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Nature of Business Meaning – Examples & Types

• June 4, 2023

Business success and a positive trajectory depend on many external factors. These include market dynamics, level of competition strength and internal strengths and weaknesses. All choices made by a business, big and small, will impact the type of company it will become and what it looks like. This leads us on to the nature of business.

Table of Contents

What is the Nature of a Business?

The nature of business defines the core identity of a company – what it does, how it operates, and its place in the market. Getting to grips with this concept provides valuable insight for entrepreneurs, investors and other stakeholders when evaluating a business.

Put simply, the nature of business refers to the fundamental characteristics that shape a company’s purpose, offerings and market approach. It encompasses aspects like:

• Legal structure – e.g partnership, private limited company
• Products and services – what the business sells or provides to customers
• Target market – the customer segments the business caters to
• Business model – how the company generates revenue and profit

So for example, an online retailer has a very different nature of business compared to a bricks-and-mortar supermarket, even though both sell groceries. Understanding these traits helps stakeholders make informed assessments about a company’s identity and potential value.

Business Nature Components

Purpose:  Every business starts with a purpose. It’s the foundation, answering why the entity exists. For some it’s selling products, for others providing services, and many it’s solving market problems. This purpose becomes the guiding North Star for all activities and decisions.

Activities:  Businesses have set operations like people have daily tasks. This could include designing products, sourcing materials, manufacturing, marketing and sales. These activities fulfil the business’s purpose.

Scale:  Business scale varies. Some operate locally like mom-and-pop shops. Others are huge enterprises spanning countries and continents. Scale dictates reach, operations and complexities.

Stakeholders:  Businesses involve stakeholders like owners, employees, customers, suppliers and communities. Each has a role, interest and expectation.

Economic Contribution:  A business contributes via job creation, taxes, trade and innovation. It plays a key economic role.

Risks & Challenges:  The landscape is dynamic with competition, trends, regulations and events posing risks. Recognizing and navigating challenges is vital.

Legal Structure:  Businesses operate within legal frameworks. Structures like sole proprietorships, partnerships and corporations define responsibilities, benefits and limitations.

In summary, a business’s nature blends purpose, functions, size, relationships, economic contribution, challenges and legal standing. These interplaying components form the intricate mosaic of business.

Nature of Business Examples

What impacts the nature of business, legal structure.

A company’s legal structure has implications for ownership, financing, taxes and operational processes. Common structures include:

• Sole proprietorships – owned and run by one individual who has unlimited liability
• Partnerships – tow or more co-owners who share financing, profits and operational duties
• Private limited companies – separate legal entities that limit owners’ liability to their investment amount
• Public Limited companies – can trade shares publicly and often have access to great financing
• Non-profit organisations – focus on social impact rather than profits

Choosing an appropriate legal structure depends on the founders’ growth ambitions, target customers, financing needs and appetite fr personal liability. An eco-friendly startup might begin as a partnership before transitioning later toa private limited company structure to attract investor funding.

Products & Services

A company’s offering encompasses what it sells to customers – whether physical goods, services, digital technologies or even ideas. The specifics here characterise the business’ core purpose. For example, a bakery sells artisanal bread and cakes, a web design agency sells bespoke websites and a charity sells the idea of positive social change through donations.

Over time, businesses may adapt or expand their offerings to pursue new opportunities or reach to market changes but the original core products and services tend to shape ongoing business identity and purpose.

Target Market

The specific customer groups a company sells to dictate much of its branding, proposition development and communications tactics. Market segmentation by demographics, geography, behaviours and values allow organisations to match products/services to buyer preferences.

For example, a specialty pet food company that prides itself on using the finest ingredients may focus its marketing on targeting affluent urban dog owners who are more likely to pay a higher price for the knowledge that better ingredients are used.

Industry Sector

The industry sector that a business operates in directly impacts its competitive environment, distribution channels and regulatory obligations. Knowing that industry landscape is key to analysing a company’s market positioning and potential.

Business Model

Every company’s business model encompasses how it generates sales revenues and profits from its offerings. The main areas of a business model usually include:

• Value proposition – products/services offering value to customers
• Target market – the selected customer segments
• Distribution channels – how deliverables reach customers
• Revenue streams = where sales income is generated
• Cost structure – the expenses required to operate
• Margin model – how the profits are produced from revenue

The Internal & External Factors Influencing The Nature Of Business

Internal factors.

• Ownership Model – Group owned businesses rather than sole proprietorships often have wider financing options available to them but the downside is, having multiple people to run decisions past, can slow down decision making timelines.
• Management culture – Visionary leaders can create strong innovative work cultures whereas prudent leaders tend to create steadier, less risky operations.
• Company size – Large organisations benefit from economic scale but small operations tend to be more agile when it comes to customer interactions.
• Technology used – Digitally driven companies are fundamentally different from traditional manual operations. As digital revolutions continue to happen, back office processes transform to provide customers with better front end experiences and personalisation.
• Staff Skills – The skills available across employees will make or break your business. If you can’t get the talent required in house, then small firms may need to outsource specialist areas.
• Purpose Alignment – Workforce diversity, community development and social justice can also reshape business nature. Younger workers choose employers that can demonstrate genuine commitment to moral causes rather than simple virtue signalling.

External Factors

• Economic Landscape – Thriving economies provide more opportunities, whereas recessions force consolidation and cuts
• Geography – Rural businesses often focus on community values whereas city-based firms can afford to follow consumer trends
• Environmental Obligations – With climate change and ecological threats prominent, sustainability conscious customers will want to see greener practices in businesses they support. For example, petroleum companies investing in renewable energy sources would be an example of environmental obligations shaping the nature of business.
• Regulations – Plenty of industries have specific compliance rules to follow which can fundamentally shape operations
• Competitors – Start-ups in crowded marketplaces must be able to disturb, whereas monopolies control captive customer bases.
• Market Globalisation – Trading across borders requires adaptations to make in branding, trading partnership and supply chains.
• Investor demands – When investors are expecting results, companies may feel under pressure to scale up quickly
• Customer expectations – Customer focused businesses must continue to adapt to the needs and demands of consumers. Those who fail to continually increase the value they offer to their customers face displacement by others who will.

These internal and external factors are constantly evolving and changes here will inevitably impact the strategies and processes required within the business. In some cases, this may lead to a change in the overall nature of business.

Types Of Businesses and their Nature

Legal structures and ownership models have a big impact on the taxes, liabilities and grow strategies available to organisations. Here is an overview of the main types available in the UK:

Sole Proprietorships

A sole proprietorship is a business owned and run by a single individual. This is one of the easiest business structures to set up and manage, only requiring a unique business name. The owner then has complete control over strategy, operations and liability. This means that personal assets can be pursued to settle business debts as there is no distinction between the owner and the business.

This type of business tends to work well for solo entrepreneurs with specialist professional skillets such as photography, consultants or tradespeople. Many people love the simplicity, autonomy and low start up costs, but lack of work during slow periods, financial protections, and difficulty if operations come to a standstill reflect the downsides of this type of business.

Partnerships

Partnerships allow two or more co-owners to set up and operate a business. All parties will contribute financing, decision making and operational oversight whilst splitting any profits made. This type of business structure allows for owner-operator involvement whilst knowledge and resources are pooled to greater business impact.

Partnerships tend to open up wider funding opportunities, diverse skill sets and expansion opportunities across several locations. All costs, responsibilities and liabilities are shared too. For this to work, an excellent collaborative approach is required which involves communications and transparency over financials and performance.

Disagreements can quickly derail partnerships but this type of set up is common in professional services such as legal firms, medical practices and architecture firms. Overall, partnerships encourage contribution to the business whilst avoiding some of the limitations faced by sole proprietors.

Private Limited Companies

A private limited company creates a legal structure that is separate from its owners. This means the company is owned by shareholders in accordance with their initial investments but that their liability is also limited to the amount invested. The benefit of this set up is that personal assets cannot be pursued to settle company debts.

The independent legal entity of the business means company ownership can be transferred more easily through the buying and selling of shares, and limited companies are also able to access favourable tax efficiencies in several areas.

The downside of a limited company is the higher volume of administrative work required to operate. Including extensive financial reporting, annual government filings and statutory obligations; They must follow regulations around hiring, workforce policies and contracts.

Public Limited Companies

Public limited companies (PLCs) can raise funds by trading shares openly though stock exchanges. Doing this opens up the business for the biggest investment to fund projects and fuel growth. To do this, a business must meet strict reporting and operational standards.

The separation of ownership from management requires non-executive directors and structured leadership teams. PLCs operate with greater public scrutiny of salaries, diversity policies and carbon footprints and underperformers will face pressure to make changes to strategy or leadership.

Non-Profit Organisations

Rather than maximising profits for owners, non-profit organisations focus on social impact and community benefit. To do this, most require donations and public sector funding to fund and are also reliant on volunteers to make up a proportion of their workforce.

Any profits cannot be divided between owners, but must stay within the company. Examples of these kinds of businesses include wildlife conservation groups, universities, medical research charities and cultural institutions. Spending is constrained and should be purposeful to reassure donors that their money is being used wisely and for the good intentions of the operation rather than internal functions. Successful non-profit companies have strong community support who engage emotionally with their causes.

The Evolving Nature Of Business

Whilst most businesses will carry their original purpose and niche with them, the nature of business may evolve over time as the company grows or responds to external or internal forces impacting it.

The Role Of Stakeholders

Within business environments, internal and external stakeholders will always have an influence over an organisation’s direction.

Staff and unions that lobby for higher pay, improved working conditions and greater work-life balance can modify company behaviour over time.

Communities

Neighbouring communities affected by business operations advocate for social programs, environmental protections and local economic opportunities which will feed into corporate policies.

Business Partners

Suppliers will always request increased margins and better terms of trading while distributors request support in pushing products. The negotiations required for these relationships will inevitably shape operations.

Wrapping Up

The nature of business refers to the key characteristics of an organisation that shape its operations, identity and competitive landscape. Understanding these things ensures that entrepreneurs, inventors and other stakeholders make informed decisions about business potential, investment decisions and the timeframe that they might see a return on their investment.

The exact makeup of a business will depend on leadership, sector, strategic choices and where the company is in its cycle, but market focus, deliverables, capabilities and growth ambitions will all shape the way the business runs.

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Nature of a Business Plan: Everything You Need to Know

The nature of a business plan discusses what the future of the business is. It should list how you plan to run the company and what you plan to do with it. 3 min read updated on February 01, 2023

What Are the Parts of a Business Plan?

Even if you just write on an envelope a few ideas about your business strategy, you've started a business plan. Business plans can be helpful, as they list all the tasks necessary to run a company. Entrepreneurs use them to explain their vision to possible investors. These plans can be used by firms that want to attract important employees, find potential business prospects, handle suppliers, and understand how to better manage their companies.

Items to include are the industry, the business concept, the business structure, what the service or product is, and what your marketing plan is in order for the company to be successful.

The marketplace section will talk about defining and analyzing possible customers. This includes where and who they are, what drives them to buy, and so on. The financial section includes your cash flow and income statement, a balance sheet, and additional financial ratios, including break-even analyses. You may want to invest in an accountant and a spreadsheet software program for this. There are seven main components in a business plan, including:

• Market strategies
• Business description
• Executive summary
• Development and design plan
• Competitive analysis
• Financial factors
• Management and operations plan

How Long Should Your Business Plan Be?

A helpful business plan can be short or long, depending on the reason you're creating it. It can be anything from a scrawl on a piece of paper to a detailed plan that's over 100 pages long. The average business plan runs between 15 and 20 pages, but there's room for variation. If your concept is simple, you might be able to define it with only a few words. If you're talking about a new business or industry, you'll need a much lengthier explanation to describe what your idea is.

What your purpose is will also define how long your business plan is. If you want to get millions of dollars to start a venture that's risky, you'll need to do plenty of convincing and explaining. On the other hand, if you use your plan internally to govern ongoing business, you can easily have a more abbreviated version of the plan.

Why Do Startups Need a Business Plan?

A traditional business plan writer is someone who considers themselves an entrepreneur and is looking for funds to start a new venture. Many successful companies originally started their plan on paper to convince investors they should put up capital to help them get started. There are many books on business planning that are aimed at the owners of startup businesses. This is because they're the least experienced and are likely the most appreciative of any help. However, small startups aren't the only companies that need a business plan.

Why Do Established Firms Need a Business Plan?

Not every business plan is written by an excited entrepreneur who is just starting their company. Many are written for and by companies that are well past the startup phase. For example, WalkerGroup/Designs was considered a well-established designer for large retailers. The founder thought of the idea of licensing and trademarking to apparel makers with the symbols 01-01-00. This was aimed at targeting the approaching millennium. Before the costly and difficult task of trademarking this around the world, the founder had a business plan that included sales forecasts. This was to convince larger retailers that it'd be smart to carry their 01-01-00 products.

Enterprises that are middle-stage might draft plans that help them get funding to grow their company similar to startups. However, they may be after larger amounts and looking for investors who will spend more. These enterprises feel it's necessary to have a written plan to manage their business that's already growing. This plan can be a helpful tool to get across their mission to potential suppliers, customers, and more.

If you need help with the nature of a business plan, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

Hire the top business lawyers and save up to 60% on legal fees

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Nature of Business - All You Need to Know About It

• 19 October 2023
• 2023-10-19 00:00:00

Table of Contents

Factors such as market dynamics, competition, and even your business loan interest rate can significantly impact your venture's trajectory. Just as the heart pumps lifeblood throughout the body, the nature of your business is the heartbeat of your entrepreneurial journey.

As we dive deeper into this topic, remember that every decision, no matter how small, shapes the very essence of your enterprise. So, let's embark on this enlightening journey together.

What is the Nature of a Business?

Simply put, The nature of business is like a company's DNA. It pinpoints an enterprise's primary activities and essence, setting the stage for its missions and visions. Just as every individual has a unique story, each business has its distinct character and purpose. It's the heartbeat of entrepreneurial tales. Read also:  Top 10 Service Business Ideas for 2023

To Avail Unsecured business loans

The components of the nature of business.

The business world is vast, but every business revolves around specific fundamental components at its core. These components come together to define a business's structure, purpose, and functions. Here's a deeper dive into these integral elements:

Purpose: Every business starts with a purpose. It's the foundation, answering the question: "Why does this entity exist?" For some businesses, the objective is to sell products; for others, it's about providing specialised services, and for many, it's about solving specific market problems. This purpose becomes the North Star, guiding every business activity and decision.

Activities: Just like we engage in daily tasks and routines, businesses have their set of operations. This could range from designing products, sourcing materials, and manufacturing to even marketing and sales. These activities define what the business does daily to fulfil its purpose.

Scale: The size or scale of a business can vary. Some operate within small local communities – think of the mom-and-pop shops. Others are sprawling enterprises with a footprint that spans across countries or even continents. The scale dictates the reach, operations, and, often, the complexities a business might face.

Stakeholders: Businesses don't operate in isolation. They involve various stakeholders, including owners, employees, customers, suppliers, and even the communities they operate in. Each stakeholder has a role, an interest, and an expectation from the business.

Economic Contribution: A business isn't just about its owners or employees. It plays a pivotal role in the broader economy. Through its operations, it contributes via job creation, taxes, boosting trade, and even fostering innovation.

Risks & Challenges: The business landscape is dynamic. External factors like competition, market trends, regulations, and even unforeseen events can pose challenges. Recognising and navigating these risks is vital for the business's sustainability and growth.

Legal Structure: Businesses operate within a legal framework. Depending on the region or country, various legal structures are available, such as sole proprietorships, partnerships, or corporations. This structure defines legal responsibilities, benefits, and limitations a business has.

To sum it up, the nature of business is a blend of its purpose, daily functions, size, interconnected relationships, contribution to the economy, potential challenges, and legal standing. Each component interplays with the other, forming the intricate mosaic of what we know as 'business'. Read also:  Top 10 Profitable Wholesale Business Ideas for 2022

List of Natures of Businesses

Here's a concise list of various natures of businesses:

This list gives a brief overview of various business categories.

Types of Business Nature

Businesses come in various forms, each distinguished by its nature and purpose. Understanding these types is essential for anyone delving into the business world. Let's explore the most prominent natures of businesses:

Manufacturing: Manufacturing businesses convert raw materials into finished products. Examples include factories that produce cars, electronics, or clothing. They utilise machinery, human labour, and technology to produce goods on a large scale, which are then sold to wholesalers or retailers.

Retail: Retail businesses sell products directly to consumers. Think of the shops you visit, like clothing stores, supermarkets, or electronics outlets. Their primary goal is to provide consumers with products they need or desire, usually in smaller quantities than wholesalers.

Wholesale: Wholesalers purchase products in bulk, typically from manufacturers, and sell them to retailers or other businesses. They act as intermediaries, ensuring that retail stores have a consistent supply of products for their customers.

Service: Service businesses offer intangible products, which are services. These can range from consulting and legal services to salons and car repairs. Their primary asset is expertise, and they monetise it by helping clients or customers achieve specific outcomes.

Agriculture: These businesses are involved in farming producing crops or livestock. Modern agriculture goes beyond traditional farming, including organic cultivation, fish farming, and even agro-based product processing.

Real Estate: Real estate businesses deal with properties - buying, selling, or leasing. They play a crucial role in the housing sector, commercial spaces, and land sales. Real estate agents, property managers, and developers all fall into this category.

Transportation: Transportation businesses are all about movement. Whether it's a taxi service, a shipping company, or an airline, these businesses move goods or people from one place to another, ensuring that both commodities and individuals reach their destinations.

Healthcare: Healthcare businesses provide medical services to individuals. This includes hospitals, clinics, diagnostic centres, and pharmacies. They focus on health promotion, illness prevention, diagnosis, treatment, and rehabilitation.

Financial Services: This category includes businesses like banks, insurance companies, and investment firms. They manage money, assets, and liabilities. Their services are essential for both individuals looking to save, invest, or insure and businesses seeking capital or risk management.

E-commerce: E-commerce businesses operate online, selling products or services directly to consumers via the Internet. This model has seen significant growth due to digital advancements and changing consumer behaviors.

The nature of a business defines its primary activities, how it operates, and its role in the market. Whether it's converting raw materials, selling products, offering expertise, or providing essential services, each business nature has its unique challenges and opportunities. Recognising these types helps stakeholders make informed decisions and navigate the vast business landscape more effectively. Read also:  Business Growth and Expansion - How to Grow Business?

Nature of Business Example

Let’s take an example of a Cafe. They provide a space for customers to enjoy beverages, light meals, and a social atmosphere. The core activities involve preparing and selling coffee or tea, along with snacks. Operationally, cafes purchase raw materials, process them using equipment, manage suppliers, hire staff, and handle finances for profitability. 

Promotion includes social media marketing and loyalty programs. Legal compliance is integral, involving health standards, licenses, and tax payments. A cafe business isn't just about coffee; it's about offering a comprehensive experience, blending quality beverages, food, ambience, and service, all while ensuring smooth operations and regulatory adherence.

How Business Loan Helpful to Start Different Types of Business?

• Startup Costs: Many businesses require significant upfront investment for things like equipment, inventory, office space, licenses, and permits.
• Expansion and Growth: As businesses grow, they often need additional funds to expand operations, hire more staff, or enter new markets.
• Technology and Innovation: In today's competitive business environment, staying technologically current is crucial.
• Inventory Management: For businesses involved in retail or manufacturing, maintaining adequate inventory is critical

Steps to Apply Business Loan to Start a Different Nature of Business

The nature of a business provides a lens through which one can understand its core activities, objectives, and the value it brings to the market. Whether a business is in retail, manufacturing, services, or any other sector, understanding its nature is pivotal for strategic planning and making informed decisions.

For instance, factors intrinsic to a business's nature can significantly influence aspects such as the business loan interest rate it might secure from financial institutions. As businesses navigate their industry landscape, acknowledging and adapting to their inherent nature becomes instrumental in fostering growth and sustainability.

Frequently Asked Questions

1. How quickly can I expect loan approval, and does it vary by industry?

Approval timelines vary, but certain industries may experience faster or slower processing times based on risk assessments and the complexity of the business model

2. What is the nature of modern business?

Modern business is digital, global, customer-centric, and sustainable, prioritizing innovation, adaptability, and tech integration to meet market and consumer needs.

3. What is your business type?

A business type defines a company's legal and operational structure, like sole proprietorship, partnership, corporation, or LLC.

4. Can a business have more than one nature or characteristic?

Sure, a business can have multiple facets. For example, it can produce goods, provide services, and do e-commerce, mixing different aspects to succeed.

5. How does the nature of business impact marketing strategies?

The nature of business dictates its target audience, product positioning, and competitive landscape, directly influencing marketing strategies in terms of channels used, messaging, and engagement tactics to reach potential customers effectively.

6. Can the nature of business change over time?

Yes, the nature of business can evolve due to market demands, technological advancements, regulatory shifts, or strategic decisions, requiring businesses to adapt their operations.

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Disbursement

The act of paying out money for any kind of transaction is known as disbursement. From a lending perspective this usual implies the transfer of the loan amount to the borrower. It may cover paying to operate a business, dividend payments, cash outflow etc. So if disbursements are more than revenues, then cash flow of an entity is negative, and may indicate possible insolvency.

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Public Notice

Notice No. 1 of 2

Public Notice: Moratorium Message

Dated: march 31, 2020.

Dear Customers,

Today, the entire world is facing a crisis in the form of Covid-19, and it is during these times that we all need to come together to support each other and to act responsibly.

In light of the recent nationwide lockdown, we at Hero FinCorp are providing a three months moratorium to our loan customers as per eligibility and guidelines issued by RBI. This moratorium facility is only applicable for EMIs due between March 01, 2020 and August 31, 2020. EMIs / over dues prior to March 01, 2020 are not eligible for moratorium.

Please note, if you opt for the moratorium, interest will continue to accrue for the duration of the moratorium period at the currently running interest rate on your loan. This additional interest will be collected from you by extending the original tenor of your loan. We will also share an updated loan repayment schedule which would include all relevant details.

We urge customers to use this option only if absolutely necessary. This facility has been especially designed for those customers whose cash flows have been severely affected and they do not have sufficient savings or other income sources which they could use for paying their EMIs. The downsides of opting for the moratorium include:

• 1. Higher interest costs
• 2. Longer loan tenor
• 3. You pay more overall

If you can, then you must continue to pay EMIs as per your existing Repayment Schedule. This would be a far superior option in the long run as it offers several benefits, it is easier, simpler, and cheaper to do, so choose wisely!

To apply for moratorium, please send us a request from your Registered Email Address, along with your Loan Account Number and Registered Mobile Number. Post which we shall initiate the moratorium for unpaid EMI of March 2020 (if any), and for EMI of April and May 2020.

For moratorium request or any other information, please write to us at:

Retail Finance Customers:

Corporate Finance Customers:

Best Wishes, Team Hero FinCorp

Notice No. 2 of 2

Public Notice: Update on Hero FinCorp’s operations during COVID-19

Dated: march 26, 2020.

At Hero FinCorp, health and safety of all our employees, customers, and stakeholders is a top priority. In the wake of the Corona virus (COVID-19) outbreak, we are strictly adhering to guidelines from the government and other concerned authorities, in order to contain the spread of the virus and minimize impact on business.

During this challenging time, we have taken several measures to ensure safety of our employees, this includes providing work from home option for all our workforce and keeping a regular check on their and their family’s well-being. We have shut–down our offices and introduced alternate ways of working through Digital modes to ensure safety and business continuity. We are also working with our vendors and partners to ensure compliant and robust BCP plans are operationalized at their end as well.

Given the 21 day nation-wide lockdown announced by the honorable Prime Minister of India on March 24, 2020, we have put in place various initiatives to ensure that there is zero disruption in critical operational processes. Accordingly we are ensuring regular and relevant communication goes out to all our stakeholders and investors on the status of our operations.

While we remain committed to providing high levels of service to our customers, given the circumstances, we urge our customers to co-operate with us by ensuring the following:

• 1. Choose E-mail channel for any loan servicing related request - This is a channel that has been strengthened to ensure quick resolutions to issues raised. While our call center remains operational, customers might encounter longer wait times, as they are operating at a reduced capacity to accommodate work-from-home policy.
• 2. Ensure timely payments of EMIs through digital channels – We urge our customers to remain disciplined towards their EMI re-payments. We have made available numerous digital modes of payments on our official website (www.HeroFinCorp.com), and encourage our Retail customers to pay their dues by leveraging the same.

This is an unprecedented situation, and we at Hero FinCorp remain fully focused on overcoming the common crisis that we face. We are confident that with a little faith and discipline we shall soon see this situation through and normal business operations shall resume.

In case of any query regarding your loan, re-payment or loan servicing requests, please do reach out to us on the below mentioned E-Mail IDs:

For Retail Loans Help

• Two-Wheeler
• Personl Loan
• Simply Cash

[email protected]

For Corporate Loans Help

• Machinery Loans
• Loan Against Property
• Corporate loans and Structured Finance
• Doctor Loans
• Supply Chain Finance/ Bill Discounting
• Medical Equipment Finance
• Construction/ Healthcare/ Education Finance

[email protected]

Team Hero FinCorp

1.1 The Nature of Business

• How do businesses and not-for-profit organizations help create our standard of living?

Take a moment to think about the many different types of businesses you come into contact with on a typical day. As you drive to class, you may stop at a gas station that is part of a major national oil company and grab lunch from a fast food chain such as Taco Bell or McDonald’s or the neighborhood pizza place. Need more cash? You can do your banking on a smartphone or other device via mobile apps. You don’t even have to visit the store anymore: online shopping brings the stores to you, offering everything from clothes to food, furniture, and concert tickets.

A business is an organization that strives for a profit by providing goods and services desired by its customers. Businesses meet the needs of consumers by providing medical care, autos, and countless other goods and services. Goods are tangible items manufactured by businesses, such as laptops. Services are intangible offerings of businesses that can’t be held, touched, or stored. Physicians, lawyers, hairstylists, car washes, and airlines all provide services. Businesses also serve other organizations, such as hospitals, retailers, and governments, by providing machinery, goods for resale, computers, and thousands of other items.

Thus, businesses create the goods and services that are the basis of our standard of living. The standard of living of any country is measured by the output of goods and services people can buy with the money they have. The United States has one of the highest standards of living in the world. Although several countries, such as Switzerland and Germany, have higher average wages than the United States, their standards of living aren’t higher, because prices are so much higher. As a result, the same amount of money buys less in those countries. For example, in the United States, we can buy an Extra Value Meal at McDonald’s for less than $5, while in another country, a similar meal might cost as much as $10.

Businesses play a key role in determining our quality of life by providing jobs and goods and services to society. Quality of life refers to the general level of human happiness based on such things as life expectancy, educational standards, health, sanitation, and leisure time. Building a high quality of life is a combined effort of businesses, government, and not-for-profit organizations. In 2017, Vienna, Austria, ranked highest in quality of life, followed by Zurich, Switzerland; Auckland, New Zealand; and Munich, Germany. It may come as a surprise that not one of the world’s top cities is in the United States: seven of the top 10 locations are in western Europe, two are in Australia/New Zealand, and one is in Canada. At the other end of the scale, Baghdad, Iraq, is the city scoring the lowest on the annual survey. 1 Creating a quality of life is not without risks, however. Risk is the potential to lose time and money or otherwise not be able to accomplish an organization’s goals. Without enough blood donors, for example, the American Red Cross faces the risk of not meeting the demand for blood by victims of disaster. Businesses such as Microsoft face the risk of falling short of their revenue and profit goals. Revenue is the money a company receives by providing services or selling goods to customers. Costs are expenses for rent, salaries, supplies, transportation, and many other items that a company incurs from creating and selling goods and services. For example, some of the costs incurred by Microsoft in developing its software include expenses for salaries, facilities, and advertising. If Microsoft has money left over after it pays all costs, it has a profit . A company whose costs are greater than revenues shows a loss.

When a company such as Microsoft uses its resources intelligently, it can often increase sales, hold costs down, and earn a profit. Not all companies earn profits, but that is the risk of being in business. In U.S. business today, there is generally a direct relationship between risks and profit: the greater the risks, the greater the potential for profit (or loss). Companies that take too conservative a stance may lose out to more nimble competitors who react quickly to the changing business environment.

Take Sony , for example. The Japanese electronics giant, once a leader with its Walkman music player and Trinitron televisions, steadily lost ground—and profits—over the past two decades to other companies by not embracing new technologies such as the digital music format and flat-panel TV screens. Sony misjudged what the market wanted and stayed with proprietary technologies rather than create cross-platform options for consumers. Apple , at the time an upstart in personal music devices, quickly grabbed the lion’s share of the digital music market with its iPods and iTunes music streaming service. By 2016, Sony restructured its business portfolio and has experienced substantial success with its PlayStation 4 gaming console and original gaming content. 2

Not-for-Profit Organizations

Not all organizations strive to make a profit. A not-for-profit organization is an organization that exists to achieve some goal other than the usual business goal of profit. Charities such as Habitat for Humanity , the United Way , the American Cancer Society , and the World Wildlife Fund are not-for-profit organizations, as are most hospitals, zoos, arts organizations, civic groups, and religious organizations. Over the last 20 years, the number of nonprofit organizations—and the employees and volunteers who work for them—has increased considerably. Government is our largest and most pervasive not-for-profit group. In addition, more than 1.5 million nongovernmental not-for-profit entities operate in the United States today and contribute more than $900 billion annually to the U.S. economy. 3

Like their for-profit counterparts, these groups set goals and require resources to meet those goals. However, their goals are not focused on profits. For example, a not-for-profit organization’s goal might be feeding the poor, preserving the environment, increasing attendance at the ballet, or preventing drunk driving. Not-for-profit organizations do not compete directly with one another in the same manner as, for example, Ford and Honda , but they do compete for talented employees, people’s limited volunteer time, and donations.

The boundaries that formerly separated not-for-profit and for-profit organizations have blurred, leading to a greater exchange of ideas between the sectors. As discussed in detail in the ethics chapter, for-profit businesses are now addressing social issues. Successful not-for-profits apply business principles to operate more effectively. Not-for-profit managers are concerned with the same concepts as their colleagues in for-profit companies: developing strategy, budgeting carefully, measuring performance, encouraging innovation, improving productivity, demonstrating accountability, and fostering an ethical workplace environment.

In addition to pursuing a museum’s artistic goals, for example, top executives manage the administrative and business side of the organization: human resources, finance, and legal concerns. Ticket revenues cover a fraction of the museum’s operating costs, so the director spends a great deal of time seeking major donations and memberships. Today’s museum boards of directors include both art patrons and business executives who want to see sound fiscal decision-making in a not-for-profit setting. Therefore, a museum director must walk a fine line between the institution’s artistic mission and financial policies. According to a survey by The Economist , over the next several years, major art museums will be looking for new directors, as more than a third of the current ones are approaching retirement. 4

Factors of Production: The Building Blocks of Business

To provide goods and services, regardless of whether they operate in the for-profit or not-for-profit sector, organizations require inputs in the form of resources called factors of production . Four traditional factors of production are common to all productive activity: natural resources , labor (human resources) , capital , and entrepreneurship . Many experts now include knowledge as a fifth factor, acknowledging its key role in business success. By using the factors of production efficiently, a company can produce more goods and services with the same resources.

Commodities that are useful inputs in their natural state are known as natural resources. They include farmland, forests, mineral and oil deposits, and water. Sometimes natural resources are simply called land, although, as you can see, the term means more than just land. Companies use natural resources in different ways. International Paper Company uses wood pulp to make paper, and Pacific Gas & Electric Company may use water, oil, or coal to produce electricity. Today urban sprawl, pollution, and limited resources have raised questions about resource use. Conservationists, environmentalists, and government bodies are proposing laws to require land-use planning and resource conservation.

Labor, or human resources, refers to the economic contributions of people working with their minds and muscles. This input includes the talents of everyone—from a restaurant cook to a nuclear physicist—who performs the many tasks of manufacturing and selling goods and services.

The tools, machinery, equipment, and buildings used to produce goods and services and get them to the consumer are known as capital . Sometimes the term capital is also used to mean the money that buys machinery, factories, and other production and distribution facilities. However, because money itself produces nothing, it is not one of the basic inputs. Instead, it is a means of acquiring the inputs. Therefore, in this context, capital does not include money.

Entrepreneurs are the people who combine the inputs of natural resources, labor, and capital to produce goods or services with the intention of making a profit or accomplishing a not-for-profit goal. These people make the decisions that set the course for their businesses; they create products and production processes or develop services. Because they are not guaranteed a profit in return for their time and effort, they must be risk-takers. Of course, if their companies succeed, the rewards may be great.

Today, many individuals want to start their own businesses. They are attracted by the opportunity to be their own boss and reap the financial rewards of a successful firm. Many start their first business from their dorm rooms, such as Mark Zuckerberg of Facebook , or while living at home, so their cost is almost zero. Entrepreneurs include people such as Microsoft cofounder Bill Gates , who was named the richest person in the world in 2017, as well as Google founders Sergey Brin and Larry Page . 5 Many thousands of individuals have started companies that, while remaining small, make a major contribution to the U.S. economy.

Catching the Entrepreneurial Spirit

Stickergiant embraces change.

Entrepreneurs typically are not afraid to take risks or change the way they do business if it means there is a better path to success. John Fischer of Longmont, Colorado, fits the profile.

The drawn-out U.S. presidential election in 2000 between Bush and Gore inspired Fischer to create a bumper sticker that claimed, “He’s Not My President,” which became a top seller. As a result of this venture, Fischer started an online retail sticker store, which he viewed as possibly the “ Amazon of Stickers.” Designing and making stickers in his basement, Fischer’s start-up would eventually become a multimillion-dollar company, recognized in 2017 by Forbes as one of its top 25 small businesses.

The StickerGiant online store was successful, supplying everything from sports stickers to ones commemorating rock and roll bands and breweries. By 2011, the business was going strong; however, the entrepreneur decided to do away with the retail store, instead focusing the business on custom orders, which became StickerGiant ’s main product.

As the company became more successful and added more employees, Fischer once again looked to make some changes. In 2012 he decided to introduce a concept called open-book management, in which he shares the company’s financials with employees at a weekly meeting. Other topics discussed at the meeting include customer comments and feedback, employee concerns, and colleague appreciation for one another. Fischer believes sharing information about the company’s performance (good or bad) not only allows employees to feel part of the operation, but also empowers them to embrace change or suggest ideas that could help the business expand and flourish.

Innovation is also visible in the technology StickerGiant uses to create miles and miles of custom stickers (nearly 800 miles of stickers in 2016). The manufacturing process involves digital printing and laser-finishing equipment. Fischer says only five other companies worldwide have the laser-finishing equipment StickerGiant uses as part of its operations. Because of the investment in this high-tech equipment, the company can make custom stickers in large quantities overnight and ship them to customers the next day.

This small business continues to evolve with an entrepreneur at the helm who is not afraid of making changes or having fun. In 2016, StickerGiant put together Saul the Sticker Ball, a Guinness World Records winner that weighed in at a whopping 232 pounds. Fischer and his employees created Saul when they collected more than 170,000 stickers that had been lying around the office and decided to put them to good use. With $10 million in annual sales and nearly 40 employees, StickerGiant continues to be a successful endeavor for John Fischer and his employees almost two decades after Fischer created his first sticker.

• How does being a risk-taker help Fischer in his business activities?
• If you were a small business owner, would you consider sharing the company’s financial data with employees? Explain your reasoning.

Sources: “All About StickerGiant,” https://www.stickergiant.com, accessed May 29, 2017; Bo Burlingham, “Forbes Small Giants 2017: America’s Best Small Companies,” Forbes, http://www.forbes.com, May 9, 2017; Karsten Strauss, “Making Money and Breaking Records in the Sticker Business,” Forbes, http://www.forbes.com, January 26, 2016; Emilie Rusch, “StickerGiant Does Big Business in Tiny Town of Hygiene,” Denver Post, April 19, 2016, http://www.denverpost.com; Eric Peterson, “StickerGiant,” Company Week, https://companyweek.com, September 5, 2016.

A number of outstanding managers and noted academics are beginning to emphasize a fifth factor of production—knowledge. Knowledge refers to the combined talents and skills of the workforce and has become a primary driver of economic growth. Today’s competitive environment places a premium on knowledge and learning over physical resources. Recent statistics suggest that the number of U.S. knowledge workers has doubled over the last 30 years, with an estimated 2 million knowledge job openings annually. Despite the fact that many “routine” jobs have been replaced by automation over the last decade or outsourced to other countries, technology has actually created more jobs that require knowledge and cognitive skills. 6

Concept Check

• Explain the concepts of revenue, costs, and profit.
• What are the five factors of production?
• What is the role of an entrepreneur in society?

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Access for free at https://openstax.org/books/introduction-business/pages/1-introduction

• Authors: Lawrence J. Gitman, Carl McDaniel, Amit Shah, Monique Reece, Linda Koffel, Bethann Talsma, James C. Hyatt
• Publisher/website: OpenStax
• Book title: Introduction to Business
• Publication date: Sep 19, 2018
• Location: Houston, Texas
• Book URL: https://openstax.org/books/introduction-business/pages/1-introduction
• Section URL: https://openstax.org/books/introduction-business/pages/1-1-the-nature-of-business

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• Corporations
• Definitions

Nature of Business (What It Is And What You Must Know)

What is the Nature of Business ?

How do you legally define it?

What are the essential elements you should know!

In this article, we will break down the Nature of Business meaning so you know all there is to know about it!

Keep reading as we have gathered exactly the information that you need!

Let’s dig into our business terms knowledge!

Are you ready?

Let’s get started!

Table of Contents

What is Nature of Business

The nature of business is a phrase referring to the overall purpose and existence of a company within a market sector or industry.

When we say nature of a business, we are alluding to:

• What type of products and services are sold by a company
• The industry in which the company operations
• Its overall mission and purpose 
• Other distinctive characteristics of the business

For example, to understand the nature of business, we can classify the “nature” into different categories:

• By product or service 
• By organizational setup
• By organizational structure
• By business type 

Nature of Business Definition

How do you define nature of business?

The definition of “nature of business” can vary from one person to another.

The nature of business is a statement about a company’s offering to its clients, its industry, legal structure, or any other distinctive qualities of the business.

For example, if you say a company in the “private sector”, you evaluate the nature of the company based on its nature to earn profits.

If you say that a company is the “manufacturing sector”, you refer to a company primarily concerned with manufacturing operations.

If you refer to a company as a “corporation”, you are qualifying the nature of the company by assessing its legal structure.

Let’s look at different categories in which you can classify the nature of different businesses.

Nature of Business Categories

To better illustrate the concept, we have put together a list of different ways you can view or consider the nature of your business.

Nature of business types 

The nature of business can be considered as business types.

A business type refers to the market sector in which the company operations, such as:

• Government sector
• Military sector
• International sector
• Private sector
• Technology sector
• Merchandising sector
• Service sector
• Manufacturing sector
• Non-profit sector
• Public sector 

Within each of these sectors, you may have subcategories.

Organization Type

Within our nature of business list, the nature of company can be viewed as the manner the company has been structured.

A company’s organizational setup can be:

• A corporation
• A partnership
• A sole proprietorship 
• A limited liability company 
• A limited liability partnership 

The legal manner of how the business entity formed is an angle to describe the nature of your business.

Business Classification 

You can consider the “nature” of a business based on its industry classification.

The government classifies all companies into different categories.

This is useful for research and statistical purposes allowing the government to track how a specific industry or business category is doing in the economy.

There are two business classifications commonly used:

• The Standard Industrial Classification (SIC)
• The North American Industry Classification System (NAICS)

SIC is a classification used by the U.S. Department of Labor whereas the NAICS is a classification system jointly used by Canada, Mexico, and the United States.

Nature of Business Examples

Let’s look at a nature of business example by type of business to complete our illustration of this notion.

Service Business

A service business is a type of business that provides intangible products to its clients.

For example, the service business can be subdivided into:

• Accounting firms
• Public relations firms
• Medical practitioners
• Software consultants
• Marketing consultants
• Banks 
• Repair shops

Merchandising Business

A merchandising business is a type of business that buys products wholesale and sells them at the retail price.

Their overall objective is to sell products at a price point higher than what it cost them.

Examples of merchandising companies can be:

• Grocery stores
• Convenience stores
• Distributors
• Resellers 

Manufacturing Business

A manufacturing business is a type of business that purchases products to combine them into something new.

They transform existing products (such as raw material or other material), into manufactured goods sold to customers.

For example, a manufacturing company may purchase nuts or grains as raw commodities and produce consumer-friendly goods.

Takeaways 

So what is the legal definition of Nature of Business ?

Let’s look at a summary of our findings.

Nature of Business

If you enjoyed this article on Nature of Business , we recommend you look into the following legal terms and concepts. Enjoy!

Related legal terms 

Business definition  Characteristics of business  Cooperative  Financial independence  Knowledge workers Limited liability company  Market expansion  Nature of management  Partnership Revenue generation Sole proprietorship Types of businesses Author

• Business Classification

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Small Business Trends

How to create a business plan: examples & free template.

This is the ultimate guide to creating a comprehensive and effective plan to start a business . In today’s dynamic business landscape, having a well-crafted business plan is an important first step to securing funding, attracting partners, and navigating the challenges of entrepreneurship.

This guide has been designed to help you create a winning plan that stands out in the ever-evolving marketplace. U sing real-world examples and a free downloadable template, it will walk you through each step of the process.

Whether you’re a seasoned entrepreneur or launching your very first startup, the guide will give you the insights, tools, and confidence you need to create a solid foundation for your business.

Table of Contents

How to Write a Business Plan

Embarking on the journey of creating a successful business requires a solid foundation, and a well-crafted business plan is the cornerstone. Here is the process of writing a comprehensive business plan and the main parts of a winning business plan . From setting objectives to conducting market research, this guide will have everything you need.

Executive Summary

The Executive Summary serves as the gateway to your business plan, offering a snapshot of your venture’s core aspects. This section should captivate and inform, succinctly summarizing the essence of your plan.

It’s crucial to include a clear mission statement, a brief description of your primary products or services, an overview of your target market, and key financial projections or achievements.

Think of it as an elevator pitch in written form: it should be compelling enough to engage potential investors or stakeholders and provide them with a clear understanding of what your business is about, its goals, and why it’s a promising investment.

Example: EcoTech is a technology company specializing in eco-friendly and sustainable products designed to reduce energy consumption and minimize waste. Our mission is to create innovative solutions that contribute to a cleaner, greener environment.

Our target market includes environmentally conscious consumers and businesses seeking to reduce their carbon footprint. We project a 200% increase in revenue within the first three years of operation.

Overview and Business Objectives

In the Overview and Business Objectives section, outline your business’s core goals and the strategic approaches you plan to use to achieve them. This section should set forth clear, specific objectives that are attainable and time-bound, providing a roadmap for your business’s growth and success.

It’s important to detail how these objectives align with your company’s overall mission and vision. Discuss the milestones you aim to achieve and the timeframe you’ve set for these accomplishments.

This part of the plan demonstrates to investors and stakeholders your vision for growth and the practical steps you’ll take to get there.

Example: EcoTech’s primary objective is to become a market leader in sustainable technology products within the next five years. Our key objectives include:

• Introducing three new products within the first two years of operation.
• Achieving annual revenue growth of 30%.
• Expanding our customer base to over 10,000 clients by the end of the third year.

Company Description

The Company Description section is your opportunity to delve into the details of your business. Provide a comprehensive overview that includes your company’s history, its mission statement, and its vision for the future.

Highlight your unique selling proposition (USP) – what makes your business stand out in the market. Explain the problems your company solves and how it benefits your customers.

Include information about the company’s founders, their expertise, and why they are suited to lead the business to success. This section should paint a vivid picture of your business, its values, and its place in the industry.

Example: EcoTech is committed to developing cutting-edge sustainable technology products that benefit both the environment and our customers. Our unique combination of innovative solutions and eco-friendly design sets us apart from the competition. We envision a future where technology and sustainability go hand in hand, leading to a greener planet.

Define Your Target Market

Defining Your Target Market is critical for tailoring your business strategy effectively. This section should describe your ideal customer base in detail, including demographic information (such as age, gender, income level, and location) and psychographic data (like interests, values, and lifestyle).

Elucidate on the specific needs or pain points of your target audience and how your product or service addresses these. This information will help you know your target market and develop targeted marketing strategies.

Example: Our target market comprises environmentally conscious consumers and businesses looking for innovative solutions to reduce their carbon footprint. Our ideal customers are those who prioritize sustainability and are willing to invest in eco-friendly products.

Market Analysis

The Market Analysis section requires thorough research and a keen understanding of the industry. It involves examining the current trends within your industry, understanding the needs and preferences of your customers, and analyzing the strengths and weaknesses of your competitors.

This analysis will enable you to spot market opportunities and anticipate potential challenges. Include data and statistics to back up your claims, and use graphs or charts to illustrate market trends.

This section should demonstrate that you have a deep understanding of the market in which you operate and that your business is well-positioned to capitalize on its opportunities.

Example: The market for eco-friendly technology products has experienced significant growth in recent years, with an estimated annual growth rate of 10%. As consumers become increasingly aware of environmental issues, the demand for sustainable solutions continues to rise.

Our research indicates a gap in the market for high-quality, innovative eco-friendly technology products that cater to both individual and business clients.

SWOT Analysis

A SWOT analysis in your business plan offers a comprehensive examination of your company’s internal and external factors. By assessing Strengths, you showcase what your business does best and where your capabilities lie.

Weaknesses involve an honest introspection of areas where your business may be lacking or could improve. Opportunities can be external factors that your business could capitalize on, such as market gaps or emerging trends.

Threats include external challenges your business may face, like competition or market changes. This analysis is crucial for strategic planning, as it helps in recognizing and leveraging your strengths, addressing weaknesses, seizing opportunities, and preparing for potential threats.

Including a SWOT analysis demonstrates to stakeholders that you have a balanced and realistic understanding of your business in its operational context.

• Innovative and eco-friendly product offerings.
• Strong commitment to sustainability and environmental responsibility.
• Skilled and experienced team with expertise in technology and sustainability.

Weaknesses:

• Limited brand recognition compared to established competitors.
• Reliance on third-party manufacturers for product development.

Opportunities:

• Growing consumer interest in sustainable products.
• Partnerships with environmentally-focused organizations and influencers.
• Expansion into international markets.
• Intense competition from established technology companies.
• Regulatory changes could impact the sustainable technology market.

Competitive Analysis

In this section, you’ll analyze your competitors in-depth, examining their products, services, market positioning, and pricing strategies. Understanding your competition allows you to identify gaps in the market and tailor your offerings to outperform them.

By conducting a thorough competitive analysis, you can gain insights into your competitors’ strengths and weaknesses, enabling you to develop strategies to differentiate your business and gain a competitive advantage in the marketplace.

Example: Key competitors include:

GreenTech: A well-known brand offering eco-friendly technology products, but with a narrower focus on energy-saving devices.

EarthSolutions: A direct competitor specializing in sustainable technology, but with a limited product range and higher prices.

By offering a diverse product portfolio, competitive pricing, and continuous innovation, we believe we can capture a significant share of the growing sustainable technology market.

Organization and Management Team

Provide an overview of your company’s organizational structure, including key roles and responsibilities. Introduce your management team, highlighting their expertise and experience to demonstrate that your team is capable of executing the business plan successfully.

Showcasing your team’s background, skills, and accomplishments instills confidence in investors and other stakeholders, proving that your business has the leadership and talent necessary to achieve its objectives and manage growth effectively.

Example: EcoTech’s organizational structure comprises the following key roles: CEO, CTO, CFO, Sales Director, Marketing Director, and R&D Manager. Our management team has extensive experience in technology, sustainability, and business development, ensuring that we are well-equipped to execute our business plan successfully.

Products and Services Offered

Describe the products or services your business offers, focusing on their unique features and benefits. Explain how your offerings solve customer pain points and why they will choose your products or services over the competition.

This section should emphasize the value you provide to customers, demonstrating that your business has a deep understanding of customer needs and is well-positioned to deliver innovative solutions that address those needs and set your company apart from competitors.

Example: EcoTech offers a range of eco-friendly technology products, including energy-efficient lighting solutions, solar chargers, and smart home devices that optimize energy usage. Our products are designed to help customers reduce energy consumption, minimize waste, and contribute to a cleaner environment.

Marketing and Sales Strategy

In this section, articulate your comprehensive strategy for reaching your target market and driving sales. Detail the specific marketing channels you plan to use, such as social media, email marketing, SEO, or traditional advertising.

Describe the nature of your advertising campaigns and promotional activities, explaining how they will capture the attention of your target audience and convey the value of your products or services. Outline your sales strategy, including your sales process, team structure, and sales targets.

Discuss how these marketing and sales efforts will work together to attract and retain customers, generate leads, and ultimately contribute to achieving your business’s revenue goals.

This section is critical to convey to investors and stakeholders that you have a well-thought-out approach to market your business effectively and drive sales growth.

Example: Our marketing strategy includes digital advertising, content marketing, social media promotion, and influencer partnerships. We will also attend trade shows and conferences to showcase our products and connect with potential clients. Our sales strategy involves both direct sales and partnerships with retail stores, as well as online sales through our website and e-commerce platforms.

Logistics and Operations Plan

The Logistics and Operations Plan is a critical component that outlines the inner workings of your business. It encompasses the management of your supply chain, detailing how you acquire raw materials and manage vendor relationships.

Inventory control is another crucial aspect, where you explain strategies for inventory management to ensure efficiency and reduce wastage. The section should also describe your production processes, emphasizing scalability and adaptability to meet changing market demands.

Quality control measures are essential to maintain product standards and customer satisfaction. This plan assures investors and stakeholders of your operational competency and readiness to meet business demands.

Highlighting your commitment to operational efficiency and customer satisfaction underlines your business’s capability to maintain smooth, effective operations even as it scales.

Example: EcoTech partners with reliable third-party manufacturers to produce our eco-friendly technology products. Our operations involve maintaining strong relationships with suppliers, ensuring quality control, and managing inventory.

We also prioritize efficient distribution through various channels, including online platforms and retail partners, to deliver products to our customers in a timely manner.

Financial Projections Plan

In the Financial Projections Plan, lay out a clear and realistic financial future for your business. This should include detailed projections for revenue, costs, and profitability over the next three to five years.

Ground these projections in solid assumptions based on your market analysis, industry benchmarks, and realistic growth scenarios. Break down revenue streams and include an analysis of the cost of goods sold, operating expenses, and potential investments.

This section should also discuss your break-even analysis, cash flow projections, and any assumptions about external funding requirements.

By presenting a thorough and data-backed financial forecast, you instill confidence in potential investors and lenders, showcasing your business’s potential for profitability and financial stability.

This forward-looking financial plan is crucial for demonstrating that you have a firm grasp of the financial nuances of your business and are prepared to manage its financial health effectively.

Example: Over the next three years, we expect to see significant growth in revenue, driven by new product launches and market expansion. Our financial projections include:

• Year 1: $1.5 million in revenue, with a net profit of $200,000.
• Year 2: $3 million in revenue, with a net profit of $500,000.
• Year 3: $4.5 million in revenue, with a net profit of $1 million.

These projections are based on realistic market analysis, growth rates, and product pricing.

Income Statement

The income statement , also known as the profit and loss statement, provides a summary of your company’s revenues and expenses over a specified period. It helps you track your business’s financial performance and identify trends, ensuring you stay on track to achieve your financial goals.

Regularly reviewing and analyzing your income statement allows you to monitor the health of your business, evaluate the effectiveness of your strategies, and make data-driven decisions to optimize profitability and growth.

Example: The income statement for EcoTech’s first year of operation is as follows:

• Revenue: $1,500,000
• Cost of Goods Sold: $800,000
• Gross Profit: $700,000
• Operating Expenses: $450,000
• Net Income: $250,000

This statement highlights our company’s profitability and overall financial health during the first year of operation.

Cash Flow Statement

A cash flow statement is a crucial part of a financial business plan that shows the inflows and outflows of cash within your business. It helps you monitor your company’s liquidity, ensuring you have enough cash on hand to cover operating expenses, pay debts, and invest in growth opportunities.

By including a cash flow statement in your business plan, you demonstrate your ability to manage your company’s finances effectively.

Example:  The cash flow statement for EcoTech’s first year of operation is as follows:

Operating Activities:

• Depreciation: $10,000
• Changes in Working Capital: -$50,000
• Net Cash from Operating Activities: $210,000

Investing Activities:

•  Capital Expenditures: -$100,000
• Net Cash from Investing Activities: -$100,000

Financing Activities:

• Proceeds from Loans: $150,000
• Loan Repayments: -$50,000
• Net Cash from Financing Activities: $100,000
• Net Increase in Cash: $210,000

This statement demonstrates EcoTech’s ability to generate positive cash flow from operations, maintain sufficient liquidity, and invest in growth opportunities.

Tips on Writing a Business Plan

1. Be clear and concise: Keep your language simple and straightforward. Avoid jargon and overly technical terms. A clear and concise business plan is easier for investors and stakeholders to understand and demonstrates your ability to communicate effectively.

2. Conduct thorough research: Before writing your business plan, gather as much information as possible about your industry, competitors, and target market. Use reliable sources and industry reports to inform your analysis and make data-driven decisions.

3. Set realistic goals: Your business plan should outline achievable objectives that are specific, measurable, attainable, relevant, and time-bound (SMART). Setting realistic goals demonstrates your understanding of the market and increases the likelihood of success.

4. Focus on your unique selling proposition (USP): Clearly articulate what sets your business apart from the competition. Emphasize your USP throughout your business plan to showcase your company’s value and potential for success.

5. Be flexible and adaptable: A business plan is a living document that should evolve as your business grows and changes. Be prepared to update and revise your plan as you gather new information and learn from your experiences.

6. Use visuals to enhance understanding: Include charts, graphs, and other visuals to help convey complex data and ideas. Visuals can make your business plan more engaging and easier to digest, especially for those who prefer visual learning.

7. Seek feedback from trusted sources: Share your business plan with mentors, industry experts, or colleagues and ask for their feedback. Their insights can help you identify areas for improvement and strengthen your plan before presenting it to potential investors or partners.

FREE Business Plan Template

To help you get started on your business plan, we have created a template that includes all the essential components discussed in the “How to Write a Business Plan” section. This easy-to-use template will guide you through each step of the process, ensuring you don’t miss any critical details.

The template is divided into the following sections:

• Mission statement
• Business Overview
• Key products or services
• Target market
• Financial highlights
• Company goals
• Strategies to achieve goals
• Measurable, time-bound objectives
• Company History
• Mission and vision
• Unique selling proposition
• Demographics
• Psychographics
• Pain points
• Industry trends
• Customer needs
• Competitor strengths and weaknesses
• Opportunities
• Competitor products and services
• Market positioning
• Pricing strategies
• Organizational structure
• Key roles and responsibilities
• Management team backgrounds
• Product or service features
• Competitive advantages
• Marketing channels
• Advertising campaigns
• Promotional activities
• Sales strategies
• Supply chain management
• Inventory control
• Production processes
• Quality control measures
• Projected revenue
• Assumptions
• Cash inflows
• Cash outflows
• Net cash flow

What is a Business Plan?

A business plan is a strategic document that outlines an organization’s goals, objectives, and the steps required to achieve them. It serves as a roadmap as you start a business , guiding the company’s direction and growth while identifying potential obstacles and opportunities.

Typically, a business plan covers areas such as market analysis, financial projections, marketing strategies, and organizational structure. It not only helps in securing funding from investors and lenders but also provides clarity and focus to the management team.

A well-crafted business plan is a very important part of your business startup checklist because it fosters informed decision-making and long-term success.

Why You Should Write a Business Plan

Understanding the importance of a business plan in today’s competitive environment is crucial for entrepreneurs and business owners. Here are five compelling reasons to write a business plan:

• Attract Investors and Secure Funding : A well-written business plan demonstrates your venture’s potential and profitability, making it easier to attract investors and secure the necessary funding for growth and development. It provides a detailed overview of your business model, target market, financial projections, and growth strategies, instilling confidence in potential investors and lenders that your company is a worthy investment.
• Clarify Business Objectives and Strategies : Crafting a business plan forces you to think critically about your goals and the strategies you’ll employ to achieve them, providing a clear roadmap for success. This process helps you refine your vision and prioritize the most critical objectives, ensuring that your efforts are focused on achieving the desired results.
• Identify Potential Risks and Opportunities : Analyzing the market, competition, and industry trends within your business plan helps identify potential risks and uncover untapped opportunities for growth and expansion. This insight enables you to develop proactive strategies to mitigate risks and capitalize on opportunities, positioning your business for long-term success.
• Improve Decision-Making : A business plan serves as a reference point so you can make informed decisions that align with your company’s overall objectives and long-term vision. By consistently referring to your plan and adjusting it as needed, you can ensure that your business remains on track and adapts to changes in the market, industry, or internal operations.
• Foster Team Alignment and Communication : A shared business plan helps ensure that all team members are on the same page, promoting clear communication, collaboration, and a unified approach to achieving the company’s goals. By involving your team in the planning process and regularly reviewing the plan together, you can foster a sense of ownership, commitment, and accountability that drives success.

What are the Different Types of Business Plans?

In today’s fast-paced business world, having a well-structured roadmap is more important than ever. A traditional business plan provides a comprehensive overview of your company’s goals and strategies, helping you make informed decisions and achieve long-term success. There are various types of business plans, each designed to suit different needs and purposes. Let’s explore the main types:

• Startup Business Plan: Tailored for new ventures, a startup business plan outlines the company’s mission, objectives, target market, competition, marketing strategies, and financial projections. It helps entrepreneurs clarify their vision, secure funding from investors, and create a roadmap for their business’s future. Additionally, this plan identifies potential challenges and opportunities, which are crucial for making informed decisions and adapting to changing market conditions.
• Internal Business Plan: This type of plan is intended for internal use, focusing on strategies, milestones, deadlines, and resource allocation. It serves as a management tool for guiding the company’s growth, evaluating its progress, and ensuring that all departments are aligned with the overall vision. The internal business plan also helps identify areas of improvement, fosters collaboration among team members, and provides a reference point for measuring performance.
• Strategic Business Plan: A strategic business plan outlines long-term goals and the steps to achieve them, providing a clear roadmap for the company’s direction. It typically includes a SWOT analysis, market research, and competitive analysis. This plan allows businesses to align their resources with their objectives, anticipate changes in the market, and develop contingency plans. By focusing on the big picture, a strategic business plan fosters long-term success and stability.
• Feasibility Business Plan: This plan is designed to assess the viability of a business idea, examining factors such as market demand, competition, and financial projections. It is often used to decide whether or not to pursue a particular venture. By conducting a thorough feasibility analysis, entrepreneurs can avoid investing time and resources into an unviable business concept. This plan also helps refine the business idea, identify potential obstacles, and determine the necessary resources for success.
• Growth Business Plan: Also known as an expansion plan, a growth business plan focuses on strategies for scaling up an existing business. It includes market analysis, new product or service offerings, and financial projections to support expansion plans. This type of plan is essential for businesses looking to enter new markets, increase their customer base, or launch new products or services. By outlining clear growth strategies, the plan helps ensure that expansion efforts are well-coordinated and sustainable.
• Operational Business Plan: This type of plan outlines the company’s day-to-day operations, detailing the processes, procedures, and organizational structure. It is an essential tool for managing resources, streamlining workflows, and ensuring smooth operations. The operational business plan also helps identify inefficiencies, implement best practices, and establish a strong foundation for future growth. By providing a clear understanding of daily operations, this plan enables businesses to optimize their resources and enhance productivity.
• Lean Business Plan: A lean business plan is a simplified, agile version of a traditional plan, focusing on key elements such as value proposition, customer segments, revenue streams, and cost structure. It is perfect for startups looking for a flexible, adaptable planning approach. The lean business plan allows for rapid iteration and continuous improvement, enabling businesses to pivot and adapt to changing market conditions. This streamlined approach is particularly beneficial for businesses in fast-paced or uncertain industries.
• One-Page Business Plan: As the name suggests, a one-page business plan is a concise summary of your company’s key objectives, strategies, and milestones. It serves as a quick reference guide and is ideal for pitching to potential investors or partners. This plan helps keep teams focused on essential goals and priorities, fosters clear communication, and provides a snapshot of the company’s progress. While not as comprehensive as other plans, a one-page business plan is an effective tool for maintaining clarity and direction.
• Nonprofit Business Plan: Specifically designed for nonprofit organizations, this plan outlines the mission, goals, target audience, fundraising strategies, and budget allocation. It helps secure grants and donations while ensuring the organization stays on track with its objectives. The nonprofit business plan also helps attract volunteers, board members, and community support. By demonstrating the organization’s impact and plans for the future, this plan is essential for maintaining transparency, accountability, and long-term sustainability within the nonprofit sector.
• Franchise Business Plan: For entrepreneurs seeking to open a franchise, this type of plan focuses on the franchisor’s requirements, as well as the franchisee’s goals, strategies, and financial projections. It is crucial for securing a franchise agreement and ensuring the business’s success within the franchise system. This plan outlines the franchisee’s commitment to brand standards, marketing efforts, and operational procedures, while also addressing local market conditions and opportunities. By creating a solid franchise business plan, entrepreneurs can demonstrate their ability to effectively manage and grow their franchise, increasing the likelihood of a successful partnership with the franchisor.

Using Business Plan Software

Creating a comprehensive business plan can be intimidating, but business plan software can streamline the process and help you produce a professional document. These tools offer a number of benefits, including guided step-by-step instructions, financial projections, and industry-specific templates. Here are the top 5 business plan software options available to help you craft a great business plan.

1. LivePlan

LivePlan is a popular choice for its user-friendly interface and comprehensive features. It offers over 500 sample plans, financial forecasting tools, and the ability to track your progress against key performance indicators. With LivePlan, you can create visually appealing, professional business plans that will impress investors and stakeholders.

2. Upmetrics

Upmetrics provides a simple and intuitive platform for creating a well-structured business plan. It features customizable templates, financial forecasting tools, and collaboration capabilities, allowing you to work with team members and advisors. Upmetrics also offers a library of resources to guide you through the business planning process.

Bizplan is designed to simplify the business planning process with a drag-and-drop builder and modular sections. It offers financial forecasting tools, progress tracking, and a visually appealing interface. With Bizplan, you can create a business plan that is both easy to understand and visually engaging.

Enloop is a robust business plan software that automatically generates a tailored plan based on your inputs. It provides industry-specific templates, financial forecasting, and a unique performance score that updates as you make changes to your plan. Enloop also offers a free version, making it accessible for businesses on a budget.

5. Tarkenton GoSmallBiz

Developed by NFL Hall of Famer Fran Tarkenton, GoSmallBiz is tailored for small businesses and startups. It features a guided business plan builder, customizable templates, and financial projection tools. GoSmallBiz also offers additional resources, such as CRM tools and legal document templates, to support your business beyond the planning stage.

Business Plan FAQs

What is a good business plan.

A good business plan is a well-researched, clear, and concise document that outlines a company’s goals, strategies, target market, competitive advantages, and financial projections. It should be adaptable to change and provide a roadmap for achieving success.

What are the 3 main purposes of a business plan?

The three main purposes of a business plan are to guide the company’s strategy, attract investment, and evaluate performance against objectives. Here’s a closer look at each of these:

• It outlines the company’s purpose and core values to ensure that all activities align with its mission and vision.
• It provides an in-depth analysis of the market, including trends, customer needs, and competition, helping the company tailor its products and services to meet market demands.
• It defines the company’s marketing and sales strategies, guiding how the company will attract and retain customers.
• It describes the company’s organizational structure and management team, outlining roles and responsibilities to ensure effective operation and leadership.
• It sets measurable, time-bound objectives, allowing the company to plan its activities effectively and make strategic decisions to achieve these goals.
• It provides a comprehensive overview of the company and its business model, demonstrating its uniqueness and potential for success.
• It presents the company’s financial projections, showing its potential for profitability and return on investment.
• It demonstrates the company’s understanding of the market, including its target customers and competition, convincing investors that the company is capable of gaining a significant market share.
• It showcases the management team’s expertise and experience, instilling confidence in investors that the team is capable of executing the business plan successfully.
• It establishes clear, measurable objectives that serve as performance benchmarks.
• It provides a basis for regular performance reviews, allowing the company to monitor its progress and identify areas for improvement.
• It enables the company to assess the effectiveness of its strategies and make adjustments as needed to achieve its objectives.
• It helps the company identify potential risks and challenges, enabling it to develop contingency plans and manage risks effectively.
• It provides a mechanism for evaluating the company’s financial performance, including revenue, expenses, profitability, and cash flow.

Can I write a business plan by myself?

Yes, you can write a business plan by yourself, but it can be helpful to consult with mentors, colleagues, or industry experts to gather feedback and insights. There are also many creative business plan templates and business plan examples available online, including those above.

We also have examples for specific industries, including a using food truck business plan , salon business plan , farm business plan , daycare business plan , and restaurant business plan .

Is it possible to create a one-page business plan?

Yes, a one-page business plan is a condensed version that highlights the most essential elements, including the company’s mission, target market, unique selling proposition, and financial goals.

How long should a business plan be?

A typical business plan ranges from 20 to 50 pages, but the length may vary depending on the complexity and needs of the business.

What is a business plan outline?

A business plan outline is a structured framework that organizes the content of a business plan into sections, such as the executive summary, company description, market analysis, and financial projections.

What are the 5 most common business plan mistakes?

The five most common business plan mistakes include inadequate research, unrealistic financial projections, lack of focus on the unique selling proposition, poor organization and structure, and failure to update the plan as circumstances change.

What questions should be asked in a business plan?

A business plan should address questions such as: What problem does the business solve? Who is the specific target market ? What is the unique selling proposition? What are the company’s objectives? How will it achieve those objectives?

What’s the difference between a business plan and a strategic plan?

A business plan focuses on the overall vision, goals, and tactics of a company, while a strategic plan outlines the specific strategies, action steps, and performance measures necessary to achieve the company’s objectives.

How is business planning for a nonprofit different?

Nonprofit business planning focuses on the organization’s mission, social impact, and resource management, rather than profit generation. The financial section typically includes funding sources, expenses, and projected budgets for programs and operations.

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What Is a Business Plan?

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

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

A business plan is a document that details a company's goals and how it intends to achieve them. Business plans can be of benefit to both startups and well-established companies. For startups, a business plan can be essential for winning over potential lenders and investors. Established businesses can find one useful for staying on track and not losing sight of their goals. This article explains what an effective business plan needs to include and how to write one.

Key Takeaways

• A business plan is a document describing a company's business activities and how it plans to achieve its goals.
• Startup companies use business plans to get off the ground and attract outside investors.
• For established companies, a business plan can help keep the executive team focused on and working toward the company's short- and long-term objectives.
• There is no single format that a business plan must follow, but there are certain key elements that most companies will want to include.

Investopedia / Ryan Oakley

Any new business should have a business plan in place prior to beginning operations. In fact, banks and venture capital firms often want to see a business plan before they'll consider making a loan or providing capital to new businesses.

Even if a business isn't looking to raise additional money, a business plan can help it focus on its goals. A 2017 Harvard Business Review article reported that, "Entrepreneurs who write formal plans are 16% more likely to achieve viability than the otherwise identical nonplanning entrepreneurs."

Ideally, a business plan should be reviewed and updated periodically to reflect any goals that have been achieved or that may have changed. An established business that has decided to move in a new direction might create an entirely new business plan for itself.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. These include being able to think through ideas before investing too much money in them and highlighting any potential obstacles to success. A company might also share its business plan with trusted outsiders to get their objective feedback. In addition, a business plan can help keep a company's executive team on the same page about strategic action items and priorities.

Business plans, even among competitors in the same industry, are rarely identical. However, they often have some of the same basic elements, as we describe below.

While it's a good idea to provide as much detail as necessary, it's also important that a business plan be concise enough to hold a reader's attention to the end.

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

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

The length of a business plan can vary greatly from business to business. Regardless, it's best to fit the basic information into a 15- to 25-page document. Other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and attached as appendices.

These are some of the most common elements in many business plans:

• Executive summary: This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services: Here, the company should describe the products and services it offers or plans to introduce. That might include details on pricing, product lifespan, and unique benefits to the consumer. Other factors that could go into this section include production and manufacturing processes, any relevant patents the company may have, as well as proprietary technology . Information about research and development (R&D) can also be included here.
• Market analysis: A company needs to have a good handle on the current state of its industry and the existing competition. This section should explain where the company fits in, what types of customers it plans to target, and how easy or difficult it may be to take market share from incumbents.
• Marketing strategy: This section can describe how the company plans to attract and keep customers, including any anticipated advertising and marketing campaigns. It should also describe the distribution channel or channels it will use to get its products or services to consumers.
• Financial plans and projections: Established businesses can include financial statements, balance sheets, and other relevant financial information. New businesses can provide financial targets and estimates for the first few years. Your plan might also include any funding requests you're making.

The best business plans aren't generic ones created from easily accessed templates. A company should aim to entice readers with a plan that demonstrates its uniqueness and potential for success.

2 Types of Business Plans

Business plans can take many forms, but they are sometimes divided into two basic categories: traditional and lean startup. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These plans tend to be much longer than lean startup plans and contain considerably more detail. As a result they require more work on the part of the business, but they can also be more persuasive (and reassuring) to potential investors.
• Lean startup business plans : These use an abbreviated structure that highlights key elements. These business plans are short—as short as one page—and provide only the most basic detail. If a company wants to use this kind of plan, it should be prepared to provide more detail if an investor or a lender requests it.

Why Do Business Plans Fail?

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

How frequently a business plan needs to be revised will depend on the nature of the business. A well-established business might want to review its plan once a year and make changes if necessary. A new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is an option when a company prefers to give a quick explanation of its business. For example, a brand-new company may feel that it doesn't have a lot of information to provide yet.

Sections can include: a value proposition ; the company's major activities and advantages; resources such as staff, intellectual property, and capital; a list of partnerships; customer segments; and revenue sources.

A business plan can be useful to companies of all kinds. But as a company grows and the world around it changes, so too should its business plan. So don't think of your business plan as carved in granite but as a living document designed to evolve with your business.

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

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

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What is a Nature of Business Statement? Meaning and Examples

Running a business generally isn’t a “set it and forget it” proposition. It takes careful planning, nurturing and dedication to even get a new business started — and that’s not to mention all the work that goes into actually operating it once it’s up and running or solving problems that crop up along the way. One of those important tasks is determining your nature of business.

Operating a business carries a certain level of risk. However, new business owners can tip the odds in their favor with careful business planning and by understanding the wide variety of activities — along with the focus of those activities — involved in each aspect of running a company. Learning more about the nature of business is key in accomplishing this goal.

What Is the Nature of Business?

The nature of business is a structured method of describing a company. This concept is a synthesis of what type of business it is and what the business does. The nature of business also highlights the specific problems a given business solves. It encompasses everything a business does to reach its goals and describes the main focus of the company’s offerings.

A discussion of the nature of business of a company usually appears in a business plan that describes how the company will operate. Entrepreneurs, investors and lenders use nature of business statements to ensure that a company is viable before offering to fund it. They want to know about the potential success of the company before deciding whether it’ll likely be a profitable investment. Grant applications are another area where nature of business statements can be necessary because this paperwork also involves funding.

A nature of business statement should thoroughly address the following elements of the business:

Regular process : This separates businesses from hobbies. Businesses have processes that repeat over and over again to produce the same result. That result is a product or service for consumers and income for the business owner.

Economic activity : All businesses have the core goal of generating income.

Utility creation – To be useful to customers, the product or service must be delivered at the right time and place, and it should solve a problem or meet a need. Goods that are not accessible to consumers, for one reason or another, serve no use.

Capital requirement : In simple terms, it takes money to make money. Every business requires employees, equipment and other goods that cost money. These are necessary for producing the product or delivering the service that leads to income.

Goods and services : All businesses deliver something to the public. Some businesses produce tangible goods, such as clothes or cars. Others produce intangible services, such as computer repairs.

Anticipated risk : All businesses require some level of investment of time and money. Sometimes a business owner makes money, and sometimes a business owner loses money. There’s always a risk of losing money when doing business, and some risks are more common in certain industries than others.

Profit-earning motive : The central motive for starting a business is to make a profit.

Satisfaction of consumers’ needs : Businesses operate on supply and demand. When consumers express a want or need, wise businesses answer the call by supplying something to meet that demand.

Involvement from the buyer and seller : In every business transaction, the customer buys something and the business sells something.

Social obligations : Businesses have an impact on their communities at large. They hire people, form relationships with other businesses and help communities by offering a needed product or service. They may also give back to the community through philanthropic efforts or enrichment programs.

A statement about the nature of a business should also explain what problem the business will solve and what type of business the company is.

The Biggest Business Goal: Products Solving Problems

A successful business must solve a problem. Making a concerted effort to discover and fix a problem builds the business’s reputation over the long term and increases its success. It’s important to perform research about consumer preferences and geographic area before starting a company to ensure that there’s a true need for the product.

For example, say you’re thinking about opening a sushi restaurant in a nearby town. However, during your research you find that there are already five sushi restaurants open there, and one recently closed. You find out that the town is lacking a good Korean barbecue place, and people are posting on social media about how they wish this type of restaurant existed nearby. Without having done this research, you might’ve moved forward with the sushi restaurant — only to see it fail.

Although every business’ product or service won’t be totally unique, the business should try to address a specific need. For example, many larger cities have at least one street that’s lined with car dealerships. Each dealership sells cars, but they specialize in different brands to solve the problem of consumers not having enough choices. One dealership may sell used luxury cars, while another specializes in Ford vehicles. One dealership has the lowest prices, while another offers in-house financing. Each of these offerings is the solution to a problem that a different group of customers has.

The Business’ Type Matters, Too

Although there’s a vast variety of businesses in the world, there are relatively few types of businesses. Wholesale and manufacturing businesses often sell products to other businesses, but they can be consumer-facing as well. Retail and service businesses often sell directly to customers.

Manufacturers are businesses that start the chain by building a product. Wholesale businesses then sell these products in bulk to retail businesses. Retail businesses sell smaller quantities of products directly to customers. Service-based businesses offer non-tangible services.

In today’s world, however, new forms of business are emerging. Projec-development businesses help other businesses gather the necessary people and capital to complete a specific major project. Hybrid businesses mix a variety of business types. For example, a used car dealership (retail) may also repair cars (service) and auction off excess inventory (wholesale). Understanding what type of business yours would be can better guide you in developing a plan for it.

Common Types of Small Businesses

Here are some of the most popular and profitable business enterprises today and the specific considerations you should make for each when it comes time to draft your nature of business statement.

Retailers earn a livelihood by selling products and services. Many items and services were only available at brick-and-mortar locations in the past. Now, it is possible to order products and services online, after which the retailer delivers them.

Retail businesses include stores that sell clothing, pharmaceuticals, food, and machine parts, among other things. For retail businesses, a nature of business statement should contain the company structure, legal name, location, and—most significantly—the products sold.

2. Hospitality

At its core, hospitality refers to making another person feel at home in one’s presence by providing entertainment and comfort. It may have a variety of definitions depending on the context. There are several sub-sectors within the hospitality business. The top four hospitality industries are food and beverage, lodging, travel and tourism, and entertainment and recreation.

The nature of the business statement will define the hospitality sub-industry in which the business operates. It should also address factors such as location, cost, facilities, and services offered.

Instead of making products, service businesses focus on providing maintenance and repair, training, and consulting services. In other words, they provide intangible value. Those who work in a service business are individuals or groups of individuals who use specialized knowledge and skills to provide value to others.

For this industry, the nature of business statement has to include the kinds of activities that the business performs daily to boost the value of operations and raise profits.

4. Real Estate

Land and buildings are the focus of a real estate business, including everything from purchasing and selling to managing and operating properties. Despite the many hurdles to starting a business in the industry, it is vibrant and incredibly appealing.

Real estate businesses must establish a specific niche, market location, and possible rivals as part of their business plan, and detail these in their nature of business statement. This is an addition to the other components typical to service or hospitality businesses.

Business Operations Guide Companies to Success

Business operations should be tied to the problem the business solves. Operations involve every aspect of managing a business, from the hours a store is open to the number of employees to hire. If the company has a brick-and-mortar presence, the location and hours of operation should serve the people who have the problem the business solves. Marketing must also be geared towards reaching the target audience — the ideal customers for the product or service who most likely have the problem the business’ product or service solves. Beyond running the business, a new business owner must decide how to handle necessary functions like accounting and inventory management.

After careful planning, the final step before starting a business is to make it official and legal by forming the business entity properly. The most common business structures to choose from include sole proprietorship, LLC, LLP, S Corp and C Corp. It’s important to consult with a legal professional who’s familiar with business law to get help in deciding what type of structure will best fit your business. Choosing the wrong entity can have serious liability and tax consequences. But, armed with a strong nature of business statement and some outside assistance where necessary, you’ll be primed for success.

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The 7 Best Business Plan Examples (2024)

As an aspiring entrepreneur gearing up to start your own business , you likely know the importance of drafting a business plan. However, you might not be entirely sure where to begin or what specific details to include. That’s where examining business plan examples can be beneficial. Sample business plans serve as real-world templates to help you craft your own plan with confidence. They also provide insight into the key sections that make up a business plan, as well as demonstrate how to structure and present your ideas effectively.

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Example business plan

To understand how to write a business plan, let’s study an example structured using a seven-part template. Here’s a quick overview of those parts:

• Executive summary: A quick overview of your business and the contents of your business plan.
• Company description: More info about your company, its goals and mission, and why you started it in the first place.
• Market analysis: Research about the market and industry your business will operate in, including a competitive analysis about the companies you’ll be up against.
• Products and services: A detailed description of what you’ll be selling to your customers.
• Marketing plan: A strategic outline of how you plan to market and promote your business before, during, and after your company launches into the market.
• Logistics and operations plan: An explanation of the systems, processes, and tools that are needed to run your business in the background.
• Financial plan: A map of your short-term (and even long-term) financial goals and the costs to run the business. If you’re looking for funding, this is the place to discuss your request and needs.

7 business plan examples (section by section)

In this section, you’ll find hypothetical and real-world examples of each aspect of a business plan to show you how the whole thing comes together. 

• Executive summary

Your executive summary offers a high-level overview of the rest of your business plan. You’ll want to include a brief description of your company, market research, competitor analysis, and financial information. 

In this free business plan template, the executive summary is three paragraphs and occupies nearly half the page:

• Company description

You might go more in-depth with your company description and include the following sections:

• Nature of the business. Mention the general category of business you fall under. Are you a manufacturer, wholesaler, or retailer of your products?
• Background information. Talk about your past experiences and skills, and how you’ve combined them to fill in the market. 
• Business structure. This section outlines how you registered your company —as a corporation, sole proprietorship, LLC, or other business type.
• Industry. Which business sector do you operate in? The answer might be technology, merchandising, or another industry.
• Team. Whether you’re the sole full-time employee of your business or you have contractors to support your daily workflow, this is your chance to put them under the spotlight.

You can also repurpose your company description elsewhere, like on your About page, Instagram page, or other properties that ask for a boilerplate description of your business. Hair extensions brand Luxy Hair has a blurb on it’s About page that could easily be repurposed as a company description for its business plan. 

• Market analysis

Market analysis comprises research on product supply and demand, your target market, the competitive landscape, and industry trends. You might do a SWOT analysis to learn where you stand and identify market gaps that you could exploit to establish your footing. Here’s an example of a SWOT analysis for a hypothetical ecommerce business: 

You’ll also want to run a competitive analysis as part of the market analysis component of your business plan. This will show you who you’re up against and give you ideas on how to gain an edge over the competition. 

• Products and services

This part of your business plan describes your product or service, how it will be priced, and the ways it will compete against similar offerings in the market. Don’t go into too much detail here—a few lines are enough to introduce your item to the reader.

• Marketing plan

Potential investors will want to know how you’ll get the word out about your business. So it’s essential to build a marketing plan that highlights the promotion and customer acquisition strategies you’re planning to adopt. 

Most marketing plans focus on the four Ps: product, price, place, and promotion. However, it’s easier when you break it down by the different marketing channels . Mention how you intend to promote your business using blogs, email, social media, and word-of-mouth marketing. 

Here’s an example of a hypothetical marketing plan for a real estate website:

Logistics and operations

This section of your business plan provides information about your production, facilities, equipment, shipping and fulfillment, and inventory.

Financial plan

The financial plan (a.k.a. financial statement) offers a breakdown of your sales, revenue, expenses, profit, and other financial metrics. You’ll want to include all the numbers and concrete data to project your current and projected financial state.

In this business plan example, the financial statement for ecommerce brand Nature’s Candy includes forecasted revenue, expenses, and net profit in graphs.

It then goes deeper into the financials, citing:

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

You can use Shopify’s financial plan template to create your own income statement, cash-flow statement, and balance sheet. 

Types of business plans (and what to write for each)

A one-page business plan is a pared down version of a standard business plan that’s easy for potential investors and partners to understand. You’ll want to include all of these sections, but make sure they’re abbreviated and summarized:

• Logistics and operations plan
• Financials 

A startup business plan is meant to secure outside funding for a new business. Typically, there’s a big focus on the financials, as well as other sections that help determine the viability of your business idea—market analysis, for example. Shopify has a great business plan template for startups that include all the below points:

• Market research: in depth
• Financials: in depth

Internal 

Your internal business plan acts as the enforcer of your company’s vision. It reminds your team of the long-term objective and keeps them strategically aligned toward the same goal. Be sure to include:

• Market research

Feasibility 

A feasibility business plan is essentially a feasibility study that helps you evaluate whether your product or idea is worthy of a full business plan. Include the following sections:

A strategic (or growth) business plan lays out your long-term vision and goals. This means your predictions stretch further into the future, and you aim for greater growth and revenue. While crafting this document, you use all the parts of a usual business plan but add more to each one:

• Products and services: for launch and expansion
• Market analysis: detailed analysis
• Marketing plan: detailed strategy
• Logistics and operations plan: detailed plan
• Financials: detailed projections

Free business plan templates

Now that you’re familiar with what’s included and how to format a business plan, let’s go over a few templates you can fill out or draw inspiration from.

Bplans’ free business plan template

Bplans’ free business plan template focuses a lot on the financial side of running a business. It has many pages just for your financial plan and statements. Once you fill it out, you’ll see exactly where your business stands financially and what you need to do to keep it on track or make it better.

PandaDoc’s free business plan template

PandaDoc’s free business plan template is detailed and guides you through every section, so you don’t have to figure everything out on your own. Filling it out, you’ll grasp the ins and outs of your business and how each part fits together. It’s also handy because it connects to PandaDoc’s e-signature for easy signing, ideal for businesses with partners or a board.

Miro’s Business Model Canvas Template

Miro’s Business Model Canvas Template helps you map out the essentials of your business, like partnerships, core activities, and what makes you different. It’s a collaborative tool for you and your team to learn how everything in your business is linked.

Better business planning equals better business outcomes

Building a business plan is key to establishing a clear direction and strategy for your venture. With a solid plan in hand, you’ll know what steps to take for achieving each of your business goals. Kickstart your business planning and set yourself up for success with a defined roadmap—utilizing the sample business plans above to inform your approach.

Business plan FAQ

What are the 3 main points of a business plan.

• Concept. Explain what your business does and the main idea behind it. This is where you tell people what you plan to achieve with your business.
• Contents. Explain what you’re selling or offering. Point out who you’re selling to and who else is selling something similar. This part concerns your products or services, who will buy them, and who you’re up against.
• Cash flow. Explain how money will move in and out of your business. Discuss the money you need to start and keep the business going, the costs of running your business, and how much money you expect to make.

How do I write a simple business plan?

To create a simple business plan, start with an executive summary that details your business vision and objectives. Follow this with a concise description of your company’s structure, your market analysis, and information about your products or services. Conclude your plan with financial projections that outline your expected revenue, expenses, and profitability.

What is the best format to write a business plan?

The optimal format for a business plan arranges your plan in a clear and structured way, helping potential investors get a quick grasp of what your business is about and what you aim to achieve. Always start with a summary of your plan and finish with the financial details or any extra information at the end.

Want to learn more?

• Question: Are You a Business Owner or an Entrepreneur?
• Bootstrapping a Business: 10 Tips to Help You Succeed
• Entrepreneurial Mindset: 20 Ways to Think Like an Entrepreneur
• 101+ Best Small Business Software Programs 

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24 of My Favorite Sample Business Plans & Examples For Your Inspiration

Published: February 06, 2024

I believe that reading sample business plans is essential when writing your own.

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As you explore business plan examples from real companies and brands, it’s easier for you to learn how to write a good one.

But what does a good business plan look like? And how do you write one that’s both viable and convincing. I’ll walk you through the ideal business plan format along with some examples to help you get started.

Table of Contents

Business Plan Format

Business plan types, sample business plan templates, top business plan examples.

Ask any successful sports coach how they win so many games, and they’ll tell you they have a unique plan for every single game. To me, the same logic applies to business.

If you want to build a thriving company that can pull ahead of the competition, you need to prepare for battle before breaking into a market.

Business plans guide you along the rocky journey of growing a company. And if your business plan is compelling enough, it can also convince investors to give you funding.

With so much at stake, I’m sure you’re wondering where to begin.

Free Business Plan Template

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

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

You're all set!

Click this link to access this resource at any time.

Fill out the form to get your free template.

First, you’ll want to nail down your formatting. Most business plans include the following sections.

1. Executive Summary

I’d say the executive summary is the most important section of the entire business plan. 

Why? Essentially, it's the overview or introduction, written in a way to grab readers' attention and guide them through the rest of the business plan. This is important, because a business plan can be dozens or hundreds of pages long.

There are two main elements I’d recommend including in your executive summary:

Company Description

This is the perfect space to highlight your company’s mission statement and goals, a brief overview of your history and leadership, and your top accomplishments as a business.

Tell potential investors who you are and why what you do matters. Naturally, they’re going to want to know who they’re getting into business with up front, and this is a great opportunity to showcase your impact.

Need some extra help firming up those business goals? Check out HubSpot Academy’s free course to help you set goals that matter — I’d highly recommend it

Products and Services

To piggyback off of the company description, be sure to incorporate an overview of your offerings. This doesn’t have to be extensive — just another chance to introduce your industry and overall purpose as a business.

In addition to the items above, I recommend including some information about your financial projections and competitive advantage here too.:

Keep in mind you'll cover many of these topics in more detail later on in the business plan. So, keep the executive summary clear and brief, and only include the most important takeaways.

Executive Summary Business Plan Examples

This example was created with HubSpot’s business plan template:

This executive summary is so good to me because it tells potential investors a short story while still covering all of the most important details.

Image Source

Tips for Writing Your Executive Summary

• Start with a strong introduction of your company, showcase your mission and impact, and outline the products and services you provide.
• Clearly define a problem, and explain how your product solves that problem, and show why the market needs your business.
• Be sure to highlight your value proposition, market opportunity, and growth potential.
• Keep it concise and support ideas with data.
• Customize your summary to your audience. For example, emphasize finances and return on investment for venture capitalists.

Check out our tips for writing an effective executive summary for more guidance.

2. Market Opportunity

This is where you'll detail the opportunity in the market.

The main question I’d ask myself here is this: Where is the gap in the current industry, and how will my product fill that gap?

More specifically, here’s what I’d include in this section:

• The size of the market
• Current or potential market share
• Trends in the industry and consumer behavior
• Where the gap is
• What caused the gap
• How you intend to fill it

To get a thorough understanding of the market opportunity, you'll want to conduct a TAM, SAM, and SOM analysis and perform market research on your industry.

You may also benefit from creating a SWOT analysis to get some of the insights for this section.

Market Opportunity Business Plan Example

I like this example because it uses critical data to underline the size of the potential market and what part of that market this service hopes to capture.

Tips for Writing Your Market Opportunity Section

• Focus on demand and potential for growth.
• Use market research, surveys, and industry trend data to support your market forecast and projections.
• Add a review of regulation shifts, tech advances, and consumer behavior changes.
• Refer to reliable sources.
• Showcase how your business can make the most of this opportunity.

3. Competitive Landscape

Since we’re already speaking of market share, you'll also need to create a section that shares details on who the top competitors are.

After all, your customers likely have more than one brand to choose from, and you'll want to understand exactly why they might choose one over another.

My favorite part of performing a competitive analysis is that it can help you uncover:

• Industry trends that other brands may not be utilizing
• Strengths in your competition that may be obstacles to handle
• Weaknesses in your competition that may help you develop selling points
• The unique proposition you bring to the market that may resonate with customers

Competitive Landscape Business Plan Example

I like how the competitive landscape section of this business plan below shows a clear outline of who the top competitors are.

It also highlights specific industry knowledge and the importance of location, which shows useful experience in this specific industry. 

This can help build trust in your ability to execute your business plan.

Tips for Writing Your Competitive Landscape

• Complete in-depth research, then emphasize your most important findings.
• Compare your unique selling proposition (USP) to your direct and indirect competitors.
• Show a clear and realistic plan for product and brand differentiation.
• Look for specific advantages and barriers in the competitive landscape. Then, highlight how that information could impact your business.
• Outline growth opportunities from a competitive perspective.
• Add customer feedback and insights to support your competitive analysis.

4. Target Audience

Use this section to describe who your customer segments are in detail. What is the demographic and psychographic information of your audience?

If your immediate answer is "everyone," you'll need to dig deeper. Here are some questions I’d ask myself here:

• What demographics will most likely need/buy your product or service?
• What are the psychographics of this audience? (Desires, triggering events, etc.)
• Why are your offerings valuable to them?

I’d also recommend building a buyer persona to get in the mindset of your ideal customers and be clear on why you're targeting them.

Target Audience Business Plan Example

I like the example below because it uses in-depth research to draw conclusions about audience priorities. It also analyzes how to create the right content for this audience.

Tips for Writing Your Target Audience Section

• Include details on the size and growth potential of your target audience.
• Figure out and refine the pain points for your target audience , then show why your product is a useful solution.
• Describe your targeted customer acquisition strategy in detail.
• Share anticipated challenges your business may face in acquiring customers and how you plan to address them.
• Add case studies, testimonials, and other data to support your target audience ideas.
• Remember to consider niche audiences and segments of your target audience in your business plan.

5. Marketing Strategy

Here, you'll discuss how you'll acquire new customers with your marketing strategy. I’d suggest including information:

• Your brand positioning vision and how you'll cultivate it
• The goal targets you aim to achieve
• The metrics you'll use to measure success
• The channels and distribution tactics you'll use

I think it’s helpful to have a marketing plan built out in advance to make this part of your business plan easier.

Marketing Strategy Business Plan Example

This business plan example includes the marketing strategy for the town of Gawler.

In my opinion, it really works because it offers a comprehensive picture of how they plan to use digital marketing to promote the community.

Tips for Writing Your Marketing Strategy

• Include a section about how you believe your brand vision will appeal to customers.
• Add the budget and resources you'll need to put your plan in place.
• Outline strategies for specific marketing segments.
• Connect strategies to earlier sections like target audience and competitive analysis.
• Review how your marketing strategy will scale with the growth of your business.
• Cover a range of channels and tactics to highlight your ability to adapt your plan in the face of change.

6. Key Features and Benefits

At some point in your business plan, you'll need to review the key features and benefits of your products and/or services.

Laying these out can give readers an idea of how you're positioning yourself in the market and the messaging you're likely to use. It can even help them gain better insight into your business model.

Key Features and Benefits Business Plan Example

In my opinion, the example below does a great job outlining products and services for this business, along with why these qualities will attract the audience.

Tips for Writing Your Key Features and Benefits

• Emphasize why and how your product or service offers value to customers.
• Use metrics and testimonials to support the ideas in this section.
• Talk about how your products and services have the potential to scale.
• Think about including a product roadmap.
• Focus on customer needs, and how the features and benefits you are sharing meet those needs.
• Offer proof of concept for your ideas, like case studies or pilot program feedback.
• Proofread this section carefully, and remove any jargon or complex language.

7. Pricing and Revenue

This is where you'll discuss your cost structure and various revenue streams. Your pricing strategy must be solid enough to turn a profit while staying competitive in the industry. 

For this reason, here’s what I’d might outline in this section:

• The specific pricing breakdowns per product or service
• Why your pricing is higher or lower than your competition's
• (If higher) Why customers would be willing to pay more
• (If lower) How you're able to offer your products or services at a lower cost
• When you expect to break even, what margins do you expect, etc?

Pricing and Revenue Business Plan Example

I like how this business plan example begins with an overview of the business revenue model, then shows proposed pricing for key products.

Tips for Writing Your Pricing and Revenue Section

• Get specific about your pricing strategy. Specifically, how you connect that strategy to customer needs and product value.
• If you are asking a premium price, share unique features or innovations that justify that price point.
• Show how you plan to communicate pricing to customers.
• Create an overview of every revenue stream for your business and how each stream adds to your business model as a whole.
• Share plans to develop new revenue streams in the future.
• Show how and whether pricing will vary by customer segment and how pricing aligns with marketing strategies.
• Restate your value proposition and explain how it aligns with your revenue model.

8. Financials

To me, this section is particularly informative for investors and leadership teams to figure out funding strategies, investment opportunities, and more.

 According to Forbes , you'll want to include three main things:

• Profit/Loss Statement - This answers the question of whether your business is currently profitable.
• Cash Flow Statement - This details exactly how much cash is incoming and outgoing to give insight into how much cash a business has on hand.
• Balance Sheet - This outlines assets, liabilities, and equity, which gives insight into how much a business is worth.

While some business plans might include more or less information, these are the key details I’d include in this section.

Financials Business Plan Example

This balance sheet is a great example of level of detail you’ll need to include in the financials section of your business plan.

Tips for Writing Your Financials Section

• Growth potential is important in this section too. Using your data, create a forecast of financial performance in the next three to five years.
• Include any data that supports your projections to assure investors of the credibility of your proposal.
• Add a break-even analysis to show that your business plan is financially practical. This information can also help you pivot quickly as your business grows.
• Consider adding a section that reviews potential risks and how sensitive your plan is to changes in the market.
• Triple-check all financial information in your plan for accuracy.
• Show how any proposed funding needs align with your plans for growth.

As you create your business plan, keep in mind that each of these sections will be formatted differently. Some may be in paragraph format, while others could be charts or graphs.

The formats above apply to most types of business plans. That said, the format and structure of your plan will vary by your goals for that plan. 

So, I’ve added a quick review of different business plan types. For a more detailed overview, check out this post .

1. Startups

Startup business plans are for proposing new business ideas.

If you’re planning to start a small business, preparing a business plan is crucial. The plan should include all the major factors of your business.

You can check out this guide for more detailed business plan inspiration .

2. Feasibility Studies

Feasibility business plans focus on that business's product or service. Feasibility plans are sometimes added to startup business plans. They can also be a new business plan for an already thriving organization.

3. Internal Use

You can use internal business plans to share goals, strategies, or performance updates with stakeholders. In my opinion, internal business plans are useful for alignment and building support for ambitious goals.

4. Strategic Initiatives

Another business plan that's often for sharing internally is a strategic business plan. This plan covers long-term business objectives that might not have been included in the startup business plan.

5. Business Acquisition or Repositioning

When a business is moving forward with an acquisition or repositioning, it may need extra structure and support. These types of business plans expand on a company's acquisition or repositioning strategy.

Growth sometimes just happens as a business continues operations. But more often, a business needs to create a structure with specific targets to meet set goals for expansion. This business plan type can help a business focus on short-term growth goals and align resources with those goals.

Now that you know what's included and how to format a business plan, let's review some of my favorite templates.

1. HubSpot's One-Page Business Plan

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

The business plan linked above was created here at HubSpot and is perfect for businesses of any size — no matter how many strategies we still have to develop.

Fields such as Company Description, Required Funding, and Implementation Timeline give this one-page business plan a framework for how to build your brand and what tasks to keep track of as you grow.

Then, as the business matures, you can expand on your original business plan with a new iteration of the above document.

Why I Like It

This one-page business plan is a fantastic choice for the new business owner who doesn’t have the time or resources to draft a full-blown business plan. It includes all the essential sections in an accessible, bullet-point-friendly format. That way, you can get the broad strokes down before honing in on the details.

2. HubSpot's Downloadable Business Plan Template

We also created a business plan template for entrepreneurs.

The template is designed as a guide and checklist for starting your own business. You’ll learn what to include in each section of your business plan and how to do it.

There’s also a list for you to check off when you finish each section of your business plan.

Strong game plans help coaches win games and help businesses rocket to the top of their industries. So if you dedicate the time and effort required to write a workable and convincing business plan, you’ll boost your chances of success and even dominance in your market.

This business plan kit is essential for the budding entrepreneur who needs a more extensive document to share with investors and other stakeholders.

It not only includes sections for your executive summary, product line, market analysis, marketing plan, and sales plan, but it also offers hands-on guidance for filling out those sections.

3. LiveFlow’s Financial Planning Template with built-in automation

This free template from LiveFlow aims to make it easy for businesses to create a financial plan and track their progress on a monthly basis.

The P&L Budget versus Actual format allows users to track their revenue, cost of sales, operating expenses, operating profit margin, net profit, and more.

The summary dashboard aggregates all of the data put into the financial plan sheet and will automatically update when changes are made.

Instead of wasting hours manually importing your data to your spreadsheet, LiveFlow can also help you to automatically connect your accounting and banking data directly to your spreadsheet, so your numbers are always up-to-date.

With the dashboard, you can view your runway, cash balance, burn rate, gross margins, and other metrics. Having a simple way to track everything in one place will make it easier to complete the financials section of your business plan.

This is a fantastic template to track performance and alignment internally and to create a dependable process for documenting financial information across the business. It’s highly versatile and beginner-friendly.

It’s especially useful if you don’t have an accountant on the team. (I always recommend you do, but for new businesses, having one might not be possible.)

4. ThoughtCo’s Sample Business Plan

One of the more financially oriented sample business plans in this list, BPlan’s free business plan template dedicates many of its pages to your business’s financial plan and financial statements.

After filling this business plan out, your company will truly understand its financial health and the steps you need to take to maintain or improve it.

I absolutely love this business plan template because of its ease-of-use and hands-on instructions (in addition to its finance-centric components). If you feel overwhelmed by the thought of writing an entire business plan, consider using this template to help you with the process.

6. Harvard Business Review’s "How to Write a Winning Business Plan"

Most sample business plans teach you what to include in your business plan, but this Harvard Business Review article will take your business plan to the next level — it teaches you the why and how behind writing a business plan.

With the guidance of Stanley Rich and Richard Gumpert, co-authors of " Business Plans That Win: Lessons From the MIT Enterprise Forum ", you'll learn how to write a convincing business plan that emphasizes the market demand for your product or service.

You’ll also learn the financial benefits investors can reap from putting money into your venture rather than trying to sell them on how great your product or service is.

This business plan guide focuses less on the individual parts of a business plan, and more on the overarching goal of writing one. For that reason, it’s one of my favorites to supplement any template you choose to use. Harvard Business Review’s guide is instrumental for both new and seasoned business owners.

7. HubSpot’s Complete Guide to Starting a Business

If you’re an entrepreneur, you know writing a business plan is one of the most challenging first steps to starting a business.

Fortunately, with HubSpot's comprehensive guide to starting a business, you'll learn how to map out all the details by understanding what to include in your business plan and why it’s important to include them. The guide also fleshes out an entire sample business plan for you.

If you need further guidance on starting a business, HubSpot's guide can teach you how to make your business legal, choose and register your business name, and fund your business. It will also give small business tax information and includes marketing, sales, and service tips.

This comprehensive guide will walk you through the process of starting a business, in addition to writing your business plan, with a high level of exactitude and detail. So if you’re in the midst of starting your business, this is an excellent guide for you.

It also offers other resources you might need, such as market analysis templates.

8. Panda Doc’s Free Business Plan Template

PandaDoc’s free business plan template is one of the more detailed and fleshed-out sample business plans on this list. It describes what you should include in each section, so you don't have to come up with everything from scratch.

Once you fill it out, you’ll fully understand your business’ nitty-gritty details and how all of its moving parts should work together to contribute to its success.

This template has two things I love: comprehensiveness and in-depth instructions. Plus, it’s synced with PandaDoc’s e-signature software so that you and other stakeholders can sign it with ease. For that reason, I especially love it for those starting a business with a partner or with a board of directors.

9. Small Business Administration Free Business Plan Template

The Small Business Administration (SBA) offers several free business plan templates that can be used to inspire your own plan.

Before you get started, you can decide what type of business plan you need — a traditional or lean start-up plan.

Then, you can review the format for both of those plans and view examples of what they might look like.

We love both of the SBA’s templates because of their versatility. You can choose between two options and use the existing content in the templates to flesh out your own plan. Plus, if needed, you can get a free business counselor to help you along the way.

I’ve compiled some completed business plan samples to help you get an idea of how to customize a plan for your business.

I chose different types of business plan ideas to expand your imagination. Some are extensive, while others are fairly simple.

Let’s take a look.

1. LiveFlow

One of the major business expenses is marketing. How you handle your marketing reflects your company’s revenue.

I included this business plan to show you how you can ensure your marketing team is aligned with your overall business plan to get results. The plan also shows you how to track even the smallest metrics of your campaigns, like ROI and payback periods instead of just focusing on big metrics like gross and revenue.

Fintech startup, LiveFlow, allows users to sync real-time data from its accounting services, payment platforms, and banks into custom reports. This eliminates the task of pulling reports together manually, saving teams time and helping automate workflows.

"Using this framework over a traditional marketing plan will help you set a profitable marketing strategy taking things like CAC, LTV, Payback period, and P&L into consideration," explains LiveFlow co-founder, Lasse Kalkar .

When it came to including marketing strategy in its business plan, LiveFlow created a separate marketing profit and loss statement (P&L) to track how well the company was doing with its marketing initiatives.

This is a great approach, allowing businesses to focus on where their marketing dollars are making the most impact. Having this information handy will enable you to build out your business plan’s marketing section with confidence. LiveFlow has shared the template here . You can test it for yourself.

2. Lula Body

Sometimes all you need is a solid mission statement and core values to guide you on how to go about everything. You do this by creating a business plan revolving around how to fulfill your statement best.

For example, Patagonia is an eco-friendly company, so their plan discusses how to make the best environmentally friendly products without causing harm.

A good mission statement  should not only resonate with consumers but should also serve as a core value compass for employees as well.

Patagonia has one of the most compelling mission statements I’ve seen:

"Together, let’s prioritise purpose over profit and protect this wondrous planet, our only home."

It reels you in from the start, and the environmentally friendly theme continues throughout the rest of the statement.

This mission goes on to explain that they are out to "Build the best product, cause no unnecessary harm, and use business to protect nature."

Their mission statement is compelling and detailed, with each section outlining how they will accomplish their goal.

4. Vesta Home Automation

This executive summary for a smart home device startup is part of a business plan created by students at Mount Royal University .

While it lacks some of the sleek visuals of the templates above, its executive summary does a great job of demonstrating how invested they are in the business.

Right away, they mention they’ve invested $200,000 into the company already, which shows investors they have skin in the game and aren’t just looking for someone else to foot the bill.

This is the kind of business plan you need when applying for business funds. It clearly illustrates the expected future of the company and how the business has been coming along over the years.

5. NALB Creative Center

This fictional business plan for an art supply store includes everything one might need in a business plan: an executive summary, a company summary, a list of services, a market analysis summary, and more.

One of its most notable sections is its market analysis summary, which includes an overview of the population growth in the business’ target geographical area, as well as a breakdown of the types of potential customers they expect to welcome at the store. 

This sort of granular insight is essential for understanding and communicating your business’s growth potential. Plus, it lays a strong foundation for creating relevant and useful buyer personas .

It’s essential to keep this information up-to-date as your market and target buyer changes. For that reason, you should carry out market research as often as possible to ensure that you’re targeting the correct audience and sharing accurate information with your investors.

Due to its comprehensiveness, it’s an excellent example to follow if you’re opening a brick-and-mortar store and need to get external funding to start your business .

6. Curriculum Companion Suites (CSS)

If you’re looking for a SaaS business plan example, look no further than this business plan for a fictional educational software company called Curriculum Companion Suites. 

Like the business plan for the NALB Creative Center, it includes plenty of information for prospective investors and other key stakeholders in the business.

One of the most notable features of this business plan is the executive summary, which includes an overview of the product, market, and mission.

The first two are essential for software companies because the product offering is so often at the forefront of the company’s strategy. Without that information being immediately available to investors and executives, then you risk writing an unfocused business plan.

It’s essential to front-load your company’s mission if it explains your "Why?" and this example does just that. In other words, why do you do what you do, and why should stakeholders care? This is an important section to include if you feel that your mission will drive interest in the business and its offerings.

7. Culina Sample Business Plan

Culina's sample business plan is an excellent example of how to lay out your business plan so that it flows naturally, engages readers, and provides the critical information investors and stakeholders need. 

You can use this template as a guide while you're gathering important information for your own business plan. You'll have a better understanding of the data and research you need to do since Culina’s plan outlines these details so flawlessly for inspiration.

8. Plum Sample Business Plan

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1.4: Chapter 4 – Initial Business Plan Draft

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• Page ID 21278

• Lee A. Swanson
• University of Saskatchewan

Learning Objectives

After completing this chapter, you will be able to

• Develop a comprehensive business plan draft

This chapter describes an approach to writing your draft business plan. It also outlines the elements of a comprehensive business plan that can be used as a template for starting your business plan.

Figure 7 – Initial Business Plan Draft (Illustration by Lee A. Swanson)

Effective Business Plans

Effective business plans

• Provide statements that are backed by evidence or data
• Include context and references with every table, figure, or illustration
• Include relevant, clear, concise tables and financial information, and exclude unnecessary material
• Present timelines for distinct purposes
• Use clear sections customized to the particular business or its environment rather than generic sections

Writing the Draft Business Plan

Although there are various ways to approach the task of writing a draft business plan, one effective approach is to do the following:

• This will provide you with a template for the information needed for your plan.
• You can copy and paste the results of your essential initial research into the sections of your business plan template where you believe that they can be used to support or justify the strategies and other decisions you will later describe in those sections. Of course, you can later move those parts of your environmental scan as needed as you develop your plan. In general, this strategy results in a stronger business plan .
• Completing this step will give you the satisfaction of seeing some of your work so far taking shape in the form of a business plan.
• Also, inserting the results from your environmental scan into the relevant sections of your plan should later provide you with the stimulus and support you will need to develop solid, realistic, evidence-based strategies and decisions for those sections.
• Incorporate your business model into your new business plan template. As there is no section in a business plan in which you specifically describe your business model, you will need to incorporate your business model elements into appropriate sections of your plan.
• You will normally include both information that you got from particular sources and information based on an assumption you made (and that you might intend to replace later with more accurate information from valid sources).

Follow these practices as you develop your plan:

• When you do this, you help establish your credibility as a business plan writer, and your business plan’s credibility. It also might save you time later when you discover that you need to add a similar item along with its cost to your list.
• Note: Do not reinvent the wheel by “inventing” your own method to reference your sources and do not use multiple methods. Use one (and only one) proper and well-established referencing method, like APA. This will improve the degree of professionalism of your plan.
• Note: if you are an expert source on something—maybe you are a construction expert that business plan readers will trust to do estimates on building costs—you should establish your credentials and clearly indicate when some of the information in your plan is based on your own expert knowledge.
• When you flag your assumptions in this way, you can quickly and easily see what information needs to be replaced with sourced information before you finalize your business plan.
• Projecting realistic sales can be difficult, but setting up a method for doing so early gives business plan writers a significant start toward completing their business plan. A well-developed sales model that takes advantage of the powers of electronic spreadsheets gives business plan writers the opportunity to relatively quickly and easily make necessary changes to their assumptions and overall estimates when needed.
• When you use the schedules provided on the spreadsheet templates, and any others that you add, you will be well on your way to developing the financial component of your business plan.

General Business Plan Format

Letter of transmittal.

A letter of transmittal is similar to the cover letter of a resume. The letter of transmittal should be tailored to the reader, clearly identifying the customized ask of the potential investor or lender. It should be short and succinct, delineating the ask (i.e. funding, specialized recruiting, purchasing a product or service, obtaining advice, etc.) within a few paragraphs. It should not summarize the business plan, as that is the job of the executive summary.

• Includes nice, catchy, professional, appropriate graphics to make it appealing for targeted readers

Executive Summary

• Can be longer than normal executive summaries—up to three pages
• Written after remainder of plan is complete
• Includes information relevant to targeted readers as this is the place where they are most likely to form their first impressions of the business idea and decide whether they wish to read the rest of the plan

Table of Contents

List of tables.

• References every table, figure, and appendix within the text of the plan so the relevance of each of these elements is clear.

List of Figures

Introduction.

• Indicates the purpose for the plan
• Appeals to targeted readers

Business Idea

• May include description of history behind the idea and the evolution of the business concept if relevant

Value Proposition

• Explains how your business idea solves a problem for your expected customers or otherwise should make them want to purchase your product or service instead of a competitor’s
• Outlines what you intend for the venture to be
• Inspires all members of the organization
• Helps stakeholders aspire to achieve greater things through the venture because of the general direction provided through the vision statement

After articulating a good vision, the business plan writer should consider what achieving the vision looks like. Many business plan writers write their vision and leave it at that. The problem with this approach is that they often then do not take the necessary steps to illustrate how the strategies they outline in their plan will move them toward achieving their vision. If they make this mistake, their strategies might indicate that they are fulfilling their current mission, but are not taking steps to move beyond that.

Vision statements should be clear with context throughout the business plan. For example, if the goal is to be the premier business operating in that industry in Saskatchewan, does that mean you have one location and are considered the best at what you do it even though you only have a small corner of the market, or does it mean that you have many locations across the province and enjoy a large market share?

• Should be very brief—a few sentences or a short paragraph
• Indicates what your organization does and why it exists—may describe the business strategy and philosophy
• Consists of five to ten short statements indicating the important values that will guide everything the business will do
• Outlines the personal commitments members of the organization must make, and what they should consider to be important
• Defines how people behave and interact with each other
• Should be reflected in all of the decisions outlined in the business plan, from hiring to promotions to location choices
• Helps the reader understand the type of culture and operating environment this business intends to develop

Major Goals

• Describes the major organizational goals
• Specific, Measurable, Action oriented, Realistic, and Timely [SMART]
• Realistic, Understandable, Measureable, Believable, and Achievable [RUMBA]
• Aligns with everything in plan
• Written, or re-written as the second last thing you do before finalizing your business plan by proofreading, polishing, and printing it (writing the Executive Summary is the final thing you should write)

Operating Environment

Trend analysis.

• However, consider whether this is the right place for this analysis: it may be better positioned, for example, in the Financial Plan section to provide context to the analysis of the critical success factors, or in the Marketing Plan to help the reader understand the basis for the sales projections.

Industry Analysis

• Includes an analysis of the industry in which this business will operate
• As above, consider whether this is the right place for this analysis: it may be better placed, for example, in the Marketing Plan to enhance the competitor analysis, or in the Financial plan to provide context to the industry standard ratios in the Investment Analysis section.

Of course, your trend analysis will also include a market-level analysis (using a set of questions, like those listed in Chapter 2) and a firm-level analysis (using tools like a SWOT Analysis / TOWS Matrix, various forms of financial analyses, a founder fit analysis, and so on), but those analyses are usually best placed in other sections of your plan to support the strategies and decisions you present there. The market-level analysis will inevitably fit in the Marketing Plan section, but the firm-level analysis might be spread across some or all of the Operating Plan, Human Resources Plan, Marketing Plan, and Financial Plan sections.

Operations Plan

• Given these constraints, what is your operating capacity (in terms of production, sales, etc.)?
• What is the work flow plan for your operation?
• What work will your company do and what work will you outsource?

Operations Timeline

• When will you make the preparations, such as registering the business name and purchasing equipment, to start the venture?
• When will you begin operations and make your first sales?
• When will other milestone events occur such as moving operations to a larger facility, offering a new product line, hiring new key employees, and beginning to sell products internationally?
• Sometimes it is useful to include a graphical timeline showing when these milestone events have occurred and are expected to occur.

Business Structure and other Set-up Elements

• Sole Proprietorship
• Partnership
• Limited Partnership
• Corporation
• Cooperative

Note: Your financial statements, risk management strategy, and other elements of your plan are affected by the type of legal structure you choose for your business. For example, all partnerships should have a clear agreement outlining the duties, expectations, and compensation of all partners as well as the process of dissolution. Spreadsheet templates are formatted for corporations and will need to be formatted for other forms of businesses.

• Zoning, equipment prices, suppliers, etc.
• Leasing terms, leasehold improvements, signage, pay deposits, etc.
• Getting business license, permits, etc.
• Setting up banking arrangements
• Setting up legal and accounting systems (or professionals)
• Ordering equipment, locks and keys, furniture, etc.
• Recruiting employees, setting up the payroll system and benefit programs, etc.
• Training employees
• Testing the products/services that will be offered
• Testing the systems for supply, sales, delivery, and other functions
• Creating graphics, logos, promotional methods, etc.
• Ordering business cards, letter head, etc.
• Setting up supplier agreements and outlining why those sellers are preferred
• Buying inventory, insurance, etc.
• Revising business plan
• And many more things, including, when possible, attracting purchased orders in advance of start-up through personal selling (by the owner, a paid sales force, independent representatives, or by selling through brokers wholesalers, catalogue houses, retailers), a promotional campaign, or other means

Note: As part of your business set-up, you need to determine what kinds of control systems you should have in place, establish necessary relationships with suppliers prior to your start-up, and generally deal with a list of issues like those mentioned above.

• What is required to start-up your business including the purchases and activities that must occur before you make your first sale?
• When identifying capital requirements for start-up, a distinction should be made between fixed capital requirements and working capital requirements.

Fixed Capital Requirements

• What fixed assets, including equipment and machinery, must be purchased so your venture can conduct its business?
• May also show the financing required, often in the form of longer-term loans

Working Capital Requirements

• What money is needed to operate the business (separately from the money needed to purchase fixed assets) including the money needed to purchase inventory and pay initial expenses?
• May also show the financing required. Working capital is usually financed with operating loans, trade credit, credit card debt, or other forms of shorter-term loans

Risk Management Strategies

• Enterprise – liability exposure for things like when someone accuses your employees or products you sell of injuring them
• Financial – securing loans when needed and otherwise having the right amount of money when you need it
• Operational – securing needed inventories, recruiting needed employees in tight labour markets, operating when customers you counted on not purchasing product as you had anticipated, managing theft, arson, and natural disasters like fires and floods, etc.
• Avoid – choose to avoid doing something, outsource, etc.
• Reduce – through training, assuming specific operational strategies, etc.
• Transfer – insure against, outsource, etc.
• Assume – self-insure, accept, etc.

Figure 8 – Risk Management Strategies (Illustration by Lee A. Swanson)

Operating Processes

• What operating processes will you apply?
• How will you ensure your cash is managed effectively?
• How will you schedule your employees?
• How will you manage your inventories?
• If you will have a workforce, how will you manage them?
• How will you bill out your employee time?
• How will you schedule work on your contracts?
• How you will manufacture your product (process flow, job shop, etc.?)
• How will you maintain quality?
• How will you institute and manage effective financial monitoring and control systems that provide needed information in a timely manner?
• How will you manage expansion?
• May include planned layouts for facilities
• What are your facility plans?
• Expressed as a set physical location
• Expressed as a set of requirements and characteristics
• How large will your facility be and why must it be this size?
• How much will it cost to buy or lease your facility?
• What utility, parking, and other costs must you pay for this facility?
• What expansion plans must be factored into the facility requirements?
• What transportation and storage issues must be addressed by facility decisions?
• What zoning and other legal issues must you deal with?
• What will be the layout for your facility and how will this best accommodate customer and employee requirements?

Organizational Structure

• May include information on Advisory Boards or Board of Directors from which the company will seek advice or guidance or direction
• May include an organizational chart
• Can be a nice lead-in to the Human Resources Plan

Human Resources Plan

• How do you describe your desired corporate culture?
• What are the key positions within your organization?
• How many employees will you have?
• What characteristics define your desired employees?
• What is your recruitment strategy? What processes will you apply to hire the employees you require?
• What is your leadership strategy and why have you chosen this approach?
• What performance appraisal and employee development methods will you use?
• What is your organizational structure and why is this the best way for your company to be organized?
• How will you pay each employee (wage, salary, commission, etc.)? How much will you pay each employee?
• What are your payroll costs, including benefits?
• What work will be outsourced and what work will be completed in-house?
• Have you shown and described an organizational chart?

Recruitment and Retention Strategies

• Includes how many employees are required at what times
• Estimates time required to recruit needed employees
• Employment advertisements
• Contracts with employment agency or search firms
• Travel and accommodations for potential employees to come for interviews
• Travel and accommodations for interviewers
• Facility, food, lost time, and other interviewing costs
• Relocation allowances for those hired including flights, moving companies, housing allowances, spousal employment assistance, etc.
• May include a schedule showing the costs of initial recruitment that then flows into your start-up expense schedules

Leadership and Management Strategies

• Outlines your leadership philosophy
• Explains why it is the most appropriate leadership approach for this venture
• What training is required because of existing rules and regulations?
• How will you ensure your employees are as capable as required?
• Health and safety (legislation, WHMIS, first aid, defibulators, etc.)
• Initial workplace orientation
• Financial systems
• Product features

Performance Appraisals

• Identifies how you will manage your performance appraisal systems

Health and Safety

• Notes any legal requirements (and also legal requirements for other issues that may be included in other parts of the plan)
• Identifies accreditation you might pursue, such as ISO 9000, and if so, evaluates the costs, benefits, and time frame
• Outlines training for employees, such as WHMIS training or machinery handling training

Compensation

• Always justifies your planned employee compensation methods and amounts
• Always includes all components of the compensation (CPP, EI, holiday pay, etc.)
• Identifies how you will ensure both internal and external equity in your pay systems
• Describes any incentive-based pay or profit sharing systems planned
• May include a schedule that shows the financial implications of your compensation strategy and supports the cash flow and income statements shown later

Key Personnel

• May include brief biographies of the key organizational people

Marketing Plan

• You must show evidence of having done proper research, both primary and secondary. If you make a statement of fact, you must back it up with properly referenced supporting evidence. If you indicate a claim is based on your own assumptions, you must back this up with a description as to how you came to the conclusion.
• It is a given that you must provide some assessment of the economic situation as it relates to your business. For example, you might conclude that the current economic crisis will reduce the potential to export your product and it may make it more difficult to acquire credit with which to operate your business. Of course, conclusions such as these should be matched with your assessment as to how your business will make the necessary adjustments to ensure it will thrive despite these challenges, or how it will take advantage of any opportunities your assessment uncovers.
• If you apply the Five Forces Model, do so in the way in which it was meant to be used to avoid significantly reducing its usefulness while also harming the viability of your industry analysis. This model is meant to be used to consider the entire industry, not a subcomponent of it (and it usually cannot be used to analyze a single organization).
• Your competitor analysis might fit within your assessment of the industry, or it might be best as a section within your marketing plan. Usually a fairly detailed description of your competitors is required, including an analysis of their strengths and weaknesses. In some cases, your business may have direct and indirect competitors to consider. Maintain credibility by demonstrating that you fully understand the competitive environment.
• Assessments of the economic conditions and the state of the industry appear incomplete without accompanying appraisals outlining the strategies the organization can/should employ to take advantage of these economic and industry situations. So, depending upon how you have organized your work, it is usually important to couple your appraisal of the economic and industry conditions with accompanying strategies for your venture. This shows the reader that you not only understand the operating environment, but that you have figured out how best to operate your business within that situation.
• Outlines an effective analysis of your venture (see the Organizational Analysis section below)

Market Analysis

• Usually contains customer profiles, constructed through primary and secondary research, for each market targeted
• Contains detailed information on the major product benefits you will deliver to the markets targeted
• Describes the methodology used and the relevant results from the primary market research completed
• If there was little primary research completed, justifies why it is acceptable to have done little of this kind of research and/or indicate what will be done and by when
• Includes a complete description of the secondary research conducted and the conclusions reached
• Define your target market in terms of identifiable entities sharing common characteristics. For example, it is not meaningful to indicate you are targeting Canadian universities. It is, however, useful to define your target market as Canadian university students between the ages of 18 and 25, or as information technology managers at Canadian universities, or as student leaders at Canadian universities. Your targeted customer should generally be able to make or significantly influence the buying decision.
• You must usually define your target market prior to describing your marketing mix, including your proposed product line. Sometimes the product descriptions in business plans seem to be at odds with the described target market characteristics. Ensure your defined target market aligns completely with your marketing mix (including product/service description, distribution channels, promotional methods, and pricing). For example, if the target market is defined as Canadian university students between the ages of 18 and 25, the product component of the marketing mix should clearly be something that appeals to this target market.
• Carefully choose how you will target potential customers. Should you target them based on their demographic characteristics, psychographic characteristics, or geographic location?
• You will need to access research to answer this question. Based on what you discover, you will need to figure out the optimum mix of pricing, distribution, promotions, and product decisions to best appeal to how your targeted customers make their buying decisions.

Competition

• However, this information might fit instead under the market analysis section.
• Describes all your direct competitors
• Describes all your indirect competitors
• If you include a competitor positioning map, insure that the x-axis and y-axis are meaningful. Often, competitor maps include quality and price as axes. Unless you can clearly articulate the distinction between high quality and low quality, it may be more valuable to have more meaningful axes or describe your value proposition relative to your competitors in the absence of a positioning map.

Figure 9 – Competitor Positioning Map (Illustration by Lee A. Swanson)

• You must clearly communicate the answers to these questions in your business plan in order to attract the needed support for your business. One caution is that it may sound appealing to claim you will provide a superior service to the existing competitors, but the only meaningful judge of your success in this regard will be customers. Although it is possible some of your competitors might be complacent in their current way of doing things, it is very unlikely that all your competitors provide an inferior service to that which you will be able to provide.

Marketing Strategy

• Covers all aspects of the marketing mix: your promotional decisions, product decisions, distribution decisions, and pricing decisions
• Outlines how you plan to influence your targeted customers to buy from you (your optimum marketing mix, and why is this one better than the alternatives)

Organizational Analysis

• Leads in to your marketing strategy or is positioned elsewhere depending upon how your business plan is best structured
• If doing so, ALWAYS ensure this analysis results in more than a simple list of internal strengths and weaknesses and external opportunities and threats. A SWOT analysis should always prove to the reader that there are organizational strategies in place to address each of the weaknesses and threats identified and to leverage each of the strengths and opportunities identified.
• An effective way to ensure an effective outcome to your SWOT Analysis is to apply a TOWS Matrix approach to develop strategies to take advantage of the identified strengths and opportunities while mitigating the weaknesses and threats. A TOWS Matrix evaluates each of the identified threats along with each of the weaknesses and then each of the strengths. It does the same with each of the identified opportunities. In this way strategies are developed by considering pairs of factors.
• The TOWS Matrix is a framework with which to help you organize your thoughts into strategies. Most often you would not label a section of your business plan as a TOWS Matrix because this would not add value for the reader. Instead, you should describe the resultant strategies—perhaps while indicating how they were derived from your assessment of the strengths, weaknesses, opportunities, and threats. For example, you could indicate that certain strategies were developed by considering how internal strengths could be employed toward mitigating external threats faced by the business.

Product Strategy

• If your product or service is standardized, you will need to compete on the basis of something else—like a more appealing price, having a superior location, better branding, or improved service. If you can differentiate your product or service, you might be able to compete on the basis of better quality, more features, appealing style, or something else. When describing your product, you should demonstrate that you understand this.

Pricing Strategy

• If you intend to accept payment by credit card (which is probably a necessity for most companies), you should be aware of the fee you are charged as a percentage of the value of each transaction. If you don’t account for this you risk overstating your actual revenues by perhaps one percent or more.
• Sales forecasts must be done on at least a monthly basis if you are using a projected cash flow statement. These must be accompanied by explanations designed to establish their credibility for readers of your business plan. Remember that many readers will initially assume your planned time frames are too long, your revenues are overstated, and you have underestimated your expenses. Well crafted explanations for all of these numbers will help establish credibility.

Distribution Strategy

• If you plan to use e-commerce, you should include all the costs associated with maintaining a website and accepting payments over the Internet.

Promotions Strategy

• As a new entrant into the market, must you attract your customers away from your competitors they currently buy from or will you be creating new customers for your product or service (i.e. not attracting customers away from your competitors)?
• If you are attracting customers away from competitors, how will these rivals respond to the threat you pose to them?
• If you intend to create new customers, how will you convince them to reallocate their dollars toward your product or service (and away from other things they want to purchase)?
• In what ways will you communicate with your targeted customers? When will you communicate with them? What specific messages do you plan to convey to them? How much will this promotions plan cost?
• If your entry into the market will not be a threat to direct competitors, it is likely you must convince potential customers to spend their money with you rather than on what they had previously earmarked those dollars toward. In your business plan you must demonstrate an awareness of these issues.
• Consider listing the promotional methods in rows on a spreadsheet with the columns representing weeks or months over probably about 18 months from the time of your first promotional expenditure. This can end up being a schedule that feeds the costs into your projected cash flow statement and from there into your projected income statements.
• If you phone or visit newspapers, radio stations, or television stations seeking advertising costs, you must go only after you have figured out details like on which days you would like to advertise, at what times on those days, whether you want your print advertisements in color, and what size of print advertisements you want.
• Carefully consider which promotional methods you will use. While using a medium like television may initially sound appealing, it is very expensive unless your ad runs during the non-prime times. If you think this type of medium might work for you, do a serious cost-benefit analysis to be sure.
• Some promotional plans are developed around newspaper ads, promotional pamphlets, printing business cards, and other more obvious mediums of promotion. Be certain to, include the costs of advertising in telephone directories, sponsoring a little league soccer team, producing personalized pens and other promotional client give-always, donating items to charity auctions, printing and mailing client Christmas cards, and doing the many things businesses find they do on-the-fly. Many businesses find it to be useful to join the local chamber of commerce and relevant trade organizations with which to network. Some find that setting a booth up at a trade fair helps launch their business.
• If you are concerned you might have missed some of these promotional expenses, or if you want to have a buffer in place in case you feel some of these opportunities are worthwhile when they arise, you should add some discretionary money to your promotional budget. A problem some companies get into is planning out their promotions in advance only to reallocate some of their newspaper advertisement money, for example, toward some of these other surprise purposes resulting in less newspaper advertising than had been intended.

Financial Plan

• Contains financial statements
• Various funding options and exit strategies for potential investors
• Business valuation (be cautious not to over value your business)
• Break-even analysis

Business Valuation

There are a multitude of sophisticated business valuation methodologies. A rule of thumb for business valuations is a multiple of its earnings. For example, if the chosen multiple is five and the business’ earnings before taxes are $55M, the business’ valuation would be approximately $275M.

Break-Even Analysis

Break-Even Point = FC/(P-VC)

• FC = Fixed Costs
• P = Unit Price
• VC = Variable Cost

Example: If the business’ total fixed costs are $1,000,000.00, it costs $5.00 to produce the widget, and the business sells the widget for $7.00, the break-even point is 500,000 widgets.

• You will most certainly need to make monthly cash flow projections from business inception to possibly three years out. Your projections will show the months in which the activities shown on your fixed capital and working capital schedules will occur. This is nearly the only way to clearly estimate your working capital needs and, specifically, important things like the times when you will need to draw on or can pay down your operating loans and the months when you will need to take out longer-term loans with which to purchase your fixed assets. Without a tool like this you will be severely handicapped when talking with bankers about your expected needs. They will want to know how large of a line of credit you will need and when you anticipate needing to borrow longer-term money. It is only through doing cash flow projections that you will be able to answer these questions. This information is also needed to determine things like the changes to your required loan payments and when you can take owner draws or pay dividends.
• Your projected cash flows are also used to develop your projected income statements and balance sheets.

Pro forma Cash Flow Statements

Pro forma income statements, pro forma balance sheets, investment analysis, projected financial ratios and industry standard ratios, critical success factors (sensitivity analysis), list of items a business may need to purchase.

• Business license
• Registration for name, etc.
• Domain name registration
• Initial product inventory
• All the little things like curtains/blinds, decorations, microwave for staff room, etc.
• All the things needed to run the business from day #1 (like cutlery, plates, cooking pots, table settings etc. for restaurants; like towels, soap, etc. for gyms; like equipment and so on for manufacturing and service places)
• Set-up and testing of new facilities—new factories and offices do not operate at peak efficiency for some time after start-up because it takes time for the new systems to kick into high gear
• Professional services needed
• Lawyer’s fees to make sure agreements are solid
• Graphic designer or design company needed to develop visuals
• Accounting firm needed to set up initial systems
• Insurance—maybe not a direct cost to this one to account for
• Accounting system software
• Computer, printer, other things needed like scanner
• Office furniture
• Initial office supplies—paper, pens, etc.
• Internet/wifi
• Microwave and coffee maker and similar supplies for staff room or coffee room
• Bank fees—business banking is normally not free—might also need to have business cheques

Customer Interaction

• Cash register
• Loyalty cards/system

Production/Operations

• Safety equipment (fire extinguishers, AED)
• Security systems
• Equipment maintenance
• Janitorial services and cleaning supplies
• Bathroom supplies—toilet paper, soap, towels
• Membership costs for various associations, including the local chamber of commerce, any professional associations for the relevant industry, etc.
• Subscriptions for things like important trade publications, etc.
• Shelving and storage systems
• Even when not full restaurant, operations like coffee shops still require equipment like dishwasher
• Safety—prior to start-up and ongoing and for new employees
• Ads, travel expenses—flights, hotels, taxi rides, meal allowances, etc.—to recruit people through interviews, meeting meals, set up with real estate agents, etc.
• Website development
• Costs for setting up and managing social media (can take a lot of an employee’s time)
• Grand opening costs
• If buying, include property taxes and all utilities in cash flows and income statement and include building maintenance and maybe build up a reserve fund to pay for things like future roof repairs and needed renovations and upgrades
• If renting/leasing, include rental/least cost and whatever utilities are not included in rental/lease payment

Renovations

• Construction
• Utility hookups
• Inspections
• Interior signage
• Fencing, parking lot, exterior lighting, other exterior things

Risk Management

• Insurance (need to choose the types needed)
• Training costs
• Things like snow removal, de-icing sidewalks, etc.

Chapter Summary

This chapter described the basic elements of a comprehensive business plan.

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• Building Your Business
• Becoming an Owner
• Business Plans

How To Write the Company Summary in a Business Plan

Company Overviews Show How the Pieces of a Business Work

What To Include in Your Company Summary

Getting started on your company summary, examples of a company summary, tips for writing a company summary, frequently asked questions (faqs).

Image by Theresa Chiechi © The Balance 2019

The company summary in a business plan —also known as the company description or overview—is a high-level look at what you are as a company and how all the elements of the business fit together.

An effective company summary should give readers, such as potential investors, a quick and easy way to understand your business, its products and services, its mission and goals, how it meets the needs of its target market, and how it stands out from competitors.

Before you begin writing your company summary, remember to stick to the big picture. Other sections of your business plan will provide the specific details of your business. The summary synthesizes all of that information into one page.

Key Takeaways

• The company summary in a business plan provides an overview containing a description of your company at a high level.
• A company summary might include your mission statement, goals, target market, products, and services, as well as how it stands out from competitors.
• The company summary can also be customized for a specific objective or audience, such as to secure financing from investors or banks.

The company summary section of a business plan should include:

• Business name
• Legal structure (i.e., sole proprietorship ,  LLC ,  S Corporation , or  partnership )
• Management team
• Mission statement
• Company history (when it started and important milestones)
• Description of products and services and how they meet the needs of the marketplace
• Target market (who will buy your product or services)
• Competitive advantage (what sets you apart in the marketplace to allow you to succeed)
• Objectives and goals (plans for growth)

The U.S. Small Business Administration (SBA) website has a lot of information available if you've never written a business plan before. The SBA provides examples of business plans for different types of companies.

Before you begin, you should decide whether you want to go with a traditional business plan format or a lean startup format. The traditional format is appropriate if you want to have a comprehensive, detail-oriented plan or if you are requesting financing. The lean startup format is best for those who have a relatively simple business and want to start it quickly or as a starting point for those who plan to refine and change the plan regularly.

No matter which type of business plan you choose, you'll need to include a company summary.

Although there are many blueprints for writing a company summary, below are a couple of examples to get you started.

Consulting Firm

You can opt for a concise opening paragraph such as this one:

XYZ Consulting is a new company that provides expertise in search marketing solutions for businesses worldwide, including website promotion, online advertising, and search engine optimization techniques to improve its clients' positioning in search engines. We cater to the higher education market, including colleges, universities, and professional educational institutions.

Several elements of the company summary are covered here, including the name (XYZ Consulting), history (new company), description of services (web promotion, SEO, advertising) and why it's needed (improve positioning in search engines), and the target market (higher education).

Starbucks Coffee Company Overview

Starbucks breaks down the company overview on their website into the following sections:

"Our Heritage"

Here the company describes how long the company has been in business, citing its roots, the founder, Howard Schultz, and how he was inspired to open the first Starbucks in Seattle after visiting Italy. It briefly mentions the growth of millions of customers and how the company's heritage remains important to its long-term success.

"Coffee & Craft"

The overview describes the high-quality products and services being offered and why they stand out from the competition by describing the detailed process of choosing and growing coffee beans. You'll notice they don't suggest their product is a low-cost product but instead provide a high level of "experiences to savor."

"Our Partners"

Starbucks describes its employees as partners that work together in an inclusive manner to achieve success. It highlights how they are at the center of the experience.

"Pursuit of Doing Good"

The company describes its values and how it gives back to the community.

Tesla Inc. Business Overview

Below are excerpts of the business overview pages from the annual 10-K filing on Dec. 31, 2021, for Tesla Inc.

"We design, develop, manufacture, sell and lease high-performance fully electric vehicles and energy generation and storage systems, and offer services related to our products. We generally sell our products directly to customers, including through our website and retail locations.

We also continue to grow our customer-facing infrastructure through a global network of vehicle service centers, mobile service technicians, body shops, supercharger stations and destination chargers to accelerate the widespread adoption of our products.

We emphasize performance, attractive styling and the safety of our users and workforce in the design and manufacture of our products and are continuing to develop full self-driving technology for improved safety.

Our mission to accelerate the world’s transition to sustainable energy, engineering expertise, vertically integrated business model and focus on user experience differentiate us from other companies."

Competition

Tesla highlights the competitive automotive market and how the company differentiates itself from the larger, more established competitors.

"The worldwide automotive market is highly competitive and we expect it will become even more competitive in the future as we introduce additional vehicles in a broader cross-section of the passenger and commercial vehicle market and expand our vehicles’ capabilities. We believe that our vehicles compete in the market both based on their traditional segment classification as well as based on their propulsion technology.

Competing products typically include internal combustion vehicles from more established automobile manufacturers; however, many established and new automobile manufacturers have entered or have announced plans to enter the market for electric and other alternative fuel vehicles."

Intellectual Property

The company highlights its intellectual property, including trademarks and patents.

"We place a strong emphasis on our innovative approach and proprietary designs which bring intrinsic value and uniqueness to our product portfolio. As part of our business, we seek to protect the underlying intellectual property rights of these innovations and designs such as with respect to patents, trademarks, copyrights, trade secrets and other measures, including through employee and third-party nondisclosure agreements and other contractual arrangements."

Mission Statement

The company highlights its mission statement and its sustainability goals using environmental, social, and governance (ESG) and human capital resources.

"The very purpose of Tesla's existence is to accelerate the world's transition to sustainable energy. We believe the world cannot reduce carbon emissions without addressing both energy generation and consumption, and we are designing and manufacturing a complete energy and transportation ecosystem to achieve this goal. As we expand, we are building each new factory to be more efficient and sustainably designed than the previous one, including with respect to waste reduction and water usage, and we are focused on reducing the carbon footprint of our supply chain."

There are other items you can include in your company summary to expand on the areas that you'd like people to focus on, depending on your objective.

You might provide more information about the company's location, legal structure, and management team. You can also include more information about the:

• Company's history, such as a family business that's been in operation for multiple generations
• Business objectives, including short-term and long-term goals
• Business strengths, highlighting anything that might give your company a competitive advantage in the field

You can also customize the summary if you have a specific objective or a targeted audience. For example, if the goal of your business plan is to secure funding, you might focus on areas that appeal to investors and lending institutions, including:

• Why you're the best person to manage the business
• Your experience in your field, as well as the total years of experience of your management team
• Expertise or special talents of your team, including training, licenses, certifications
• How you plan to make the business a success
• Financial information, such as a high-level discussion of your track record of revenue growth and the financial opportunities that can be realized as a result of securing financing

You may also want to address any areas of perceived weakness by explaining how you'll overcome them or compensate.

How do you write a company overview?

You might provide a description of the company, its location, legal structure, and management team. You can also highlight the company's business objectives, goals, and strengths. You can also customize the summary to a specific audience, such as a bank or lender, focusing on your competitive advantages and highlights of recent financial success.

What should an organizational overview include?

Some of the discussion points to include in a company overview might be:

• Company name and location
• Legal structure such as a sole proprietorship, LLC, or partnership
• Mission statement and management team
• Description of your products and services and how they are needed
• Target market or who are your customers
• Competitive advantage or what makes your company different

The Clute Institute. " Using Business Plans for Teaching Entrepreneurship ," Page 734.

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

Starbucks Coffee Company. " Our Company ."

United States Securities and Exchange Commission. " Form 10-K, Annual Report Pursuant to Section 13 or 15(D) of the Securities Exchange Act of 1934 for the Fiscal Year Ended December 31, 2021, Tesla, Inc., " Pages 3-12.

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How to Write a Business Plan [Complete Guide]

Last Updated on – Aug 8, 2023 @ 3:22 pm

Preparing to write your business plan? You’re already one step ahead of other entrepreneurs who don’t see its value.

A well-thought-out and well-written plan for starting and running your business helps you focus on what you need to do to make your business idea work. It can also boost your chance of getting investments and loans to finance your business .

Did you know that half of small businesses fail in their first four years? Planning is such a crucial step to reducing the risks of managing an enterprise. Turn your business idea from something abstract and uncertain into a successful venture. It starts with drafting a good business plan.

Here’s your definitive guide to writing a business plan that speaks for itself.

What is a Business Plan?

A business plan is a written document that details what a business is, what direction it will take, and how you’ll get it there.

Practically speaking, the business plan evaluates your business’ viability. As the Department of Trade and Industry (DTI) puts it , the document allows entrepreneurs to find out whether or not their business idea will bring in more money than how much it costs to start and run it.

More than just a document, the business plan helps business owners to figure out the key aspects of an enterprise, including the following:

• Business goals and strategies to meet them
• Competitive edge and how to leverage it
• Potential problems and how to solve them
• Funding required to start the business
• Equipment, facilities, and manpower needed for operations

Who Needs a Business Plan and What Is It Used For?

Every aspiring entrepreneur who will spend a great amount of money, time, and energy to earn a profit needs a business plan.

Business planning is a crucial part of starting an entrepreneurial journey, no matter how small or big a business is. Never skip this step—as they say, failing to plan is planning to fail.

Here are some examples of business types that benefit much from business planning:

Founders of startup businesses seek funds to begin their new venture. Business plans help them persuade investors and lenders to provide the funding they need.

For startups, a business plan explains the nature of the new venture, how it will achieve its goals, and why the founders are the best people to lead the company. The startup business plan should also specify the capital needed to jumpstart the new business.

Related: Fast-Growing Startups in the Philippines

Existing Businesses

Not only do startups gain advantage from a business plan—existing enterprises need it, too.

But business plans for growing businesses serve a different purpose. Usually, a business plan helps a middle-stage business raise funds for additional facilities, equipment, manpower, and others needed for expansion. This document also defines strategies for growth and allocates resources based on strategic priorities.

Growing businesses also use business plans to communicate their vision to various stakeholders such as customers, business partners, potential investors and lenders, employees, and suppliers.

For such needs, a business plan for existing businesses lays out the goals, strategies, metrics to evaluate success, responsibilities, and resource allocation.

Social Enterprises

Social enterprises may not be as profit-driven as other business types, but that doesn’t mean they need business planning any less.

A social enterprise needs to prepare a business plan to achieve its social objectives and keep empowering the communities it’s supporting. This document is what government agencies and donor agencies require and evaluate when approving grants for funding a social project .

A social enterprise business plan determines the social issue that a business idea will solve, its beneficiaries, products or services, target market, and sales projections, among many others.

Non-Profit Organizations/NGOs

Like social enterprises, non-governmental organizations (NGOs) can also use business plans to source funds for their campaigns and projects.

A nonprofit business plan discusses the problems an NGO is trying to solve through a certain project, as well as how it will do that and how much resources are needed.

It also helps the organization and its board members to prepare for risks by making projections on how likely the activities will push through and how the current sources of funds will continue to yield a certain level of revenue. Most importantly, the business plan defines the Plan B if the original plan ends up failing.

Business Plan Format and Its Components

How does a business plan exactly look like? There’s no recommended universal format for business plans. Ideally, yours is customized according to the nature of your business and what you’re going to use the plan for.

However, all business plans have sections in common. Here’s a quick walkthrough of the six components that make up a business plan.

1. Executive Summary

Like an abstract of a college thesis or a foreword of a book, the executive summary is meant to provide a brief overview of the document. It presents the highlights of a business plan in a page or two.

The executive summary the first thing that readers see, so keep it short yet engaging and compelling enough to make them want to view more details in your plan.

2. Company Profile

The company profile is your chance to introduce yourself and your business to people outside your company. It’s also called the company summary, company information, business description, and business profile.

This section quickly answers the five Ws and one H of your business: who, what, when, where, why, and how.

Think of it as your business calling card. Being the shortest section of the business plan, the company profile provides a quick overview of the business—who the owner and founder is, management team, business goals, business address, product or service, and what makes it unique.

3. Operations Plan

The operations plan explains how you’ll run your business, focusing on the different aspects of manufacturing your product. This section includes the following information, among many others:

• Type of business (sole proprietorship, partnership, corporation , or non-profit)
• How the product is made or the service completed
• Necessary materials, equipment, and facilities to manufacture the product or complete the service
• Any subcontractors needed
• Quality control system

4. Organizational Plan

Your people should play a major role in your business plan, just as how they’re important to your business success . The organizational plan includes a chart that shows how your company is structured according to key departments or functions such as administration, production/manufacturing, marketing, and finance. This organizational chart not only presents the levels of authority in a company but also clarifies who is responsible for which people and function.

Aside from the organizational chart, the organizational plan also includes these details:

• Number of employees to hire
• Responsibilities of each job role
• Qualifications of workers who will perform each role
• Salaries and benefits per job assignment

5. Marketing Plan

The marketing plan and the succeeding chapters are the heart and soul of your business plan, explaining the things that will make your business work. This section details how you plan to promote your product or service in the market.

Specifically, the marketing plan covers the following:

• How the product or service will work and how it will benefit customers
• Target market and its profile
• Strategies for packaging, advertising, public relations, and distribution
• Competitive advantage

6. Financial Plan

A critical section in your business plan, the financial plan helps you assess how much money you’ll need to start or grow your enterprise and identify your funding sources to get your business off the ground and sustain its operations. This is where you’ll provide financial estimates that cover at least one year of running your business.

Investors and lenders specifically look for these financial details in business plans:

• How much you’re going to borrow, what you’ll use the loan for, and how you’ll pay it back
• How much profit you’re expecting to make (through an income statement and balance sheet)
• How you can finance your business operations (through a cash flow statement)
• Whether to keep the business going or close it down to cut losses (through a break-even analysis)

Related: How to Write a Business Proposal

Should You Use a Business Plan Template?

Business plan templates identify what information to put into each section and how it should be structured.

They provide instructions to guide entrepreneurs through the process. This way, nothing is missed out while writing the plan.

Thus, using a business plan template is a great idea, especially if this is your first time to prepare a plan for starting or growing your enterprise.

Helpful as it as may be, a business plan template doesn’t make business planning 100% effortless. While it provides the outline that makes writing the plan easy and quick, you still need to do your homework.

For example, a template won’t compute the financial projections for you—it’s a task you have to complete either on your own or with the help of a professional.

So before you use a business plan template, manage your expectations first and be prepared to do a lot of math!

8 Free Business Plan Templates

Yes, you read it right—you can download free online business plan templates. Some of these templates are designed for a specific niche, while others offer sample business plans for a wide range of business categories and industries.

Start off by choosing any of these free templates that suit your business planning needs.

1. Business Plan Format by the DTI

DTI has a wealth of useful information for micro, small, and medium businesses in the Philippines. Of course, it’s free to access since it comes from the government.

On the DTI website, simply look for the Business Planning section and download the business plan format in a PDF file. This document not only lists down all the information to be included in every section of a business plan, but it also provides guide questions per section—making business planning easier for first-timers.

If you want a more detailed discussion of what should go into each component of your business plan plus sample scenarios, check the DTI’s Negosyo Center e-book that fleshes out things for small business owners.

2. Simple Business Plan Template by The Balance Small Business 

The Balance is an online resource for small business owners. It has a free business plan template that’s simple and easy to understand for beginners, with instructions on how to use it. Broken down into sections, the simple business plan template tells you what to include in each component of the plan.

Simply copy the free template and paste it into a word document or spreadsheet. From there, you can start drafting your business plan with the template as a guide.

3. Free Sample Business Plans by Bplans

This website features a collection of over 500 free business plan samples for various industries, including restaurants, e-commerce, real estate, services, nonprofit, and manufacturing.

Under each category are links to many sample business plans for specific types of business. Each sample comes with a plan outline, too. For example, under the Services category, you’ll find sample plans for businesses like auto repair shops, advertising agencies, catering companies, health spas, photography studios, and more.

4. Business Plan Samples by LivePlan

More than 500 free sample business plans are available at the LivePlan website, so you’re likely to find one that suits your business best. The samples allow users to know how other businesses structured and worded each component of their business plans. You can copy and paste the sections into your own plan.

To download a full business plan sample, you’ll have to sign up by submitting your name and email address through the website.

5. Business Plan Templates by PandaDoc

PandaDoc offers free business plan templates for NGOs, startups, restaurants, cafes, bakeries, hotels, and salons. These documents can be downloaded in PDF format.

But if you want a customizable template, you can download the PandaDoc template for a 14-day free trial. This template allows you to edit the document, choose a theme that matches your branding, and add pictures and videos.

The website also has free templates for executive summaries and business letters.

6. The One-Page Business Plan by The $100 Startup

If your business has a simple concept, then a one-page business plan template is ideal to use. This downloadable PDF file is a very simple outline made up of a few sections with questions that you have to answer in just a short sentence or two.

7. Business Plans by Microsoft

Microsoft provides a broad selection of templates for its users, including business plan templates in Word, business plan presentations in PowerPoint, and business plan checklists in Excel.

• Sample business plan template (Word) – Provides the steps in writing a complete business plan
• Business plan presentation template (PowerPoint) – Consists of slides for different sections of a business plan that highlight the key points for viewers
• Business plan checklist template (Excel) – Enumerates the important things to do when writing a business plan, using the Strength, Weakness, Opportunity, and Threat (SWOT) analysis framework

The advantage of using a template from Microsoft is having a professional-looking document, slideshow presentation, or spreadsheet. No need to do the formatting by yourself because the template is already formatted. All you have to do is enter the necessary information into the template to complete your business plan.

8. Social Business Plan Guidelines by the Ateneo de Manila

This free business plan format for social entrepreneurs comes from the Ateneo de Manila University’s John Gokongwei School of Management. In a glimpse, it provides the basic information you need to plan a social enterprise.

It also has more detailed business plan guidelines you can refer to. Simply click the link to the word document at the bottommost part of the page.

Related: 11 Best MBA Programs & Schools in the Philippines

How to Write a Business Plan

An outstanding business plan covers everything your stakeholders need to know about your business. So don’t just wing it—put a lot of thought into this critical document.

Let’s get down to the nitty-gritty of drafting a business plan, whether you’ll use a template or not.

1. Brainstorm about your business idea

You may have a very promising business idea, but it won’t fly unless you develop it into a clear-cut concept.

Brainstorm with your team about everything you can think of about starting and running the business. Then list them all down.

Be as creative as possible. No need to be too critical at this point.

While brainstorming, aim to answer these key questions:

• Why do you want to start the business? What has inspired you to go for it?
• What product or service do you plan to sell?
• Who will be your target customers? What are their problems that you’re hoping to solve through your product or service? How will you promote your offerings to them?
• What will be your business branding ? How will you position your brand in the industry?
• What is your competitive advantage? What makes your business unique?
• Where do you see your business within a year?

2. Validate your business idea

Research on the specifics of your business idea—paying special attention to your product or service, target market, and competitors.

According to entrepreneurship experts, it’s best to spend twice as much time on this step as spending the time to the actual drafting of the business plan.

Here are some ways to validate your business idea:

• Read studies and research to find information and trends about your industry .
• Conduct market research to gather insights from industry leaders, potential customers, and suppliers . You can do this through surveys, focus group discussions, and one-on-one interviews with your stakeholders.
• Collect data about your competitors , especially the product or service they offer and how they reach their customers. Consider buying from them or visiting their store to get a feel of their products and customer experience.

Gather all relevant information and analyze your findings to assess whether the business idea is feasible or not. You may need to tweak your business idea based on your evaluation of its feasibility.

3. Define the purpose of your business plan

It’s extremely difficult to carry out anything if you aren’t sure about why you’re doing it in the first place. Without a clear purpose, you’re like driving a car without knowing where you’re headed to.

When it comes to writing your business plan, you should have its purpose in mind from the get-go. It can be one or more of the following:

• Create a roadmap to provide the directions the business must take to achieve your goals and overcome challenges. This is ideal for bootstrapping or self-funding startups.
• Seek investments and loans to finance a business. If this is your purpose for making a business plan, it should be compelling enough to attract investors and lenders.
• Set your targets, budget, timelines, and milestones. When you put them all in writing, it’s so much easier to evaluate and measure your business’ actual performance versus your goals.
• Communicate your vision and strategic priorities with the management team. With this purpose, your business plan must establish specific goals for your managers so that they have something to commit to, you can track progress, and get them to follow through on their commitments. Also, having a business plan for this purpose ensures that everybody involved in running your business is on the same page.
• Minimize risks. Running a business in itself involves a lot of risks, and it gets riskier with a poorly researched business idea. A business plan can help entrepreneurs mitigate them by organizing activities and preparing for contingencies.

4. Create an outline for the executive summary

The first section of any business plan is the executive summary. You don’t have to draft it yet at this point, but it helps to write an outline for it before you proceed with the rest of the sections.

In a sentence or two, describe these key aspects of your business:

• Product or service
• Target market
• Competitors
• Unique value proposition (how you set your business apart from the competition)
• Management team
• Short-term and long-term business goals
• Possible sources of revenue

5. Describe your business

The next step is to write your company profile. Get your readers to become familiar with your business and realize why they should be interested in it.

If you have no idea what specifically goes into this crucial business plan section, you can check the company profiles of businesses in your industry. Usually, you can find them on their websites at the About Us or About the Company page. Take note of the information included and how they’re written.

Here are the must-haves of a great company profile:

• Brief history of the company
• Mission and vision
• Product or service lineup
• Target market and audience
• How the business will address the customers’ pain points
• What makes the business unique

6. Provide details about your operations and organizational structure

Anyone who will read your business plan needs to know what they should expect when they deal with you. They need to see a solid plan for your operations and the people who make up your team. So give your operations plan and organizational plan a careful thought.

For your operations plan, choose carefully the right legal structure for your business. Will you be a sole proprietor? Or will you partner with someone or form a corporation? Your choice will have an impact not only on your business operations but also on the taxes you’ll pay and your personal liability .  

As for the organizational plan, it’s where you put your organizational chart that shows a glimpse of the hierarchy within your organization. You can easily create this chart in Microsoft Word, Excel, or PowerPoint.

Also introduce the people who comprise your management team—their relevant experience, qualifications, and expertise . The organizational plan must also include information of the support personnel, as well as who reports to whom and who manages whom.

If you’ll be outsourcing some of your business functions, add them to your organizational plan, too. These may include consultants , accountants , lawyers , logistics specialists, and IT specialists. This way, you’re showing that you’re planning to fill in any expertise and skill gaps in your in-house team.

Also Read: Business Process Outsourcing to the Philippines [Complete Guide]

7. Compose your marketing plan

Make this section of your business plan as comprehensive and detailed as possible. You’d want to prove that you’ll take a strategic and aggressive approach to reach your target customers and promote your brand and product or service to them.

Divide your marketing plan into five subsections: objectives, product/service description, target market profile, competition profile, and promotional activities.

A. Objectives

Zero in on the what and the why of your marketing activities. Under the marketing objectives section, list down all your goals and the strategies you’ll implement to meet them.

Your marketing goals can be any of the following:

• Raise brand awareness
• Introduce a new product or service
• Regain or get more customers for an existing product or service
• Secure long-term contracts with your ideal clients
• Increase sales in a certain market, product, or price point
• Improve product manufacturing or product/service delivery
• Increase prices without affecting sales

B. Product/Service Description

Describe each product or service you’ll offer, including its features and benefits. You can use storytelling , images, charts, tables, or any visual element that best illustrates how each item will work to the benefit of your target customers.

C. Target Market Profile

Present as much relevant data as you can about your potential customers. Make sure to include the following:

• Demographic profile: age range, gender, income level, education, interests, etc.
• Buying behaviors
• Factors that influence their buying decisions: purchasing power, personal preferences, economic conditions, marketing campaigns, social factors (such as peer pressure and social media influencers ), cultural factors, etc.

D. Competition Profile

Your marketing plan must focus not only on your own business but also those of your competitors. List down the similar products or services that they offer to your target customers.

Also, provide an assessment of your competitors’ performance. Which areas are they doing well? How can you improve on their strengths and weaknesses? How can your business stand out? Is it your more competitive pricing? Better customer service? Superior product quality?

To come up with a good competition profile, take the time to research about your competitors. When interviewing your target customers, ask them about the brands they use or businesses they deal with.

You can also do an online search of your competitors. For example, if you’ll run a pet supplies store in Pasig, search for “pet stores Pasig” on Google. The search engine results page may show you the different stores that sell the same products as the ones you plan to offer. Read customer reviews online to get deeper insights on how these businesses serve their clients.

Consider doing a “secret shopping” in your competitor’s store. This way, you can experience firsthand how they treat their customers and how they market and sell their products or services. You might even be able to get information about their product lineup and pricing.

E. Promotional Activities

The last subsection of your marketing plan must discuss how you’ll promote your brand and products or services and connect with customers. Also, be ready to allocate budget for each marketing activity you identify in your plan.

Create a list of marketing activities you plan to implement. Will you reach your audience through SEO (organic online search), paid advertising, and/or social media? Or will you go the traditional route through print and TV advertising or joining expos, exhibits, and trade shows? The right choice depends on the nature of your business and the type of audience you’re trying to reach.

8. Develop your financial plan

The financial plan is the section where you’ll crunch the numbers. Unless you’re really good at math, it’s best to hire an accountant or business consultant who will work with you to develop a foolproof financial plan.

Put simply, a financial plan explains how a business will spend money and make more money. It also estimates the amount of time it will take for the business to earn a profit.

Here are the specifics of a good financial plan:

• Total capital requirement
• Business financing plan and any loan requirement
• Collateral to put up for a business loan
• Schedule for loan repayment
• Financial statements : cash flow statement, income statement/profit and loss statement, and balance sheet
• Break-even analysis
• Return on investment (ROI)
• Financial analysis

Ultimately, these financial projections answer the question, “Is your business financially feasible?”

9. Back up your business plan with supporting documents

Books and theses have an appendix section at the end that provides additional resources. Your business plan should have one, too. This final section consists of documents, surveys, studies, charts, tables, images, and other elements that provide supporting data.

Depending on the information you’ve presented in the other sections of the plan, your appendix may include these things:

• Market research data and findings
• Resumes of the management team
• Relevant financial documents
• Lease agreements
• Bank statements
• Licenses and permits

10. Review and refine your business plan

Your business plan is almost done at this point. Now all you have to do is go over the document once more to ensure you’ve covered everything and nothing crucial is left out.

Check your final draft and be sure it has the following:

• Sound business idea – If you’ve done Step 2 properly (validating business idea), you can be confident that you have a sound business idea.
• Comprehensive and in-depth look into your business in a professional format
• Thorough understanding of your target customers , their behaviors, interests, and needs
• Competent management team – The people who make up your team must possess the skills and expertise that complement yours.
• Business focus or specialization

Aside from yourself, ask a business partner, proofreader, and accountant or financial expert to review your business plan and spot any errors and inconsistencies. You’d want to make sure that it looks professional and is accurate.

11. Write the executive summary

Lastly, get back to the outline you created in Step 4 and write it based on your final draft. Make sure to craft an engaging executive summary that hooks people into reading the rest of the plan.

6 Actionable Tips on Writing a Business Plan

Anyone can write a business plan—but it takes more than great writing skills to create an exceptional one.

Here are some tips to help you prepare an effective business plan that goes beyond the ordinary.

1. Write with your audience in mind

When drafting your business plan, you’re writing not for yourself but for people who will play key roles in starting and running your enterprise. This is why it’s important that you know whom you’re writing for and keep them in mind while preparing your business plan.

If you think you can’t create a plan that caters to all your audience groups, consider having different versions of the document. For example, you can come up with a business plan for investors, another for lenders, one for employees, and so on. But keep the data consistent across all versions.

To write a business plan that suits a particular audience, you have to use the right language, highlight the parts that interest them, and adjust the format accordingly.

A. Use the Right Language

One of the most important rules in business writing: use the language that your target audience easily understands. If you’re writing for engineers, finance people, or lawyers, your language can be technical—meaning you can use jargons and terminologies familiar to them.

However, if you’re writing for investors who barely have technical knowledge, tweak your language in simple terms that are easy to grasp and appreciate.

Likewise, if you’re writing a business plan to communicate internally with managers and employees your company’s direction and strategies, it’s best to use more casual language than you would when writing for high-level, external stakeholders.

B. Appeal to Your Audience’s Interests

It also helps to understand what interests your audience because they will influence how you’ll write your business plan.

Your management team, for instance, will be interested in knowing your business goals and strategies so that they can help you steer the company in the right direction.

Investors and lenders look at the business plan differently—they’ll be more interested in your financial statements to determine your financial health, like if your business is worth investing in or has the ability to pay back a loan.

C. Adopt a Suitable Business Plan Format

There’s no one-size-fits-all format for business plans because it depends mainly on your audience, aside from the nature of your business.

Let’s say you’ll set up a restaurant, and you’re drafting a business plan to apply for a business loan. To convince lenders that your business is viable, details such as your restaurant’s location and possible renovations are crucial.

Meanwhile, if you’re writing the plan for potential big-time investors, you’ll take a different approach. A good restaurant business plan focuses on the business aspects that will lead to growth and profitability (Remember that investors are interested in how they’ll make money from partnering with you).

2. Keep it concise

How long should a business plan be? According to the U.S. Small Business Administration (SBA) , it depends on various factors such as the specific audience it’s written for and the nature of a business. The SBA cites surveys that found the ideal length to be at least 25 to 100 pages.

Sounds a lot? If you have a simple business idea and you’re writing a business plan for busy people who don’t have time to pore over hundreds of pages, then one page up to 20 pages should be fine.

However, you may need to provide more explanation (which will take up more pages in your business plan) if you’re planning to build a new kind of business, and a risky one at that.

The size of your business also affects the length of your business plan. Business plans for small businesses need not exceed 30 pages. Corporate business plans are expected to be longer.

What matters more than length is how concise your business plan is. Meaning, it provides all the necessary information—including solid research and analysis—using the fewest words possible. No place for wordiness here!

3. Document everything related to your business

Support your claims in the business plan with solid facts and proof. Investors, for instance, need an assurance that they won’t lose their investment when they trust you with their money. This is where documenting your business thoroughly plays a crucial role.

What kinds of documentation can you include in your business plan?

• Industry forecast or projections
• Licensing agreements
• Location strategy
• Prototype of your product or service
• Survey and FGD results
• Resumes of your management team

4. Show your passion and dedication to your business

Although business plans have straightforward, matter-of-fact content, you can still establish an emotional connection with your readers through your plan. After all, your readers are humans with feelings and motivations.

No need to be dramatic about it—you can show your passion and dedication while still sounding professional in your business plan. Write about the mistakes you’ve had (like a failed business in the past), what you’ve learned from the experience, the values you hold, and the problems of your customers you want to solve through your product or service.

5. Know your competition and how you’ll stand out

Your business won’t be the single player in your industry. Other businesses in the same niche have started way ahead of you, and some new ones will also compete for business in the future.

Write your business plan in such a way that you know your competitors so well. Identify all of them and what makes your business unique compared with the rest without belittling them.

6. Be realistic and conservative in all your estimates

In any aspect of your business, it’s better to underpromise and overdeliver than the other way around. This also holds true when writing a business plan. You wouldn’t want to set unrealistic expectations that will lead to disappointments and worse, losses, when you fail to deliver on your promise.

There’s no place for too much optimism in your business plan. Your budget allocation, timelines, capital requirements, sales and revenue targets, and financial projections must be reasonable, realistic, and conservative. These will lend credibility to your business plan and yourself as an entrepreneur. Because there are a lot of factors beyond your control, always assume that things will get completed longer and cost more ( consider inflation over time! ).

This is where your research prior to writing the draft comes extremely helpful. You have something solid and factual to benchmark against. For example, if your analysis based on the facts you’ve gathered indicates that you’ll be able to get 40% share off the market in your first year of operations, consider making your estimates a bit more conservative and attainable.

Related: The Ultimate Guide to Business Valuation in the Philippines

10 Mistakes to Avoid When Writing a Business Plan

Now, let’s explore the mistakes entrepreneurs often commit when writing a business plan. Listing them all down here to let you know what to avoid.

1. Prioritizing Form Over Substance

Spend most of your time and energy on building solid research and facts rather than obsessing about which font type or background color will look best for your document.

2. Overthinking

Many entrepreneurs take too long to complete their business plans because they worry too much about it. Don’t get intimidated by business planning—you don’t have to be an expert or a degree holder in business management or business administration to be able to write an outstanding business plan. Overthinking will just lead to analysis paralysis and get nothing done.

As long as you know your business well and are passionate about it, then writing a business plan won’t be as difficult as you think, especially if you’re using a template.

3. Submitting the Document Without Proofreading It

If your business plan is filled with typos and grammatical errors, readers will get distracted even if you’re presenting substantial information. It may also give your audience an impression that you’re careless—and who wants to deal with a person who isn’t professional and careful enough?

Even if it costs you money, pay a professional proofreader to check your work and correct any errors so that the message you wanted to convey through your business plan will get across.

4. Making Empty Claims

Any statement that isn’t sufficiently supported by solid research or documentation has to go. For example, if you want to claim to be the top player in your industry but you don’t have any evidence to back it up, rethink about including it in your business plan.

5. Writing an Overly Long and Wordy Plan

Make sure that everything you put into your business plan is relevant and serves your purpose. Otherwise, remove unnecessary statements that just add fluff to the document.

Also, don’t waste your readers’ time by using too many words—including highfalutin ones. Remember, your goal is to make your audience understand your business, not to impress them with beautiful or complex prose.

6. Using Too Many Superlatives

Even if you really feel that your business, business idea, or projection is incredible, amazing, the best, great, fantastic, or one of a kind, avoid using these superlatives because they aren’t appropriate for formal documents like a business plan.

7. Doing the Financial Projections on Your Own

Unless you’re an accountant yourself, it’s best that you get a professional to do the job for you. It will save you time and the headache of dealing with numbers and formatting your financial plan properly.

8. Overestimating Your Projections

The business plan is not a place to make impossible promises—while they look good on paper, you might run into trouble fulfilling them. To avoid this mistake, always do your research. Find out how other businesses do it and what the typical timeframes and financial projections are before you come up with your estimates.

9. Long-Term Business Planning

As much as possible, limit your projections to only a year. A lot of things can happen and make your business different from how you initially planned it. Stick with your short-term or one-year targets and estimates, then just tweak your business plan as time goes by.

10. Including Unfounded Rumors About Your Competitors

Not only do rumors make your business plan look unprofessional, but they also distract your readers from your intended message, which is to highlight what makes your business different from the competition. Avoid including details based only on hearsay. Everything in your plan must be backed up by solid, quantifiable facts.

Key Takeaway

A business plan is more than just a document that you prepare once and will never look at again. Rather, it’s a strategic tool that you should use from time to time to guide your business operations, get the buy-in of your stakeholders, and grow your business over time.

Once you’re done with writing your business plan, make the most of it for your business. Use it and modify it as often as needed!

Ready and confident to start writing your business plan? Share your thoughts and questions below!

Other Useful Business Resources from Grit PH:

• How to Sell a Business in the Philippines

About Venus Zoleta

Venus Zoleta is an experienced writer and editor, specializing in personal finance and digital marketing.

She has been a regular columnist for some of the biggest business & finance publications in the Philippines, such as MoneyMax.ph and Filipiknow.net.

Hoping to retire early, she started investing and bought a home in her early 20s. This crazy cat mom eats ramen like there's no tomorrow.

Education: University of the Philippines (B.A. Journalism) Focus: Personal Finance, Personal Development, and Entrepreneurship

Reader Interactions

March 3, 2020 at 10:00 am

I like it, and i want to learn more about for business

March 6, 2020 at 9:46 am

Hello Ms. Venus, Rise Against Hunger Philippines, N.G.O. , branching out into a new high ways… and i am newly hired as a social enterprise development officer… whose main tasks to launch a product line; an up-cycled tarpaulin bags.. manufactured by a group of community women (skills training’s, coordinated by life coached; aiming w-holistic transformation and sustainability program.. . with such a big tasks, i need a step by step guides, and if possible a coach for i cannot do it alone… thank you, henry reandino chua

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The Nature of Business: Everything You Need to Know

• Post author: HICAPS
• Reading time: 25 mins read

This post talks about the nature of business, what is nature of business, nature of business meaning, and example of nature of business.

A business is an organization or enterprising entity engaging in commercial, industrial, or professional activity. The nature of business can be for-profit, non-profit, or others (more about this later). 

Moreover, businesses can range in size from small to huge. They can also range in scale from sole proprietorships to multinational organizations.

But what is the nature of business? Why is it important? 

Let’s find out.

What Is Nature of Business: Nature of Business Meaning

So what is nature of business meaning?

The term nature of business meaning pertains to different things to different people.

Generlly, the nature of business describes what the company offers to its clients and the industry. It also describes the legal structure or any other distinguishing characteristics of the business. 

For example, if one says that the nature of business is private, it usually implies the company’s money-making nature. 

Similarly, when one says the nature of business is manufacturing, the company focuses on manufacturing operations.

Additionally, when the nature of business is a corporation, it means that the company has a big reach. 

The nature of business also refers to the structured technique of describing a company. This idea describes the type of business. It also describes the services it provides. 

Moreover, the nature of business meaning describes what a company addresses. It describes the major focus of the company’s goods or services. Such also incorporates everything a firm does to achieve its objectives.

Entrepreneurs, investors, and lenders analyze the nature of financial statements. They do this to determine whether a firm is feasible before investing in it. They want to know about the company’s prospects for success first. This lets them choose whether or not it will be a worthwhile investment. 

Because this documentation also involves finance, nature of business meaning statements may be required. Moreover, the said statement should thoroughly address the following elements of the business:

Regular Process

This separates businesses from hobbies. Businesses have procedures that repeat themselves to get the same outcome. As a result, people receive a product or service. The owner then earns money.

Economic Activity

The primary purpose of any firm is to make money.

For a product or service to be helpful to customers, it must be given at the proper time and place, solve a problem, or meet a demand. Goods that are not available to consumers, for whatever reason, are useless.

Capital Requirement

To put it another way, people need money to make money. These are required for the production of a product or the provision of a service that generates revenue.

Did you know that you can get a loan for small business from the government ?

Goods and Services

Every company provides something to the people. 

Some businesses manufacture tangible things like clothing or automobiles. Others offer intangible services like computer repair.

Anticipated Risk

All require some level of time and financial effort. A business owner will gain money on occasion and lose money sometimes. 

When it comes to business, there’s always the possibility of losing money. Some risks are also more prevalent in certain areas than others.

Profit-Earning Motive

Profit is the primary motivation for beginning a business.

When customers express a want or need, businesses respond by providing a product or service to match that need.

Involvement From the Buyer and Seller

The customer buys something and the company sells something in every transaction.

Social Obligations

Businesses have an influence on their surrounding areas. 

They recruit people and develop partnerships with other businesses. These companies also assist communities by providing a needed product or service. They may also give back to the community through charitable endeavors or enrichment programs.

A statement about the nature of a business should also indicate what problem the firm will tackle. 

Read Other HICAPS Business Articles

• Insurance for Small Business: Definition, Types, and Cost
• What is a Lawyer for Business? Do You Need One?
• Starting A Bakery Business In the Philippines
• How To Tell If A Baking Business Is Doing Well: 7 Big Signs
• 5 Powerful Sales Strategies to Turn Cold Leads into Loyal Clients
• 12 Small Business Ideas Philippines
• 7 Importance of Website for Small Business Success
• History of Baking: What You Need to Know

Types of Nature of Business 

Here are the types of nature of business:

Public Sector

This sector is made up of government and government-controlled businesses. The Department of Health (DOH) and the British Broadcasting Corporation (BBC) are two examples. 

Private Sector

This sector includes for-profit firms that operate privately. They work individually or collectively.

HICAPS and Gardenia Wheat Bread are two examples.

International Sector

This sector includes exports from foreign countries. Examples are McDonald’s and Coca-Cola.

Technological Sector

This industry is concerned with the creation, of tech products. They also develop and distribute them. Apple Inc. and Microsoft Corporation are two examples.

Sole Proprietorship

Businesses run by a single individual fall under this category. The owner and the company entity have no legal difference. Local restaurants and grocery stores are two examples.

Partnership

Businesses operated by two or more persons under a formal agreement fall into this category. 

Microsoft and Apple are two examples. These companies began as collaborations.

Corporation

This sector includes huge corporations or a collection of corporations working as one. Amazon and JP Morgan Chase are two examples.

Limited Liability Company

An LLC involves a business structure. Here, proprietors are not personally accountable for the company’s debts or liabilities.

Limited Liability Partnership

An LLP means that all partners have limited responsibility to the company. Brake Bros Ltd and Virgin Atlantic are two examples.

For-Profit Organizations

Businesses in this category make a profit. These companies operate privately. 

Non-profit Organizations

Such organizations use the funds they get to further their social cause. 

Example of Nature of Business

To further understand the concept, you must know at least an example of nature of business. Let’s look at the example of nature of business: 

Example of Nature of Business 1: Service Business

Think about how many times you have paid someone to do something for you. 

Perhaps you paid someone to paint your house, replace your car’s oil, or make your dinner at a restaurant. You most likely paid someone to perform these things because you lacked the time or ability to do them yourself. 

Maybe you didn’t feel like doing it on your own. So, you decided it was better to hire someone else to do it instead.

Cafes or Restaurants , auto service shops, and other similar establishments are all service-based enterprises. Every day, they meet the needs of thousands of customers. 

Service businesses will prosper as long as we have limited time and knowledge. They also work because people do not enjoy doing things themselves.

Moreover, the service industry comprises companies that provide customers with intangible goods. They serve their clients by offering professional advice, skills, and knowledge. 

These include professional services (accounting, legal, taxes, programming, etc.), personal services (laundry, cleaning, etc.), public services (recreational parks, fitness centers, banks, etc.), and many more. 

Example of Nature of Business 2: Merchandising Business

A merchandising business, often known as a merchandiser, is one of the most common sorts of companies. We benefit from them on a daily basis. 

In general, a merchandising enterprise buys finished goods and resells them to customers. 

Recall the last time you went shopping for food, home goods, or personal stuff. You were most likely getting them from a merchandiser. 

In particular, the products were bought wholesale from a distributor or manufacturer. Then they got sold to you through that retailer. 

While the retailer may have been compelled to buy in bulk, they provide the goods to you in a modest, personal-use way. 

For example, a wholesaler may sell baking supplies to a retail store at a significant discount. However, the store will be required to purchase hundreds, if not thousands, of units. This must be done so they qualify for the discount. 

The merchandiser then sells you the deodorant at full retail price. They also permit you to buy one container. 

The difference between what you paid the retailer and what the shop paid the wholesaler becomes the store’s profit. Profits enable the store to stay in business. It also lets them continue to provide you with items in the future.

The manufacturing industry includes companies that purchase things at wholesale costs. Then, they resell them at retail prices. These include stores selling clothes, medicines, and appliances. 

Example of Nature of Business 3: Manufacturing Business

Even if you don’t buy directly from them, many things you consume on a daily basis come from a manufacturing company. 

Take a look around your house or apartment. The television you’re watching, the phone next to you, and the computer you’re using right now were all constructed and developed by a manufacturing firm.

This sort of company is also responsible for the tires on your automobile and the picture frame on your wall.

In particular, a manufacturing company used components, pieces, or raw materials to create a finished product. These final products can be sold directly to customers or to other manufacturing companies for use in the production of another product. 

Manufacturing firms in today’s world often need machines, tools (e.g. kitchen tools and equipment ). They also use robots, computers, and human labor. These components work together to generate a product.

A manufacturing company also has an assembly line. In this, the product gets assembled from one workstation to the next. By moving the product down an assembly line, the completed product gets assembled faster and with less manual work.

It’s also worth noting that in other sectors, the manufacturing process is referred to as fabrication.

Manufacturers include food factories and car companies They also include baking business with bakery logos . These brands use baking ingredients to make cakes. 

Example of Nature of Business 4: Hybrid Business

This industry includes companies that do the things mentioned above. 

A vehicle manufacturer, for example, sells automobiles. They also buy old cars. Then, they resell them for a greater price after repairs. These companies also provide repairs for broken cars. 

Frequently Asked Questions

A business’ nature specifies what kind of firm it is and what its goals are. It describes a company’s legal structure and industry. Nature also includes goods or services. In short, it describes verything it does to achieve its objectives. It also represents the company’s problem as well as its services.

Natural resources, labor (human resources), capital, and entrepreneurship are the four classical components of production shared by all economic activity. Many experts now consider knowledge to be the fifth component, recognizing its importance in company success.

Here are the types of nature of business: Government sector Military sector International sector Private sector Technology sector Merchandising sector Service sector Manufacturing sector

More Questions with Answers

The three nature of business includes the goods or services that must be designed in a certain way. They must generate form utility. This means they must convert products into consumable forms. The products or services must also have time utility. This involves making the goods and services available when needed. Lastly, they must generate place utility. This describes the availability of goods or services wherever needed by the consumers.

The following aspects determine the nature of business: Regular process. The profit-generating processes are regularly repeated. Economic activity. The activities that maximize profit. Utility creation. A kind of utility the goods or services create for the consumer, such as time utility, place utility, etc. Capital requirement. The amount of funding required for the business. Goods or services. The types of goods (tangible or intangible) offered by the business. Risk. The risk factors related to the business. Profit earning motive. The businesses’ profit-earning motive. Satisfaction of consumers’ needs. The goods or services are based on the consumers’ satisfaction. Buyers and sellers. The type of buyers and sellers involved in the business. Social obligations. All businesses have corporate social responsibilities to undertake .

The nature of a business specifies what it is and what it does.

Nature of businesses may be determined according to the way they operate and their goals. It can also be determined by their organizational structure, profit orientation, and what they provide. 

If you’re planning to start a business, knowing the nature of business meaning helps. Doing so guides you in the right direction. As a result, you will have a thriving business. 

What do you think is the nature of your business? Are you a manufacturer, merchandiser, service provider, or all of the above? Let us know in the comment section below!

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Business Plan

Where do you see yourself ten or five years from now? This question perhaps is inherently frequently asked during job interviews. Why do you ask? This is a test to evaluate your forecasting and planning ability, as is why a  home business plan  is made. It does not matter whether it is a home business plan or whatsoever, but the idea is in gauging a person who has a vision and plans to accompany that vision. Starting a small business can be daunting. But it eases the process as soon as you established a business  plan . Now, take your time to look at the following business plan examples and determine how you can start.

What is a Business Plan? A business plan is a document that thoroughly outlines the nature of your business, the direction or  smart goal to which it is leading, and the how’s of getting to that goal. Further, it contains an  evaluation plan  on the page show how any evaluation is made or conducted.

Business Plan Format

Executive summary.

Business Concept: Briefly describe the essence of your business, including the product or service you offer. Business Objectives: Outline your short-term and long-term goals. The Market: Summarize your target market and how you plan to reach it. Financial Features: Highlight key financial elements such as revenue projections, profitability, and cash flow estimates. Financial Requirements: State the amount of financing you are seeking and its purpose.

Company Description

Business Information: Provide detailed information about your business, including legal structure, history, and the current situation. Mission Statement: Define your business’s mission and the values that guide it. Products/Services: Detail the products or services you offer, emphasizing their benefits to customers.

Market Analysis

Industry Analysis: Discuss the industry within which you operate, including trends, size, and growth prospects. Market Segmentation: Identify and describe your target market segments. Competitive Analysis: Analyze your competition, their strengths and weaknesses, and your competitive advantage.

Organization and Management

Organizational Structure: Outline your company’s structure, detailing the roles and responsibilities of each department and key employee. Management Team: Introduce your management team, including backgrounds that demonstrate their role in contributing to success. Ownership Structure: Describe the ownership structure of your company, including major shareholders.

Marketing and Sales Strategy

Marketing Strategy: Detail how you plan to attract and retain customers, including pricing, promotion, and distribution strategies. Sales Strategy: Describe your sales approach, sales activities, and how you’ll measure success. Customer Service: Outline your customer service strategy to ensure customer satisfaction and retention.

Product or Service Line

Product/Service Details: Provide comprehensive details about your products or services, including development status, production process, and lifecycle. Unique Selling Proposition (USP): Highlight what makes your product/service unique and how it meets customer needs better than competitors. Future Products/Services: Discuss any future products or services you plan to introduce.

Financial Plan

Revenue Model: Explain how your business will make money, detailing pricing strategies, revenue streams, and gross margin targets. Financial Projections: Include detailed financial projections—profit and loss, cash flow, and balance sheet—for the next 3-5 years. Funding Requirements: Specify the amount of funding needed over the next few years and how it will be used.

Supporting Documents: Attach any additional documents that support your business plan, such as resumes of key personnel, market research data, technical specifications, and letters of support from potential partners.

Example of Business Plan

Executive Summary Business Concept: Green Innovations Ltd. is dedicated to developing eco-friendly technologies that reduce environmental impact. Our flagship product is a biodegradable packaging solution designed for the food and beverage industry.   Financial Features: Projected Sales: $2 million in Year 1, growing to $5 million by Year 3. Profitability: Expected to reach profitability by Q4 of Year 1. Cash Flow: Positive cash flow anticipated by the end of Year 1.   Financial Requirements: Seeking an initial investment of $1 million for product development, market entry, and operational expenses.   Current Business Position: In the final stages of product development, with a strong management team and strategic industry partnerships.   Major Achievements: Secured provisional patents for our biodegradable material technology and established pilot programs with three regional food distributors. Company Description Business Overview: Green Innovations Ltd. aims to lead in sustainable business practices by offering innovative products that serve both the planet and profits. Our biodegradable packaging solutions represent a step change in how businesses approach environmental responsibility.   Mission Statement: To innovate and deliver sustainable solutions that protect the environment and support our customers’ green initiatives.   Company History: Founded in 2023 by environmental engineers Jane Doe and John Smith, Green Innovations Ltd. was born from a shared vision to combat plastic pollution.   Legal Structure: Incorporated as a Limited Liability Company (LLC) in Anytown, Anystate, USA. Products or Services Description: Our biodegradable packaging decomposes within 90 days after use, offering a sustainable alternative to traditional plastic packaging. It is made from renewable resources, such as cornstarch and bamboo.   Development Status: Finalizing R&D and moving towards mass production.   Differentiation: Unlike other biodegradable options, our product maintains the durability and versatility of traditional plastics without harmful environmental effects.   Production Process: Manufactured using a proprietary process that ensures high quality and minimal waste.   Future Products/Services: Plans to expand our product line to include reusable and compostable containers and utensils. Market Analysis Industry Analysis: The global eco-friendly packaging market is expected to reach $250 billion by 2025, driven by consumer demand for sustainable products and regulatory pressures.   Target Market: Our initial focus is on the food and beverage industry, specifically companies seeking sustainable packaging options. This includes restaurants, cafes, grocery stores, and food manufacturers.   Market Needs: As environmental regulations tighten and consumer preferences shift towards sustainability, the demand for eco-friendly packaging solutions is growing rapidly.   Competition Analysis: While there are other biodegradable packaging options, our product’s unique composition and performance give us a competitive edge.   Market Trends: Increasing awareness of plastic pollution and a shift towards green consumerism are major trends influencing market growth. Strategy and Implementation Marketing Strategy: We will target businesses through direct sales, trade shows, and online marketing, emphasizing the cost savings and environmental benefits of switching to biodegradable packaging.   Sales Strategy: Our sales approach includes free samples, pilot programs, and volume discounts to encourage adoption.   Location and Facilities: Headquartered in Anytown, Anystate, with a manufacturing facility capable of supporting large-scale production.   Technology: Leveraging advanced biopolymer technology to create our biodegradable material.   Operations Plan: Our operations are designed for scalability and efficiency, with a focus on quality control and sustainable practices. Organization and Management Team Organizational Structure: Led by co-founders Jane Doe (CEO) and John Smith (CTO), supported by a team of experts in R&D, sales, and operations.   Management Team: Our leadership brings together expertise in engineering, environmental science, and business development.   Roles and Responsibilities: Detailed roles include product development (CTO), marketing and sales (CMO), operations (COO), and financial management (CFO). Financial Plan Revenue/Sales Forecast: Detailed projections anticipate steady sales growth, with major revenue spikes following distribution agreements.   Expense Budget: Initial expenses include R&D, production setup, and marketing campaigns.   Cash Flow Forecast: Careful financial management will ensure positive cash flow, with reinvestment in product development and market expansion.   Profit and Loss Statement: Projected to achieve profitability by the end of Year 1, with significant profit growth in subsequent years.   Break-even Analysis: Expected to break even within the first 18 months of operation.

Business Plan Samples to Edit & Download

• Business Plan in Entrepreneurship
• Business Plan for Startup
• Business Plan for Coffee Shop
• Business Plan for Small Business
• Blank Business Plan
• Business Plan for Restaurants
• Business Plan for Food Truck
• Business Plan for Nonprofit
• Business Plan for Dummies
• Business Plan for Laundromat
• Business Plan for Students
• Business Plan for Sales

Business Plan Examples & Templates

1. business plan example.

2. Sample Business Plan

3. Sample Business Plan Outline

More often than not, business plan mistakes are made simply for the reason of lack of foresight and discussion. Business plan examples are found in the page to help you in your next strategic plan, marketing plan , and even your personal plan .

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6. Business Plan Guidelines Template

7. Joint Venture Business Plan

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10. Nonprofit Business Plan Template

11. Trucking Business Plan Template

12. Business Plan Table of Contents Template

13. Startup Business Plan Template

14. Rental Property Business Plan Template

15. Construction Business Plan Template

16. Sample Construction Business Plan Template

17. Restaurant Business Plan Template

18. Freight Trucking Business Plan Template

19. Mortgage Broker Business Plan Template

20. Simple Business Plan Template

21. Boutique Business Plan Template

22. Staffing Agency Business Plan Template

23. Business Plan Proposal Template

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25. Business Plan Template

26. Easy to Print Business Plan Template

27. Simple Business Plan Outline Template

28. Plan for Startup Business

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29. Event Business Plan Example

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30. Mini Business Plan

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31. Strategic Business Sample Plan

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32. Family Business Plan

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33. Business Plan Outline

34. Restaurant Business Plan Example

35. Bakery Business Plan

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36. Product Business Sample Plan

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37. Insurance Agency Business Plan

38. Business Investment Plan

liveinvictoria.vic.gov.au

39. Business Continuity Plan

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40. Web Design Business Example

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41. Business Planning Template

42. Company Business Plan

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43. Internet Cafe Business Plan Example

44. Business Plan Checklist

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45. Farm Business Plan

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47. Free Business Plan

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48. Social Enterprise Business Plan

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49. One Page Business Plan

retailassociation.org

Key Components of a Business Plan

While there may be more  components for a business plan , based on the article published by Growbusiness.org, the following are the key components that each business plan absolutely must have:

1. Executive Summary

The executive summary is among the most important or the heart of a business plan or any  financial plan . The summary includes the founders, principal employees, or the management team and the skills they will bring to the business.

2. Competitor Analysis

This part of the plan showcases other businesses directly in the competition of the business proposed. The business plan includes action plans in which to take for the business to be better in comparison to the said competitors and other  strategic plans  to advance the business further than them.

Types of Business Plan

Business plans come in various formats, each tailored to meet specific needs, objectives, and audiences. Understanding the different types of business plans can help you select the most appropriate one for your situation. Here are the main types:

1. Startup Business Plan

Ideal for new businesses, this comprehensive plan outlines everything from business objectives and market analysis to financial projections and marketing strategies. It’s used to attract investors, secure loans, and serve as a roadmap for business operations.

2. Internal Business Plan

Focused on a specific aspect of a business, such as a new product or market expansion, without the need for background information on the company. It’s used for internal planning and strategy, often to evaluate a particular project or direction.

3. Strategic Business Plan

This plan outlines the company’s strategy, mission, vision, and objectives, along with key metrics for success. It includes detailed action plans for achieving goals and is used to guide the overall direction of the business.

4. Feasibility Business Plan

Before a full-scale business plan is developed, a feasibility plan can help assess whether an idea is viable. It focuses on who will buy the product or service, how big the market is, and the potential for profit.

5. Growth or Expansion Business Plan

Designed for established businesses looking to expand, this plan focuses on growth opportunities, such as entering new markets or launching new products. It’s used to secure investment or loans for expansion projects.

6. Operations Business Plan

Details the logistics, technology, and processes that a business will use to operate efficiently. It’s often more technical and is used to manage the day-to-day operations of the business.

7. Financial Business Plan

Centers on the financial aspects of the business, including detailed financial projections, funding requirements, and strategies for achieving financial goals. It’s crucial for securing funding and managing finances effectively.

8. Lean Startup Plan

A modern approach to business planning, this format focuses on summarizing the key elements of a business on a single page. It’s quick to create and easy to adjust, making it suitable for startups and businesses looking to pivot quickly.

9. Social Enterprise Business Plan

For organizations that aim to address social issues, this plan details the mission, social impact strategies, and financial models that balance profit with social goals. It’s used to attract funding and partnerships that align with the social mission.

10. One-Page Business Plan

Condenses the essential elements of the business into a single page, highlighting the business idea, target market, unique selling proposition, and key objectives. It’s useful for quickly communicating a business idea or for small businesses not requiring extensive planning.

How To Make a Business Plan

Writing a business plan for a startup may not easy. Perhaps, you need to think of a strategy and financial stability at the same time. But,  small business  plans should not be so complicated. Sure, it will be a smooth process when you follow the steps below. 

1. Do Your Research

It’s alright to be ambitious. But it is only acceptable once you establish a strong foundation. To start with, make sure to create a strong plan. Here, you will test your decision making—secure thorough research. Whether you are opening a coffee shop, bakery, or a restaurant, you need to perform a  SWOT analysis  and  market analysis . Prioritize these two, or if one else fails, the other follows. 

2. Have a Long-term Goal

Don’t settle on your plans. Instead, get motivated by plotting your goals. Draft your  list . Then, decide whether one of each item is a priority or not. Then, determine if one is attainable, measurable, and cost-effective. This helps you decide whether or not that particular goal is worth your time. 

3. Enumerate Your Actions

Once you have established your goal, jump right away with the  action plan . In this section, you will outline the process and steps that will help you achieve your goals. Remember, it is time-bounded, so make sure that the tasks listed are attainable with a certain time frame. 

4. Decide on a Budget

Of course, do not forget the budget . Budgeting can be tough. But it is substantial in making a business plan because it decided whether you can consider something or not. With that, you can insert an estimate that will enable you to understand your economy. 

5. Test and Adjust It 

For the last part, you need to test the plan. But it doesn’t need to take you a month or year before you can use it for actual business. You can record and keep a  progress report . Each day, look at the organization’s growth. 

What are the primary purposes of a business plan?

A business plan has plenty of purposes. Among are the mapping growth and business focus.

How do you define a good business plan?

A good business plan is defined as informative in all aspects, including finance and marketing. It should be attainable in helping business success.

What are the two main reasons why business plans don’t work?

There are various reasons to take note of. But the most common include the lack of planning and poor leadership.

Truly, starting a business can be daunting. But it wouldn’t be as such as long as you begin with thorough planning. But when can you start? Since we provided the list of steps above, now is the right time to prepare a document you can keep. Plan now, and later on, you will reach success and continuous growth.

Text prompt

• Instructive
• Professional

Create a study plan for final exams in high school

Develop a project timeline for a middle school science fair.