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

May 24, 2021

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

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

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

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

What Is a Business Plan?

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

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

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

Get a Business Idea

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

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

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

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

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

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

Conduct Market Analysis

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

Product and Service Demand

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

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

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

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

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

Identify Demographics of Target Market

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

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

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

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

How to Write a Business Plan

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

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

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

SWOT Analysis

• Competitor Data
• Competitive Analysis
• Marketing Expenses Strategy 

Pricing Strategy

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

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

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

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

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

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

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

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

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

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

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

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

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

Mike told us,

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

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

It consists of three basic parts:

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

Example of an informal executive summary 

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

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

What should I include in an executive summary for investors?

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

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

Successful business plan examples

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

Here’s the interview with the owner of Urbanity:

When to write an executive summary?

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

What mistakes do people make when writing an executive summary?

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

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

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

How to Write a Business Plan Step 4. Company Description

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

• Mission statement
• Philosophy and vision
• Company goals

Target market

• Legal structure

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

Mission Statement

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

Company Philosophy and Vision

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

What makes your company different?

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

Examples of core values

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

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

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

What is a vision statement?

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

Example vision statements

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

A world without Alzheimer’s Disease and other dementia.

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

Business Goals

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

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

How far in advance should a business plan?

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

Example of great business goals

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

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

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

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

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

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

Industry resources

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

• Trade Associations
• Federal Reserve
• Bureau of Labor Statistics

Legal Structure

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

• Sole proprietorships
• Limited Liability Companies (LLC)

Partnerships

Corporations.

• Franchises.

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

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

Sole Proprietorship

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

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

Limited Liability Company (LLC)

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

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

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

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

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

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

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

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

Questions to answer about your products and services

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

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

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

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

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

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

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

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

SWOT Examples

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

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

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

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

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

Include Competitor Data in Your Business Plan

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

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

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

Marketing Strategy

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

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

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

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

Advertising Strategy

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

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

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

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

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

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

Some common pricing strategies are:

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

HubSpot has a great calculator and blog on pricing strategies.

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

Distribution Plan

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

Supply Chain Examples

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

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

Examples of Supply Chains

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

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

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

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

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

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

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

Quality Control

• Legal environment

Let’s look at each for some insight.

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

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

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

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

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

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

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

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

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

Legal Environment

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

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

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

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

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

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

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

How to Write a Business Plan Step 8. Financial Statements 

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

Provide All Financial Income from an Existing Business

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

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

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

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

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

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

Financial Projections For A Startup Business Plan

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

Mike gave the following advice in his interview:

Financial Forecasting Mistakes

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Ways to get funding for a small business

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

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

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

How funding will be used

When asking for business financing make sure to include:

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

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

How to Write a Business Plan Resources

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

• Sample plan

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

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

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

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

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

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

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

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

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How to Start a $360K+/Year Comic Book Store

• What is a comic book store?
• Products that comic book stores sell
• Resources necessary
• Licensing and legal requirements
• Funding your comic book shop
• Hiring employees

Step 1: What is a comic book store?

Step 2: Products that are sold in the comic book industry

• Rare Comic Book Issues

Marvel Comics

Dark horse comics, graphic novels, dungeons and dragons, rare comic books.

• 32.2% of comic book store sales are Marvel titles
• 62% of people 18-29 claim to be Marvel fans
• 87% of Americans recognize Spider-Man
• The plot is normally fully contained within a graphic novel while comic book plots normally span numerous episodes or even multiple series.
• The length is typically longer than a comic book.
• The spine is more like a standard book than the comic book genre.

Step 3. Resources needed when starting a comic book store

• A comic book store business plan
• An online presence

Retail Space

A business plan for your comic book store.

• Companies with business plans tend to grow 30% faster.
• Companies with business plans are 120%-260% more likely to move past the startup stage.
• Business owners who have a business plan are 271% more likely to walk away before it becomes a major loss.

How much does it cost to open a comic shop?

Step 4: licensing and legal requirements, business formation.

• Getting a free Employee Identification Number (EIN) from the IRS
• Getting a state/local business license

Unemployment Insurance

• Workman’s Comp (if necessary)
• Business Insurance/General Liability Insurance

Sole proprietorship

Limited liability corporation (llc), partnerships and corporations, apply for an ein, state/local business licenses, workman’s compensation, business insurance/ general liability insurance.

Step 5. Funding Your Store

• Personal funds
• Loan from family or friends
• Business partner(s)– inc.com has a great blog on considerations about a partnership
• Business loans- Check out our partners

Step 6. Hiring Employees

• Help Wanted signs
• Pinning notices at local hot spots.

Step 7. Marketing

• Identifying target markets.
• Creating a website that allows you to sell online.
• Creating and using your social media wisely.

Identify your target market

Find the best way to reach your target market, create a website.

• Squarespace

Create and Use Social Media Well

Influencers.

• Kevin Smith
• Marvel Entertainment
• Robert Downey Jr.

Put Your Customers First

How to Start a Bakery: A Step-by-Step Guide (2024)

Have you ever wanted to make people happy with yummy cakes or tasty breads? Ever thought about entering one of the fastest-growing industries for small businesses? It may be time to start a bakery!

Today we're revealing insider information on how to start your own baking business.

We connected with Puran Deep, a successful bakery owner who runs the wildly popular Wild Wheat Bakery in Kent, Washington. In 2019, his bakery exceeded over $1 million in revenue!

Now, we're passing his expert advice on to you. We'll show you step-by-step how to plan, start, and grow a thriving bakery business in this $30 billion per year industry.

Step 1. Consider Bakery Business Ideas

Step 2. perform market research, step 3. understand your local business laws, step 4. consider locations, step 5. get menu ideas, step 6. understand the finances, step 7. create a bakery business plan, step 8. create a business entity, step 9. secure funding, step 10. develop a marketing plan, step 11. purchase equipment, step 12. hire staff, step 13. build your business, what are the biggest mistakes when opening a bakery.

Click any of the links above to jump ahead to that section.

How Do I Start My Own Bakery?

You'll find everything you need to know in this step-by-step guide for starting a bakery!

If you are new to the bakery world—or haven't ever stepped foot in a kitchen—it's a good idea to visit some bakery businesses to glean information and practical experience. Small business owners are often happy to share what they know.

We interviewed Puran Deep (P.D.) from Wild Wheat Bakery in Kent, Washington. P.D. started four different businesses in the past and now runs Wild Wheat, a cafe-bakery often featured in The Seattle Times and the winner of many “Best of Kent” awards.

See the YouTube video about how to start a bakery below.

P.D. grew tired of the rat race and wanted to start his own business. That's when the opportunity to purchase Wild Wheat, an established bakery-cafe with an excellent reputation, landed on his desk.

P.D. bought an existing bakery, but he still has tons of advice to offer to someone starting from scratch. We'll share his expert tips and other practical advice as we proceed through the steps for starting a bakery as a new business.

[su_quote]You have to treat everybody that walks in this door with great customer service. Make sure they are getting what they need. Make sure you're giving them quality food. Over 50% of our customers on a daily basis are our regular customers.[/su_quote]

Another alternative is to buy an existing bakery.

The first step of starting a bakery is considering the different types of bakery ideas you're interested in. Retail bakeries, home bakeries, and wholesale bakeries are viable options.

Recently, the baked goods industry has grown significantly, so it’s a good time to get started. Several options are available for starting your own bakery business.

Bakery Cafes

• Average Annual Revenue : $1.52 million per year • Average Profit Margins : 5.4% • Startup Cost : $100 (at home) to $3M (Panera Franchise) • Time To Revenue : 1-6 months • Annual Market Growth Rate : 1.1% • Best for : Cooks, chefs, people who love cooking

A bakery cafe offers tables where customers can sit down and eat in a dining area. It combines the benefit of freshly baked goods with the enjoyment of a small restaurant business.

Like a small restaurant, this type of business also provides coffee, other beverages, and an extended menu. Wild Wheat Bakery offers an extended breakfast menu featuring omelets and other egg dishes.

As an added component, P.D. roasts his own coffee beans on location. Customers can enjoy a cup in the cafe or take home the beans to brew themselves.

A perfect example of a Bakery Cafe is the world-famous Ferrara Bakery in New York City.

Wholesale Bakeries

This type of bakery business does not keep a storefront and acts as a supplier to restaurants, grocery stores, etc.

Wholesale bakeries benefit from predictable and reliable sales to retail businesses. Wholesale bakeries sell to customers who buy in bulk. And there's no worry about the upkeep of a retail bakery.

Finding grocers, local coffee shops, and restaurants to carry your product is the key challenge of a wholesale bakery. This critical aspect may be difficult for a new business trying to break into the baking market.

However, it is very important for any bakery. We asked P.D. why wholesale is so important for a bakery, and here's what he told us:

[su_quote]You have your staff; you have your employees that are producing a certain number of breads or whatever they're making. It's not a huge cost for them to produce a little bit more with the same employees and the same equipment, but you can increase your sales significantly.[/su_quote]

Marsee Baking is a wholesale bakery that operates in Seattle and Portland and would be a great model to build your business on.

Counter-Service Bakery

Typically, small counter-service bakeries expect customers to pick up their orders and go. One benefit is that it limits the time and energy spent on customer service.

Part of the larger category of retail bakeries, it's possible to combine a counter-service bakery with a wholesale bakery. The bakery would sell baked goods to grocers or restaurants and provide pick-up and/or delivery service to retail clients.

Clark Street Bakery in Los Angeles started in an apartment and now has four counter-service locations.

Food Truck Bakeries

One of the most affordable ways to open a bakery is through food trucks. Food truck bakeries have become a viable option for running your own business. For more information on how to get started, check out our blog post on How to Start a Food Truck Business .

The Teal House Coffee and Bakery food truck is one of the most well-known around Austin, Texas!

Home Bakeries

Cottage industry businesses can be a simple way to dip into opening a bakery without a large investment. For those wondering how to start a home bakery, simply alter the steps in this business guide to meet your home baking needs.

[su_quote]Baking can be done with a few simple ingredients, so it's about simplicity and nostalgia – people are reminded of their childhood.” – Paul Hollywood – Celebrity Chef and Judge on The Great British Bake Off [/su_quote]

Specialty Bakery Cakes

Many business owners succeed with specialty bakeries like a cake business. One of my favorites is Freed’s Bakery in Vegas. They create custom wedding cakes and other treats for special events. Check out their fidget spinner cake below.

How to Start a Bakery Business From Home

Many people start a bakery from home simply by selling their baked goods to friends and family. You might not need a formal business plan, but check into local regulations on how to run a bakery from home without a commercial kitchen.

You might wonder whether starting a bakery business in your area is viable.

It's important to know what's happening in the baking business in order to meet customer needs. This market research report provides tons of information and industry data about Bakery Cafes in the US.

The good news? Bakeries are on the upswing!

Even so, it's important to research your local business environment for things like:

• Demographics
• Local Market Trends
• Competition
• Target Audience

All of this information will be vital later when you build your business plan.

According to P.D., knowing what customers need is critical to running a business. He says:

[su_quote]…you have to have the right mindset, you have to take care of the customers and know their needs.[/su_quote]

So, before you even get started in business, find out what potential customers want by doing your research ahead of time.

When considering which baked good offerings to provide, know that certain segments of the market are larger than others, as seen below:

• Retail bakery products: 10%
• Soft cakes: 8%

Because it can take time for agencies to process paperwork, it's important to understand business licensing early in the process. The bakery industry deals with food, so the Health Department in your area should be your first contact.

Licensing and registration varies between states and even within local jurisdictions. One excellent resource for learning the basics is the Small Business Administration . The required permits depend on the type of bakery and location.

Run through this list for a cost estimate of your licenses and permits:

• Business License – Around $50. Based on location/type/size. Renewable.
• Food Service License: $100-1000. Based on size, # of employees. Renewable.
• Employer ID Number (EIN) – Free. Issued by IRS for tax purposes. Takes time.
• Certificate of Occupancy – Around $100. Proof of final inspection. Locally issued.
• Fire Department Permit – $50-200. Inspection of ovens, etc. Locally issued.
• Food Handler's Permit – $100-500 for each employee. Renewable.
• Sign Permit – $20-50+. Allows a permanent sign. Locally issued.
• Music License – $250-500 to play music.

Here's a link to the U.S. FDA list of regulations and codes for food service establishments by state. It clarifies the differences in regulations between states.

For county and city information, perform a quick internet search or inquire at your local health department.

Can I Get A Baking License For At-Home Bakery?

Sometimes. It depends on your local laws. A home bakery business may also be called a home baking business or cottage food business. There may be special requirements for how to start a bakery from home including:

• Refrigeration 
• Ingredient 
• Maximum Revenue
• Distribution

Cast Iron is a home-based food business management software platform that has a list of laws that make a good starting point for those wondering how to start a cake business from home. It’s a good place to start for others starting a baking business too.

How Long Does It Take to Start a Bakery?

Starting a bakery can take from a few weeks to a few months, depending on the scale of the operation.

A bakery at home can be fairly quick when your customers are people you know. A retail or wholesale bakery may take a few months or even a year to start, depending on your location, funding, and other circumstances.

A retail bakery does best in a high-traffic area. Ideally, your space will be easily accessible to lots of people, have enough space for seating, and a reasonable rent for the square footage.

For example, the world-famous Ferrara Bakery is located in New York City in the heart of Little Italy on the corner of Grand and Mulberry Street. 

It may not be the most spacious cafe, but the foot traffic more than makes up for the lack of seating. Try to find this balance with your location!

[su_quote]In any business, location is key. If someone is planning to open up a new location, pay a lot of attention to the foot traffic where you are opening it. Location can be something that can make or break your business. It's very important.[/su_quote]

Consider these factors when choosing your business location:

• Accessibility : Is it easy for customers to get to your location? 
• Competition : Are there other bakeries nearby?
• Foot traffic : How many potential customers pass by on foot? Remember P.D.'s advice.
• Parking : For customers arriving in their own vehicles, is there enough space to park?
• Growth potential : Is there a possibility to expand in the future?
• Demographics (target audience): Who lives or works in the area? Does this align with your ideal customer?
• Cost : Research all the details of the price to buy or rent the space.
• Bakery layout : There's much more to consider than just how customers will move through the bakery. Keep reading below.

Bakery Layout

You should consider the new bakery floor plan before you open a bakery in a commercial space. You’ll want to consider the following features:

• Counter space
• Bakery equipment
• Dining space
• Office space

All this goes into a bakery floor plan. You should probably consult an architect and a commercial real estate agent before choosing a small commercial space where you’ll open bakery operations.

Before determining the cost of opening your new business, you must have a rough idea of your menu. Mastering recipes takes time and practice. The good news is that you can enjoy tasting the test recipes!

Business success hinges on offering the highest quality products that people want. It's important to create an eye-catching menu.

Offer special items that make you stand out from the crowd. Give customers a reason to do business with you!

If you need some inspiration, here are some recipe sites to review:

• Love and Lemons
• Food Network
• Taste of Home

Look at the bakery offerings that offer the highest profit potential.

While spending time in the kitchen is loads of fun, you also need to crunch the numbers to open a successful bakery. You’ll want to consider the following:

• Cost of opening a bakery
• Monthly operating costs
• Cost of goods sold for the products.

How Much Does It Cost to Start a Bakery?

The startup capital for starting a bakery varies based on the type of bakery you choose to start. Those who want to know how to start a baking business should expect the following startup costs depending on what type of business entity they start.

• Home-based : $100+
• Food Trucks: $100+. Learn more about getting the startup capital for food trucks .
• Franchises : You’ll need to demonstrate up to $7.5 million net worth for starting a Panera franchise.

While the low end is just for a small bakery to buy the materials, those who are really interested in owning a bakery should expect $2-5K just for the business licensing. Depending on the scale, you can get by with the minimum, or go all out.

Learn How to Price Your Baked Goods

To run a profitable business, you must figure out how much it costs to make each one of your baked goods. This allows you to price items for the highest profit margin.

It's easy to lose money on a product if you don't know exactly how much it costs to make it. This includes ingredients, labor, packaging, and even cooking time to account for the electricity (or gas) running the oven. Most restaurant managers aim for the cost of serving to be approximately 1/3rd of revenue.

Before you open, call local vendors to price their supplies, and then determine the cost of production. Consider this pricing guide based on information from the Houston Chronicle .

PRICING GUIDE FOR BAKED GOODS

Click through the 10 steps below to calculate your costs.

Track Your Finances

Along with determining costs, you need to decide on a way to keep track of your business finances. One option is to hire a trusted bookkeeper or accountant to free up your time to run the business.

There are also several options available for small business accounting software including Quickbooks, Freshbooks, Wave, Xero, and more.

A detailed business plan is helpful when starting a bakery.

Consider these components when writing your bakery’s business plan:

• Executive Summary : contains the most important points from each of the following categories
• Company Overview : a description of your business
• Market Analysis : includes pertinent information from your market research
• Business Offering : a list of the products you will sell to your customers
• Management : includes business partnerships, number of employees, who will run the various areas
• Marketing Plan : information on how you plan to reach customers, advertise, etc.
• Financial Projections : predictions for the financial success of your business

The Small Business Administration offers this business plan writing guide . We’re also partial to our business plans created by Mike Andes or Brandon Boushy to help you create a bakery business plan.

Is a Bakery a Profitable Business?

Baking can be very profitable if you work hard and provide the best products for customers. Depending on various factors,  bakery owner salaries range from around $17K to $71K per year.

These statistics include tiny home bakeries, so there's potential for earning much more!

With a business plan in place, it's time to create a legal company. Register your business at the federal and state levels and establish a legal structure. It's possible to register online .

Choosing a business structure (Limited Liability Corporation, Sole Proprietorship, Corporation, S Corporation, or Partnership) can be complicated if you're not familiar with the process.

The IRS has extensive resources on business structures, but it’s best to work with an accountant and/or business attorney to maximize your legal and tax benefits.

Typically, a bakery will be set up as a Limited Liability Corporation (LLC) to avoid exposing the owner's personal assets to legal action (like a slip and fall in the bakery).

If you have personal savings available to start your business, that's fantastic! But you may need to borrow a portion of your startup costs until it becomes a viable business.

If you only have around $50,000, but want a larger cushion at $100,000, you may get a business loan. However, you must provide viable financial projections that show your ability to pay back the loan.

As P.D. said,

[su_quote]If you make a good business plan and the lenders buy into that, you can get funding.[/su_quote]

Consider these different options to secure funding for your business, as suggested by the Small Business Association:

Venture Capital Funding

If you can find an angel investor who believes in you and your plan, this type of funding can be effective.

However, it means shared ownership, which many entrepreneurs are not super excited about. But it also lowers risk and prevents borrowing money.

Consider this video we've created about Venture Funding .

Crowdfunding

Another way to avoid a loan is to raise the money from many people who invest a small amount of money.

Typically, investors get something in return, such as advertising credit, or gifts and other perks. Several online platforms host crowdfunding campaigns.

Business Loan

The amount and interest rate on business loans varies significantly. You can try for a loan through a local bank, as well as through the government-assisted loan programs with the SBA.

Securing this type of funding requires a business plan, financial projections (usually for 5 years), and expense sheets.

Friends and Family

If your friends or family are interested in your project, you may find you can borrow the funds from someone you know.

How to Start a Bakery Business With No Money

If you want to start your bakery on a shoestring budget, that's great! As mentioned above, you can save a ton of money by starting in your own home and by selling to friends and family.

Another option, if you have good credit, is to leverage a zero-interest rate period on a credit card. It's risky but possible to use the zero-interest period to start your business and then pay the card off before the interest kicks in.

Note : Have a solid business plan in place if you're thinking about this option.

When you invest in starting a bakery, make sure customers can find you!

P.D.'s strategy for getting new customers is based on Social Media Marketing , like these recommendations from Neil Patel. He outsources a marketing company to run his Instagram, Facebook, and other profiles.

They focus on letting customers know about new product releases and any interesting news.

[su_quote]These days everyone is on their phone![/su_quote]

You can get your name out there and draw in customers in a variety of ways, including these options:

Traditional Advertising

This includes print ads, billboards, radio, flyers, and going door-to-door.

Social Media

Initially free to use, you can also purchase additional social media ad options. It's possible to outsource your social media marketing by hiring a professional marketer. Find a professional to help with this through Fiverr or Upwork .

Press Releases

Besides social media, don't forget about print and online newspapers. Depending on your location, your local paper may print your bakery opening as business news when you present it to them as a press release.

Consider placing coupon ads in a local paper. To offer bounce-back coupons (used on a return visit), use an online tool like Canva to design them, then have them printed locally. Many bakeries or coffee shops have loyalty cards designed and printed this way.

Is It Hard to Open a Bakery?

Opening a bakery is hard work, but it is worth it! According to P.D.:

[su_quote]There's nothing you can't learn if you have the right mindset and the right attitude. You need to be open-minded. Keep the right mindset. Stay the course, do what you have to do, keep at it. Eventually, things smooth out and you come out on top.[/su_quote]

You've found your space and secured funding. Now you must prepare your kitchen and dining area to bake and serve the best products.

What Equipment Do I Need to Start a Bakery?

Reliable equipment is essential for any commercial kitchen. Purchase your equipment online or locally. Your bakery equipment list for your commercial kitchen should include:

• Ovens – Commercial-grade ovens can be extremely pricey but are a vital piece of equipment for your business. P.D. says his ovens cost around $100K each brand new. Many bakeries choose to lease larger equipment to save on startup costs.
• Mixers – Large capacity stand mixers, with special dough hooks for kneading bread.
• Refrigeration – For storing your perishable ingredients such as milk and cream.
• Tables/Workspace – Depending on the type of baking, tables may be necessary for decorating cakes or for packaging products.
• Storage – A place to store your ingredients prior to use, and for storage of packaging, or other items. Carts with shelves may be useful for cooling baked goods fresh out of the oven.
• Dining Area – Tables, chairs, and a counter for the retail area are all important aspects of your bakery.
• POS System – One critical point for any business is how to let your customers pay. A Point-of-Sale system is vital to your business. When you can choose one that links well with your accounting software (mentioned above), it's even better!

For a retail or wholesale bakery business, qualified employees working in the kitchen are the backbone of the business. Bakeries open very early, and it is essential to have reliable employees willing to bake bread at four in the morning.

If you're running a cafe-bakery, counter help and possibly servers are a necessity. They act as the front line for providing great customer service that ensures return business.

Here are some sites where you can post jobs and find qualified candidates:

• ZipRecruiter

Finding top talent in food service is no simple task, so go beyond traditional job hiring sites like Indeed. Instead, reach out to local culinary schools and food programs (community colleges) to secure reliable talent with interest in the industry.

According to P.D., in taking care of your staff, you don't want to skimp:

[su_quote]I tell them to make sure that your people are taken care of, and the rest will be fine. You only have so many hours in a day. You'll burn out if you're not careful. It's not worth stressing yourself out.[/su_quote]

Once you've started baking, pursue continuous growth for your business. That means setting goals and making plans to find and keep customers.

P.D. says you should ask yourself a simple question:

[su_quote]I want to grow 10% every year. What do I have to do?[/su_quote]

Here are some other questions to ponder on growth:

• What should I do differently or better to gain new customers and keep existing ones?
• Is there room to add new products?
• Would a customer loyalty program help our bottom line?
• What does our marketing data show?

Brainstorm and research ways to please your customers and then execute the best ideas.

According to P.D., wholesale products are one of the best ways to grow a bakery business. They provide large profit margins without a large investment.

It may mean running the ovens a bit longer or arranging for more deliveries, but it's a steady way to increase revenue without a lot more work.

P.D. says that with samples in hand, cold call restaurants with whom you want to do business and let them try your products. If your product is of outstanding quality, it should sell itself. But you must get people to try it.

[su_quote]I would throw a bunch of samples in my car and just go to a bunch of different restaurants and drop off samples and ask them. Look at their menu, whether they're serving hamburgers or if they're a sub shop. Give them hamburger buns or baguettes for their sandwiches. And when they like the product, they call and they're ready to order.[/su_quote]

P.D. stated that one of the biggest mistakes in opening a bakery is not finding and keeping the best employees. With 36 full and part-time staff, P.D. offers this insight:

[su_quote]Employees are what you need for your business. You can't be everywhere, so you have to put trust in your people and take care of them, then they'll take care of your business.[/su_quote]

If you can already smell the heavenly croissants baking in your oven, then it might be time to get started with these steps on how to start a bakery! Follow our guide to overcome many of the hurdles beginning entrepreneurs and bakers face. 

With planning and perseverance, you'll be serving customers and raking in dough (get it?) like P.D.

If you were thinking about starting a bakery, would you start a home bakery, wholesale, or food truck bakery? Let us know in the comments below!

25 Side Business Ideas (for 2024)

Are you wondering how to make money on the side? We have 25 good side business ideas for your extra time.

We spend thousands of hours annually interviewing small business owners to learn the recipes they used to start and grow a business. We’ve put together a list of businesses to work on the side. Get ready to find a business idea you can start.

Good ideas for side business entrepreneurs are available in every field. You’ll want to consider various ideas for making extra money before choosing one. Check out some of the good business ideas below.

5 Top Side Business Ideas with Low Startup Costs

5 lucrative side hustles to make extra money, 5 small side business ideas, 5 second income ideas: good ways to make money on the side, 5 passive extra income ideas.

Keep reading for ideas on how to make extra money on the side.

All revenue figures are using IBIS World data by taking the industry revenue divided by the estimated businesses. Your performance will vary based on the time and business strategies you use. 

#1. Cleaning Business

• Average Annual Revenue: $74K+ • Average Profit Margins: 6.7% • Startup Costs: $500-$30K • Time To Revenue: 1-6 months • Annual Market Growth Rate: 1.2% • Best for: Self-motivated, independent, and detail-oriented entrepreneurs

Have about $1,000 saved up? Look no further than a cleaning side hustle. When it comes to success rate and ease of getting started with no experience, it blows most side hustles out of the water. The best part is that how much you make and how much time you spend are completely up to you.

Only have a couple of hours on the weekend? Book some gigs and make an extra income. Made your weekend money and feel ready to turn cleaning into a business you work on and not in ? Do what our friend Chris Mondragon did…

He went from earning $6,053 in his first month as a cleaning business owner to over $1.5M in annual revenue. Chris made a free masterclass that takes you through everything you need to get started. We recommend giving it a watch before starting your cleaning side hustle.

Check out our interview with Chris below:

#2. Lawn Care or Landscaping Business

• Average Annual Revenue: $272K+ • Average Profit Margins: 8.7% • Startup Costs: $2K-$10K • Time To Revenue: 1-3 months • Annual Market Growth Rate: 8.1 • Best for: Designers, gardeners, people who like physical work and working outside

A landscaping business is among the best “on the side” business ideas that you can start with almost no money. Trevor Kokenge invested $300 to start Plan-It Vision and runs it out of a small shed (hear how he did it in this interview ).

Granted, Trevor has a degree in landscape architecture, but you don’t need this training to make good money in lawn care. All it takes is some basic equipment, an eye for detail, strong communication skills, and a willingness to work hard. 

Since landscaping tends to be a seasonal business, this is also an ideal side hustle idea for those who have more time in the summers, like students or teachers looking to start a side business.

#3. Freelance Web Design

• Average Annual Revenue: $239K+ • Average Profit Margins: 5.3% • Startup Cost: $100-$1K • Time To Revenue: 1-3 months • Annual Market Growth Rate: 1.4% • Best for: Designers, programmers, or anyone with website-building skills

As a freelance website designer or developer, you can work on your own schedule and only take the jobs that you have time for. Because of this, it’s a top side business idea for people with design or coding skills who have full-time jobs.

The trickiest part of starting a web design business is often landing your first few clients. Maintaining your own website to show your skills can help build customer trust. 

Since you can work from home and don’t need expensive equipment, web design is a low-cost business idea. You also don’t need coding skills to start this side hustle if you’re skilled at using platforms like WordPress or Wix.

If you want to make more money, you can scale your side hustle into a very lucrative business by taking on more clients and projects, or even hiring a team to grow your business into an agency.

Check out this video by Flux Academy . They have a ton of videos about web design.

#4. Handyman Business 

• Average Annual Revenue: $204K+ • Average Profit Margins: 5.4% • Startup Costs: $500-$5K • Time To Revenue: 3+ months • Annual Market Growth Rate: 0.7% • Best for: Fixers and repair experts, entrepreneurs who like working with their hands

A handyman takes care of the repairs and odd jobs that their customers don’t have the time or skills to do themselves. Since you’re not doing full construction, you don’t need a license to start your own business (until you make over $600)—just be handy.

That said, you can charge more if you do have training in plumbing or electrical systems, so it’s a great side business idea for construction workers and skilled tradesmen.

Being a handyman proved a very profitable business idea for Caleb Ingraham. He started North Seattle Handyman when he realized the niche market with high demand. See how he got started:

In five years, Caleb has scaled his business to $25,000 a month, working six days a week. This is a side business idea with big growth potential. If you want to make money on the side, you can keep a smaller client list and work just a few hours a week.

#5. Mobile Car Wash or Car Detailing

• Average Annual Revenue: $73K+ • Average Profit Margins: 16.1% • Startup Cost: $500-$5K • Time To Revenue: 3+ months • Annual Market Growth Rate: 1.0% • Best for: Car enthusiasts, detail-oriented entrepreneurs, and those who enjoy working with their hands

Mobile detailing is a popular side business to earn extra cash because it hits the sweet spot of high demand and has a low barrier to entry. Making your business mobile is convenient for customers and cuts down on overhead costs. 

Mobile detailing small business owners can set their own schedules. That said, most customers will want the service in the evenings and on weekends when their cars aren’t in use. This is perfect for someone with a 9-to-5 day job who wants a side income.

Kevin Lieu sold insurance before he started his mobile detailing side hustle. Now detailing is his main job, earning him upward of $10,000 every month. 

This is a very lucrative business with a lot of growth potential. You can hear how Kevin started with just $500 in this interview :

Keep reading to find other ideas about how to make money on the side.

#6. Dropshipping

• Average Annual Revenue: $36K-$50K • Average Profit Margins: 5% • Startup Cost: $150-$500 • Time To Revenue: 1-3 months • Annual Market Growth Rate: 25% • Best for: Those with marketing and eCommerce skills

Dropshipping is one of the cheapest and easiest ways to earn money with an online business. In this business model, you create and online store and market products to customers, and someone else takes care of storing, managing, and shipping inventory.

A dropshipping business is one of the top side hustle ideas for people with a large online or social media presence and strong marketing skills. 

The most difficult part of starting a new business is connecting with customers, and it’s a fast way to earn money if you can do that well. 

Heather Johnson started her dropshipping business as a side hustle when her hours were cut during the pandemic. She grew her side business while working a day job in healthcare, and it now brings in more than $15,000 a month in revenue.

#7. Consulting Business

• Average Annual Revenue: $363K • Average Profit Margins: 6.4% • Startup Costs: $100K-$3.5M • Time To Revenue: 6-18 months • Annual Market Growth Rate: 2.2% • Best for: Teachers and educators, people with niche expertise and experience

Consulting is among the best side job ideas for marketers, leadership experts, or anyone with in-demand skills and knowledge who wants to make extra income. 

As a consultant, you help other entrepreneurs or existing businesses streamline their operations, increase their revenue, or otherwise improve their systems and processes. 

Starting a side business as a consultant can help you advance your career path in your full-time job, too. Establish yourself as an expert at the same time as you’re making money on the side. 

Of course, consulting can also be a lucrative business on its own.

Ryan Gromfin makes $35,000 a month as a restaurant consultant. His business idea lets him make money from his expertise in food service without the stress and long hours of managing restaurants. Hear how he started in this podcast interview :

Success as a small business that offers consulting starts by identifying your niche market. Among the most profitable consulting side hustles are recruiting and hiring, social media and marketing, leadership and management, IT and technology, and business strategy. Read our guide on business consulting to learn more.

#8. Vending Machine Business

• Average Annual Revenue: $182K+ • Average Profit Margins: 4.3% • Startup Cost: $2K-$10K • Time To Revenue: 3+ months • Annual Market Growth Rate: 0.5% • Best for: Those who like to tinker with machines and understand mechanics and those who enjoy driving

Many side hustles demand almost as much energy as a second full-time job. If you’re looking for the type of side hustle where you can put in concentrated effort now and reap the rewards, passively , for years to come, a vending business is it.

If done right, you set up your machine once and let it run itself, just a few hours of maintenance a month required. One of our guests, Adam Hill, has done just that. He’s pulling in six figures working two days a week.

Intrigued? We were, too! We pestered Adam until he agreed to spill the beans and take us behind the scenes of his vending machine empire. The best part? UpFlip readers get FREE access to his vending masterclass .

You can hear Adam’s story in this interview :

#9. Personal Trainer

• Average Annual Revenue: $16K+ • Average Profit Margins: 10.9% • Startup Costs: $500-$5K • Time To Revenue: 1-6 months • Annual Market Growth Rate: 0.6% • Best for: Fitness buffs, exercise experts, people who excel at motivating others

If you spend most of your free time at the gym, personal training is among the best side business ideas to start. A personal trainer helps other people meet their fitness goals with guided exercise, diet advice, and other wellness insights. 

There are many ways to start a side hustle as a personal trainer. You can work with people in their homes, reserve space in a gym or community center, or make it an online business with YouTube videos or Zoom sessions.

The low costs to start and high demand make personal training the right side business idea for exercise enthusiasts who want to be their own bosses. 

You can also tailor your services to your interests by choosing a niche market like senior fitness, mommy and baby exercise, or weight loss. 

Fitness training can be a very lucrative business. Just ask Bedros Keuilian, whose Fit Body Boot Camp is a key part of his $200-million-a-year empire:

#10. Food Truck

• Average Annual Revenue: $41,040 • Average Profit Margins: 6.4% • Startup Cost: $1K-$100K • Time To Revenue: 3+ months • Annual Market Growth Rate: 1.2% • Best for: Foodies, chefs, cooks, bakers, and other food service veterans

For food experts seeking profitable side business ideas, food trucks are one of the best ways to make money on the side. 

Unlike a brick-and-mortar restaurant, you don’t need to maintain consistent hours. Instead, you can open the truck when it’s most likely to make money and meet customers where they are. 

Now, a food truck does have higher upfront costs than other side hustle ideas, and while you can run it from home, you will need somewhere to park it. 

It’s still significantly cheaper than starting a cafe or restaurant, though, and is a top side business for those who want to break into the food industry.

Kyle Gourlie started the Vet Chef in 2016 and, by 2020, was making more than $400,000 a year, so this is another side business idea you can take full-time if you want to grow. You can hear Kyle’s story in this interview :

#11. Photography Business

• Average Annual Revenue: $50K • Average Profit Margins: 7.3% • Startup Costs: $1K-$10K • Time To Revenue: 1-6 months • Annual Market Growth Rate: 0.3% • Best for: Visual artists and photographers, outgoing and social entrepreneurs

A successful wedding photography business can be very lucrative, and it’s just one great side business idea for those with photography skills. 

See how Korbin and Whitney Korzan started their business, Mile High Productions, which has worked with big-name clients like the HGTV show House Hunters .

Other photography business ideas include a portrait studio or collaborating with other local businesses to take marketing and promotional photos. 

Photographer Katelyn James set out to make $24,000 a month and has now scaled to more than $2 million every year. You can hear how she did it in this podcast:

  #12. Tutoring and Test Prep

• Average Annual Revenue: $18K+ • Average Profit Margins: 13.10% • Startup Cost: $100-$1K • Time To Revenue: 1-3 months • Annual Market Growth Rate: 8.5% • Best for: Teachers, educators, professors, and tutors

Tutoring is among the easiest small businesses to start because all you need is knowledge or expertise in a given subject area. Keep your client list small to make extra cash or scale into a full-time job by starting an independent tutoring agency.

You can expand your side business income and build your authority with an online course, so there are many ways to make money as a tutor. There are also lots of online marketplaces to find students, including TutorMe , Skooli , and Wyzant .

#13. Event Planning or Wedding Planning Business

• Average Annual Revenue: $93K+ • Average Profit Margins: 13.8% • Startup Costs: $500-$5K • Time To Revenue: 3+ months • Annual Market Growth Rate:  -0.90% • Best for: Strong networkers, great party planners, outgoing and social entrepreneurs

A wedding planning business is among the best small business ideas if you want to make money using your logistics and communication skills. You’ll need those skills to get started, though having connections with other local businesses can help you grow your side business faster.

Check out the event planning business video by Elevate Experiences below.

#14. Dog Walking Business

• Average Annual Revenue: $34K+ • Average Profit Margins: 16% • Startup Costs: $500-$5K • Time To Revenue: 3+ months • Annual Market Growth Rate: 1.7% • Best for: Pet owners, animal lovers, those who like working outdoors

Dog owners and pet lovers can turn their passion into a side business for extra cash by walking people’s dogs while they’re at work or on vacation. 

This can be an especially good small business idea for people who live in urban areas and can maximize their revenue by walking multiple dogs at once.

Check out our blog on pet care businesses if you’re interested in this business or the next one.

#15. Pet Sitting Business

Similar to dog walking, a side business as a pet sitter lets you make money for hanging out with animals, and you can even offer both services to make extra cash.

Both dog walking and pet sitting are in the same NAICS code , so business owners will see similar profit margins.

Pet sitters feed and care for animals while their owners are away, usually in the owner’s home. 

While some jobs may ask you to stay with the animal for multiple hours per day, you can often do other things while you’re there, making it ideal for students or freelancers looking to make extra cash on the side

#16. Sell Products Online

• Average Annual Revenue: $60K-$120K • Average Profit Margins: 5-15% • Startup Cost: $100-$10K • Time To Revenue: 30-90 days • Annual Market Growth Rate: -9.3% • Best for: Thrifters, collectors, hobbyists and craftsmen

Opening your own online store is a great way to start a side business selling products without the expense or time commitment of a storefront.

If you’re creative or crafty, you can sell things you make yourself. That’s what Jazmin Richards did when she started Blk Sunflower, and she made $300,000 in 18 months selling handmade candles:

If you’d rather buy things than make them, you can sell products you find for cheap in thrift stores or on Facebook Marketplace. Mike Wilson makes upward of $30,000 a month reselling on eBay. Hear how he got started in this podcast interview:

#17. Be a Virtual Assistant 

• Average Annual Revenue: $35K-$50K • Average Profit Margins: 10.5% • Startup Costs: $100-$200 • Time To Revenue: 1-3 months • Annual Market Growth Rate: 1.9% • Best for: Outgoing and social entrepreneurs, those with strong scheduling, time management, and problem-solving skills

A virtual assistant takes care of necessary administrative tasks for busy professionals. This can include things like making travel plans and dinner reservations, replying to emails, or managing their social media channels.

If being a virtual assistant sounds like the side business idea for you, you can find work on freelancer platforms like Upwork or 24/7 Virtual Assistant .

#18. Freelance Writing or Editing

• Average Annual Revenue: $46K • Average Profit Margins: 14.6% • Startup Cost: $100-$200 • Time To Revenue: 1 month to 3 years • Annual Market Growth Rate: -1.5% • Best for: Creative entrepreneurs with strong communication skills

Writing and editing work is often independent work, meaning you can make extra cash in your free time on your own schedule.

There’s also a wide variety of work you can write or edit, from social media and blog posts to news and magazine articles, advertising copy, or novels and short stories. Writers and editors with niche skills and knowledge can also get work like technical or medical writing and editing.

You can find writing and editing jobs on freelancer platforms like Fiverr , Upwork , or the Freelance Writing job board, just to name a few options.

#19. Be a Delivery or Rideshare Driver

• Average Annual Revenue: $131K • Average Profit Margins: 3.6% • Startup Cost: $100-$9.5K • Time To Revenue: 3+ months • Annual Market Growth Rate: 6.7% • Best for: Drivers, those who like to socialize

If you like meeting new people, being a rideshare driver through Uber or Lyft is a fun way to earn extra cash. More introverted folks can deliver food or groceries instead through platforms like Uber Eats or DoorDash .

The flexibility of delivery and rideshare driving is great, too. Some people do it as their full-time job, but when and how often you work is completely up to you.

#20. Be an Airbnb Host

• Average Annual Revenue: $201K • Average Profit Margins: 8.1% • Startup Cost: $1K-$3.5M • Time To Revenue: 6-18 months • Annual Market Growth Rate: 2.2% • Best for: Homeowners, frequent travelers, people with hospitality experience

If you have a spare room in your home or are often away from home for business or vacations, you can turn that space into a side business by listing it on Airbnb. 

Where you live will affect how much you can make with this side business idea. You can charge more if you live near a tourist attraction or in an urban area that gets lots of visitors. 

Check out how Sid and Eva started their business, Nicasa, which grew to 22 properties that generate a lucrative revenue of $400,000 a month.

[su_youtube url="https://www.youtube.com/watch?v=6m-MosXlpOE&ab_channel=UpFlip"]

#21. Make and Sell Online Courses

• Average Annual Revenue: $234K+ • Average Profit Margins: 5.8% • Startup Cost: $100-$1K • Time To Revenue: 1-3 months • Annual Market Growth Rate: 1.1% • Best for: People with niche or in-demand skills and expertise

You don’t need technical knowledge to make and sell online courses, thanks to platforms like Kajabi and Udemy . All you need to start this side business idea is knowledge or skills others want to learn.

Online courses do take some time and effort to make. Once they’re launched, though, they’re great ways to make side money without an ongoing time commitment.

You don’t need to be an expert in your subject area, either. Jacques Hopkins played piano as a hobby before starting his online course, Piano in 21 Days, and now it brings in almost $500,000 a year. Hear more from Jacques in this interview:

#22. Affiliate Marketing

• Average Annual Revenue: $60K-$160K • Average Profit Margins: 8% • Startup Cost: $100-$2K • Time To Revenue: 1-3 months • Annual Market Growth Rate: 10.5% • Best for: Bloggers, YouTubers, those with a large social media presence

With affiliate marketing, you promote products or services and get a commission each time someone buys through your platforms. You don’t need your own online store—just a way to reach potential customers. 

If you have a large social media or online presence, affiliate marketing is among the best side business ideas for making extra money with a minimal time investment. You can hear how Matt Diggity started a $400,000-a-month affiliate marketing business in this podcast interview:

#23. Be a Landlord or Property Manager 

• Average Annual Revenue: $372K+ • Average Profit Margins: 10.1% • Startup Cost: $100K-$3.5M • Time To Revenue: 6-18 months • Annual Market Growth Rate: 1.3% • Best for: Those who are interested in real estate investing, home repair, and home maintenance

People will always need places to live, and local businesses need storefronts. If you own property, you can make extra money renting it out to people who need it.

Getting the property is often the hardest part of starting a side business as a landlord. Thach Nguyen has a winning formula he used to start his own business in real estate from scratch, and you can hear it in this interview :

Emma Powell’s real estate side hustle started when her family moved. She was a real estate photographer but realized real estate investing is a better supplemental income. 

Within 18 months, Powell Ventures acquired almost 100 units and gave Emma more time to homeschool her kids. The company now has over 400 units and is approaching 100% passive income.

#24. Print-on-Demand (POD) eCommerce Store

• Average Annual Revenue: $1.6M • Average Profit Margins: 4.3% • Startup Cost: $500-$250K • Time To Revenue: 3+ months • Annual Market Growth Rate: -5.6% • Best for: Visual artists and graphic designers, people with strong marketing skills

There’s a big market for customized products, and you can tap into that when you start a side business as a print-on-demand online store.

While you will need your own website or eCommerce storefront, you don’t need to worry about inventory or shipping, making this a top home business idea, too. 

A POD store is easy to manage alongside a day job. Ryan Hogue had two jobs when he started his Amazon POD store. He shares his Ryan’s Method passive income plan in this podcast interview:

#25. Sell Domain Names

• Average Annual Revenue: $1.5M • Average Profit Margins: 4.5% • Startup Cost: $500-$5K • Time To Revenue: 1-3 months • Annual Market Growth Rate: 3.4% • Best for: Analytical entrepreneurs, data and internet experts, smart investors

This is another side hustle that’s easy to work around a day job. It’s similar to real estate investing but in the digital realm. You buy domain names at a low price then resell them for a profit to people or businesses that want them. 

While you can definitely make extra cash selling domain names, that profit isn’t necessarily consistent. Understanding keywords and what makes a domain name valuable can help you to maximize your revenue. 

You can also make money from the websites while you own them. Ron Stefanski makes an average of $30,000 a month from the seven sites he owns. You can hear his advice for growing website traffic and revenue in this podcast interview:

Come Up With Your Own Business Idea

As you can see, there are a lot of ways to make extra money. You just have to consider the time requirements and startup costs, then take the steps to make it happen.

Did we help you figure out how to make more money on the side? Which business idea are you considering?

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How to Write a Business Plan, Step by Step

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What is a business plan?

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

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

ZenBusiness

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

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

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

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

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

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

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

Your business’s registered name.

Address of your business location .

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

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

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

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

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

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

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

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

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

You should include the following:

An explanation of how your product or service works.

The pricing model for your product or service.

The typical customers you serve.

Your supply chain and order fulfillment strategy.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

NerdWallet’s picks for setting up your business finances:

The best business checking accounts .

The best business credit cards .

The best accounting software .

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

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

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

Licenses and permits.

Equipment leases.

Bank statements.

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

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

How much do you need?

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

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

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

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

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

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

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Starting a Business | How To

How to Write a Business Plan in 7 Steps

Published February 2, 2024

Published Feb 2, 2024

WRITTEN BY: Mary King

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This article is part of a larger series on Starting a Business .

Starting A Business?

Step 1: Gather Your Information

Step 2: outline your business plan, step 3: write each section, step 4: organize your appendix, step 5: add final details, step 6: add a table of contents, step 7: get feedback, bottom line.

A solid business plan helps you forecast your future business and is a critical tool for raising money or attracting key employees or business partners. A business plan is also an opportunity to show why and how your business will become a success. Learning how to write a business plan successfully requires planning ahead and conducting financial and market research.

How to write a business plan step-by-step:

• Gather your information
• Outline your business plan
• Write each section
• Organize your appendix
• Add final details
• Add a table of contents
• Get feedback.

Your first step is to get organized by gathering all your relevant business information. This will save you time completing the various sections of your business plan. At a minimum, you’ll want to have the following handy:

• Business name, contact information, and address
• Owner(s) names, contact information, and addresses
• Names, contact information, and addresses of any business partners (if you will be working with partners)
• Resume and relevant work history for yourself and any key partners or employees
• Any significant sales, commerce, traffic, and financial data and forecasts
• Customer data (if applicable)
• Any significant data about your nearest competitors’ commerce, traffic, or finances

Now it’s time to outline your business plan, making note of the sections you need to include and what data you want to include in each section. You can create an outline on your own or use a business plan template to help. Whichever route you choose, it is common to include these sections in your business plan outline:

• Introduction
• Executive summary
• Company overview
• Products and services
• Market and industry analysis
• Marketing strategy
• Sales strategy
• Management and organization
• Financial data, analysis, and forecasts

Connect the data you gathered in step one to specific sections of your outline. Make a note if you need to convert some information into charts or images to make them more compelling for potential investors. For example, you’ll want to include relevant work history in your management section and convert your sales forecasts into charts for your financial data section.

Now it’s time to write your business plan. Attack this one section at a time, adding the relevant data as you go.

Executive Summary

The executive summary is an overview of the business plan and should ideally be one, but no more than two, pages in length. Some investors actually only request the executive summary. So make it an informative, persuasive, and concise version of your business plan.

It can be easier to write the executive summary last, after the other sections. Then you can more clearly understand which sections of your business plan are the most important to highlight in the executive summary.

When learning how to write an executive summary for a business plan, remember to include the following:

• Business objectives : Your business objectives are specific and attainable goals for your business. Create at least four business objectives organized by bullet point. If you’re not sure how to phrase your objectives, read our SMART goals examples to understand how to do so.
• Mission statement: The mission statement discusses the aim, purpose, and values of your business. It’s typically a short statement from one sentence to several sentences in length. You may find that your mission statement evolves as your business grows. Learn more on how to write your mission statement in our guide.

Consider also including the following in your executive summary:

• Business description : Similar to a 30-second pitch, describing your business and what makes it unique
• Products and services : The type of products and services you’re providing and their costs
• Competitors : Your biggest competitors and why your business will succeed despite them
• Management and organization : The owners’ backgrounds and how they will help the business succeed; management structure within the business
• Business location (or facility) : Location benefits and the surrounding area
• Target market and ideal customer : Who your ideal customers are and why they’re going to purchase your products or services
• Financial data and projections : Provide brief financial data and projections relevant to your business, such as startup costs, at what month the business will be profitable, and forecasted sales data
• Financing needed : Explanation of the startup funding sources and the amount of financing being requested

The bullets above can be combined into several paragraphs. You can add or remove sections based on your business’ needs. For example, if you don’t have a physical location, you might remove that piece of information. Or, if a web presence is crucial to your success, include two to three sentences about your online strategy .

Company Overview

The company overview (sometimes also called a “business overview”) section highlights your company successes (if you’re already in business) or why it will be successful (if you’re a startup). In the opening paragraph or paragraphs, provide information like location, owners, hours of operation, products, and services.

How you structure this section depends on whether you’re a startup or an established business. A startup will discuss the general expenses and steps needed to open the business, such as permits, build-outs, rent, and marketing. An established business will briefly discuss the company’s financial performance over the past three years.

If you’re trying to raise capital from an investor or bank, include a chart listing the items your business will acquire with the capital. For example, if you’re purchasing equipment with the additional funding, list each piece of equipment and the associated cost. At the bottom of the chart, show the total of all expenses, which should be the requested amount of funding.

This startup cost table for a pizza restaurant separates startup expenses from startup assets.

Your company overview should cover the following:

• Location & Facilities : If you have a brick-and-mortar location or a facility, like a warehouse, describe it here. Detail the benefits of your location and the surrounding areas. Write about square footage, leases or ownership, the surrounding area, and a brief description of the population.
• Ownership : Briefly mention the company ownership team and their backgrounds. Show why these owners are likely to be successful in operating this business by providing certain details, such as each owner’s industry experience, previous employers, education, and awards. This will be discussed more in-depth in the management and organization section below.
• Competitive advantage : Ideally, your competitive advantage is what your business can do that your competitors cannot. It’s the one big differentiator that will make your company successful. Many investors are looking for specific competitive advantages, such as patents, proprietary tech, data, and industry relationships. If you don’t have these, describe the top aspect in which your business will do better than competitors, such as quality of products, quality of services, relationships with vendors, or marketing strategy.

Products & Services

The products and services section is the most flexible section because its structure depends on what your business sells. Regardless of what you’re selling, include a description of your business model to explain how your business makes money. Also include future products or services your business could provide one, two, or five years down the road.

List and describe all physical and digital products you plan to sell, as well as any services the business provides. Services don’t necessarily have to be sold for a cost—your business might offer entertainment, like live music or bar games as a free service.

Whether you’re selling products, services, or both, it’s important to discuss fulfillment, or how each will be delivered. If you make or sell physical products, describe how products will be sold, assembled, packed, and shipped. If your business is service-based, describe how a service, such as a window installation, will be ordered and completed. Where will the glass be purchased from and acquired, how will customers place orders, and how will the window be installed?

Market & Industry Analysis

The market and industry analysis section is where you analyze potential customers and the forces that influence your industry. This section is where you make the case as to why your business should succeed, ideally backed by data. You’ll want to do a deep dive into your competitors and discuss their challenges and successes. Learn more about sales targeting to improve how you approach your sales strategy.

Market Segmentation

Market segmentation, or your target market, consists of the customers who are most likely to purchase your products or services. Describe these groups of customers based on demographics, including attributes like age, income, location, and buying habits. Additionally, if you’ll be operating with a business-to-business (B2B) model, use characteristics to describe the ideal businesses to which you’ll sell.

Once your target market is segmented into groups, use market research data to show that those customers are physically located near your business (or are likely to do business with you if you’re online). If you’re opening a daycare, for example, you’ll want to show the data on how many families are in a certain mile radius around your business. You can obtain this kind of data from a free resource, like the U.S. Census and ReferenceUSA .

Once you have at least three segments, briefly outline the strategy you’ll use to reach them. Most likely it will be a combination of marketing, pricing, networking, and sales.

Learn the best approach to product pricing in our guide.

Industry Analysis

Take a look at your business’s industry and explain why it’s a great idea to start a business in that niche. If you’re in a growing industry, a bank is more likely to lend your business capital because it’s predicted to be in demand and have additional customers. Learn about how to find a niche market .

Find industry statistics from a free tool, like the Bureau of Labor Statistics , or a paid tool like the Hoovers Industry Research , which provides professionally curated reports for over 1,000 industries.

Competitor Research

Wrap up the market and industry analysis section by analyzing at least five competitors within a five-mile radius (expand the radius, if needed). Create a table with the five competitors and mention their distance from your business (if applicable), along with their challenges, and successes.

During your analysis, you’ll want to frame their challenges as something you can improve upon. Persuade your reader that your business will provide superior products and services than the competitors.

Marketing Strategy & Implementation Summary

In the opening paragraphs of your marketing strategy and implementation summary, give an overview of the subsections below.

Include any industry trends you may take advantage of. If applicable, include the advertising strategy and budget, stating specific channels. Mention who in the business will be responsible for overseeing the marketing.

Include any platforms and tools the business will use, like your website, social media, email marketing, and video. If you’re hiring a company to do any online work, like creating a website or managing social media, briefly describe them and the overall cost (you can elaborate more on costs in the financial data section ).

Don’t forget to include a subsection for your traditional marketing plan. Traditional marketing encompasses anything not online, such as business cards, flyers, local media, direct mail, magazine advertising, and signage.

Sales Strategy

If sales is an important component of your business, include a section about your sales strategy. Describe the role of the salesperson (or persons), strategies they’ll use to close the deal with clients, lead follow-up procedures, and networking they’ll attend. Also, list any training your sales staff will attend.

Sales Forecast Table

A sales forecast table gives a high-level summary of where you expect your sales and expenses to occur for each of the next three years in business. In the paragraph before the table, state where you expect growth to come from and include a growth percentage rate. The annual sales forecast chart will be broken down further in the financial projections section below.

The annual sales forecast for this restaurant summarizes sales, cost, and profit for the first three years in business.

Pricing Strategy

In the pricing strategy section, discuss product/service pricing, competitor pricing, sales promotions , and discounts—basically anything related to the pricing of what you sell. You should discuss pricing in relation to product and service quality as well. Consider including an overview of pricing for specific products, e.g., pizza price discounts when ordering a specific number of pizzas for catering.

Milestones in a business plan are typically displayed in a table. They outline important tasks to do before the business opens (or expands, if already in business). For each milestone, include the name, estimated start and completion date, cost, person responsible, and department responsible (or outside company responsible). List at least seven milestones.

Milestones for this commercial photography business include hiring staff and completing marketing campaigns.

Management & Organization Summary

The management and organization summary is an in-depth look at the ownership background and key personnel. This is an important section because many investors say they don’t invest in companies, they invest in people. In this section, make the case why you and your team have the experience and knowledge to make this business a success.

Ownership Background

Discuss the owners’ backgrounds and place an emphasis on why that background will ensure the business succeeds. If you don’t have experience managing a retail business, consider finding a co-owner who does. Typically, banks won’t lend to someone who doesn’t have experience in the type of business they’re trying to open.

Management Team Gaps

If there are any experience or knowledge gaps within the management team, state them. List the consultants or employees you will hire to cover the gaps. Investors who know your industry well may recognize gaps within your business plan, and it’s important to state the gaps without waiting for the investor to bring it up. This makes it appear that you know the industry well.

Personnel Plan

The personnel plan outlines every position within your business for at least the next three years. In the opening paragraph, discuss the roles within the company and who will report to whom. Include a table with at least three years of salary projections for each employee in your business. Include a total salary figure at the bottom. This table may be broken down further into salaries for each month in the financial projections or appendix.

This commercial photography business has the CEO at the same salary every year, with their employees’ salaries increasing year over year.

Financial Data & Analysis

The financial data and analysis section is the most difficult part of a business plan. This section requires you to forecast income and expenses for the next three years. You’ll need a working knowledge of common financial statements, like the profit and loss statement, balance sheet, and cash flow statement.

In the opening paragraphs of the financial data and analysis section, give an overview of the sections below. Discuss the break-even point and the projected profit at the first, second, and third year in business. State the assets and liabilities from the projected balance sheet as well.

If you’re getting a loan from a bank, say how long and from what source the loan will be repaid. One of the main pieces of information bankers want to ascertain from financial forecasting is if they will be paid back and how likely that is to happen.

You might also include the following financial reports:

• Break-even analysis : Break-even is when your business starts to make money. Break-even analysis is where you illustrate the point at which your revenue exceeds expenses and a profit occurs. In this section’s opening paragraph, state your monthly fixed costs and average percent variable costs (cost that changes with output, like labor or cost of goods). In the example below, variable costs increase 8% for every additional dollar made.

The break-even point for this document shredding business is $31,500 in a month.

• Projected profit & loss: The profit and loss table is a month-by-month breakdown of income and expenses (including startup expenses). Typically, you should expect your business to show a profit within the first year of operating and increase in years two and three. Be sure to show income and expenses month-by-month for the first two years in operation. Create a separate chart that shows income and expenses year-by-year for the first three years.
• Projected cash flow : The cash flow section shows your business’s monthly incoming and outgoing cash. It should cover the first two years in business. Mention what you plan to do with excess cash. See how to run a statement cash flow in QuickBooks Online .
• Projected balance sheet: The balance sheet shows the net worth of the business and the financial position of the company on a specific date. It focuses on the assets and liabilities of the business. Ideally, the balance sheet should show that the net worth of your business increases. Prepare a projected year-by-year balance sheet for the first three years.
• Business ratios: Also called financial ratios, these are a way to evaluate business performance. It’s helpful to compare your projected business ratios to the industry standard. Project your business ratios by year for the first three years.

The appendix is where you put information about the business that doesn’t fit in the above categories. What you put here largely depends on the type of business you’re creating. It’s a good idea to put any visual components in the appendix. A restaurant might add an image of the menu and an artist rendering of the interior and exterior, for example.

Consider including the following items in your business plan appendix:

• Artist mock-up of interior
• Building permits
• Equipment documentation
• Incorporation documents
• Leases and agreements
• Letters of recommendation
• Licenses and permits
• Marketing materials
• Media coverage
• Supplier agreements

An appendix isn’t required in a business plan, but it’s highly recommended for additional persuasion. Documents like media coverage, agreements, and equipment documentation show the investor and banker you’re serious about the business. If your appendix is more than 10 pages, consider creating a second table of contents just for the appendix.

Detailed Financial Projections

Put the more detailed projections in the appendix. The financial projections in the previous section is typically a year-by-year breakdown for three years in the future. But many bankers and investors want to see the first two years broken down month-by-month for at least the profit and loss statement, balance sheet, cash flow, and personnel plan.

Typically, you can print out the spreadsheet in smaller font and include it in the appendix. You don’t need to create additional charts for the appendix.

With all of your information organized, now it’s time to add the final details, like cover pages and a nondisclosure agreement (NDA).

• Cover Page: The cover page provides contact information about the business and its owner. The cover page should have the business name and who prepared it, including your name, address, phone number, and email address. Additionally, if the registered company name with the state is different from the business name, you may want to add that as a “company name.”
• Nondisclosure Agreement: An NDA ((also called a confidentiality agreement) is a legal document that safeguards business information. You’d want someone to sign it before reading your business plan if you believe they could use the information to their advantage and your disadvantage, such as to steal your business idea or marketing strategy.

Fit Small Business provides a free non-disclosure agreement.

Once your final details are added, proofread all the sections of your business plan, ensuring that the information is accurate and that all spelling and grammar are correct. If there are any illustrations, projections, or additional information you forgot to include, now is the time to add it.

The final step is adding a table of contents so that bankers and potential investors can easily navigate your business plan. A table of contents lists the sections and subsections of your business plan. All of the headers above (Executive Summary, Business Objectives, Company Overview, Products and Services, and so on) are considered sections of a business plan. You can number the sections for additional organization. For example, 1.0 is the executive summary, 1.1 is the business objectives, and 1.2 is the mission statement.

Editing and formatting can change the pagination of your business plan. So you’ll save yourself work if you finalize the business plan content first, then arrange the table of contents at the end.

Congratulations! You’ve captured your business idea and plan for profitability on paper. Before you send this business plan to loan officers and potential investors, ask friends, family, and other supportive business owners to read it and provide feedback. They may notice typos or other errors that you missed. They may also identify details you can add to make your business plan more persuasive.

Frequently Asked Questions (FAQs) About How to Write a Business Plan

These are the most common questions I hear about writing a business plan.

What needs to be in a business plan?

What you should put in a business plan depends on its purpose and your industry. If you’re seeking funding from a bank or investor, you’re going to need most of the sections above, with a strong focus on your financial projections. If you are using your business plan to attract key employees (like a chef for your restaurant), mock-ups and vendor agreements will be more useful. Think about the information that will help your target reader make a decision about whether to get involved with your business—whether that is a location, a business model, or product idea—and be sure your business plan includes that information.

How do you write a business plan for a startup?

The business plan for a startup is similar to a business plan for an established business. The startup business plan will include startup costs, which will be listed by item and factored into the financial projections. Additionally, since your business hasn’t proven it can be successful yet, you may need additional information about the ownership, business model, market, and industry to convince the reader your business will succeed.

How long does it take to write a business plan?

A simple business plan may only take a couple of hours. However, for the business plan provided with this template, which includes financial projections, it may take over 60 hours to research the income and costs associated with running your business. You also have to format those costs into a chart, because it’s best to showcase the data with easy-to-understand charts.

Is writing a business plan hard?

Creating a business plan for funding from a bank or investor is a detailed process. Unless you have a background in financial statements, the financial projections may be difficult for the average business owner. But you can ask for help; it is common to hire a bookkeeper or accountant to assist you with financial projects to ensure your math is correct. Outside of the projections, most other business plan sections are simple, though you’ll want to give yourself time to make each section persuasive.

Every type of business, whether it’s a side hustle or a multimillion-dollar business, should have a business plan. The industry analysis and market segmentation sections validate your business idea. Researching and forecasting financial projections helps you logically think through income and expenses, which lessens the risk of business failure. Remember to get feedback on your business plan from business employees and associates. If necessary, have them sign an NDA before they review the plan.

About the Author

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Mary King is an expert restaurant and small business contributor at Fit Small Business. With more than a decade of small business experience, Mary has worked with some of the best restaurants in the world, and some of the most forward-thinking hospitality programs in the country. Mary’s firsthand operational experience ranges from independent food trucks to the grand scale of Michelin-starred restaurants, from small trades-based businesses to cutting-edge co-working spaces.

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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.

What Is a Business Plan?

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

Understanding Business Plans

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.

How to Write a Business Plan

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.

Common Elements of a Business Plan

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 Often Should a Business Plan Be Updated?

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.

The Bottom Line

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

By Joe Weller | October 11, 2021

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

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

What Is a Business Plan?

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

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

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

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

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

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

Business Plan Steps

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

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

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

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

Do I Need a Simple or Detailed Plan?

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

How to Choose the Right Plan for Your Business

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

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

Is the Order of Your Business Plan Important?

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

The Difference Between Traditional and Lean Business Plans

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

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

How to Write a Business Plan Step by Step

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

Step 1: Executive Summary

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

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

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

Step 2: Description of Business

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

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

Step 3: Market Analysis

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

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

Step 4: Competitive Analysis

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

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

Step 5: Description of Organizational Management

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

Step 6: Description of Products or Services

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

Questions to answer in this section are as follows:

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

Step 7: Marketing Plan

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

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

Step 8: Sales Plan

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

Start by answering the following questions:

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

Step 9: Funding Details (or Request for Funding)

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

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

Step 10: Financial Projections

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

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

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

Business Plan Template

Download Business Plan Template

Microsoft Excel | Smartsheet

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

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

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

How to Write a Simple Business Plan

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

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

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

Simple Business Plan Template

Download Simple Business Plan Template

Microsoft Excel |  Microsoft Word | Adobe PDF  | Smartsheet

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

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

How to Write a Business Plan for a Lean Startup

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

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

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

Lean Business Plan Template for Startups

Download Lean Business Plan Template for Startups

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

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

How to Write a Business Plan for a Loan

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

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

Download free financial templates to support your business plan.

Tips for Writing a Business Plan

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

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

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

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

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

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

Resources for Writing a Business Plan

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

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

How a Business Plan Helps to Grow Your Business

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

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

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What Are the 4 Important Parts of a Business Plan?

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How to prepare business plans, what are the components of a good business plan.

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• How to Make a Business Plan for Running a Dog Kennel

When you’re starting a small business, a sound business plan is a critical element you need to secure funding and develop your operational and marketing tactics. While there are several different sections within a business plan, it’s critical to focus on the most important ones so that you can guide your business where you want it to go.

The four most important sections of a business plan include your unique value proposition, details about your management team, your market analysis and your financial projections.

The 4 Most Important Elements of a Business Plan

According to the U.S. Small Business Administration , a business plan is like a GPS for your new venture. Without it, you can often feel lost or confused. Taking time to write out a solid business plan helps to cement your ideas and fine tune your tactics. This is a good exercise to do even if you don’t need to get funding for your business. A business plan helps entrepreneurs think through their ideas carefully, and provides the next steps they need to take to succeed.

When you’re writing a business plan, it’s important to consider your audience. In many cases, this includes potential investors, partners or financial institutions. They want to understand why your business is posed to succeed and why you are the person that’s going to get it there. As a result, there are four key areas you need to focus on in your business plan, in addition to the rest of its contents:

• The unique value proposition of your business
• The experience, education and successes of your management team
• A detailed market analysis
• A realistic financial projection

Anyone who is looking at your business plan will pay special attention to these four key areas because they summarize your plan for success.

Describe Your Unique Value Proposition

Directly after your executive summary, you need to include a section in your business plan where you describe your company and the products or services you sell. This section should include details on your business structure, legal form and whether you need any special licenses or permits. This practical information is key, according to Entrepreneur , because investors need to see that you have the logistical details in place.

This section is a key element of your business plan because you have the opportunity to showcase what makes your business unique. According to Forbes , it’s critical to show how your products and services are different from your competition. For example, do you use a new ingredient that other cafés don't have, or do you have a unique process no one else in the industry knows? These are the types of things you’ll need to include in this section of your business plan.

Plus, be sure to outline who your market is. Who are your ideal customers and why will they be interested in what you have to offer? You can provide an overview of your prospects here and delve deeper into it in your market analysis.

Showcase Your Management Team

A most important aspect of a business plan is the management bios. When it comes to small businesses, your successes are interlinked with the company leadership. A business can succeed based on the experience, education and expertise of its owner. Similarly, it may fail if the leadership team makes poor decisions, lacks the proper experience or isn’t interested in learning new skills.

As a result, investors and financial institutions will want to know who is heading up your organization. Take some time to write up professional bios of your core management team. This may include the business owner and heads of key departments such as sales, marketing and product development.

The bios should contain previous positions the management team have held and what kind of accolades they have received. Adding quantitative metrics is key, such as a sales manager increasing sales in their last position by 110 percent. If anyone of the leadership team has previous experience starting a business, be sure to highlight this information and provide the successes of that business. You’ll also need to point out any skills gaps, and discuss how you plan to fill them with additional resources or outsourced assets, according to Constant Contact .

Conduct a Market Analysis

Another most important component of a business plan is the market analysis. In this key section, you need to cover why this is a viable market from a financial standpoint, according to The Business Plan Shop . This requires a lot of detailed quantitative and qualitative research into your target audience and your competition.

Begin by outlining who your audience is, and provide their demographic, geographic, behavioral and psychographic characteristics. It’s important to provide numbers wherever possible to show how big your potential market segment is and whether it can support your business. Be sure to outline what kind of problems or challenges they are experiencing and how your business can solve them.

You’ll also need to provide a competitive analysis by reviewing other players in your industry. Provide estimations on how much market share each competitor has and where you have opportunities to take market share from them. This section should also include any barriers to entry. For example, can anyone open up a similar store and take market share away from you?

Provide Financial Statements and Projections

Perhaps the most important part of a business plan, especially for investors, partners and financial institutions, is your financial projections. These show the viability of your business in the years to come, according to Constant Contact. While complicated graphs, charts and spreadsheets can look intimidating, it’s important to be familiar with them and be able to talk about them in plain English. Entrepreneur recommends providing a cover page to the financial document section describing the content in detail.

Be sure to include these three financial statements in this section:

• Income statement: Entrepreneur recommends listing your income projections monthly for your first year of business, quarterly for your second year of business and annually after that.
• Cash flow statement: This document is important for investors because it shows how much money is required for your business, where it’s going to come from and when it’s going to come in.
• Balance sheet: This document summarizes your business’ assets, liabilities and equity.

Other Important Elements of Your Business Plan

While these four sections are key to your business plan, it’s important to also focus on the other necessary sections. Typically, business plans follow a templated order so that information is provided in a logical format to meet your investors’ needs. Be sure to include these sections within your business plan:

• Executive summary
• Mission and vision statement
• Business description and unique value proposition
• Management team biographies
• Market analysis with competitor details and target market segmentation
• Marketing plan
• SWOT analysis (strengths, weaknesses, opportunities, threats)
• Logistics and operations plan
• Financial statements and projections

Some investors or financial institutions may have separate requirements for business plans, so it’s important to keep your audience in mind when writing it out. Whenever possible, be sure to provide concrete examples, quantitative information and intricate details. Remember that writing out a business plan is useful for you even if you’re not seeking investment or funds, because it will help you clarify your plans and develop market strategies for success.

• U.S. Small Business Administration: 5 Reasons You Need a Business Plan
• Constant Contact: 4 Sections Every Business Plan Must Have (And Why they’re Important)
• Entrepreneur: Elements of a Business Plan
• Forbes: 10 Essential Business Plan Components
• The Business Plan Shop: How to Do a Market Analysis for a Business Plan

Anam Ahmed is a Toronto-based writer and editor with over a decade of experience helping small businesses and entrepreneurs reach new heights. She has experience ghostwriting and editing business books, especially those in the "For Dummies" series, in addition to writing and editing web content for the brand. Anam works as a marketing strategist and copywriter, collaborating with everyone from Fortune 500 companies to start-ups, lifestyle bloggers to professional athletes. As a small business owner herself, she is well-versed in what it takes to run and market a small business. Anam earned an M.A. from the University of Toronto and a B.A.H. from Queen's University. Learn more at www.anamahmed.ca.

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550+ Business Plan Examples to Launch Your Business

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

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View all sample business plans

Example business plan format

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

Executive summary

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

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

Products & services

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

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

Market analysis

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

Competition

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

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

Marketing & sales

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

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

Milestones & metrics

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

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

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

Company & team

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

Financial projections

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

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

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

Types of business plans explained

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

Traditional business plan

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

Business model canvas

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

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

One-page business plan

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

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

Growth planning

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

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

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

Download a free sample business plan template

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

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

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

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

Choose a business plan example from a similar type of company

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

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

Use a business plan example as a guide

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

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

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

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

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

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

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

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

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

Prepare to pitch your business

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

Your pitch deck and pitch presentation are likely some of the first things that an investor will see to learn more about your company. So, you need to be informative and pique their interest. Luckily we have a round-up of real-world pitch deck examples used by successful startups that you can review and reference as you build your pitch.

For more resources, check out our full Business Pitch Guide .

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1.1: Chapter 1 – Developing a Business Plan

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• Lee A. Swanson
• University of Saskatchewan

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Learning Objectives

After completing this chapter, you will be able to

• Describe the purposes for business planning
• Describe common business planning principles
• Explain common business plan development guidelines and tools
• List and explain the elements of the business plan development process
• Explain the purposes of each element of the business plan development process
• Explain how applying the business plan development process can aid in developing a business plan that will meet entrepreneurs’ goals

This chapter describes the purposes, principles, and the general concepts and tools for business planning, and the process for developing a business plan.

Purposes for Developing Business Plans

Business plans are developed for both internal and external purposes. Internally, entrepreneurs develop business plans to help put the pieces of their business together. Externally, the most common purpose is to raise capital.

Internal Purposes

As the road map for a business’s development, the business plan

• Defines the vision for the company
• Establishes the company’s strategy
• Describes how the strategy will be implemented
• Provides a framework for analysis of key issues
• Provides a plan for the development of the business
• Helps the entrepreneur develop and measure critical success factors
• Helps the entrepreneur to be realistic and test theories

External Purposes

The business plan provides the most complete source of information for valuation of the business. Thus, it is often the main method of describing a company to external audiences such as potential sources for financing and key personnel being recruited. It should assist outside parties to understand the current status of the company, its opportunities, and its needs for resources such as capital and personnel.

Business Plan Development Principles

Hindle and Mainprize (2006) suggested that business plan writers must strive to effectively communicate their expectations about the nature of an uncertain future and to project credibility. The liabilities of newness make communicating the expected future of new ventures much more difficult than for existing businesses. Consequently, business plan writers should adhere to five specific communication principles .

First, business plans must be written to meet the expectations of targeted readers in terms of what they need to know to support the proposed business. They should also lay out the milestones that investors or other targeted readers need to know. Finally, writers must clearly outline the opportunity , the context within the proposed venture will operate (internal and external environment), and the business model (Hindle & Mainprize, 2006).

There are also five business plan credibility principles that writers should consider. Business plan writers should build and establish their credibility by highlighting important and relevant information about the venture team . Writers need to elaborate on the plans they outline in their document so that targeted readers have the information they need to assess the plan’s credibility. To build and establish credibility, they must integrate scenarios to show that the entrepreneur has made realistic assumptions and has effectively anticipated what the future holds for their proposed venture. Writers need to provide comprehensive and realistic financial links between all relevant components of the plan. Finally, they must outline the deal , or the value that targeted readers should expect to derive from their involvement with the venture (Hindle & Mainprize, 2006).

General Guidelines for Developing Business Plans

Many businesses must have a business plan to achieve their goals. Using a standard format helps the reader understand that the you have thought everything through, and that the returns justify the risk. The following are some basic guidelines for business plan development.

As You Write Your Business Plan

1. If appropriate, include nice, catchy, professional graphics on your title page to make it appealing to targeted readers, but don’t go overboard.

2. Bind your document so readers can go through it easily without it falling apart. You might use a three-ring binder, coil binding, or a similar method. Make sure the binding method you use does not obscure the information next to where it is bound.

3. Make certain all of your pages are ordered and numbered correctly.

4. The usual business plan convention is to number all major sections and subsections within your plan using the format as follows:

1. First main heading

1.1 First subheading under the first main heading

1.1.1. First sub-subheading under the first subheading

2. Second main heading

2.1 First subheading under the second main heading

Use the styles and references features in Word to automatically number and format your section titles and to generate your table of contents. Be sure that the last thing you do before printing your document is update your automatic numbering and automatically generated tables. If you fail to do this, your numbering may be incorrect.

5. Prior to submitting your plan, be 100% certain each of the following requirements are met:

• Everything must be completely integrated. The written part must say exactly the same thing as the financial part.
• All financial statements must be completely linked and valid. Make sure all of your balance sheets balance.
• Everything must be correct. There should be NO spelling, grammar, sentence structure, referencing, or calculation errors.
• Your document must be well organized and formatted. The layout you choose should make the document easy to read and comprehend. All of your diagrams, charts, statements, and other additions should be easy to find and be located in the parts of the plan best suited to them.
• In some cases it can strengthen your business plan to show some information in both text and table or figure formats. You should avoid unnecessary repetition , however, as it is usually unnecessary—and even damaging—to state the same thing more than once.
• You should include all the information necessary for readers to understand everything in your document.
• The terms you use in your plan should be clear and consistent. For example, the following statement in a business plan would leave a reader completely confused: “There is a shortage of 100,000 units with competitors currently producing 25,000. We can help fill this huge gap in demand with our capacity to produce 5,000 units.”

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

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

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

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

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

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

Let’s get started.

Why Are Business Plans Important?

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

1. Proves Your Business Viability

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

2. Guides You Throughout the Business Cycle

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

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

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

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

3. Helps You Make Better Business Decisions

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

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

4. Eliminates Big Mistakes

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

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

5. Secures Financing and Attracts Top Talents

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

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

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

Key Elements of Business Plan

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

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

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

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

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

1. Executive Summary

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

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

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

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

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

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

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

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

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

Components of an Executive Summary

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

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

2. Business Description

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

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

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

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

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

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

Components of a Business Description

Your business description needs to contain these categories of information.

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

3. Market Analysis

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

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

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

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

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

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

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

Market Analysis Factors

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

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

Components of the Market Analysis Section

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

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

4. Marketing Plan

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

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

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

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

5. Sales Strategy

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

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

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

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

6. Competitive Analysis

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

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

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

This section should define the following:

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

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

7. Management and Organization

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

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

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

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

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

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

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

8. Products and Services

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

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

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

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

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

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

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

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

9. Operating Plan

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

The operating plan for your business should include:

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

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

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

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

10. Financial Projections and Assumptions

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

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

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

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

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

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

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

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

11. Request For Funding

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

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

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

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

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

12. Exhibits and Appendices

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

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

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

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

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

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

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

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Martin luenendonk.

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

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

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UK employers plan 4% pay rises in coming year: survey

BRITISH employers expect to raise wages by 4 per cent over the coming 12 months, a similar rate to three months ago, according to an industry survey on Monday that suggested businesses were less willing to take on higher labour costs.

The Chartered Institute of Personnel and Development said expected median pay settlements in the private sector for the coming 12 months was unchanged at 4 per cent, while expectations in the public sector remained at 3 per cent.

British consumer price inflation slowed to 3.2 per cent in March and the Bank of England expects it to have eased further to around 2 per cent in April after a reduction in regulated energy prices.

“While employers’ pay rise expectations remain above pre-pandemic levels, we would expect them to adjust their plans for pay rises in the coming months, as inflation falls and the labour market continues to slow,” James Cockett, labour market economist at the CIPD, said.

The Resolution Foundation think tank, in a separate report on Monday, also said the current growth in inflation-adjusted wages looked unsustainable.

“Unless productivity picks up, wage growth will peter out, or pay rises will simply be passed on through higher prices and prolong our inflation problems,” Resolution Foundation Research Director Greg Thwaites said.

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A BoE survey of employers, published on Thursday, showed they expected to raise wages by 4.6 per cent over the coming year, the smallest amount since the series started in May 2022.

Official labour market figures are expected to show a small slowdown in wage growth on Tuesday. Economists polled by Reuters forecast regular pay to have increased by 5.9 per cent in March, slightly below the 6.0 per cent rise in the month before.

Wage growth tends to be faster than growth in pay settlements in Britain, as the latter does not include gains made by workers who move to better paid jobs.

Although the Bank of England held interest rates at a 16-year high last week and signalled it could be on course to cut rates at its next meeting in June, it is still closely monitoring wage growth which threatens to push up inflation.

The BoE is now forecasting wage growth of 5.25 per cent for 2024, up from a 4 per cent forecast in February.

The CIPD survey of 2,009 employers took place between March 26 and April 18. REUTERS

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• Squeeze on UK job market eases in April, recruiters say
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Crime and Public Safety | ‘We’re on the friends and family plan now’: New…

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Crime and Public Safety

Crime and public safety | ‘we’re on the friends and family plan now’: new details emerge in alleged at&t scheme to bribe house speaker.

The unidentified relative said the idea came “at the suggestion of our good friend, Mike McClain,” a former lobbyist and Madigan’s longtime confidant, according to a new prosecution filing. La Schiazza forwarded the request to a colleague in the legislative affairs department on July 12, 2017, writing “this will be endless,” according to the filing.

“I suspect the ‘thank you’ opportunities will be plentiful,'” the colleague allegedly emailed back, referring to the recent passage of AT&T’s coveted landline legislation expected to save to company millions of dollars.

“Yep,” La Schiazza allegedly responded. “We are on the friends and family plan now.”

The email exchange, which was disclosed for the first time in a recent court filing, gets to the heart of the bribery case against La Schiazza, who is set to go on trial in September on charges he approved a scheme to funnel payments to a Madigan associate in exchange for the speaker’s help passing legislation important to the company.

The same filing, known as a Santiago proffer, alleged for the first time late last week that the landline bill was not the only piece of legislation where Madigan helped AT&T.

The then-powerful speaker was also directly involved in “small cell” legislation in 2017 that allowed companies such as AT&T to put up micro-towers on light poles and elsewhere in public rights-of-way, according to the filing.

That fall, Madigan helped to advance the small cell bill during the veto session of the Illinois General Assembly, and in the spring of 2018, he helped defeat an amendment to the legislation that would have been harmful to AT&T’s interests, according to prosecutors.

References to the small cell bill were also captured in FBI wiretaps, prosecutors alleged. In a call intercepted on May 16, 2018, for example, Madigan and McClain discussed the amendment that would have walked back AT&T’s gains.

When Madigan asked McClain if he was familiar with the legislation, McClain allegedly responded: “The small cell bill that, uh, you, you directed me to help them pass it last year, which I did do,” according to court filings.

“Yeah, yeah, yeah,” Madigan allegedly said.

Meanwhile, at the time La Schiazza was discussing the donation request from Madigan’s relative, AT&T had just agreed to pay $2,500 a month to former state Rep. Edward Acevedo, a onetime member of Madigan’s leadership team who’d recently left the General Assembly.

The payments to Acevedo — allegedly negotiated by McClain — were made via a lobbying contract between AT&T and Thomas Cullen, a former Madigan staffer and longtime political strategist aligned with the speaker, according to prosecutors. Acevedo who was a registered lobbyist at the time, did no actual work for AT&T in exchange for the payments, prosecutors alleged.

According to the new court filing, La Schiazza’s colleague with AT&T’s legislative affairs group highlighted in his email exchange “the connection between Madigan’s and McClain’s requests and AT&T’s legislative success.”

“There is a sensitivity in that office about us going away now that we got COLR,” the colleague wrote, referring to the landline bill’s acronym according to the filing. “That is something to keep in mind in rest (of) 17 and in 18 regarding budget and profile with the Speaker’s office.”

La Schiazza allegedly responded he would “emphasize” that to the company’s leadership, “especially if we expect to pass a small cell bill.”

Shortly after the exchange, AT&T made the contribution requested by Madigan’s relative, a move prosecutors allege demonstrated that La Schiazza “knew AT&T’s responses to Madigan’s requests played a role in their legislative success.”

La Schiazza, 66, was charged in an indictment returned by a federal grand jury in October 2022 with conspiracy, federal program bribery, and using a facility in interstate commerce to promote unlawful activity. The most serious counts carry up to 20 years in prison if convicted. He has pleaded not guilty and has been free on bond while his case is pending.

La Schiazza’s attorneys did not respond to calls and emails seeking comment about Friday’s filing.

Acevedo pleaded guilty to separate tax counts stemming from the feds’ probe into Madigan’s operation and was sentenced to six months in prison.

But neither Acevedo nor Cullen has been charged with any wrongdoing in the alleged AT&T scheme, and both are on prosecution witness lists for La Schiazza’s upcoming trial.

Jury selection in La Schiazza’s case is scheduled to start Sept. 9, just a month before Madigan and McClain are set to go on trial at the same Dirksen U.S. Courthouse on sweeping racketeering conspiracy charges that include the AT&T scheme as well as similar allegations regarding utility giant Commonwealth Edison.

Madigan had originally been scheduled to go on trial well before La Schiazza, but his case was postponed after the U.S. Supreme Court agreed to take up an Indiana case dealing with a federal bribery statute charged in Madigan’s indictment. That ruling is expected to come down in late June.

Meanwhile, the scheme to reward Acevedo, who is referred to in the court papers as “FR-1,” began in February 2017, after the company learned through McClain that the speaker was looking to kick Acevedo some money, according to the indictment.

In an email exchange that March, AT&T Illinois’ director of legislative affairs asked two of the company’s executives if they were “100% certain” they would get credit “from the powers that be” if the payments were made to Madigan’s associate.

“I would hope that as long as we explain the approach to McClain and (the associate) gets the money then the ultimate objective is reached,” one of the executives wrote back, according a statement of facts AT&T agreed to in court.

The legislative affairs director responded, “I don’t think (La Schiazza) wants this based on hope. We need to confirm prior to executing this strategy,” the statement said.

At McClain’s direction, AT&T employees then met with Acevedo to discuss a “pretextual” reason for the payments: to “prepare a report on the political dynamics of the General Assembly’s and Chicago City Council’s Latino Caucuses,” according to the statement of facts.

Acevedo never did any real work for AT&T Illinois, however. In fact, according to AT&T’s admissions in court, he balked at first at the payments, saying they were too low. But Acevedo agreed to the deal after McClain stepped in and said the amount was “sufficient.”

After a protracted fight, the landline bill passed during the final hours of the spring 2017 legislative session — with Madigan’s direct assistance, according to legislative records and the statement of facts agreed to by AT&T.

On June 29, 2017, Madigan permitted the bill to be brought to a vote and cast his ballot in favor of the legislation, records show. Two days later, after Republican Gov. Bruce Rauner vetoed the legislation, Madigan and the Democrat-led General Assembly overrode him, with Madigan again voting for the override.

Madigan, 82, was the longest serving leader of any legislative chamber in the nation who held an ironclad grip on the state legislature as well as the Democratic Party and its political spoils. He was dethroned as speaker in early 2021 as the investigation swirled around him, and soon after resigned the House seat he’d held since 1971.

Madigan and McClain were charged in March 2022 in the original 22-count indictment alleging they conspired to participate in an array of bribery and extortion schemes from 2011 to 2019 that allegedly leveraged Madigan’s elected office and political power for personal gain

The indictment also accused Madigan of illegally soliciting business for his private property tax law firm during discussions to turn a state-owned parcel of land in Chinatown into a commercial development.

Madigan and McClain have pleaded not guilty. Their attorneys have accused prosecutors of trying to criminalize legal political actions such as job recommendations in a quest to bring down the once-powerful speaker.

McClain is also awaiting sentencing in his conviction for bribery conspiracy last year in the “ComEd Four” case against him and three other ComEd executives and lobbyists.

Both AT&T and ComEd entered into a deferred prosecution agreements with the U.S. attorney’s office, admitting their roles in the schemes to influence Madigan in exchange for prosecutors dropping criminal charges. ComEd also agreed to pay a record $200 million fine, while AT&T was fined $23 million.

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Business | Selling an asset? Don’t forget to plan before…

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Business | Selling an asset? Don’t forget to plan before you sign

What if you found out, after the sale, that instead of only a small amount or no taxes being owed, your tax bill was close to 50% of the profit? Because you did not consider tax planning before selling the asset, the proceeds you planned to spend on a new car, kitchen remodel, or vacation must now be paid immediately to the government instead.

Here are some cautionary examples of when assets were sold without planning for taxes and how to avoid these mistakes.

Outdated or incorrect advice

As a simple example, you have heard how capital gains tax rates are lower than ordinary tax rates, which is true. Long-term federal capital gains are taxed at 0-20%. However, to qualify for those lower rates, you must hold the asset for over a year. Otherwise, the sale is taxed as a short-term capital gain at 10-37% ordinary tax rates. Add in state taxes, and your tax rate can approach 50% if you did not hold the asset for more than a year.

Many other holding periods and restrictions can be found throughout the IRS Code. For example, if you want to take advantage of the exclusion available when you sell your residence, according to the IRS, you must have owned the home and used it as your residence for at least 24 months of the previous 5 years unless certain exceptions are met.

Since your primary residence is generally the largest asset you will sell in your lifetime, here is another common tax planning mistake. Even though it has not been true for some time, many still believe you will pay no tax if you trade up to a more expensive home. Also, the excluded amount on home sales is only $250,000. It is only $500,000 if your filing status is married filing jointly.

The cost of not qualifying for the $500,000 exclusion could result in an additional $100k in federal taxes.

Not documenting losses and costs

A married couple, both medical doctors, neglected to report their many rental property activities on their tax returns because their preparer said their high income prohibited them from writing off the passive losses they incurred. Therefore, they assumed there was no reason to include the income and expenses on their returns.

When they disposed of the properties, those passive losses they did not report could have been written off against the sale proceeds. Not keeping track of and reporting those accumulated losses resulted in the couple paying several hundreds of thousands of dollars in taxes they should not have owed.

Another mistake is that some do not report capital losses, generally on stock sales, because they believe the losses are limited to $3,000. While it is true that the losses are limited, any losses in excess of $3,000 can be carried forward on your individual return to offset future gains.

The same is true for charitable contributions and some forms of accelerated depreciation. You can carry those excess deductions forward to future years.

If someone says, “Don’t bother” to keep track of losses or expenses, seek another opinion. For instance, those capital improvement expenditures for your home can be used when you sell. In many cases, the documented improvements over the years, like roofs, patios, and pools,  can eliminate the gains on the sales of homes. Keep those receipts and use them later!

The danger of corporations

While the use of entities like LLCs and corporations can often offer asset protection, tax, and estate planning benefits, there are many tax ramifications when you eventually sell assets that are no longer owned by you personally.

For example, we often advise clients not to hold appreciable assets in their closely held corporations. Why? When you sell an asset held by a corporation but want to use the sale proceeds personally, the taxes will often be much higher than if the asset was held in your name or an LLC. Since the asset belongs to a corporation and not you,  you must somehow transfer that asset or the profit from the asset’s sale from the corporation to you as a shareholder.

One client put all her properties in several C-Corporations just before death and left it for her kids to figure out what to do. They would have paid no taxes had she not put the real estate in the corporation. The trustee also had to file unnecessary corporate returns and close the corporations.

Unfortunately, new business owners often elect to be an S-corporation without considering what will happen when they sell the business. (I also think clients assume that since the S stands for small and they are a small business, they figure they must be an S-Corporation. This is not the case.)

If, instead of electing to be an S-Corporation, they chose to operate as a C-corporation, with some other qualifying factors, they could pay little or no tax when the business sells five or more years in the future. One business owner could have saved $300k in federal and state taxes on selling $1 mil in stock. For more information, read about Sec. 1202 small business stock here- https://www.sba.gov/blog/qualified-small-business-stock-what-it-how-use-it.

Instead of using an online or do-it-yourself incorporation service, work with a qualified attorney and knowledgeable accountant and ask questions to avoid making costly planning mistakes.

A renowned tax attorney and educator of other attorneys with fifty years of experience offers profound insight: “Paying an income tax is a reflection that something good has happened, not something bad. As a result, the fact a tax related event has occurred is, almost always, a reason to celebrate.”

Just make sure to do some tax planning before the sale; then, the tax savings will be an additional reason to celebrate.

Michelle C. Herting is a CPA, an accredited business valuator, and an accredited estate planner. She specializes in succession planning, business valuations, and settling trusts.

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