Marketing and Sales Plan

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

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

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

7. Clearly Show Your Funding Request

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

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

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

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

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

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

Funding Request: Debt or Equity?

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

Case for Equity

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

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

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

Case for Debt

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

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

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

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

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

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

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

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

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

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

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

8. Detail Your Financial Plan, Metrics, and Projections

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

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

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

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

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

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

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

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

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

Use Graphs and Charts

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

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

Address the Risk Factors and Show Realistic Financial Projections

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

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

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

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

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

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

1. Sales Forecast

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

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

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

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

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

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

2. Personnel Plan

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

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

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

3. Income Statement

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

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

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

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

4. Cash Flow Statement

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

5. Balance Sheet

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

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

6. Exit Strategy

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

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

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

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

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

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

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

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

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

9. Add an Appendix to Your Business Plan

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

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

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

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

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

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

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

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

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

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

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

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

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

Tips and Strategies for Writing a Convincing Business Plan

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

1. Know Your Audience

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

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

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

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

2. Get Inspiration from People

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

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

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

3. Avoid Being Over Optimistic

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

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

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

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

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

4. Keep it Simple and Short

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

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

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

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

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

5. Make an Outline and Follow Through

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

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

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

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

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

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

6. Ask a Professional to Proofread

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

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

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

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

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

1. hubspot's one-page business plan.

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

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

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

2. Bplan’s Free Business Plan Template

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

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

3. HubSpot's Downloadable Business Plan Template

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

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

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

4. Business Plan by My Own Business Institute

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

The comprehensive template consists of a whopping 15 sections.

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

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

5. Score's Business Plan Template for Startups

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

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

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

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

6. Minimalist Architecture Business Plan Template by Venngage

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

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

7. Small Business Administration Free Business Plan Template

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

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

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

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

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

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

9. PandaDoc’s Free Business Plan Template

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

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

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

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

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

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

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

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

Alternatives to the Traditional Business Plan

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

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

Business Model Canvas (BMC)

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

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

Segments of the Business Model Canvas

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

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

Lean Canvas

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

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

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

Startup Pitch Deck

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

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

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

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

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

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

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

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

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

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

Business Plan FAQ

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

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

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

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

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

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

Exlore Further

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

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Martin luenendonk.

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

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

• 212 best farm names

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?

80% of businesses fail... Learn how not to.

Learn from business failures and successes in 5 min or less. The stories, frameworks, and tactics that will make you a 10x better founder.

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301 Unique Cleaning Business Name Ideas (2024)

Name Ideas for Your Cleaning Service

Catchy cleaning business names, unique cleaning business names, unused cleaning business names, cute cleaning business names, funny cleaning business names, clever names for cleaning businesses.

• Carpet Cleaning Business Names

Commercial Names for Cleaning Business

House cleaning business names, eco-cleaning business names, air duct cleaning business names.

• Your New Cleaning Crew : Google “Cleaning Crew” and see what comes up. I had a result from a state halfway across the country, meaning that you can dominate this term in most locations.
• Riches Cleaning Service : Leave a pot of gold coin candy in each room when you are done.
• Dust Busters Cleaning Services : Come dressed as the Ghost Busters with a backpack vacuum on your back.

Carpet Cleaning Service Name Ideas

Cleaning Business Names Generator

What Makes Good Cleaning Company Name Ideas?

• Does your business name tell what you do and where you do it?
• Is your business name easy to remember and spell correctly?
• Does your cleaning business name have a positive connotation?
• Is the domain available?
• Is the trademark available?
• Is anyone using the name (or a similar name) in the locations where you will operate?
• Does your name translate well to other languages your customers speak?

Tip 1. Your Business Name Needs to Explain What You Do (and Where)

• Remediation
• Restoration
• Rug Cleaner : Rug Restoration Group, LLC
• Window Washing : Spotless Window Washers, Inc.
• Homes : House Stars Maid Services
• Deep Office Cleaners : Deeper Office Cleaners, LLC
• Windy City EcoMaids, LLC
• Happy House Cleaners Las Vegas, LLC
• Best Seattle Janitorial, Inc.

Tip 2. Your Cleaning Business Name Should Be Easy to Remember

• Raggedy Ann’s Maid Service
• Bippity Boppity Boo Cleaning Service (Seriously, don’t use this one. I suspect you’ll get a cease and desist letter from Disney.)
• Kompletely Klean Maid Service

Tip 3. A Cleaning Company Name Should Be Positive

• Glass House Cleaners : “Don’t throw stones in a glass house” is a common idiom that reminds us not to be hypocrites. So Glass House Cleaners could be misinterpreted.
• Washed Up Cleaning Service : Is this business past its prime or freshly showered? I’m not sure. Let’s avoid names like it.
• Discreet Maid Services
• Hands Knees Professional Cleaning

You Need Unused Cleaning Business Names

• A website domain
• A trademark
• A state business name

Tip 4. Verify the Website Domain Availability for Your Cleaning Company Name

• 2001:4860:4860::8888
• 2001:4860:4860::8844

• Protocol : Should always be https://.
• Domain Name : This is your business name. In our case UpFlip, but it’s all lowercase because domains aren’t case sensitive.
• Subdomain : The subdomain is a segment of the domain name. In this example, the subdomain is www, but it can also be a blog, info, employee, public, etc.
• Top Level Domain : .com, .edu, .gov, and .net are the most familiar ones, but country specific ones like .au, .uk, and .ru dominate the top 10 globally according to Statista.

Tip 5. Check if the Trademark is Available for Your Cleaning Company Name

Tip 6. Register the Cleaning Services with SOS

Tip 7. consider variations of the cleaning co. name, helping cleaning service businesses get ahead.

• Cleaning Business YouTube Playlist : 12 cleaning company videos 
• How to Start a Carpet Cleaning Business : Blog featuring North Seattle Carpet Cleaning
• How to Start a Cleaning Business : Blog featuring Queen Bee Cleaning

60+ Essential Marketing Budget Statistics (2024)

Marketing is essential for any small business that wants to grow and succeed. We surveyed our large audience and analyzed over a dozen high-impact reports to establish how small businesses approach their marketing.

Our original surveys were presented as multiple-choice questions; each received a minimum of 500 unique responses.

[su_note note_color="#dbeafc"] Table of Contents

Top Marketing Budget Statistics

Average american marketing spend, marketing budgets broken down, where most companies draw the line, social media marketing, the effectiveness of content marketing, preferred ad platforms, online vs. traditional businesses, return on ad spend distribution, a reduction in long-term marketing, marketing goods vs. marketing services, b2c vs. b2b.

• Methodology [/su_note]
• On average, each American business spends $14,575 on marketing per year— $481 billion in total. But 66.3% of small business owners spend less than $1,000 on marketing each year.
• Major outliers drive that average up. The majority of marketing spending is done by just 14.9% to 18% of all businesses .
• 60% of business owners consider social media their best marketing strategy , but 24% are disappointed with its returns.
• Less than 6% of small business owners consider content marketing their best marketing strategy , but 93% of business owners who invest in content marketing are satisfied with their results.
• Marketing a service costs 36.5% more than marketing consumer goods.
• Business-to-consumer (B2C) companies spend 52% to 71% more to earn the same revenue as business-to-business (B2B) companies .

Keep reading for more high-impact marketing statistics, plus cutting-edge marketing strategies you can implement right now.

There are over 33 million businesses in the U.S., and they spend a combined $481 billion a year on marketing. This means the average American business spends $14,575 on marketing annually.

But this is a top-heavy figure. M ost marketing spending comes from 14.9% to 18% of all businesses (from sole proprietorships to publicly held companies). By comparison, 63.4% of small businesses spend less than $1,000 annually.

The average business spends 12.3% percent of revenue on marketing, with the median rate coming in at 10% .

On average, companies spend 53.4% of marketing dollars on their digital marketing budget. Small businesses spend 46.6% of marketing budgets on traditional advertising.

Here's a breakdown by industry:

• Educational companies spend 75.5% of their marketing budget on digital marketing.
• Technology companies spend 65.7% of their marketing budget on digital marketing.
• Healthcare companies spend 64.6% of their marketing budgets on digital marketing.
• Banking, finance, and insurance companies spend 60.7% of their marketing budgets on traditional marketing.
• Real estate companies spend 60% of their marketing budget on traditional marketing.
• Manufacturers spend 56% of their marketing budgets on traditional marketing.

Research-Based Recommendation: Companies should spend between 39.3% and 75.5% of their marketing budgets on digital marketing and 24.5% to 60.7% on traditional marketing, depending on their industry.

Professional marketers who responded to Gartner's 2023 CMO Spend and Strategy Survey intended to spend approximately equal portions of their marketing budgets on labor, paid media, technology, and outsourcing , as seen below:

Paid media spending makes up the largest portion of marketing budgets, with 25.6% , but even the smallest portion is only 2.3% behind.

We surveyed 1,800 UpFlip viewers about how much they spend on marketing per year.

• 66.3% of small business owners spend less than $1,000 on marketing each year.
• 15% of small businesses spend over $10K annually on marketing.
• 19% of small business owners spend between $1K and $10K on marketing each year.

That 85.1% of businesses spend less than $10,000 on marketing isn't surprising. According to the U.S. Small Business Administration's Office of Advocacy , 99.99% of U.S. businesses qualify as small businesses.

Research Opportunity: Further research should be done to determine 1) How marketing expenditure correlates to revenue and 2) How marketing expenditure impacts revenue per employee.

Social media marketing uses a combination of organic marketing strategies and paid marketing strategies to build relationships with customers on platforms like Facebook, Instagram, and TikTok.

Our survey found that 60% of small business owners prefer social media marketing over Google Ads, SEO/SEM, print advertising, and content marketing.

While social media marketing dominates the battle of preference, 24% of small business owners say that it's their least successful marketing strategy.

Research Opportunity : Further research should be performed to find what sets successful social media campaigns apart from unsuccessful campaigns.

Content marketing is a strategy that involves creating and sharing blogs, videos, and other useful content to drive awareness of products and services. This strategy can be highly successful because it helps develop authority with both potential customers and search engines.

Just 6% of businesses surveyed use content marketing , but o nly 7% of businesses surveyed found content marketing to be unsuccessful.

These numbers indicate that small business owners can benefit tremendously by focusing on producing new content.

Research-Based Recommendation: We suggest spending at least a couple of days each month creating new content and scheduling social media posts. If you aren’t confident doing this yourself and don’t have an employee you can assign it to, consider contracting a freelance content creator.

Business owners can choose numerous forms of paid advertisement, but some platforms drive results better than others.

44% of small business owners prefer using Google Ads over Facebook/Instagram ads ( 32% ), YouTube ads ( 13% ), or TikTok ads ( 11% ).

17% of small business owners prefer Google Ads over other forms of marketing , and only 13% of small businesses are not satisfied with the performance of Google Ads.

Research-Based Recommendation: Start by spending your ad budget on Google Ads, then learn how to optimize other ad platforms.

Specific Marketing Campaign Costs

Small business owners need to break their marketing budgets down by campaign. These numbers will help you get a feel for the real-world cost of different marketing tactics and tools.

• Content marketing budget: Expect to spend a minimum of $29 per piece, but know that some of the best content creators have content marketing budgets that cost up to $1,000 per piece. You may also find content creators that charge $.05 to $1 per word.
• Paid digital advertising budget: Small businesses should expect to spend $2.59 per click, $3.12 per 1,000 impressions, $0.66 to $1.23 on remarketing, $15 to $800 on tools, and a minimum of $350 per month on paid digital advertising .
• Monitor ad budget: To pay someone to monitor ads for your small business, include a marketing spend of $350 to $5K per month or 12% to 30% of monthly ad spend—whichever is more.
• Email marketing budget: Your email marketing budget will vary based on the number of email addresses on your list and the features you need, but you should expect to spend around $18 per month for up to 1,000 people on your email list. As you grow, costs may increase up to $540 per month plus related labor expenses.
• Social media marketing budget: Social media marketing in 2023 was expected to reach $72.33 billion , or $2,178.62 per business (calculated by dividing $72.33B by the number of U.S. businesses).
• Sales funnel automation budget: Automations are part of a marketing budget that will fluctuate depending on the number of automations included in your email marketing, social media marketing, and other marketing tactics.
• Marketing tools and software: You might include these in other categories or you might include them in a separate category. Depending on the size of your company and number of customers, you may need a budget ranging from free tools to thousands of dollars per month.
• Traditional advertising budget: Traditional marketing budgets are expected to decrease by 2.6% according to The CMO Survey. This includes print ads, outdoor advertising, radio, and more.

For social media, paid ads, and traditional advertising, you may want to break the marketing budget into specific marketing channels. We recommend utilizing this marketing budget template .

Our surveys found that online businesses are 75% more likely to increase their marketing budgets.

• 70.6% of online businesses are either increasing their marketing budgets or keeping them at the same level this year.
• 40% of businesses with less than 10% of revenue from online sales have flat or increasing marketing spending.
• 60% of businesses with less than 10% of revenue from online sales are decreasing their marketing spending.

This is consistent with consumer trends, as online sales are increasing their overall percentage of sales by approximately 1% per year .

Research-Based Recommendation: Even if you’re saving money by decreasing your digital marketing budget, foregoing an online marketing strategy may mean poor performance in the future. We recommend maintaining a digital marketing budget comparable to industry benchmarks.

One of the metrics small businesses use is return on ad spend (ROAS), which is defined as revenue from ads divided by cost of ads, but many business owners implement a modified ROAS calculation that uses this formula:

(Revenue - Cost of Good Sold)/Cost of Ads

893 people responded to our questions about their ROAS. Here’s what the survey showed…

• 67% of small business respondents make less than $3 for every dollar spent on ads.
• 14% of small business respondents make $3 to $6 for every dollar spent on ads.
• 3% of small business respondents make $6 to $9 for every dollar spent on ads.
• 15% of small business respondents make less than $3 for every dollar spent on ads.

Numbers From Real Business Owners

Some of our original survey respondents provided more detailed information that you can use to determine what you might aim to spend in your industry.

As stated earlier, 70.6% of online businesses are either increasing their marketing budgets or keeping them at the same level, while 60% of businesses with less than 10% of revenue from online sales are decreasing their marketing spending.

@bobsimpson9228 told us:

[su_quote][We are in] Ecommerce and average about 3-4 ROAS) with a break-even [point] of 2.2 [ROAS].[/su_quote]

Learn more about how small business owners start online businesses .

Car Detailing

@josh3.064 gave an example of what to expect in car detailing:

[su_quote]I detail cars and I average about $5-8 [in revenue] per ad [at the moment][/su_quote]

Want to learn more about car detailing? See our comprehensive blog and YouTube video.

Automotive Repair

@allaboutdiy1375 provided information about car shops:

[su_quote]I don’t advertise at all with my Mercedes Benz repair shop. It turns out that if you are honest, fair, and have integrity, word of mouth and reputation is all you need. I’ve got more work than I can even get done in five, 9 hour days. [/su_quote]

Want to know more about automotive repair? Check out our how-to blog and in-depth interview .

House Painting Business Marketing

@kdp9607 had the best performance with a nearly 22x return on ad spend in the painting industry.

[su_quote]Housepainting business here. I spent $1.5k on Google ads this year. The return is between 35 / 40k gross profit.[/su_quote]

Coffee Shop Advertising

@stoneroastery disclosed:

[su_quote]I’m in the hole. Lost money[/su_quote]

Coffee mogul Wes Herman confessed that 19-location Woods Coffee doesn’t actually spend a lot on marketing. Read about how he runs his coffee shops .

Growth in customer relationship management, customer experience spending, and brand building is expected to slow by 50% in the next year.

There are some exceptions:

• Communications companies expect to increase their spending on customer relationship management, customer experience spending, and brand building by 19.1% .
• Pharmaceutical and biotech companies expect to increase their spending on customer relationship management, customer experience spending, and brand building by 13.4% .
• Professional service companies expect to increase their spending on customer relationship management, customer experience spending, and brand building by 10.3% .

These three industries are spending nearly double what other industries are spending.

Interestingly, marketing consumer goods costs 36.5% less than marketing services.

As such, the U.S. Small Business Administration (SBA) suggests different marketing budgets for different types of small businesses.

• Business-to-business (B2B) companies spend 6.3% of revenue on marketing if they offer a product.
• A good marketing budget for B2B service companies is 6.9% of revenue.
• Consumer product companies spend 9.6% of revenue on marketing.
• B2C service companies spend 11.8% on marketing.
• B2B companies spend 9.5% more to market a service than a product.
• B2C companies spend 36.5% more to market a service than a product.

Research-Based Recommendation : Effectively, this shows that small business owners should expect to spend between 10% and 40% more when they are selling services instead of a product.

Business-to-consumer companies spend 52% to 71% more to earn the same revenue as B2B companies.

This may be because since the 1970s, productivity has grown eight times as fast as wages. GDP has increased by a multiple of 8.7x before inflation .

Businesses have more spending power today than they did in the past , but consumers have similar spending power than they did in 1979.

Research-Based Recommendation: Marketing a B2B product is the least costly form of marketing. If you’re trying to decide on a type of business to start or exploring new ways to increase revenue, consider selling products to companies instead of individual consumers to maximize your marketing effectiveness.

Methodology

These statistics were gathered by reviewing literature, surveying our audience, and using the combined statistics to help small business owners understand the marketing landscape and highlight opportunities to improve their marketing results.

Literature Review

We studied numerous reports and blogs on marketing statistics, marketing budgets, and other economic data to gather statistics obtained and published by other companies and organizations.

We used these statistics to better understand how UpFlippers' survey responses compare to the findings of larger companies and organizations regularly published in annual reports and other research.

UpFlip Surveys

UpFlip surveys were conducted on our YouTube channel. Due to the limited nature of YouTube surveys, it is impossible to tie every answer to a specific respondent unless they leave additional comments.

Nor could we establish whether there were correlations between ad spending and successful results with each type of marketing expense. In the future, we will update this piece with long-form surveys that will provide additional insights into how small businesses use their marketing.

Combining Statistics

In some scenarios, we compared two statistics to gain more insight into a subject. Combining two statistics was useful for gaining insights about content marketing being underutilized, selling products requiring less marketing than selling services, and B2B marketing being more cost-effective than marketing to consumers.

Operating based on these conclusions may have different results for different companies, and they should always use metrics to measure the success of their results.

These small business marketing budget statistics can help small business owners create an informed marketing budget, especially when you keep in mind that online marketing is steadily gaining traction over traditional marketing channels like print and radio advertising.

Whether you’re a small business owner or work with them, you can use the information in this report and our marketing budget template to create a balanced small business budget. What’s the biggest pain point in creating your marketing budget breakdown, and what new marketing strategy are you going to try next?

How Much to Charge for House Cleaning in 2024

Professional house cleaning is a major industry. The global cleaning industry is currently valued at over $55 billion, and that’s expected to double by 2030. That means it's a great market for new entrants, but you'll need a house cleaning pricing guide to make sure you charge properly, which is exactly what we provide here.

[su_note note_color="#dbeafc"] Read from start to finish or click any of the links below to jump to the section you need right now.

Case study: Queen Bee Cleaning

How much to charge for cleaning a house, what kind of house cleaning services should i provide, ways to charge for professional house cleaning.

• Sign up for our exclusive 7-Figure Cleaning Business Blueprint [/su_note]

Chris Mondragon’s wife started cleaning houses in 2015 to make some extra money. Their company, Queen Bee Cleaning, took off so quickly Chris quit his job and helped build it into a $1.5 million empire. Today, Queen Bee is also top-rated on Nextdoor, Yelp, Houzz, Thumbtack, HomeAdvisor, and Porch.

We'll share Chris’s insights to help you create a cleaning pricing guide that will allow you to make a great living in the house cleaning services industry. We'll cover the types of services and different ways to charge—and share a pricing list.

Keep reading for a rare opportunity to learn Chris's unique pricing strategies from his UpFlip-exclusive course . You'll discover exactly how he prices his cleaning services, which skyrocketed the growth of his business to $4.5M in record time.

House cleaning prices for a home should be between $100 and $800, but each house cleaning service will have different prices depending on the size of the home, the type of cleaning, and where you live.

There are three typical ways house cleaning prices are calculated by a house cleaner:

• Hourly: $25 to $90 per hour, per cleaner
• Flat fee : $100 to $800 weekly or biweekly for standard cleaning of a single-family home
• Room rate: $100 for 1 bed/1 bath + $10 to $20 for each additional bedroom and bathroom
• Per square foot: $0.05 to $0.10 per square foot

Now that you know how much to clean a home, let’s discuss the different kinds of house cleaning services.

A housecleaning service will normally offer other services besides just cleaning homes for people who live in them. They may also provide services for Airbnbs, moving, apartments, and commercial spaces. For instance, Queen Bee also offers:

• Airbnb cleaning
• Carpet cleaning
• Disinfecting services
• Home cleaning
• Move-in cleaning
• Deep cleaning
• Move-out cleaning
• Office and commercial cleaning

Chris told us:

[su_quote] If I was to start today, I would probably focus on Airbnb cleaning because it has a higher profit margin. [/su_quote]

For standard house cleaning services, Queen Bee includes:

• Dusting all furniture, walls, fans, counters, and other hard surfaces
• Vacuuming all floors
• Mopping wood, marble, tile, and linoleum floors
• Mirror and window cleaning with a glass cleaner
• Cleaning and sanitizing all bathroom surfaces including toilets, sinks, tubs, and showers
• Sanitizing all kitchen surfaces including inside the microwave and the front of the fridge
• Spot-cleaning cabinets
• Changing linens (if fresh linens are left out) and making beds
• Emptying the trash and relining the trash can before exiting each room

These are just some of the house cleaning services Queen Bee offers. You can find Chris’s complete cleaning services checklist, including 11 add-ons, in our Cleaning Business Master Course .

Let's look at what you might offer as the owner of your own house cleaning business, starting with Airbnb cleaning.

What should I include in Airbnb cleaning services?

In addition to your standard offerings as a house cleaning service, Chris suggests maintaining an inventory of your own supplies to replace toiletries, kitchen essentials, and linens. For the laundry portion, you'll need to have someone do laundry or partner with a laundry service.

He also told us:

[su_quote] I charge extra for the toiletries and linens, but it basically takes me the same time as a normal home clean. [/su_quote]

Check out our interview with Chris below:

[su_youtube url="https://www.youtube.com/watch?v=d4Iip7BHXwg"]

What should I include in carpet cleaning services?

Carpet cleaning services focus only on rugs, carpets, and other floorings. You'll need to assess your time differently from other services and have the special cleaning equipment to do the job best.

Chris shared his cleaning pricing guide for carpet cleaning, and it includes five main cleaning points with time and price for:

It's typical for a carpet cleaning business to have a minimum amount, such as $99 for two bedrooms.

What should I include in disinfecting services?

Disinfecting services are focused on cleaning surfaces with medical-grade cleaning products. The goal here is on keeping the space particularly clean in a way that helps to minimize germs. I would imagine this is popular for businesses or households that have had a COVID outbreak.

Christ told us:

[su_quote] Eliminating germs & pathogens requires more than just a wipe of a towel with bleach. We use an electrostatic sprayer to apply the disinfectant. The sprayer ‘loads’ the mist with a positive charge, making the disinfectant stick to all surfaces killing 99% of the pathogens. Our hospital-grade disinfectant is an EPA-certified product safe to use around children and pets [that’s] safe on all surfaces. [/su_quote]

What should I include in deep cleaning services?

Deep cleaning services should include everything you do in standard house cleaning, plus baseboards and behind furniture. Chris also includes dishes in his standard deep clean service and offers a variety of additional offerings.

How much does a deep clean cost?

Deep cleaning services are normally charged at a premium compared to a standard cleaning price. For Queen Bee clients, deep house cleaning costs between $199 and $319 above the standard house cleaning prices.

So, once you know how much you'll charge for regular services, it's easy to decide how much to charge for deep cleaning a house.

What should I include in a move-out cleaning service?

Move-out cleaning is a service offered to renters to help them save time and money by helping them get their deposits back. These services include:

• Thoroughly cleaning all counters, cabinets, and appliances
• Cleaning bathrooms, including toilets, sinks, and showers
• Cleaning floors and carpets
• Wiping down light switches, walls, and doorknobs
• Disposing of any expired food items
• Deep-cleaning the oven

Chris recommends using the move-out checklist provided by the client's landlord as the basis for bidding on the cleaning job and told us:

[su_quote] I charge $279 to $479 more for move-out cleaning costs than my standard cleaning rates. [/su_quote]

Want more great tips like this? Check out all of our UpFlip courses .

What should I include in office and commercial cleaning?

Offices and commercial cleaning jobs are different for every building. Chris recommends touring the property and establishing the following:

• Square footage
• Number of desks
• Percent of floors that are carpet and tile
• Number of windows
• Number of toilets and sinks
• Square footage of counters
• Kitchens in the building
• Parking lots
• Special requirements

These jobs can be more complex, but businesses need more routine cleaning services, which could be a win for you. Commercial buildings also tend to be better suited for pricing per square foot because you can assign a price per square foot to each task and then just multiply quantities. It might look like the table below. (Note that sqft = square feet.)

House cleaning prices vs. operating costs

Every cleaning company will have costs associated with operating. One powerful difference between a successful cleaning business and other cleaning companies is how well the business owner manages their cleaning costs. Your house cleaning prices need to cover the following expenses:

Payroll expenses, taxes

• Marketing costs

Cleaning supplies

Professional fees.

Based on Queen Bee Cleaning Service's annual expenses, you might expect your total overhead costs to be approximately 87% of the amount that you make if you have employees. If you are a single-person house cleaner, the total overhead will be between 30% and 50%.

In the following sections, we share a few examples. You can use similar math regardless of what type of cleaning business you run. Queen Bee is primarily house cleaning, so I refer to house cleaners in these sections.

Let's look at each of these to give you an idea of what they are for Queen Bee and what you can expect to pay when you start to charge for housecleaning.

How labor impacts house cleaning prices

Labor typically accounts for approximately 50% of the costs of running a house cleaning company. Whether this amount is going to you or your employees will vary. If you have employees, you'll typically need to pay them either an hourly rate or billable hours.

Just make sure you don't try to consider them independent contractors. Chris told us:

[su_quote] I was misclassifying the maids and got a hefty fine. [/su_quote]

To help establish an hourly rate, check what house cleaning companies in your area pay their housekeepers. The Bureau of Labor Statistics has a lot of data on the hourly rate of the house cleaning industry, too. In most places, a house cleaner will be paid an hourly rate of $15 or more.

Remember to train your staff well because employee efficiency can impact both quality and overhead.

Assuming the following:

• Employee pay: $15 per hour
• Employee hourly rate, revenue: 50%
• Number of people on cleaning crew: Two

You'll want to charge the customer no less than $60 per hour . That is far lower than the cleaning rates for many house cleaning companies. The reason is that a house cleaner has other costs that go into the standard cleaning fees.

On top of employee pay, your house cleaning price will also need to cover the costs of payroll expenses and taxes. The government requires employers to collect:

• Income taxes: You'll need to withhold these for all employees using the information in Publication 15-T .
• Payroll taxes: The employee pays 7.65%, and the employer pays 7.65%.
• State taxes: There are seven states without income taxes . You'll have to collect these from employee pay unless you live in Alaska, Florida, Nevada, South Dakota, Texas, Washington, or Wyoming.
• Other deductions: Insurance, 401K, etc., will be deducted if you offer them.

There are a lot of tasks associated with compliance, so you may want to outsource your human resources . Most of these services start around $39 per month plus $6 per month for each employee.

The 7.65% tax increases the $60 per hour fee to $65 per hour, which is starting to get closer to the cleaning rates of industry leader Molly Maid, which charges $75 to $96 per hour for a basic cleaning package.

Your revenue will also need to cover other costs such as cleaning supplies, which we'll discuss next.

Based on standard cleaning services, you'll probably need to spend an average of $3 to $5 per hour on cleaning supplies. You'll be buying these in bulk to save money, but Chris estimates that the supply list for many cleaning companies will be around $900 for startup costs.

That means a rate of $70 per hour, which gets us even closer to the price your house cleaning service needs to charge.

Vehicle, fuel, insurance, and repairs

Local businesses will have to drive to provide weekly cleaning to residential and commercial clients. That means you'll need to maintain the vehicle and meet insurance requirements. At Queen Bee, these costs are approximately 17% of the revenue.

This is why your credit score is so important to businesses. Bankrate estimates that insurance costs 25% more for an average credit score than excellent credit, and those with poor credit spend twice as much as any other group.

If you add 17% to the $70 cleaning crew rate, that brings you to $81.9 per hour—without any administrative costs, marketing costs, rent, or other utilities.

Marketing and administration costs

The Small Business Administration advises spending 5% to 15% of your desired revenue on marketing your cleaning business (or any other business). Chris doesn't think you need to spend that much, though

If you have good software, you can automate many of your tasks and reduce the final cost of operating. Chris runs his marketing for between 2.4% and 6.2% of revenue per month, with the lower percentages during the holidays.

Pro Tip: To learn some of the ways Chris uses marketing, check out our blog on getting clients , and don’t miss our original report on small business marketing budget statistics that will help you make the most of your marketing spend.

Chris’s rent and utilities are based on running a home-based business. These are marvelous because they are mostly legal accounting maneuvers. If you store supplies in your home or do office work out of it, you can claim the space you use and the energy associated with it on your taxes.

There are a lot of rules governing this, but if you choose the simplified method of claiming, you get an allowance of up to $1,500 a year. If use your the actual expenses, it can go higher (but may increase the chances of an audit). You'll want to measure the square footage of the space used.

You don't have to include the costs of operating from home in your house cleaning cost, but if you do, it will raise the hourly rate by about $1 per hour.

If you have a home-based business, you'll be using the energy associated with work as a write-off, but if you have a separate location where you store everything, you'll need to cover those costs.

Utilities shouldn't be too much unless your cleaning business does a lot of laundry or manufacturing in-house. To give you an idea, Chris only spends about $300 per month on utilities.

Local companies will often need a lawyer and an accountant to help them structure their domestic services correctly. You'll want to budget for these. Chris assumes approximately $1,000 per month for his cleaning company, but different cleaning services will have different needs.

There are a variety of ways to charge for a cleaning service. We'll cover the most common pricing strategies cleaning businesses use, including:

• Charging by the hour
• Pricing per square foot
• Pricing per room
• Comparing house cleaning prices in your area
• Offering weekly cleaning subscriptions with discounts
• Proposing household chores as add-ons
• Giving free estimates

How much to charge for house cleaning per hour

The hourly rate for house cleaning is the easiest pricing structure to use, but it can create fluctuations in costs based on how long it takes to clean the property. This works best if the client provides all the cleaning supplies and just needs someone to help. You might want to do this if a client wants specific eco-friendly or other specific cleaning supplies.

You'll probably want to charge higher for the first hour. I typically assume that it will cost me $50 just to drive somewhere. Based on Queen Bee's pricing guide, Chris has established that cleaning services prices should be approximately $70 for the travel costs and booking fees.

To calculate how much you want to charge, assume:

• 2,000 hours per year
• 65% profit margin when you are the worker or 15% when someone else is doing the work
• Your income goals (let's say $100K per year to start)

Divide your income goal by the hours in a year to get an hourly rate. See the example below:

$100,000 / 2,000 = $50 per hour

$50 per hour would be revenue, though. To calculate the profit, you'd need to divide the hourly by .65.

$50 / .65 = $76.92 per hour

Let's make it a nice even number, so it's easy to multiply and make it a straight $80 per hour. You need to add your first-hour fee, though. Let's use the $70 Chris uses, and that will make the first hour $150, and each additional hour $80.

That means you need five hourly cleaners to make the same $100K profit you would if you were doing all the cleaning yourself. Now, if you have five employees plus yourself, you can make $200K per year after paying your employees their house cleaning rates per hour.

How to calculate cleaning cost per square foot pricing

The price per square foot is straightforward to estimate. Given that almost every address has a public record, you can look it up to see how many square feet their house is. Then to charge by the square foot, multiply the square feet by 20 cents (or divide by five).

Example: How much should I charge to clean a 2,000 sq ft house?

2,000 x $.20 = $400

2,000 / 5 = $400

Example: How much should I charge to clean a 3,000 sq ft house?

You can make it more complicated and separate it by carpet and tile, where the carpet is 20 cents and tile is 25 (examples for easy math).

(2,000*$0.20) + (1,000*$0.25) = $650

As you can see, the square foot billing can change based on the type of cleaning.

How much does it cost to clean a house per room?

Another easy way is to price by the room or by the fixture. Chris charges a fee per room plus fees for other specific tasks. For instance, he has a table that details:

• 1- to 10-room pricing
• Full restroom pricing
• Half bath pricing
• Add-ons like full window cleaning

Each has a specific price, so he can quickly estimate based on the number of rooms, restrooms, and add-ons. You should really check out how he does it on the Queen Bee Cleaning Service booking page .

Pro Tip: Chris uses Booking Koala to automate the whole booking process. Check it out, and let us know what you think!

How much do other cleaning services charge?

Professional cleaners have plenty of sites to help evaluate the average house cleaning cost in their areas. Many of the sites are the same ones you'll use to find customers for your house cleaning service.

For instance, Thumbtack makes it easy to establish the rates house cleaners charge in a particular area. While you're on the site, you might want to sign up to provide cleaning services.

Offer weekly cleaning service discounts

Whether you are a residential cleaning business or offer commercial cleaning services, your cleaning company can benefit tremendously by offering regular cleaning services at a discount to loyal customers.

House cleaners benefit from offering discounts for routine cleaning in the following ways:

• Increased efficiency: Less travel time, more cleaning jobs completed per day, reduced house cleaning costs.
• Better forecasting: Order your own cleaning supplies with more accurate forecasts.
• Better scheduling: You can schedule house cleaners working each day more effectively.
• Better cash flow: The more of your cleaning jobs that occur on a recurring basis, the better your cash flow will be.
• Reduces churn: CB Insights says that subscription models change the customer retention dynamic from mostly churning to mostly retention.
• Increases lifetime value: The value of a customer increases consistently over time.
• Reduced marketing costs: Your cleaning company will be able to spend less on marketing when you have higher retention rates.
• Lower overhead-to-revenue ratio: As a cleaning company's recurring jobs grow, the overhead stays the same until you have to invest in more equipment or administration.
• Happier customers: Everyone (except maybe hoarders) loves a clean home! Someone coming in each week and cleaning their home will delight customers.

When you have long-term relationships you may want to have a commercial cleaning contract . Chris doesn't use them, but a lot of his suggestions still work for contracts.

We used the pricing from Queen Bee Cleaning Service to show how their subscription model increases the revenue over the course of a year. As you can see, offering a 10% monthly, 15% bi-weekly, and 20% weekly discount can dramatically increase the revenue of a house cleaning business.

How much do house cleaners charge for add-ons?

Customers might want you to offer other services like appliance cleaning. Anticipate this and have easy ways to calculate cleaning cost estimates. Some of the most common add-ons are:

• Deep house cleaning
• Appliance cleaning
• Indoor and outdoor window washing

You can add each of these to the house cleaning cost to help improve your revenue per cleaning job. A $200 cleaning job easily turns into a full day if someone wants all the add-ons. It will increase the cleaning rate to potentially as high as $1,000 and make it so your cleaning crew only has to clean one house that day.

That's great for reducing expenses!

How much do house cleaners make for estimates?

Whether you are doing a deep clean, home cleaning, or post-construction cleaning, people love free stuff, and businesses should, too!

[su_quote] Most people don't know the square footage of their house. [/su_quote]

A free estimate gives you a chance to view the property, manage the risk of underestimating with a flat rate, and establish the square footage and whether it needs a deep clean. Plus, it gives you a chance to develop a relationship, ask questions, and help your customer develop a plan. This may increase overhead costs, but it builds loyalty.

Sign up for our exclusive 7-Figure Cleaning Business Blueprint

Knowing how to correctly price your cleaning services determines if your business will grow and prosper, or fail before it even gets off the ground. Chris will show you the best pricing strategies so you can start earning $10,000 a month in just three months as you launch your business! Sign up for our exclusive seven-figure cleaning course today by clicking here .

What type of pricing do you plan to adopt with your cleaning business?

nice work https://binarychemist.com/

My Name is PRETTY NGOMANE. A south African female. Aspiring to do farming. And finding a home away from home for the differently abled persons in their daily needs.

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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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Home > Business > Business Startup

How To Write a Business Plan

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

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

Table of contents

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

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Step 1: Write your executive summary

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

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

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

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

Step 2: Do your market research homework

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

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

Step 3: Set your business goals and objectives

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

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

Step 4: Plan your business strategy

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

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

Step 5: Describe your product or service

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

Step 6: Crunch the numbers

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

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

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

Step 7: Finalize your business plan

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

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

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The takeaway

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

Related content

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

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How to Start a Business in 15 Steps

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1. Find the right opportunity

2. write a business plan, 3. choose a business structure, 4. get a federal tax id, 5. apply for licenses and permits, 6. open a business bank account, 7. understand your startup financing options, 8. get a business credit card, 9. choose the right accounting software, 10. prepare to pay your taxes, 11. protect yourself with business insurance, 12. establish your online presence, 13. set up a payments system, 14. hire employees, 15. get financing to grow your business.

Starting a business takes research, smarts and self-confidence — and a measure of fearlessness. You may already be asking yourself: How can I start my own business with no money? What's the right equipment? Am I getting the best advice?

Here are the essential steps on how to start a business, from choosing the right business idea, creating a solid business plan and structuring your company to opening a business bank account and choosing the right accounting software.

» MORE: 5 steps to turn your side gig into a full-fledged business

ZenBusiness

What business should you start? It depends on your expertise, plus how much time and money you’re able to invest. Some small-business ideas can be launched from home with little overhead, and e-commerce and remote businesses have become increasingly common in the wake of the COVID-19 pandemic.

As you narrow your scope, you also want to be sure that your idea can actually make money . If you’re not sure what kind of business you want to run, use these lists to get the wheels turning:

50 best small-business ideas.

The 23 most profitable business ideas .

40 startup ideas to try .

16 e-commerce business ideas.

40 home business ideas to explore .

44 online business ideas you can start now .

Looking for tools to help grow your business?

Tell us where you're at in your business journey, and we'll direct you to the experience that fits.

on NerdWallet's secure site

A strong business plan can help you prepare for every aspect of your business. Plus, you’ll need one to present to potential investors and lenders. This document should include details of the products or services you plan to offer, how you plan to make money, who you need on your team and more.

You’ll also want to include detailed financial projections, budgets and thorough explanations of how you plan to spend investor dollars or loans. Since cash flow projections will fluctuate as you adjust projected income and expenses, it helps to think of the plan’s financials as a living, changing document.

Ultimately, your business plan will help you chart a course for your business, anticipate potential roadblocks and work out how to overcome them — and will likely go through multiple iterations before your idea comes to fruition. Industry colleagues and accountants may be able to provide valuable feedback on how realistic your projections look and point out any overlooked costs.

How to write a business plan, step by step .

How to create a business budget .

Best business budgeting software tools .

5 tips to write a successful business plan . 

How to write a successful business plan for a loan .

The legal structure of your business can affect everything from your taxes to what you're liable for. For example, there’s no legal distinction between a sole proprietorship and its owner. Limited liability companies (LLCs) and their owners, however, are considered separate entities by law, which can provide more personal asset protection.

Talking with a tax professional can help you choose the right business structure for you. And you can change your structure as your business grows.

How to choose the right business structure .

Pros and cons of a limited liability company .

LLC vs. sole proprietorship: How to choose .

Partnership vs. corporation: How to choose .

Getting an employer identification number (EIN) is necessary for most businesses to file taxes, open bank accounts and perform other essential tasks. Even if you don’t have employees, there are benefits to getting an EIN. It’s free to apply and the online application only takes a few minutes.

How to apply for an employer identification number .

Benefits of getting an EIN (even if you don’t have to) .

In general, restaurants need health inspections and liquor licenses. Hair stylists need cosmetology licenses. Your city may require you to apply for a business license regardless of what field you’re in. And if you’re renovating a space to sell products or perform services, you may need to ask local officials for a zoning change.

Set aside time early on to find out what licenses and permits you need before you can open your doors. While you don’t typically need a lawyer to apply for a business license, they can help you navigate the process and review other documents, like lease agreements or loans, before you sign them. Industry associations, city officials who work on economic development issues and local business associations, like your Chamber of Commerce, may be able to offer advice, too.

How to get a business license .

Do you need a business license to sell online?

How to find a startup lawyer . 

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.

Keeping your business and personal finances separate is key to managing your business finances. It’s standard bookkeeping hygiene and makes it easier to deduct business expenses come tax time. A business bank account can help, and they’re simple to set up.

Best business bank accounts . 

Best business bank accounts for freelancers .

Best free business checking accounts .

Best business bank accounts for LLCs .

Most businesses need a little capital to get started. However, the majority of business loans are not available to businesses that have been operating for less than six months, and most online lenders prefer at least a year in business. Startups should consider alternative financing options, or try to leverage other strengths of their business, such as strong credit or collateral. If your business does qualify for a loan, be sure to pay attention to interest rates, potential prepayment fees and personal liability terms.

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Many business owners rely on their own savings to get started. You can also look into crowdfunding, personal loans, business grants and more. High-growth-potential startups may also be eligible for equity financing, which gives partial ownership, or equity, to investors in exchange for capital.

How do business loans work?

Best startup business loans.

Startup business grants .

Asset-based lending options.

Types of startup funding.

Crowdfunding for business .

Is equity financing right for your business?

Funding your business with a personal loan .

Is your to-do list overwhelming?

Business credit cards can also be used as a short-term financing solution to help you purchase necessary supplies and pay bills while cash flow is still shaky. Just be sure to spend within your limit and pay off your balance in full each month so you don’t get into a cycle of debt. Startup financing aside, business credit cards also make it easier to keep business and personal finances separate. As an added bonus, you can also earn rewards, such as cash back, on the money you spend.

Usually, you can qualify for a business credit card based on your personal credit score.

What is a business credit card?

How to get a business credit card .

Best small-business credit cards .

Best business credit cards for new businesses .

Best 0% APR business credit cards.

It’s essential that you keep records that show how much revenue you’re bringing in and how much you’re spending. Accounting software helps you track and analyze these numbers by generating reports and recording sales trends — and there are even some free options.

As your business grows, you may want to start working with a bookkeeper . This person can help ensure your records are complete and accurate, which makes it easier to file your taxes, apply for financing and more.

Best accounting software for small businesses .

Best online bookkeeping services .

Bookkeeping basics for small businesses. 

Best free accounting software .

Know these 4 business financial metrics to track performance .

You'll have some new tax responsibilities as a business owner — including, potentially, the need to pay taxes throughout the year, not just during tax season. But you'll probably discover some new tax breaks , too.

Filing taxes can be complex, especially as a small-business owner. Developing a relationship with a tax professional early on can help set you up for success, and they can be a trusted adviser to your business later on.

A tax guide for small-business owners.

Self-employment tax, explained.

Best tax software for small businesses .

How estimated quarterly taxes work .

How to find the right tax advisor for your business .

It's important to protect your business and your personal assets, and business insurance exists to do just that. NerdWallet recommends that every business carry general liability insurance in case of legal claims.

You may also need insurance to comply with a contract, like to set up a booth at an event or work as a subcontractor on a larger project.

Best small-business insurance providers .

How much does business insurance cost?

What is general liability insurance?

What is a business owner’s policy (BOP)?

An online presence is critical for almost every business — especially if you want to sell products online. Setting up a website and social media profiles early on, even if they’re simple, can help you start developing relationships with potential customers right away.

Here’s what you need to know to start your business website:

How to build an e-commerce website .

The ultimate guide to small-business marketing .

The best ways to promote your business on social media .

6 Instagram tips for small-business owners .

8 best e-commerce website builders for small businesses .

The do’s and don’ts of using Facebook to drive business sales .

5 best places to advertise your business online .

If your business takes credit and debit cards, you'll likely need a payment processor and point-of-sale (POS) system. Lots of POS system providers double as processing companies, which can make the decision-making process simple. Remember to consider upfront hardware costs for card readers or POS registers, monthly POS software fees and processing fees. Online payments typically have higher processing fees than in-person payments, so be sure to consider the full range of fees when choosing your provider.

How to accept credit card payments.

What is credit card processing and how does it work?

Cheapest credit card processing companies.

Best point-of-sale (POS) systems .

Best credit card processing companies .

Best credit card readers for small businesses .

You may not need to hire employees right away — and some small-business owners prefer to remain solopreneurs throughout the life of their business. But if you do choose to hire, you’ll probably need workers’ compensation insurance, payroll software and more. Here’s what goes into hiring your first employees.

Ready to hire your first employee? Prep with these steps .

Strategies to attract good employees.

Tips for hiring remote workers.

Strategies to help retain employees.

How to choose the right payroll software for your business .

Best payroll software for small businesses. 

What is workers’ compensation insurance?

Once you’ve been in business for six to 12 months, you may start qualifying for business loans. Financing can help your business grow and expand — by buying equipment, renovating an office or expanding your inventory, for instance — or float you through a slow season while you prepare for increased future revenue.

Here’s what you need to know about business loans, lines of credit and other financing options.

How to get a business loan .

SBA loans: What they are and how to qualify .

Equipment financing: What it is and top lenders.

Best small-business loans .

Types of business loans.

Should you grow your business? 6 questions to help you decide .

On a similar note...

How to Start a Business: A Startup Guide for Entrepreneurs [Template]

Published: February 15, 2024

I started a local HVAC business in the summer of 2020, and since then, I’ve learned a lot about which steps are most important for getting a business venture off the ground. To help you make your business idea a reality, I've put together a complete guide that walks you through the steps of starting a business.

The guide covers every step I’ve discovered you need to start a business, from the paperwork and finances to creating your business plan and growing your business online. At the bottom, you’ll find a library of the best free tools and resources to start selling and marketing your products and services.

Use the links below to navigate to each section of the guide:

• What do you need to start a business?

How to Start a Business

How to make a business plan, how to decide on a company name.

• How to Choose a Business Structure

How to Register Your Business

How to comply with legal requirements, how to find funding for your new business, how to create a brand identity for your new business, tips for starting a business, resources to start a business, how to start a business online.

Let's get started.

Every budding entrepreneur wants more visitors, more qualified leads, and more revenue. But starting a business isn’t one of those “if you build it, they will come” situations. So much of getting a startup off the ground has to do with timing, planning, and the market, so consider if the economic conditions are right to start a company and whether you can successfully penetrate the market with your solution.

In order to build and run a successful company , you’ll also need to create and fine-tune a business plan, assess your finances, complete all the legal paperwork, pick your partners, research apps for startup growth, choose the best tools and systems to help you get your marketing and sales off the ground … and a whole lot more.

When I first started my business, I felt overwhelmed by the sheer magnitude of requirements, which is why I’ve summed up the process to make it easier for you.

In brief, the requirements for starting a business are:

• A business plan.
• A business name.
• An ownership or business structure.
• A business registration certificate.
• A legal license or seller’s permit (as well as other legal documents).
• A source of funding.
• A brand identity.

Without these elements in place, you unnecessarily risk your new business’s future. Now let’s go over these basic steps for starting a business.

• Write a business plan.
• Choose a business name.
• Choose an ownership structure.
• Register your business.
• Review and comply with legal requirements.
• Apply for funding.
• Create a brand identity.

Having a great business idea is only part of the journey. In order to be successful, you’ll need to take a few steps to get it off the ground. In order to refine your business idea and set yourself up for success, consider doing the following:

1. Write a business plan.

Your business plan maps out the details of your business, including how it’s structured, what product or service you’ll sell, and how you’ll be selling it. Creating a business plan will help you find any obstacles on the horizon before you jump into running a business.

Pro tip: Remember that part of a business plan is telling investors or funders which specific items you need funding for. Be sure to list what you need to be funded, the reasoning behind items, and how long you will need funding.

Recommended Reading:

• What is a Business Plan? Definition, Tips, and Templates
• How to Build a Detailed Business Plan That Stands Out
• How to Write an Ecommerce Business Plan
• How to Become an Entrepreneur With No Money or Experience

70 Small Business Ideas for Anyone Who Wants to Run Their Own Business

Jump to: How to Start a Business Plan →

Featured Resource: Free Business Plan Template

Below are the key elements in a business plan template, details about what goes into each of them, and example sections at the bottom. You’ll also learn tips for writing a business plan .

1. Use a business plan template .

2. Narrow down what makes you different.

Before you start whipping up a business plan, think carefully about what makes your business unique first. If you’re planning to start a new athletic clothing business, for example, then you’ll need to differentiate yourself from the numerous other athletic clothing brands out there.

What makes yours stand out from the others? Are you planning to make clothing for specific sports or athletic activities, like yoga or hiking or tennis? Do you use environmentally friendly material? Does a certain percentage of your proceeds go to charity? Does your brand promote positive body image?

Understanding your brand’s positioning in the market will help you generate awareness and sales.

Pro tip: Remember, you’re not just selling your product or service — you’re selling a combination of product, value, and brand experience. Think through these big questions and outline them before you dive into the nitty-gritty of your business plan research.

3. Keep it short.

Business plans are shorter and more concise nowadays than they used to be. While it might be tempting to include all the results of your market research , flesh out every single product you plan to sell, and outline exactly what your website will look like, that’s actually not helpful in the format of a business plan.

Know these details and keep them elsewhere, but exclude everything but the meat and potatoes from the business plan itself. Your business plan shouldn’t just be a quick(ish) read — it should be easy to skim, too, like the example below.

Pro Tip: If someone who doesn’t know a lot about your service can easily digest your business plan, you’re doing it right.

The executive summary should be about a page long. It should cover:

• Overview . Briefly explain what the company is, where you’ll be located, what you’ll sell, and who you’ll sell to.
• Company profile. Briefly explain the business structure, who owns it, what prior experience/skills they’ll bring to the table, and who the first hires might be.
• Products or services . Briefly explain what you’ll sell.
• The market. Briefly explain your main findings from your market analysis and product market fit .
• Financial considerations . Briefly explain how you plan to fund the business and what your financial projections are.

Featured Resource: Executive Summary Template

On the marketing side, you’ll want to cover answers to questions like:

• How do you plan to penetrate the market?
• How will you grow your business?
• Which channels will you focus on for distribution?
• How will you communicate with your customers?

Pro tip: Marketing trends change year after year, so be sure to keep up on the latest trends by subscribing to the Hubspot Marketing blog .

On the sales side, you’ll need to cover answers to questions like:

• What’s your sales strategy ?
• What will your sales team look like, and how do you plan to grow it over time?
• How do you plan to scale for growth ?
• How many sales calls will you need to make to make a sale?
• What’s the average price per sale?

Speaking of average price per sale, you’ll want to go into your pricing strategy as well.

Featured Resource: Marketing & Sales Alignment Template

More importantly, it typically doesn’t entail giving partial ownership of the business away. Instead, it’s a way of getting funding not from potential co-owners, but from potential fans and customers who want to support the business idea, but not necessarily own it.

What you give donors in exchange is entirely up to you — and typically, people will come away with early access to a product, or a special version of a product, or a meet-and-greet with the founders.

Pro tip: Choose the right platform for your crowdfunding campaign type. Some platforms are more geared towards traditional investors, while others are for donations. Learn more about crowdfunding here .

5. Venture Capital Financing

Only a very small percentage of businesses are either fit for venture capital or have access to it. All the other methods described earlier are available to the vast majority of new businesses.

If you’re looking for a significant amount of money to start your company and can prove you can quickly grow its value, then venture capital financing is probably the right move for you.

Venture capital financing usually means one or more venture capital firms make large investments in your company in exchange for preferred stock of the company — but, in addition to getting that preferred return as they would in series seed financing, venture capital investors also usually get governance rights, like a seat on the Board of Directors or approval rights on certain transactions.

VC financing typically occurs when a company can demonstrate a significant business opportunity to quickly grow the value of the company but requires significant capital to do so.

Pro tip: A lot of venture capital financing is simply being in the right room with the right people. Make sure to network extensively if this is your approach to financing.

When you’re first starting a business, you’ll need to build the foundation for a strong brand identity. Your brand identity is about your values, how you communicate concepts, and which emotions you want your customers to feel when they interact with your business. Having a consistent brand identity to promote your business will make you look more professional and help you attract new customers.

Here’s what you need to do to develop your brand identity:

1. Design a logo.

Creating the right logo for your business requires careful thought and consideration. It should be representative of your brand’s purpose and target audience, while also being memorable and distinct from competitors.

To start, you need a deep understanding of your business’s mission, values, and target audience. Think beyond what your company does and truly examine why you do what you do and who you do it for. This knowledge will serve as the foundation for your logo.

Conducting market research and identifying current logo trends can help you understand what works well for others and strategize on how to stand out. Then, start brainstorming design ideas that showcase what makes your business unique.

For instance, you could try writing out a list of words that best describe your business and what makes it special and then use those words as inspiration to start sketching ideas and concepts.

Once you have some sketches created, pick which ones you think are the best and share them with stakeholders, colleagues, and buyer personas to gather feedback and refine your design. After narrowing down a design, you’ll want to test its versatility and scalability to ensure it works well in different sizes and formats.

Pro tip: Check out this blog on designing your logo, and then try out different logo design features in Canva’s logo maker .

2. Develop a visual identity.

Your brand’s visual identity doesn’t stop at creating a logo — you’ll also need to establish guidelines for typography, color palette, imagery, and other graphic elements. The more consistent your brand is with its visuals, the more consumers will be able to recognize and trust it.

To get started, consider creating a brand mood board. Ask yourself: What kind of emotions do you want your brand to evoke? Is there a specific visual aesthetic that you want to emulate? This can help you gather visual inspiration that resonates with your brand.

Choose your color palette and typography wisely. Spend some time researching color theory , as color can have a major impact on how people perceive your brand. Make sure your typography is readable and looks good across different sizes and formats.

Additionally, you should create other visual assets such as patterns, shapes, illustrations, and icons that pair well with your color palette and typography.

Pro tip: If design and color palettes aren’t your thing, consider hiring a freelance graphic designer on LinkedIn or Fiverr to help you create your visual identity and incorporate it into your logo and overall design.

3. Craft a tagline.

In just a few words, your tagline should encapsulate your brand’s essence and communicate its value. Think of it as a written or verbal version of your logo. Both elements are created to immediately capture the attention of your audience. Even if consumers don’t remember anything about your product or service, they will remember a catchy tagline.

When crafting your tagline, keep it simple. You want your tagline to be memorable, so aim for a short phrase and focus on key benefits or unique aspects of your brand. Also consider using techniques like alliteration, rhyme, or play on words to make your tagline stand out — just make sure it aligns with the rest of your brand’s voice and tone.

Pro tip: This is another element of starting a business that could benefit from someone with experience. A marketing consultant or a content writer could help you establish a compelling tagline with the next step of developing your voice and tone.

4. Develop your voice and tone.

Your brand voice refers to the personality that your brand adopts in its communication with its audience. It provides direction on what to say and how to say it, allowing you to differentiate yourself and cut through the noise.

A well-defined brand voice helps create a distinct and memorable identity for your brand, allowing you to connect with your target audience on a deeper and more meaningful level.

When determining the appropriate voice and tone for your brand, remember that consistency is key. Ensure that your brand voice and tone align with your brand’s values, mission, and positioning. Alignment between your brand’s personality and its communication style is crucial for building trust and authenticity.

Pro tip: Adapt your voice and tone to suit the preferences and understanding of your audience. Additionally, use emotion and storytelling techniques to engage your audience and resonate with them.

5. Create brand guidelines.

Once you determine all of the previously mentioned brand elements, establish a set of brand guidelines that communicate how to appropriately use them. Having these rules and standards set in place ensures consistent and cohesive messaging and representation for your brand.

Get started by defining the rules for using your brand elements across different channels and applications, such as digital and print media, social media profiles, web design, packaging, and any other relevant materials.

Show practical examples of correct and incorrect usage scenarios to demonstrate the do’s and don’ts of brand representation. This helps stakeholders and users understand the guidelines and their application. You can also offer your team templates or mock-ups to ensure correct implementation.

Once the brand guidelines are set, distribute them to internal stakeholders and relevant external partners. To make sure everyone’s on the same page, take the time to review the guidelines with everyone and consider conducting training sessions if necessary.

As your brand evolves, so should your brand guidelines. Continuously review and update them to reflect any changes or refinements. Keep the guidelines easily accessible and communicate any updates effectively.

Pro tip: A writing style guide is a great place to start when creating brand guidelines. Check out this blog on brand style guide examples.

Starting a business online is a little different from starting a traditional business. Here are some important steps for starting and scaling your business online.

1. Determine your niche and business idea.

Your business niche is the target focus area for your product or service. It’s important to choose a niche because customers like brands and businesses that specifically cater to their needs. Most customers are more likely to purchase products or services from a brand that provides personalized experiences.

When determining your niche and business idea, first identify your target audience and specify everything from their age to their interests. Then, use that information to figure out their principal need. If your product doesn’t resolve a specific need, your business will fail to get off the ground.

Pro tip: You should have a good idea of the market at this point. Use that knowledge to position yourself in a way that differentiates you from your competitors.

2. Conduct market research.

Conduct market research to understand what product or service you should offer, whom you should serve, and where you face the stiffest competition. From physical goods to digital downloads, understanding your target market and competitors will help you determine how to best position your product.

Your research should help you create a strong selling proposition . In other words, what makes your business unique? Why should someone buy from you?

Pro tip: Sometimes, market research is as easy as calling around to competitors and getting a quote on services. Make sure your pricing is competitive but not so low as to be unsustainable.

3. Learn online business laws.

While online businesses may require fewer licenses and permits than traditional businesses, there are still legal requirements that you will need to adhere to. Be sure to check:

• What kind of business license (if any) do you need to start operations?
• What legal structure makes the most sense for your company?
• Are there any permits that you need to obtain?
• Are there any inspections that you need to pass?
• Do you need a sales tax license?
• Are there any specific regulations applicable to online businesses only?
• What are the laws regarding hiring contractors and hiring employees?

Pro tip: Check out this article for more information on starting an online business and navigating online laws.

4 . Make sure your business is insured.

Depending on your business type, you may be required by state law to be both licensed and insured. HVAC businesses have a lot of liability as they involve both plumbing and electricity. I spoke with several insurance agents before deciding on the best insurance for my business needs.

There are also many different business insurance types, such as:

• Liability insurance.
• Worker’s comp.
• Property insurance (think your business location, tools, and equipment you use).
• And more. Be sure to research these different insurance types and purchase the necessary ones.

Pro tip: Check out this article on small business insurance.

5. Create a website.

After handling the research, taking care of legalities, and honing your products or services, it is time to create your website . When creating your website, you will need to choose a strong ecommerce platform that will allow you to sell products online.

Pro tip: Check out Hubspot’s free CMS tool for website building here.

6. Set up shop.

Once your website is complete, it’s time to add products or services to your store. When adding your products, pay attention to product images and descriptions. Having a crisp image and a detailed but concise description will help your audience maneuver your website smoothly.

After you have finished setting up your store, it’s critical to ensure you offer a seamless shipping or delivery experience to your buyers. For example, you can use HubSpot to manage quality control before you ship products out.

Finally, you want to make sure everything is working before you hit the live button on your website. Make sure that everything is clickable and that all pages look good across all devices and browsers. Once you’ve checked that, you are ready to go live.

Pro tip: If you take credit card information on your website, you will need to abide by compliance laws that ensure the safety of sensitive data. Read more on credit card compliance .

7. Create a marketing plan.

You’ve created an awesome product, and now it’s time to get the word out. In other words, it’s time to grow your audience. There are numerous ways to reach your target customer, including:

• Social media : Use hashtags and paid ads to expand your reach.
• Influencer marketing : Send free samples to “celebrities” in your niche.
• Facebook groups : Connect with your target market on this platform.
• Google advertising : Put your products in front of people all over the web.
• Content marketing : Publish blog posts to bring organic traffic to your site.
• Word-of-mouth : Encourage customers to spread the word.
• YouTube videos : Start a channel to showcase your products.

Pro Tip: Google ads and LinkedIn ads regularly offer discounts or free ad money; consider using these promos to try online advertisements out.

8 . Grow your business.

You’ve heard it said that in business, you’re either growing or you’re dying. Here are a couple of tips for growing your business online:

• Reduce the amount of time it takes online viewers to receive value from you and your brand.
• Answer the questions no one in your industry is answering — for example, a lot of companies won’t talk about pricing, forcing customers to keep looking for someone who will.
• Create a dynamic website that changes with the times. Update your images and writing to reflect what’s happening with your business now, and ensure your website isn’t dating you.
• Invest in content and SEO . They aren’t cheap, but they are really important for being found online, organically.

Pro tip: Check out this blog on how to become an SEO expert, according to HubSpot’s SEO team.

9. Watch your income and expenditures closely.

The first year of your business is an essential set point for discovering your overhead and your profit. Have a date in mind of when you want your business to start turning a profit and a solid plan for if you aren’t meeting that goal. Read further on potential exit strategies below.

Pro tip: Use a free business budget template to monitor your finances.

10. Plan for an exit strategy.

If you’re like me, you didn’t consider an exit strategy when thinking up your business. You probably assumed you’d run your business for the foreseeable future. However, economic uncertainty or unexpected success can both impact the end of your business. In fact, 90% of startups fail , which makes it a wise choice to know under what circumstances you would close down your business.

You could also experience unexpected buzz and success and be offered a buyout. A good exit strategy will plan for this as well. What amount of money would make selling worth it? Consider also how long you would have to run your business before considering offers. Some want to sell high and fast, whereas other business owners want to see where things go during a set amount of time.

An exit strategy could also include who you want to inherit your business, maybe family or an employee.

Pro tip: Check out this blog on the importance of having an exit strategy.

Next Steps: Getting Ready to Launch Your Business

I know from experience that being a small business owner isn’t easy, but with the right plan, you can set up your business for success. Be sure to check and know your requirements, have a solid business plan, and submit your legal paperwork before you take your business live. Once you have a solid business plan and the financing to execute your goals, you’ll be well on the path to launching a successful enterprise.

Editor’s note: This post was originally published in August 2019 and has been updated for comprehensiveness.

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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.

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

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

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

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

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

550+ Business Plan Examples to Launch Your Business

Need help writing your business plan? Explore over 550 industry-specific business plan examples for inspiration.

Find your business plan example

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

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Finish your plan faster with step-by-step guidance, financial wizards, and a proven format.

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View all sample business plans

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.

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Conducting Market Research

Crafting a business plan, reviewing funding options, understanding legal requirements, implementing marketing strategies, how much does it cost to start a business, what should i do before starting a business, what types of funding are available to start a business, do you need to write a business plan, the bottom line.

Starting a business in the United States involves a number of different steps, spanning legal considerations, market research, creating a business plan, securing funding, and developing a marketing strategy. It also entails decisions around a business’s location, structure, name, taxation, and registration.

This article covers the key steps involved in starting a business, as well as important aspects of the process for entrepreneurs to consider.

Key Takeaways

• Entrepreneurs seeking to develop their own business should start by conducting market research to understand their industry space and competition, and to target customers.
• The next step is to write a comprehensive business plan, outlining the company’s structure, vision, and strategy. Potential funders and partners may want to review the business plan in advance of signing any agreements.
• Securing funding is crucial in launching a business. Funding can come in the form of grants, loans, venture capital, or crowdfunded money; entrepreneurs may also opt to self-fund instead of or in combination with any of these avenues.
• Choosing a location and business structure can have many implications for legal aspects of business ownership, such as taxation, registration, and permitting, so it’s important to fully understand the regulations and requirements for the jurisdiction in which the business will operate. 
• Another key aspect of launching a new business is having a strategic marketing plan that addresses the specifics of the business, industry, and target market.

Before starting a business, entrepreneurs should conduct market research to determine their target audience, competition, and market trends. 

The U.S. Small Business Administration (SBA) recommends researching demographic data around potential customers to understand a given consumer base and reduce business risk. It also breaks down common market considerations as follows:

• Demand : Do people want or need this product or service?
• Market size : How many people might be interested?
• Economic indicators : These include income, employment rate, and spending habits of potential customers.
• Location : Where are the target market and the business located?
• Market saturation : How competitive is the business space, and how many similar offerings exist?
• Pricing : What might a customer be willing to pay?

Market research should also include an analysis of the competition (including their strengths and weaknesses compared to those of the proposed business), market opportunities and barriers to entry, industry trends, and competitors’ market share .

There are various methods for conducting market research, and the usefulness of different sources and methodologies will depend on the nature of the industry and potential business. Data can come from a variety of sources: statistical agencies, economic and financial institutions, and industry sources, as well as direct consumer research through focus groups, interviews, surveys, or questionnaires.

A comprehensive business plan is like a blueprint for a business. It will help lay the foundation for business development and can assist in decision making, day-to-day operations, and growth. 

Potential investors or business partners may want to review and assess a business plan in advance of agreeing to work together. Financial institutions often request business plans as part of an application for a loan or other forms of capital. 

Business plans will differ according to the needs and nature of the company and only need to include what makes sense for the business in question. As such, they can vary in length and structure depending on their intended purpose. 

Business plans can generally be divided into two formats: traditional business plans and lean startup business plans. The latter is typically more useful for businesses that will need to adjust their planning quickly and frequently, as they are shorter and provide a higher-level overview of the company.

The process of funding a business can be as unique as the business itself—that is, it will depend on the needs and vision of the business and the current financial situation of the business owner. 

The first step in seeking funding is to calculate how much it will cost to start the business. Estimate startup costs by identifying a list of expenses and putting a number to each of them through research and requesting quotes. The SBA has a startup costs calculator for small businesses that includes common types of business expenses. 

From there, an entrepreneur will need to determine how to secure the required funding. Common funding methods include:

• Self-funding , also known as bootstrapping  
• Seeking funding from investors, also known as venture capital  
• Raising money by crowdfunding
• Securing a business loan
• Winning a business grant

Each method will hold advantages and disadvantages depending on the situation of the business. It’s important to consider the obligations associated with any avenue of funding. For example, investors generally provide funding in exchange for a degree of ownership or control in the company, whereas self-funding may allow business owners to maintain complete control (albeit while taking on all of the risk). 

The availability of funding sources is another potential consideration. Unlike loans, grants do not have to be paid back—however, as a result, they are a highly competitive form of business funding. The federal government also does not provide grants for the purposes of starting or growing a business, although private organizations may. On the other hand, the SBA guarantees several categories of loans to support small business owners in accessing capital that may not be available through traditional lenders.

Whichever funding method (or methods) an entrepreneur decides to pursue, it’s essential to evaluate in detail how the funding will be used and lay out a future financial plan for the business, including sales projections and loan repayments , as applicable.  

Legally, businesses operating in the U.S. are subject to regulations and requirements under many jurisdictions, across local, county, state, and federal levels. Legal business requirements are often tied to the location and structure of the business, which then determine obligations around taxation, business IDs, registration, and permits.

Choosing a Business Location

The location—that is, the neighborhood, city, and state—in which a business operates will have an impact on many different aspects of running the business, such as the applicable taxes, zoning laws (for brick-and-mortar, or physical locations), and regulations.

A business needs to be registered in a certain location; this location then determines the taxes, licenses, and permits required. Other factors to consider when choosing a location might include:

• Human factors : Such as the target audience for your business, and preferences of business owners and partners around convenience, knowledge of the area, and commuting distance
• Regulations and restrictions : Concerning applicable jurisdictions or government agencies, including zoning laws
• Regionally specific expenses : Such as average salaries (including required minimum wages), property or rental prices, insurance rates, utilities, and government fees and licensing
• The tax and financial environment : Including income tax, sales tax, corporate tax, and property tax, or the availability of tax credits, incentives, or loan programs

Picking a Business Structure

The structure of a business should reflect the desired number of owners, liability characteristics, and tax status. Because these have legal and tax compliance implications , it’s important to fully understand and choose a business structure carefully and, if necessary, consult a business counselor, lawyer, and/or accountant.

Common business structures include:

• Sole proprietorship : An unincorporated business that has just one owner, who pays personal income tax on profits
• Partnership : Options include a limited partnership (LP) or a limited liability partnership (LLP)
• Limited liability company (LLC) : A business structure that protects its owners from personal responsibility for its debts or liabilities
• Corporation : Options include a C corp , S corp , B corp , closed corporation , or nonprofit

Getting a Tax ID Number

A tax ID number is like a Social Security number for a business. Whether or not a state and/or federal tax ID number is required for any given business will depend on the nature of the business, as well as the location in which the business is registered.

If a business is required to pay state taxes (such as income taxes and employment taxes), then a state tax ID will be necessary. The process and requirements around state tax IDs vary by state and can be found on individual states’ official websites. In some situations, state tax IDs can also be used for other purposes, such as protecting sole proprietors against identity theft.

A federal tax ID, also known as an employer identification number (EIN) , is required if a business:

• Operates as a corporation or partnership
• Pays federal taxes
• Wants to open a business bank account
• Applies for federal business licenses and permits
• Files employment, excise, alcohol, tobacco, or firearms tax returns

There are further situations in which a business might need a federal tax ID number, specific to income taxation, certain types of pension plans, and working with certain types of organizations. Business owners can check with the Internal Revenue Service (IRS) about whether they need an EIN.

Registering a Business

Registration of a business will depend on its location and business structure, and can look quite different depending on the nature and size of the business. 

For example, small businesses may not require any steps beyond registering their business name with local and state governments, and business owners whose business name is their own legal name might not need to register at all. However, registration can include personal liability protection as well as legal and tax benefits, so it can be beneficial even if it’s not strictly required. 

Most LLCs, corporations, partnerships, and nonprofits are required to register at the state level and will require a registered agent to file on their behalf. Determining which state to register with can depend on factors such as:

• Whether the business has a physical presence in the state
• If the business often conducts in-person client meetings in the state
• If a large portion of business revenue comes from the state
• Whether the business has employees working in the state

If a business operates in more than one state, it may need to file for foreign qualification in other states in which it conducts business. In this case, the business would register in the state in which it was formed (this would be considered the domestic state), and file for foreign qualification in any additional states.

Some businesses may decide to register with the federal government if they are seeking tax-exempt status or trademark protection, but federal registration is not required for many businesses.

Overall registration requirements, costs, and documentation will vary depending on the governing jurisdictions and business structure.

Obtaining Permits

Filing for the applicable government licenses and permits will depend on the industry and nature of the business, and might include submitting an application to a federal agency, state, county, and/or city. The SBA lists federally regulated business activities alongside the corresponding license-issuing agency, while state, county, and city regulations can be found on the official government websites for each region.

Every business should have a marketing plan that outlines an overall strategy and the day-to-day tactics used to execute it. A successful marketing plan will lay out tactics for how to connect with customers and convince them to buy what the company is selling. 

Marketing plans will vary according to the specifics of the industry , target market, and business, but they should aim to include descriptions of and strategies around the following:

• A target customer : Including market size, demographics, traits, and relevant trends
• Unique value propositions or business differentiators : Essentially, an overview of the company’s competitive advantage with regard to employees, certifications, or offerings
• A sales and marketing plan : Including methods, channels, and a customer’s journey through interacting with the business
• Goals : Should cover different aspects of the marketing and sales strategy, such as social media follower growth, public relations opportunities, or sales targets
• An execution plan : Should detail tactics and break down higher-level goals into specific actions
• A budget : Detailing how much different marketing projects and activities will cost

The startup costs for any given business will vary greatly depending on the industry, business activity, and product or service offering. Home-based online businesses will usually cost less than those that require an office setting to meet with customers. The estimated cost can be calculated by first identifying a list of expenses and then researching and requesting quotes for each one. Use the SBA’s startup costs calculator for common types of expenses associated with starting a small business.

Entrepreneurs seeking to start their own business should fully research and understand all the legal and funding considerations involved, conduct market research, and create marketing and business plans. They will also need to secure any necessary permits, licenses, funding, and business bank accounts.

Startup capital can come in the form of loans, grants, crowdfunding, venture capital, or self-funding. Note that the federal government does not provide grant funding for the purposes of starting a business, although private sources do.

Business plans are comprehensive documents that lay out the most important information about a business. They are important references for the growth, development, and decision-making processes of a business, and financial institutions as well as potential investors and partners generally request to review them in advance of agreeing to provide funding or work together.

Starting a business is no easy feat, but research and preparation can help smooth the way. Having a firm understanding of the target market, competition, industry, business goals, business structure, funding requirements, tax and operating regulations, and marketing strategy, and conducting research and consulting experts where necessary, are all things that entrepreneurs can do to set themselves up for success.

U.S. Small Business Administration. “ Market Research and Competitive Analysis .”

U.S. Small Business Administration. “ Write Your Business Plan .”

U.S. Small Business Administration. “ Loans .”

U.S. Small Business Administration. “ Fund Your Business .”

U.S. Small Business Administration. “ Pick Your Business Location .”

U.S. Small Business Administration. “ Choose a Business Structure .”

U.S. Small Business Administration. “ Get Federal and State Tax ID Numbers .”

Internal Revenue Service. “ Do You Need an EIN? ”

U.S. Small Business Administration. “ Register Your Business .”

U.S. Small Business Administration. “ Apply for Licenses and Permits .”

U.S. Small Business Administration. “ Marketing and Sales .”

U.S. Small Business Administration. “ Grants .”

• How to Start a Business: A Comprehensive Guide and Essential Steps 1 of 25
• How to Do Market Research, Types, and Example 2 of 25
• Marketing Strategy: What It Is, How It Works, and How to Create One 3 of 25
• Marketing in Business: Strategies and Types Explained 4 of 25
• What Is a Marketing Plan? Types and How to Write One 5 of 25
• Business Development: Definition, Strategies, Steps & Skills 6 of 25
• Business Plan: What It Is, What's Included, and How to Write One 7 of 25
• Small Business Development Center (SBDC): Meaning, Types, Impact 8 of 25
• How to Write a Business Plan for a Loan 9 of 25
• Business Startup Costs: It’s in the Details 10 of 25
• Startup Capital Definition, Types, and Risks 11 of 25
• Bootstrapping Definition, Strategies, and Pros/Cons 12 of 25
• Crowdfunding: What It Is, How It Works, and Popular Websites 13 of 25
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• What Is an LLC? Limited Liability Company Structure and Benefits Defined 20 of 25
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How to create a business plan: a step-by-step guide.

From entrepreneurs with the seed of a great idea to established companies, every business needs a business plan.

But what is a business plan exactly? Is it worth the time and effort to write one?

Let’s take a look at why your organization needs this business roadmap and how it can set you up for long-term success.

What Is a Business Plan?

The easy answer, of course, is right there in the name—it’s a plan for your business. It serves as a guide for how you manage your organization.

Considered a basic business principle for startups, business plans are helpful for all kinds of companies.

For example, a plan for a startup might be a simple one or two-page document, sometimes referred to as a lean plan. It lays out only the essential information, immediate milestones the firm wants to reach and how to secure funding to meet those goals.

For a larger or established company, the plan might be more comprehensive in a traditional format . It typically includes areas such as financial data, a marketing overview and future plans for each department in the organization.

In either case, the intent is to provide a map for your business. You want to answer questions like how the business works, what your goals are and how your team will reach them.

Business plans can be internal or external, meaning it is used as a guide to get your team on the same page or an overview for those with whom you do business or to pitch to those who want to invest in your ideas.

Why Do You Need a Business Plan?

As with the plan itself, the need and purpose for one vary between businesses.

Let’s take a look at two scenarios, involving ownership of rental property.

1. Growing Business

Imagine you own and rent a handful of condominium properties. You have plans to acquire more and turn it from a hobby to a full-time pursuit. This means a lot is going on in the early stages of your organization’s development. A business plan breaks down the moving pieces into more manageable portions.

For your growing real estate portfolio, those pieces include acquisition and capital improvement costs. Also important are income projections and growth or financial benchmarks. Plus, many tasks exist with finding a property, securing loans and closing deals.

One of the central uses of most startup business plans is for raising investment funds . A business plan conveys what the new company needs and convinces others to help fund its growth. For banks, lenders or investors, the business plan shows them the who, what and how of the business operations. Then it communicates why the new business is a solid investment.

2. Established Firm

A second scenario involves an already established real estate firm. You own several different types of properties and rent and manage them with an in-house team.

A business plan for an existing company takes on a much different purpose than for the startup.

Even if profitable, your company still needs a pathway to future growth. You need strategies for responding to a changing market or tracking current projects. You also want to establish goals or metrics to define your success.

An established owner might use a business plan to determine what it takes to move into a new market. You might tweak that same plan in response to new competition entering the market.

For firms currently on solid footing, the business plan helps assess where they stand. It can then detail their next steps for achieving further success and how to accomplish more, faster.

Updating Your Plan

After writing a plan, one of the key questions becomes how often do you update it. The answer is—it depends.

There are times when you might need a “one-off” version. For instance, those that are provided to a specific shareholder or future partner.

In other cases, you may develop a plan for the fiscal year 2020. Then that plan will serve as the basis for your 2021 plan, then the 2022 plan and so on.

You should approach your plan as a living, breathing document. Create a master business plan, one kept up to date based on your company’s activity. You can then tailor that plan to a specific request or need without having to recreate it from scratch.

Elements of a Business Plan

Contrary to popular belief, business plans don’t need to be thousand-page documents. The critical factor is that they meet the needs of your business.

Business plans themselves come in various forms. As we noted, startups might use a one-page document to ask for initial funding. A legacy company might use a 10-page analysis to showcase its financial health.

Both could even be for the same audience , such as a financial institution. Or it could be used for customers or suppliers. Whoever it’s directed toward, the narrative of the plan serves the company that is creating it.

Despite a difference in style or purpose, every business plan includes a handful of central elements.

View these as your jumping-off point when writing the first draft of your plan. Hone in on the information that’s important to your organization to create a plan that reflects your company’s needs.

Executive Summary

The one universal aspect for every plan is the inclusion of an executive summary . This is your plan’s introduction to the reader, so be sure it’s well-constructed.

The key to your executive summary is providing meaningful, relevant information in a brief description. Your main points should cover:

• Why your company’s expertise provides the best solution in your particular field.
• Why your specific area of focus is a favorable market in which to take part.
• Why your firm is best positioned to meet the market’s needs in this area.

To stand out, allow your introduction to mirror your firm’s culture and voice. If you produce and sell skateboards, let your passion for those unique boards shine through in the summary. If your organization is a financial services company, your summary should reflect a firm grasp of investment trends and customer needs.

To captivate your audience, both internal and external, start out with a compelling summary.

Company Overview

This second section in a business plan is straightforward and includes the background and history of your organization. Keep your firm’s bio short and to the point. Summarize your location(s), history, significant accomplishments and ownership or legal data.

If your group has a mission statement , include it in this section as well.

Some internal plans often leave out the company bio. Write one anyway. It’s good practice to convey your organization’s story. Plus, if you have it written, it’s ready to go should you ever need to publicly share it.

Product or Service Information

In this section, you’ll detail what your company does. This includes the goods you produce and sell or the services you provide. Make this section effective by capturing the following:

• How your solution is a benefit to customers.
• How you produce that solution, such as the lifecycle of product production or philosophy and method behind a service.
• Is your solution proprietary? Does it feature copyrights or patents?
• What is your company’s market advantage in what you do?

With product details, it’s best to paint a picture of the marketplace then detail how your business is positioned as a leader in that specific market.

Marketing or Sales Plan

Within your business plan, it’s not necessary to drill down into the finer details of every area. This is most true with your marketing or sales strategy. You don’t have to list every advertising source, but you should convey a grasp of your target demographics and how to reach them. You can include key points such as:

• How you price your offerings.
• How you promote and generate interest and sales from new customers.
• How you will keep those customers.

While product data shows your current market position, marketing data focus on your tactics to keep and grow that market share .

For potential investors to know whether or not to invest, they need to know financial information. While the level of financial detail varies based on the audience’s need, the best financial plans feature the following:

• Financial forecast—this varies with industry but should include at least a five-year forecast.
• Income statement.
• Balance sheet.
• Cash flow statement.
• Capital expense expectations.
• Financials show both the current monetary health of your firm and what your future success may look like.

If you’ve got a lot of good data, don’t hold it back. This is especially true if the plan is to attract investors. The more comprehensive your financial data, the better.

Organizational Team

Your team summary is an extension of your company bio. The goal is to clearly define your company’s hierarchy and the key players at the top. This induces any influential department heads or partnerships you’ve built.

You also want to identify the principles that govern your company’s management style. Company culture is an underrated aspect of today’s business climate. Placing importance on it in your business plan will set yours apart from those that don’t. This is also a good spot to detail any personnel plans or challenges to consider.

Additional Elements

Depending on the purpose of the business plan or its intended audience, there are two other sections worth noting.

In creating a comprehensive plan, you may need to include supporting documentation. The appendix helps organize requested materials or information that did not fit within your primary plan. These inclusions may consist of the following:

• Contracts or legal documents.
• References.
• Permits or licenses.
• Product specs or images.
• Organizational charts.
• Detailed financial reports.

Funding Request

For startups, or even established firms, seeking investment, you’ll want to include a dedicated section that outlines the request . You should specify the type of funding you need, how you’ll apply the funds and over what timeframe. It also helps to include a note on the financial endgame for your organization.

Final Thoughts

Whether for securing funding or getting your established team on the same page, business plans are invaluable for providing a pathway to success.

Develop a plan that best serves your company and its future growth. Keep it up to date and focused on the elements vital to your success, including where you’ve been, where you want to go and how you plan to get there.

A great business plan doesn’t need to be expertly written to be effective. It should, however, be written so you can expertly execute it.

Advance Your Business Expertise

In a degree program at PGS, you’ll expand your knowledge, skills and experiences in practical areas such as developing a business plan. Check out business programs from the associate to master’s level to discover your next step in growing your career and achieving your business goals.

Learn more about our adult programs

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Kacey Spencer

Kacey Spencer (B.S. ’12, MBA ’20) previously served as development coordinator for Cornerstone University’s WCSG Radio. She also served as an enrollment counselor for Cornerstone University’s Professional & Graduate Studies division. She graduated in 2012 with a bachelor’s in business management. She enjoys cooking, reading, event planning and being outside in nature.

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Business.govt.nz, in association with, how to write a business plan.

There isn’t a one-size-fits-all formula to write a business plan. But there are some key things to consider. Check out our free templates — one for start-ups and a quick-focus template for growing businesses.

Tips for preparing a business plan

• Be clear and focused about what you want to achieve – this will help align your team so you’re all working toward the same thing.
• Choose the type of business plan that works for you – you may like to have a document, or a business canvas might work better.
• Keep it short, simple and easy to understand.
• Keep your goals realistic and relevant to what is going on in the economy and in your industry.
• Use Stats NZ’s Data for Business website to find useful business tools and statistics.
• Contact Stats NZ to get useful business data.
• Get out and speak with your customers to gain understanding of how your product works for them and whether it’s something they would pay for.
• Do a SWOT analysis to determine your strengths, weaknesses, opportunities and threats.
• Ask your advisor or mentor to review your plan and give you feedback and suggested improvements.

Data for Business (external link) — Stats NZ

Call Stats NZ toll-free on 0508 525 525

Use this free template to help you write a great plan for launching your new business.

A business plan helps you set goals for your business, and plan how you’re going to reach them. When you’re starting out it’s a good idea to do a full and thorough business plan.

Quick-focus business plan

Quick-focus planning to make sure you work on the right things for your growing business - every day.

It’s important to take time to reflect on your business strategies and plan. It doesn’t have to be a difficult or time-consuming task.

Implementing your business plan

• Keep your business plan as a living document – don’t leave it to gather dust on a shelf.
• Make sure it’s easily accessible and top-of-mind for you and your team.
• Reflect your goals in the day-to-day operations of your business.
• Outline the most practical and cost-effective way to achieve each goal – make a note of any extra resources you’ll need.
• Make it clear these goals are the top priority for the business.

SWOT your business, and your competition

A SWOT analysis is a great way to assess what your business does well, and where you’ll need to improve. It can also help you identify ways you can exploit opportunities, and to identify and prepare for potential threats to your business success.

Strengths and weaknesses are typically inside your business — what are you good at, what are you not so good at — while opportunities and threats are external factors.

It can be as simple as drawing a large square, and dividing it into four quadrants – one for each element of the SWOT analysis.

Think about what you, your team, and your business are good at – all the attributes that will help you achieve your goals, for example, what you (and your team) do well, any unique skills or expert knowledge, what you/your business do better than your competitors, good processes and systems, and where your business is most profitable.

Think about the things that could stop you from achieving your objectives. This might include what costs you time and/or money, the areas you or your company need to improve in, what resources you lack, which parts of the business aren’t profitable, poor brand awareness, disorganised processes, or a poor online presence. Think about what you can do to minimise your weaknesses.

Opportunities

Think about the external conditions that will help you achieve your goals. How can you do more for your existing customers, or reach new markets? Are there related products and services that could provide opportunities for your business, and how could you use technology to enhance your business?

Consider the external conditions that could damage your business's performance – things like what’s going on in your industry, and in the economy, the obstacles you face, the strengths of your biggest competitors, and things your competitors are doing that you're not. Think about how you could try to minimise or manage the threats.

Repeat the exercise for your competition too – it’ll help you identify areas where you can beat them, to fine-tune your niche market, and make sure you’re prepared to address the challenge they pose.

Refine and review

Craig Jackson has dabbled in business planning before. But when he set up his ice pop business Dr Feelgood, he decided to work with a mentor.

“She was instrumental to pushing us to a very healthy product. Our first business plan was 47 pages long. It came down to four pages, which distilled down what we were doing and how we look at it,” says Jackson.

“It’s really important to ask ‘do people want your product’ and then ‘are there enough of them to buy it’? Our market validation was me going around gas stations, cafes, dairies and looking in freezers and talking to freezer managers and talking to our friends.”

Jackson regularly reviews progress against his business plan. “We’ve hit all our targets, but have learnt a lot in the first six months of operating. Places I thought we’d really sell, we don’t, and places I thought we’d never go is where we’re going.”

Review your business plan

• Check how you’re tracking to reach key milestones in your business plan every month, and celebrate when these have been reached.
• Stay on top of industry trends and stay connected with your customers – this will help you keep ahead of any changes needed in your business.
• Update your business plan with any changes affecting your business or industry.

Tips on when business planning is right for your business

Tips on types of advice you’ll need

Common mistakes

Not being able to clearly articulate your business and the value it offers to customers.

Making assumptions about your customers rather than speaking with them.

Not reviewing and monitoring your business plan.

Setting unrealistic or uninformed targets.

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Write a business plan

Download free business plan templates and find help and advice on how to write your business plan.

Business plan templates

Download a free business plan template on The Prince’s Trust website.

You can also download a free cash flow forecast template or a business plan template on the Start Up Loans website to help you manage your finances.

Business plan examples

Read example business plans on the Bplans website.

How to write a business plan

Get detailed information about how to write a business plan on the Start Up Donut website.

Why you need a business plan

A business plan is a written document that describes your business. It covers objectives, strategies, sales, marketing and financial forecasts.

A business plan helps you to:

• clarify your business idea
• spot potential problems
• set out your goals
• measure your progress

You’ll need a business plan if you want to secure investment or a loan from a bank. Read about the finance options available for businesses on the Business Finance Guide website.

It can also help to convince customers, suppliers and potential employees to support you.

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Honda to set up $11 bln electric vehicle, battery plants in Canada

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Auto parts supplier BorgWarner raised its full-year adjusted profit outlook on Thursday, aided by sustained demand from its exhausts, turbos and emission control systems.

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Asian stocks surge on tech boost; yen extends gains to cap wild week

Asian stocks rallied on Friday after Apple's record $110 billion share buyback plan lifted the tech sector, while the yen put more distance from recent 34-year lows to cap a tumultuous week that saw suspected interventions from Tokyo.

Biden administration bans noncompete agreements, setting up legal showdown with business groups

The Biden administration has issued a nationwide ban on the ability of employers to make their workers sign noncompete agreements, a move regulators said would help boost employee pay but which is set to be challenged in court by business groups.

In a ruling Tuesday afternoon, the Federal Trade Commission (FTC) said noncompete clauses would henceforth be illegal. The measure was necessary, it said, for "protecting the fundamental freedom of workers to change jobs, increasing innovation, and fostering new business formation."

“Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism,” said FTC chair Lina M. Khan in a statement. “The FTC’s final rule to ban noncompetes will ensure Americans have the freedom to pursue a new job, start a new business, or bring a new idea to market.”

The FTC estimates nearly one in five Americans are subject to noncompetes. They have grown increasingly common in lower wage or hourly work industries like fast food franchises, restaurants, and security firms, where some employers have sought to limit the ability of workers to effectively raise their pay by looking for work at competing establishments.

In addition to banning all new noncompetes, the FTC's rule applies to all existing noncompete agreements. Employers will now have to provide notice to workers bound to a current noncompete that it will not be enforced against them.

The rule was hailed by labor groups and left-leaning policy experts.

"Noncompetes are about reducing competition, full stop. It’s in their name," said Heidi Shierholz, president of the progressive nonprofit Economic Policy Institute. "Noncompetes are bad for workers, bad for consumers, and bad for the broader economy. This rule is an important step in creating an economy that is not only strong but also works for working people."

The AFL-CIO, America's largest labor group, praised the new rule in a post on X Tuesday, saying noncompete agreements "trap workers from finding better jobs, drive down wages, and stifle competition."

But business groups are already hitting out at the ban, saying noncompetes are essential to protecting trade secrets and proprietary information. The groups also say noncompetes ultimately help workers by engendering a more collaborative firm environment and limiting so-called "free riders," or employees who seek to capitalize on a specific company's methods and taking that knowledge elsewhere.

The U.S. Chamber of Commerce, the country’s largest business lobby, said it plans to sue the FTC over the ruling. In a statement , it called the ban an "unlawful power grab."

“This decision sets a dangerous precedent for government micromanagement of business and can harm employers, workers, and our economy," it said. 

Separately. a Dallas-based tax services firm filed a lawsuit in Texas federal court — which has proven hostile to Biden administration rulings — challenging not only the ban but the very structure of the FTC itself.

"We stand firm in our commitment to serve the rightful interest of every company to retain its proprietary formulas for success taught in good faith to its own employees,” said chairman and CEO G. Brint Ryan said in a statement.

The FTC's rule is set to go into effect in August, but is unlikely to be enforced until the court challenges are resolved, something that could take years.

Rob Wile is a breaking business news reporter for NBC News Digital.

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Would Trump Move to Control the Fed?

Allies of the former president are said to be devising plans to reduce the central bank’s independence if he is re-elected, a move that would have big consequences for monetary policy.

By Andrew Ross Sorkin ,  Ravi Mattu ,  Bernhard Warner ,  Sarah Kessler ,  Michael J. de la Merced ,  Lauren Hirsch and Ephrat Livni

An effort to give Trump more say on rates

This week, investors had planned to examine the latest inflation data, due out at 8:30 a.m. Eastern on Friday, for clues about when the Fed would start cutting interest rates. But they now have something potentially bigger to digest.

The Wall Street Journal reports that allies of Donald Trump are devising ways of watering down the central bank’s independence if he is re-elected president.

If true, that change would represent the biggest shake-up in U.S. monetary policy in decades. But it also raises questions about whether such a plan is possible — or whether Trump’s Wall Street supporters would back it.

Both big and small changes are on the table, according to The Journal, which cites unidentified sources. Among the most consequential would be asserting that Trump had the authority to oust Jay Powell as Fed chair before Powell’s term is up in 2025. While Trump gave Powell the job in 2017, he has since soured on his pick for raising rates, and has publicly said he wouldn’t give Powell a second term .

Smaller changes include allowing the White House to review Fed rules and using the Treasury Department to keep the central bank on a tighter leash.

The overall goal is to give Trump what he wants: more say on interest rates. Trump allies have discussed requiring candidates to lead the Fed to informally consult with him on such decisions and essentially act as the president’s advocate on the institution’s rate-setting committee.

We have questions about such a move, which could have huge consequences including raising the U.S. government’s borrowing costs because of investor worries about the Fed’s loss of independence.

Does Trump really support these nascent proposals? Representatives for the former president told The Journal that “no aspect of future presidential staffing or policy announcements should be deemed official” unless it came from him or an authorized official — but they didn’t dismiss the report entirely and he has long favored more powers to chip away at the authority of the Fed and other agencies.

Could Trump recruit a credible candidate for Fed chair under these circumstances?

Would Trump’s financial backers, including the hedge fund billionaire John Paulson, support these plans?

For context, remember that presidents have tried to influence the Fed before. See Andrew’s 2018 interview with Paul Volcker who led the central bank from 1979 to 1987:

Mr. Volcker recounts being summoned to meet with President Ronald Reagan and his chief of staff, James Baker, in the president’s library next to the Oval Office in 1984. Reagan “didn’t say a word,” Mr. Volcker wrote. “Instead Baker delivered a message: ‘The president is ordering you not to raise interest rates before the election.’” Mr. Volcker wasn’t planning to raise rates at the time. “I was stunned,” he wrote. “I later surmised that the library location had been chosen because, unlike the Oval Office, it probably lacked a taping system.”

HERE’S WHAT’S HAPPENING

Antony Blinken meets with President Xi Jinping of China in Beijing. The two sides were conciliatory in public, even as the U.S. secretary of state was expected to raise numerous concerns about the countries’ relationship and Xi warned Blinken about engaging in a “vicious competition.”

Anglo American rejects BHP’s $39 billion takeover bid. The offer from its mining rival “significantly undervalues” the company, Anglo American said, setting up a potential fight. BHP must now weigh improving its bid — and figure out how to win over the South African government , whose public pension fund is Anglo American’s biggest shareholder.

Elon Musk’s xAI is reportedly close to raising $6 billion. The fund-raising round, which would include investors such as Sequoia Capital, would value the artificial intelligence start-up at about $18 billion , according to The Information. It would be one of the biggest cash hauls in an A.I. start-up amid a heated innovation race, and shows investors are spreading their bets: Sequoia is already a big investor in OpenAI.

A.I. is still giving tech giants a boost

Maybe not all tech giants are being punished for their hefty investments in artificial intelligence.

Shares in Microsoft are up nearly 4 percent in premarket trading, while those in Alphabet are up a whopping 11 percent, after they announced their latest earnings. Both are soaring a day after Meta’s stock tumbled 12 percent — the parent company of Instagram had predicted bigger-than-expected spending on A.I.

The results show that investors are willing to be patient on A.I. — as long as they can see benefits on the horizon. (Getting extra payouts like a dividend helps, however.)

Like Meta, Microsoft and Alphabet are spending a lot. Microsoft reported $14 billion in capital expenses and leases in the first quarter, up 21 percent year-on-year, while Alphabet invested $12 billion — a 91 percent increase.

By comparison, Meta spent $22 billion in the quarter, up 6 percent.

All three said they planned to keep spending on A.I.:

“We’ll still grow our investment envelope meaningfully before we make much revenue from some of these new products,” Mark Zuckerberg, Meta’s C.E.O., told analysts.

Ruth Porat, Alphabet’s C.F.O., said spending would be “roughly at or above” current levels.

Amy Hood, Microsoft’s C.F.O., said investment would “increase materially.”

There are key differences: Meta also forecast lower-than-expected revenue. And investors are also still wary after the company’s multibillion-dollar investment in so-called metaverse technologies, despite no clear sign of a payoff.

Its rivals showed more tangible results from their spending sprees:

Microsoft reported a 31 percent jump in sales at its Azure cloud service, which powers many of its A.I. offerings like technology from its partner OpenAI. (Note: The Times has sued OpenAI and Microsoft, accusing both of copyright infringement of news content via their A.I. systems.)

Alphabet also reported a 27 percent rise in revenue at its Google Cloud business.

That said, Alphabet emphasized that it was cutting costs (which Meta did last year, to investors’ delight) and also introduced a dividend and carried out a $70 billion stock buyback.

Wall Street hasn’t written Meta off yet. Despite the company’s stock tumble on Thursday, analysts still think it’s poised to become a leader in A.I. Some agreed with Zuckerberg’s contention that the company had proved it could eventually make money from new technologies.

The other high-stakes N.B.A. contest

While the N.B.A. has already seen some thrilling playoff games , the league is also managing another contest worth billions.

The basketball league got $24 billion in its current contract with Disney, which owns ESPN and ABC, and Warner Bros. Discovery, which runs TNT. Now it’s looking to double that in a new deal — and the results could reshape the media landscape.

Streaming platforms are competing hard for a piece of the pie. The N.B.A. could split its game rights into two bundles: broadcast and digital.

Some games would be taken from the current package held by Disney and Warner to create a streaming offering that would show both nationally televised contests and some playoff matches, according to The Wall Street Journal. (That said, Disney and Warner would still be expected to pay more despite showing fewer games.)

The front-runner among streamers is Amazon, which has won plaudits for its handling of football games. The tech giant signed an $11 billion, 11-year deal to show Thursday night N.F.L. matches in 2021, and this year reportedly paid $120 million for exclusive rights to air a playoff game .

That said, YouTube is also in the mix, The Journal reported.

NBC also wants a big piece of the NBA broadcast pie. It’s vying for regular-season and playoff games to show on its broadcast network and its Peacock streaming service, as well as shared rights with ABC for the finals, according to The Journal.

Warner Bros. Discovery faces a dilemma. Some analysts and investors are worried about the company paying more for a new deal while it tries to pare its $44 billion debt load: Wolfe Research downgraded its shares to an underperform rating this week on those concerns.

But sports rights are among the most highly sought media assets for a reason: Live sports are a big draw for audiences, making them a valuable bargaining chip with cable and satellite companies as well as advertisers.

“Are you better paying up for less games and hurting your financials or juicing your financials but potentially destroying your long term?” Rich Greenfield, an analyst at LightShed Ventures, said to DealBook.

The not-so-new rules for the internet

Net neutrality is back. The Federal Communications Commission voted to reinstate rules designed to prevent internet service providers from slowing or blocking services from some websites, most likely setting the stage for another legal fight between business and regulators.

The F.C.C. restored Obama-era rules that were scrapped under Donald Trump. In a vote on Thursday, the agency classified internet service as a public utility.

The rule is supposed to ensure that broadband providers like Verizon and Comcast don’t charge some websites more than others or slow delivery of content by rivals, like Netflix or YouTube. “Every consumer deserves internet access that is fast, open and fair,” Jessica Rosenworcel, chair of the F.C.C. and a Democrat, said. “This is common sense.”

Critics say the rule is another case of regulatory overreach. Broadband providers worry that the F.C.C. could move next to regulate prices. (Some states have already capped the rate that low-income households can be charged.)

In a letter sent to Rosenworcel this week, dozens of Republicans argued that net neutrality would harm the growth of the telecom industry.

Both sides’ worst fears have never become reality. The Obama administration didn’t start setting broadband prices when it created the rules. When the Trump administration repealed them, broadband companies didn’t throttle or block websites and consumers didn’t notice big changes in how they reached the internet or how much they would have to pay for it.

Democrats say rules are still needed to protect consumers in the long term. Rosenworcel has also said that greater oversight of internet infrastructure would allow the F.C.C. to better protect networks from cybersecurity attacks.

THE SPEED READ

Shares in CVC Capital Partners rose 24 percent in their trading debut on Friday, after the private equity giant raised $2.15 billion in its long-awaited I.P.O. (Bloomberg)

The C.E.O. of Fisker, the embattled electric-vehicle start-up, told employees that the company was in talks with four potential buyers . (Business Insider)

The F.D.I.C. delayed plans to limit the influence of big shareholders in banks after neither of two rival proposals for doing so gained support. (FT)

“A Chinese Firm Is America’s Favorite Drone Maker — Except in Washington ” (NYT)

Best of the rest

New York’s highest court overturned the 2020 felony conviction of Harvey Weinstein on sex crime charges, citing a lower court judge’s error during the disgraced movie mogul’s trial. (NYT)

The Democratic Republic of Congo accused Apple of using minerals illegally exported from the war-torn eastern half of its territory in its iPhones, Macs and other products. (FT)

We’d like your feedback! Please email thoughts and suggestions to [email protected] .

Andrew Ross Sorkin is a columnist and the founder and editor at large of DealBook. He is a co-anchor of CNBC’s "Squawk Box" and the author of “Too Big to Fail.” He is also a co-creator of the Showtime drama series "Billions." More about Andrew Ross Sorkin

Ravi Mattu is the managing editor of DealBook, based in London. He joined The New York Times in 2022 from the Financial Times, where he held a number of senior roles in Hong Kong and London. More about Ravi Mattu

Bernhard Warner is a senior editor for DealBook, a newsletter from The Times, covering business trends, the economy and the markets. More about Bernhard Warner

Sarah Kessler is an editor for the DealBook newsletter and writes features on business and how workplaces are changing. More about Sarah Kessler

Michael de la Merced joined The Times as a reporter in 2006, covering Wall Street and finance. Among his main coverage areas are mergers and acquisitions, bankruptcies and the private equity industry. More about Michael J. de la Merced

Lauren Hirsch joined The Times from CNBC in 2020, covering deals and the biggest stories on Wall Street. More about Lauren Hirsch

Ephrat Livni reports from Washington on the intersection of business and policy for DealBook. Previously, she was a senior reporter at Quartz, covering law and politics, and has practiced law in the public and private sectors.   More about Ephrat Livni