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Small Business Trends

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

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

Table of Contents

How to Write a Business Plan

Executive summary.

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

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

Overview and Business Objectives

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

Company Description

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

Define Your Target Market

Market analysis.

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

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

SWOT Analysis

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

Competitive Analysis

Organization and management team.

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

Products and Services Offered

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

Marketing and Sales Strategy

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

Logistics and Operations Plan

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

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

Financial Projections Plan

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

Income Statement

Cash flow statement.

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

Tips on Writing a Business Plan

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

FREE Business Plan Template

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

What is a Business Plan?

Why you should write a business plan.

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

What are the Different Types of Business Plans?

Using Business Plan Software

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

Business Plan FAQs

What is a good business plan.

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

What are the 3 main purposes of a business plan?

Can i write a business plan by myself, is it possible to create a one-page business plan.

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

How long should a business plan be?

What is a business plan outline, what are the 5 most common business plan mistakes, what questions should be asked in a business plan.

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

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

How is business planning for a nonprofit different.

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How to Write a Strong Small Business Plan + Templates

Written by: Idorenyin Uko

Gearing up to start a small business?

Writing a business plan should be your top priority, as it’s known to set you up for success.

Research shows that entrepreneurs who write a business plan are 16% more likely to create successful businesses.

A great business plan can help you assess the feasibility of your idea, map out your strategy, spot potential roadblocks and figure out what you need to achieve your short and long-term goals. It also helps investors decide whether or not your business is a viable investment opportunity.

Business plans aren’t just for startups that need to secure funding. You can use them to assess new ideas or plans as you look to scale your small business.

Keep reading to learn how to write a winning business plan for your small business. Plus, we’ve provided customizable templates to inspire and get you started quickly.

Table of Contents

What is a small business plan.

• What is Included in a Small Business Plan?

12 Small Business Plan Templates

How to write a small business plan, small business plan faqs.

• A business plan is a strategic document that details a company's goals, strategies and timeframe for reaching them.
• Traditional business plans cover key aspects like executive summary, business concept, market analysis, financial projections, etc.
• Lean business plans cover areas like problem and solution, customer segments, unique value propositions, channels, revenue streams, cost structure, unfair advantage, etc.
• To write a business plan, craft a compelling executive summary, define your business concept, research and analyze the market, discuss funding requirements and provide your financial projections.
• With Visme, you can create winning business plans that win investors over. Sign up for free and get access to thousands of customizable templates, millions of stunning design assets, dozens of intuitive features and AI-powered tools that streamline your business planning process.

A small business plan is a document that sets out the goals, strategies and actions necessary to launch and grow the company.

It serves as a blueprint for your startup, explaining the business concept, how it will operate, generate revenue, achieve its objectives and address potential challenges. A small business plan also includes details about the market analysis, products and services, marketing and sales strategy, operational plan and financial projections.

Additionally, business plans are crucial to getting funding or attracting new business partners for your new business. Essentially, Investors need confidence in seeing a return on their investment, and your business plan is the tool you'll use to convince them that working with you or investing in your company is a smart choice.

What’s Included in a Small Business Plan?

There are different types of business plans, and the content of your business plan depends on what you want to achieve and the stage your small business is in.

In general, business plans can be divided into two common categories: traditional or lean startup.

Traditional business plans are the most commonly used format. They provide a thorough analysis of your business and can range from 20 to 50 pages or more. This format is suitable if your company is detail-oriented, needs in-depth planning for complex operations or is seeking substantial funding from investors, lenders or financial institutions.

Lean startup business plans are concise and focus on only the most important points of the key elements of your plan. They are typically shorter and limited to one or a few pages. Lean plans may also be used to quickly pitch the business idea to potential partners, customers or investors who prefer a summary rather than a detailed document.

Made with Visme Infographic Maker

Traditional Business Plan Format

Here are the key elements of a traditional business plan format:

• Executive Summary: Provide a brief overview of the entire business plan, including the business concept, product and service, financial highlights, leadership team and employees, growth plans and business goals.
• Company Description: Outline detailed information about your small business, including the mission statement , vision, business objectives and location. Also, discuss the problem your business solves, your target audience and your competitive advantage.
• Market Analysis: Share in-depth research and analysis of the industry, market size and trends, target market and competitive landscape.
• Organization and Management: Provide a description of your company's legal and organizational structure and information about your management team and key employees.
• Products or Services: Share a detailed description of the products or services offered, including the features, benefits and unique selling propositions.
• Marketing and Sales Strategy: Discuss your sales and marketing plan in detail, including pricing, promotion and distribution strategies.
• Operational Plan: Provide details about the day-to-day operations of your business, including location, facilities, technology and logistics.
• Financial Plan: Include a detailed financial projection of your business for the next 3-5 years, including income statements, cash flow statements, balance sheets, capital expenditure budgets and break-even analysis.
• Funding Request: Cover the specific amount of funding you need, the purpose of the funds and a detailed explanation of how the funds will be utilized.
• Appendix: Include all the supporting documents, such as resumes, permits, licenses, patents, legal documentation, product pictures and other relevant materials.

Lean Startup Business Plan Format

Many lean business plans are structured using the Lean Canvas model, which is a revamp of the business model canvas and basically a one-page business plan template .

Below are the elements you’ll find in the lean business plan canvas:

• Problem: Describe the problems that your potential customers have that your business aims to address.
• Solution: Explain how your product or service offers a unique and effective solution to that problem.
• Customer Segments: Outline the specific groups of customers your business aims to service and why they need your product or service. Create an ideal customer profile (ICP) and buyer persona that outline the characteristics of your target customer segment(s).
• Unique Value Proposition: Describe what sets your business apart from competitors and the unique benefits and advantages that your product or service provides.
• Channels: Discuss the methods and platforms your business will use to reach, communicate with and deliver value to its target customers.
• Revenue Streams: This section should discuss how your business will generate income. Outline the primary sources of revenue and the pricing strategy for your products or services.
• Cost Structure: Identify the key costs and expenses associated with operating the business.
• Key Activities: Highlight the core functions your business needs to continue operating and achieve success (e.g., product development, marketing, customer service, order fulfillment).
• Customer Relationships: Define how you will build and maintain relationships with your customers. This section should highlight your customer acquisition and retention strategy.
• Key Resources: Identify the key resources, such as technology, personnel and intellectual property, you’ll use to create value for your customer.
• Key Partnerships: Specify any partnerships or collaborations critical to your business model (e.g., suppliers, distributors, technology partners).
• Milestones: Define the key milestones or goals you aim to achieve within specific timeframes. These could include launching the business, reaching certain sales targets, acquiring a specific number of customers, expanding to new markets or introducing new products or services.
• Metrics: Identify the key performance indicators (KPIs) that you will track to measure the progress and success of your plan.
• Unfair Advantage: Highlight your unique advantage that competitors cannot easily copy or buy. Examples include proprietary technology, unique partnerships, strong brands or exclusive access to resources.
• Team: Share brief information about the founding team and key personnel including their roles, relevant experience and contributions to the business.
• Financial Projections: Provide a concise summary of your financial projections, including startup costs, revenue projections and expected profitability.

Here’s a template you can use to map out your lean business plan.

Creating a business plan for your small business can feel like a puzzle—especially if you’re new to the game. Whether you’re creating a traditional, multi-paged business plan or a one-page business plan , Visme’s AI-powered business plan generator can help you create one in seconds.

If you prefer to start with pre-built templates, Visme provides an extensive array of professionally designed small business plan templates and AI-powered features to get you off the ground.

Use these 12 helpful business plan examples and the intuitive features in Visme to  a business plan that ticks all the right boxes.

1. Startup Business Plan

Launch your startup and position it for success with an attractive business plan template.

This traditional business plan has dedicated sections for objectives, marketing analysis, value proposition, business model, customer segment and social media channels.

With this plan, you can explain your business goals and how your company intends to generate revenue and stay profitable.

The captivating modern layout makes the document easy to read and absorb. This template can be fully customized with Visme—use our intuitive editor to tweak fonts, colors and data before downloading the finished plan or sharing it online with investors or partners.

Add some extra flair to your design by incorporating beautiful vector icons , shapes and graphics into your content. Visme offers an extensive selection of design assets and graphics you can tap into.

2. Retail Business Plan One Pager Template

Perfect for small and growing businesses, this one-page business plan is a compact way to share your company’s vision and strategy with style and clarity.

The effectiveness of this one-pager business lies in its structure. With information arranged into two columns, it covers everything about your business at a glance.

It begins with a brief company overview, a bullet list of the marketing strategy and lead investors. Additionally, the plan provides details about key team members, accompanied by a brief recap of their experience. Financial projections are laid out in a colorful chart that transforms your data into compelling narratives.

3. Consultancy Business Plan Template

Launching a new consultancy business or looking to expand an existing one? This service business plan is an indispensable tool for companies in this industry looking to outline their value proposition and growth potential.

It covers crucial aspects such as company overview, mission and business goals, services, market analysis, strategy and implementation plan and financial summary.

This template is sure to make a memorable impression on potential investors, partners and customers, leaving no doubt about the strength and viability of your retail business startup.

Communicate financial data in an eye-catching way with the help of tables, charts, widgets and other data visualization types. Even if your data is domiciled in Excel or Google Sheets, you can connect and import data into your table or chart in live data into your Visme project.

4. Engineering Company Business Plan Template

Investors and lenders require a solid business plan to understand the potential and viability of your business before committing funds. This modern template has everything you need to convince them.

It clearly articulates important business elements such as your company's mission and vision, objectives, products and services, SWOT analysis and marketing strategy. Plus, there are pages dedicated to competitor analysis and financial forecasts.

Customize this engineering business plan template to match your business idea by adjusting the colors to fit your brand or industry and inserting your own logo, fonts and colors throughout. Swap photos with your own or choose premium, high-quality stock photos that represent your business from Visme’s stock photo library .

5. Tech Business Plan One-Pager

Featuring a sleek layout and minimalist design, this modern tech-inspired template showcases your company's competitive edge in the tech market.

It effectively presents your innovative technology solutions and the advantages of your services, making it easy for potential investors, clients and partners to understand your business at first glance.

What’s more, you can seamlessly infuse your brand identity with Visme’s Brand Design Tool . Just input your URL and the tool will extract your brand assets—logo, color and fonts—and save them to your brand kit. That way, you can apply your branding with a single click and get a set of branded templates crafted specially for you.

6. Real Estate Business Plan

If you’re in the real estate business, this small business plan is your strategic framework for running and growing your business.

With its trendy layout and thoughtful attention to detail, this template provides all the essential elements required for an effective business plan. It shares an overview of your business, along with valuable insights into your objectives, marketing plan, financial forecast and market conditions.

Keep your team aligned with your business objectives and vision for the future by working collaboratively to get their feedback on design and content with Visme’s collaboration tool . Set up permissions for team members to edit, comment and even provide illustrations in real-time or at their own pace.

The best part? With Visme, team collaboration is on a whole new level. You can assign the entire plan or different parts for team members to work on, add notes for context, add or reply in comments, set deadlines and track progress using our workflow feature .

Here’s a video showing how this feature works in real-time.

7. Small Business Plan

Running a cafe, restaurant or food business? This graphic-rich business plan template embodies the perfect blend of aesthetic appeal and strategic clarity. It’s designed to captivate investors and stakeholders while effectively outlining your vision, operational plan and financial projections.

The accent colors and modern fonts seamlessly blend with these breathtaking photos to ensure the plan is not only engaging but captures the essence of your brand's identity and vision.

Not sure how to get premium images that reflect the essence and appeal of your business? Transform your ideas into stunning photos with Visme’s AI-powered image generator . With a text prompt, you can generate unique visuals in different styles—3D graphics, paintings, photos, pencil drawings, icons, abstract art and more.

8. Ecommerce Business Plan One Pager Template

Whether sharing your start-up’s vision with potential partners, mapping out your strategy or pitching to potential investors, this business plan template is your ally. It gives you a creative head start so you won’t spend hours staring at a blank page, wondering where to start.

With this start-up one pager template , you can present your business concept, market analysis, product offerings, marketing strategy and initial financial projections on a single page. The striking contrast between the dark text and the gray background makes the content pop.

The bold headers and subheadings organize your information while making it easier for readers to find what's most important to them.

Swap out the content with information about your business and industry. And if you need help with content ideas or are facing writer’s block, AI Writer can give you a boost. Besides generating text, you can use it as a proofreading tool or adjust the context and tone of your plan. Experiment with different prompts as often as you want until you’re satisfied with the result.

9. Photography Business Plan

Starting a small business can be overwhelming. You've got to handle finances, attract customers, figure out regulations and ensure everything runs smoothly, all while staying true to your vision and rolling with the market's punches.

This photography business plan template is designed to help you crystallize your ideas and guide you through the process of goal-setting, securing funding, growing your customer base and efficiently managing your operations.

Furthermore, this business plan template has breathtaking graphics, accent colors and design elements that perfectly represent your business and its mission. It will ensure that you are fully equipped for the journey ahead.

Infuse animation and interactive elements like pop-ups, hover effects, links and animated icons, illustrations and special effects to keep your readers glued to your plan. For example, you can link each section to a larger document that provides more context.

10. Fashion Business Plan Template

If you’re starting a small business in the fashion industry, this masterpiece is what you need to secure investor buy-in. It shows potential investors that you've covered all bases and carefully considered every aspect of the business — from your value proposition to the market analysis to the direct and indirect competition.

This gorgeous fashion business plan template provides a comprehensive and immersive experience that truly captures the essence and allure of your brand. The stunning fashion-themed photos, cohesive color schemes and modern typography authentically reflect your vision for the fashion industry.

Replace these images with yours, and if they need editing, use Visme’s AI Edit Tools . With a click, you can unblur and upscale small or too blurry images, erase and replace objects in images to create different scenes and remove unwanted backgrounds with one click.

11. Retail Business Plan One Pager Template

Impress potential retail investors with this one-page retail business plan proposal template. This exquisite layout is designed to showcase your venture's key points in a way that commands attention.

This small business plan example highlights key points about your company, including your target audience, product offerings, revenue and cost projections. With a clean, organized and fascinating layout, you can be sure it will grab your audience's attention.

You can customize it with your logo and photos to make a powerful statement about your brand. Plus, there are plenty of design elements to choose from to make it even more captivating.

If you’re pitching to multiple investors, use Dynamic Fields to easily customize this template in minutes. Create custom fields like headline, name and address that can be modified with a click.

12. Daycare Business Plan Template

Creating a daycare business plan is critical in turning your childcare mission into a successful reality.

This small business plan example can help you articulate your unique approach to childcare, the age groups you plan to cater to, the services you will offer and the values that will guide your business. In addition to the market research and competitive analysis, it outlines the operational and marketing strategies for your small business.

Make this plan even more captivating with Visme's exclusive vector icons and shapes. From vibrant multicolor designs to sleek isometric and outline graphics, our collection has everything you need to add a personalized touch to your content in no time.

You can download your business plan in multiple formats, including PDF, PNG, JPG or PPTX. Alternatively, you can share it with stakeholders using an online URL or generate HTML code to embed it on your webpage.

With Visme analytics , you can track the number of people who have read your plan, how long they’ve spent on each section, the date of visit and the IP address from which they viewed it.

We've already discussed what you should include in a small business plan.

Now, let's briefly take a look at who writes the business plan and then explore how to write a business plan step by step, with examples you can learn from.

1. Write a Compelling Executive Summary

The executive summary is the first thing potential investors will read.

Whether you’re an entrepreneur or part of the management team tasked with writing a business plan—It’s also your best chance to get time-crunched investors and lenders excited about your business concept.

Try to keep it as brief as possible—no more than one page with three to four paragraphs. It’s best to write it last as it is a high-level summary of your business mission statement, a brief description of the products or services your business offers and a broad summary of your financial growth plans.

2. Define Your Business Concept

Before you dive into the rest of your plan, you need to share detailed information about your business idea.

Start by providing detailed information about your company's structure, business model, brand values, goals and objectives, mission and vision. Dive into the real-world problems your business is on a mission to solve. Then, get specific and outline the types of customers, organizations or businesses that your company aims to serve.

Next, showcase your products or services and how they bring value to your customers. Illustrate the journey of your offerings from creation to delivery. Share your strategies for safeguarding your intellectual property through copyrights or patents. If you're leading the charge in research and development, explain the details and what you hope to achieve.

Share details about your industry and the competitive edges that set your business apart. Do you have experts on your team? Have you secured the ideal location for your business? This section is a great place to showcase your strengths and what sets your business apart from competitors.

3. Research and Analyze the Market

Investors will readily invest in market-driven companies. Your company's market, sales and profit potential matter more to investors and make a more compelling case than its technical features.

To win over investors, you'll need to show a thorough understanding of your industry and target market. In your research, estimate the target audience or market size for your products, industry trends, customer behavior and buying habits.

This is where you include details of the competitive landscape. So before you write this section, do competitive research to find out what other businesses are doing, what their strengths and weaknesses are and how you stack up against them.

A SWOT analysis is a good framework for competitive analysis. Plus, you can gather information from competitors’ marketing and sales collateral, industry experts, trade publications, research reports, Google Trends, government publications and academic journals.

4. Share Your Marketing and Sales Plan

Your marketing plan should explain how you’ll attract and persuade your ideal customers to buy your products or services. It’s also important to describe how you will build customer loyalty to encourage repeat business.

Here are things you should explain in detail:

• Marketing goals and objectives: What you want to achieve
• Target audience: The specific demographic or group of customers you’re trying to reach
• Strategies and tactics: Detailed plans and actions you will use to reach your marketing goals
• Budget: Resources you’ll deploy, such as finances, time and personnel, to support your marketing efforts
• Metrics : How you’ll measure progress and success

Be sure to include specifics about your sales and distribution plans, including your pricing strategy and the cost of selling each item. This is a great place to explain your sales process, including how you will generate leads, manage customer relationships and close sales.

5. Discuss Funding Requirements

Next on your business plan checklist is the funding requirements. How much do you need over the next five years, and how will you use it? Provide a detailed description of how you’ll use these funds, including equipment, inventory, staffing, marketing and operational costs.

Also, share information about your burn rate—the amount of money your business needs in a certain period to cover all expenses. Investors look out for companies with low burn rates because they are more likely to become profitable and yield positive ROI.

The next important item to cover is your funding strategy. Are you leaning towards debt or equity? Explain the repayment terms, duration and potential return on investment. Remember to share your future financial and business strategies, such as debt repayment, succession plans and potential business exits.

6. Provide Your Financial Projections

Strengthen your funding request with detailed financial projections. You want to convince readers that your business is stable and poised for financial success.

If your business is already up and running, present income statements, balance sheets and cash flow statements from the last three to five years. In addition, specify any assets that could be used as collateral for a loan.

Share prospective financial predictions for the next five years, including forecasted cash flow statements, forecasted income statements, balance sheets and capital expenditure budgets. In the first year, be even more specific and use quarterly - or even monthly - projections.

Use charts, graphs and widgets to visualize financial data and tell your business's financial story. Visme offers 50+ data visualization tools to help you translate your numbers into beautiful visuals that are easy to grasp.

Q. What is the first thing to write in a business plan?

The executive summary is the first thing that appears in a business plan. It provides an overview of the business plan and highlights the key points in other sections.

Q. Can I write a business plan myself?

Yes, you can definitely write a business plan yourself. While it may seem daunting, there are plenty of resources and templates available online to guide you through the process.

Q. How much does a small business plan cost?

The cost of a small business plan can vary depending on the complexity of the plan, the industry and whether you hire a professional to help you. On average, a professionally written business plan can cost anywhere from a few hundred to a few thousand dollars.

If you choose to create your own business plan, the cost will mainly be your time and effort. Tools like Visme can be helpful in creating professional business plans in a fraction of the time and cost.

Q. How many hours does it take to write a business plan?

The time it takes to write a business plan can vary widely depending on the complexity of the business, the amount of research required and the level of detail you want to include.

Typically, a simple business plan might take around 20-40 hours to complete, while a more comprehensive and detailed plan could take 100 hours or more.

Q. What is the simplest type of business plan?

The simplest type of business plan is a one-page business plan. It's a concise document that outlines the core elements of your business, such as your mission statement, target market, key objectives and strategies. It's a great way to quickly convey your business idea and strategy in an abridged manner.

Q. How many pages should a small business plan be?

A traditional business plan should be around 10 to 20 pages in length.

However, the exact length may vary depending on the specific nature and complexity of the business. You'll want to ensure you include enough information to get your business concept and goals across while keeping it short and easy to read.

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

A business plan lays out the goals, strategies and operational and financial details of a new or existing business.

On the other hand, a strategic plan is used only by established companies looking to set a clear direction and roadmap for long-term success. This plan includes high-level strategies, long-term goals and the actions needed to achieve them.

Q. What’s the difference between a business plan and a pitch deck?

A business plan is a comprehensive document that provides detailed information about a company's operations, market analysis and financial projections. It serves as a roadmap for the business and is often used to secure funding or attract potential business partners.

On the other hand, a pitch deck is a concise and engaging presentation that highlights the key aspects of a business in a compelling way. The pitch deck is designed to capture the attention of potential investors and stakeholders and generate interest in the business.

Easily Create Professional Business Plans with Visme

Whether you’re starting your business or scaling growth, business plans offer immense value. They can help map out clear next steps for your business or uncover gaps in your business before they stunt your growth.

Even if you’re looking to pitch to investors—a winning business plan can get them excited about investing in your business. This article has covered everything you need to craft your own business plan.

Now it’s time to make it count. Visme provides an extensive range of customizable templates, advanced tools and AI-powered features to help you create business plans and other visual content that stands out.

Create your business plan in seconds with Visme’s AI business plan generator .

Put together winning business plans in Visme within minutes

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How to Write a Business Plan: Step-by-Step Guide + Examples

Noah Parsons

24 min. read

Updated May 7, 2024

Writing a business plan doesn’t have to be complicated. 

In this step-by-step guide, you’ll learn how to write a business plan that’s detailed enough to impress bankers and potential investors, while giving you the tools to start, run, and grow a successful business.

• The basics of business planning

If you’re reading this guide, then you already know why you need a business plan . 

You understand that planning helps you: 

• Raise money
• Grow strategically
• Keep your business on the right track 

As you start to write your plan, it’s useful to zoom out and remember what a business plan is .

At its core, a business plan is an overview of the products and services you sell, and the customers that you sell to. It explains your business strategy: how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow. 

A good business plan is much more than just a document that you write once and forget about. It’s also a guide that helps you outline and achieve your goals. 

After completing your plan, you can use it as a management tool to track your progress toward your goals. Updating and adjusting your forecasts and budgets as you go is one of the most important steps you can take to run a healthier, smarter business. 

We’ll dive into how to use your plan later in this article.

There are many different types of plans , but we’ll go over the most common type here, which includes everything you need for an investor-ready plan. However, if you’re just starting out and are looking for something simpler—I recommend starting with a one-page business plan . It’s faster and easier to create. 

It’s also the perfect place to start if you’re just figuring out your idea, or need a simple strategic plan to use inside your business.

Dig deeper : How to write a one-page business plan

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• What to include in your business plan

Executive summary

The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally just one to two pages. Most people write it last because it’s a summary of the complete business plan.

Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan. 

In fact, it’s common for investors to ask only for the executive summary when evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation , or more in-depth financial forecasts .

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
• Your funding requirements (if you are raising money)

Dig Deeper: How to write an effective executive summary

Products and services description

This is where you describe exactly what you’re selling, and how it solves a problem for your target market. The best way to organize this part of your plan is to start by describing the problem that exists for your customers. After that, you can describe how you plan to solve that problem with your product or service. 

This is usually called a problem and solution statement .

To truly showcase the value of your products and services, you need to craft a compelling narrative around your offerings. How will your product or service transform your customers’ lives or jobs? A strong narrative will draw in your readers.

This is also the part of the business plan to discuss any competitive advantages you may have, like specific intellectual property or patents that protect your product. If you have any initial sales, contracts, or other evidence that your product or service is likely to sell, include that information as well. It will show that your idea has traction , which can help convince readers that your plan has a high chance of success.

Market analysis

Your target market is a description of the type of people that you plan to sell to. You might even have multiple target markets, depending on your business. 

A market analysis is the part of your plan where you bring together all of the information you know about your target market. Basically, it’s a thorough description of who your customers are and why they need what you’re selling. You’ll also include information about the growth of your market and your industry .

Try to be as specific as possible when you describe your market. 

Include information such as age, income level, and location—these are what’s called “demographics.” If you can, also describe your market’s interests and habits as they relate to your business—these are “psychographics.” 

Related: Target market examples

Essentially, you want to include any knowledge you have about your customers that is relevant to how your product or service is right for them. With a solid target market, it will be easier to create a sales and marketing plan that will reach your customers. That’s because you know who they are, what they like to do, and the best ways to reach them.

Next, provide any additional information you have about your market. 

What is the size of your market ? Is the market growing or shrinking? Ideally, you’ll want to demonstrate that your market is growing over time, and also explain how your business is positioned to take advantage of any expected changes in your industry.

Dig Deeper: Learn how to write a market analysis

Competitive analysis

Part of defining your business opportunity is determining what your competitive advantage is. To do this effectively, you need to know as much about your competitors as your target customers. 

Every business has some form of competition. If you don’t think you have competitors, then explore what alternatives there are in the market for your product or service. 

For example: In the early years of cars, their main competition was horses. For social media, the early competition was reading books, watching TV, and talking on the phone.

A good competitive analysis fully lays out the competitive landscape and then explains how your business is different. Maybe your products are better made, or cheaper, or your customer service is superior. Maybe your competitive advantage is your location – a wide variety of factors can ultimately give you an advantage.

Dig Deeper: How to write a competitive analysis for your business plan

Marketing and sales plan

The marketing and sales plan covers how you will position your product or service in the market, the marketing channels and messaging you will use, and your sales tactics. 

The best place to start with a marketing plan is with a positioning statement . 

This explains how your business fits into the overall market, and how you will explain the advantages of your product or service to customers. You’ll use the information from your competitive analysis to help you with your positioning. 

For example: You might position your company as the premium, most expensive but the highest quality option in the market. Or your positioning might focus on being locally owned and that shoppers support the local economy by buying your products.

Once you understand your positioning, you’ll bring this together with the information about your target market to create your marketing strategy . 

This is how you plan to communicate your message to potential customers. Depending on who your customers are and how they purchase products like yours, you might use many different strategies, from social media advertising to creating a podcast. Your marketing plan is all about how your customers discover who you are and why they should consider your products and services. 

While your marketing plan is about reaching your customers—your sales plan will describe the actual sales process once a customer has decided that they’re interested in what you have to offer. 

If your business requires salespeople and a long sales process, describe that in this section. If your customers can “self-serve” and just make purchases quickly on your website, describe that process. 

A good sales plan picks up where your marketing plan leaves off. The marketing plan brings customers in the door and the sales plan is how you close the deal.

Together, these specific plans paint a picture of how you will connect with your target audience, and how you will turn them into paying customers.

Dig deeper: What to include in your sales and marketing plan

Business operations

The operations section describes the necessary requirements for your business to run smoothly. It’s where you talk about how your business works and what day-to-day operations look like. 

Depending on how your business is structured, your operations plan may include elements of the business like:

• Supply chain management
• Manufacturing processes
• Equipment and technology
• Distribution

Some businesses distribute their products and reach their customers through large retailers like Amazon.com, Walmart, Target, and grocery store chains. 

These businesses should review how this part of their business works. The plan should discuss the logistics and costs of getting products onto store shelves and any potential hurdles the business may have to overcome.

If your business is much simpler than this, that’s OK. This section of your business plan can be either extremely short or more detailed, depending on the type of business you are building.

For businesses selling services, such as physical therapy or online software, you can use this section to describe the technology you’ll leverage, what goes into your service, and who you will partner with to deliver your services.

Dig Deeper: Learn how to write the operations chapter of your plan

Key milestones and metrics

Although it’s not required to complete your business plan, mapping out key business milestones and the metrics can be incredibly useful for measuring your success.

Good milestones clearly lay out the parameters of the task and set expectations for their execution. You’ll want to include:

• A description of each task
• The proposed due date
• Who is responsible for each task

If you have a budget, you can include projected costs to hit each milestone. You don’t need extensive project planning in this section—just list key milestones you want to hit and when you plan to hit them. This is your overall business roadmap. 

Possible milestones might be:

• Website launch date
• Store or office opening date
• First significant sales
• Break even date
• Business licenses and approvals

You should also discuss the key numbers you will track to determine your success. Some common metrics worth tracking include:

• Conversion rates
• Customer acquisition costs
• Profit per customer
• Repeat purchases

It’s perfectly fine to start with just a few metrics and grow the number you are tracking over time. You also may find that some metrics simply aren’t relevant to your business and can narrow down what you’re tracking.

Dig Deeper: How to use milestones in your business plan

Organization and management team

Investors don’t just look for great ideas—they want to find great teams. Use this chapter to describe your current team and who you need to hire . You should also provide a quick overview of your location and history if you’re already up and running.

Briefly highlight the relevant experiences of each key team member in the company. It’s important to make the case for why yours is the right team to turn an idea into a reality. 

Do they have the right industry experience and background? Have members of the team had entrepreneurial successes before? 

If you still need to hire key team members, that’s OK. Just note those gaps in this section.

Your company overview should also include a summary of your company’s current business structure . The most common business structures include:

• Sole proprietor
• Partnership

Be sure to provide an overview of how the business is owned as well. Does each business partner own an equal portion of the business? How is ownership divided? 

Potential lenders and investors will want to know the structure of the business before they will consider a loan or investment.

Dig Deeper: How to write about your company structure and team

Financial plan

Last, but certainly not least, is your financial plan chapter. 

Entrepreneurs often find this section the most daunting. But, business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast. 

A typical financial forecast in a business plan includes the following:

• Sales forecast : An estimate of the sales expected over a given period. You’ll break down your forecast into the key revenue streams that you expect to have.
• Expense budget : Your planned spending such as personnel costs , marketing expenses, and taxes.
• Profit & Loss : Brings together your sales and expenses and helps you calculate planned profits.
• Cash Flow : Shows how cash moves into and out of your business. It can predict how much cash you’ll have on hand at any given point in the future.
• Balance Sheet : A list of the assets, liabilities, and equity in your company. In short, it provides an overview of the financial health of your business. 

A strong business plan will include a description of assumptions about the future, and potential risks that could impact the financial plan. Including those will be especially important if you’re writing a business plan to pursue a loan or other investment.

Dig Deeper: How to create financial forecasts and budgets

This is the place for additional data, charts, or other information that supports your plan.

Including an appendix can significantly enhance the credibility of your plan by showing readers that you’ve thoroughly considered the details of your business idea, and are backing your ideas up with solid data.

Just remember that the information in the appendix is meant to be supplementary. Your business plan should stand on its own, even if the reader skips this section.

Dig Deeper : What to include in your business plan appendix

Optional: Business plan cover page

Adding a business plan cover page can make your plan, and by extension your business, seem more professional in the eyes of potential investors, lenders, and partners. It serves as the introduction to your document and provides necessary contact information for stakeholders to reference.

Your cover page should be simple and include:

• Company logo
• Business name
• Value proposition (optional)
• Business plan title
• Completion and/or update date
• Address and contact information
• Confidentiality statement

Just remember, the cover page is optional. If you decide to include it, keep it very simple and only spend a short amount of time putting it together.

Dig Deeper: How to create a business plan cover page

How to use AI to help write your business plan

Generative AI tools such as ChatGPT can speed up the business plan writing process and help you think through concepts like market segmentation and competition. These tools are especially useful for taking ideas that you provide and converting them into polished text for your business plan.

The best way to use AI for your business plan is to leverage it as a collaborator , not a replacement for human creative thinking and ingenuity. 

AI can come up with lots of ideas and act as a brainstorming partner. It’s up to you to filter through those ideas and figure out which ones are realistic enough to resonate with your customers. 

There are pros and cons of using AI to help with your business plan . So, spend some time understanding how it can be most helpful before just outsourcing the job to AI.

Learn more: 10 AI prompts you need to write a business plan

• Writing tips and strategies

To help streamline the business plan writing process, here are a few tips and key questions to answer to make sure you get the most out of your plan and avoid common mistakes .  

Determine why you are writing a business plan

Knowing why you are writing a business plan will determine your approach to your planning project. 

For example: If you are writing a business plan for yourself, or just to use inside your own business , you can probably skip the section about your team and organizational structure. 

If you’re raising money, you’ll want to spend more time explaining why you’re looking to raise the funds and exactly how you will use them.

Regardless of how you intend to use your business plan , think about why you are writing and what you’re trying to get out of the process before you begin.

Keep things concise

Probably the most important tip is to keep your business plan short and simple. There are no prizes for long business plans . The longer your plan is, the less likely people are to read it. 

So focus on trimming things down to the essentials your readers need to know. Skip the extended, wordy descriptions and instead focus on creating a plan that is easy to read —using bullets and short sentences whenever possible.

Have someone review your business plan

Writing a business plan in a vacuum is never a good idea. Sometimes it’s helpful to zoom out and check if your plan makes sense to someone else. You also want to make sure that it’s easy to read and understand.

Don’t wait until your plan is “done” to get a second look. Start sharing your plan early, and find out from readers what questions your plan leaves unanswered. This early review cycle will help you spot shortcomings in your plan and address them quickly, rather than finding out about them right before you present your plan to a lender or investor.

If you need a more detailed review, you may want to explore hiring a professional plan writer to thoroughly examine it.

Use a free business plan template and business plan examples to get started

Knowing what information to include in a business plan is sometimes not quite enough. If you’re struggling to get started or need additional guidance, it may be worth using a business plan template. 

There are plenty of great options available (we’ve rounded up our 8 favorites to streamline your search).

But, if you’re looking for a free downloadable business plan template , you can get one right now; download the template used by more than 1 million businesses. 

Or, if you just want to see what a completed business plan looks like, check out our library of over 550 free business plan examples . 

We even have a growing list of industry business planning guides with tips for what to focus on depending on your business type.

Common pitfalls and how to avoid them

It’s easy to make mistakes when you’re writing your business plan. Some entrepreneurs get sucked into the writing and research process, and don’t focus enough on actually getting their business started. 

Here are a few common mistakes and how to avoid them:

Not talking to your customers : This is one of the most common mistakes. It’s easy to assume that your product or service is something that people want. Before you invest too much in your business and too much in the planning process, make sure you talk to your prospective customers and have a good understanding of their needs.

• Overly optimistic sales and profit forecasts: By nature, entrepreneurs are optimistic about the future. But it’s good to temper that optimism a little when you’re planning, and make sure your forecasts are grounded in reality. 
• Spending too much time planning: Yes, planning is crucial. But you also need to get out and talk to customers, build prototypes of your product and figure out if there’s a market for your idea. Make sure to balance planning with building.
• Not revising the plan: Planning is useful, but nothing ever goes exactly as planned. As you learn more about what’s working and what’s not—revise your plan, your budgets, and your revenue forecast. Doing so will provide a more realistic picture of where your business is going, and what your financial needs will be moving forward.
• Not using the plan to manage your business: A good business plan is a management tool. Don’t just write it and put it on the shelf to collect dust – use it to track your progress and help you reach your goals.
• Presenting your business plan

The planning process forces you to think through every aspect of your business and answer questions that you may not have thought of. That’s the real benefit of writing a business plan – the knowledge you gain about your business that you may not have been able to discover otherwise.

With all of this knowledge, you’re well prepared to convert your business plan into a pitch presentation to present your ideas. 

A pitch presentation is a summary of your plan, just hitting the highlights and key points. It’s the best way to present your business plan to investors and team members.

Dig Deeper: Learn what key slides should be included in your pitch deck

Use your business plan to manage your business

One of the biggest benefits of planning is that it gives you a tool to manage your business better. With a revenue forecast, expense budget, and projected cash flow, you know your targets and where you are headed.

And yet, nothing ever goes exactly as planned – it’s the nature of business.

That’s where using your plan as a management tool comes in. The key to leveraging it for your business is to review it periodically and compare your forecasts and projections to your actual results.

Start by setting up a regular time to review the plan – a monthly review is a good starting point. During this review, answer questions like:

• Did you meet your sales goals?
• Is spending following your budget?
• Has anything gone differently than what you expected?

Now that you see whether you’re meeting your goals or are off track, you can make adjustments and set new targets. 

Maybe you’re exceeding your sales goals and should set new, more aggressive goals. In that case, maybe you should also explore more spending or hiring more employees. 

Or maybe expenses are rising faster than you projected. If that’s the case, you would need to look at where you can cut costs.

A plan, and a method for comparing your plan to your actual results , is the tool you need to steer your business toward success.

Learn More: How to run a regular plan review

Free business plan templates and examples

Kickstart your business plan writing with one of our free business plan templates or recommended tools.

Free business plan template

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How to write a business plan FAQ

What is a business plan?

A document that describes your business , the products and services you sell, and the customers that you sell to. It explains your business strategy, how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

What are the benefits of a business plan?

A business plan helps you understand where you want to go with your business and what it will take to get there. It reduces your overall risk, helps you uncover your business’s potential, attracts investors, and identifies areas for growth.

Having a business plan ultimately makes you more confident as a business owner and more likely to succeed for a longer period of time.

What are the 7 steps of a business plan?

The seven steps to writing a business plan include:

• Write a brief executive summary
• Describe your products and services.
• Conduct market research and compile data into a cohesive market analysis.
• Describe your marketing and sales strategy.
• Outline your organizational structure and management team.
• Develop financial projections for sales, revenue, and cash flow.
• Add any additional documents to your appendix.

What are the 5 most common business plan mistakes?

There are plenty of mistakes that can be made when writing a business plan. However, these are the 5 most common that you should do your best to avoid:

• 1. Not taking the planning process seriously.
• Having unrealistic financial projections or incomplete financial information.
• Inconsistent information or simple mistakes.
• Failing to establish a sound business model.
• Not having a defined purpose for your business plan.

What questions should be answered in a business plan?

Writing a business plan is all about asking yourself questions about your business and being able to answer them through the planning process. You’ll likely be asking dozens and dozens of questions for each section of your plan.

However, these are the key questions you should ask and answer with your business plan:

• How will your business make money?
• Is there a need for your product or service?
• Who are your customers?
• How are you different from the competition?
• How will you reach your customers?
• How will you measure success?

How long should a business plan be?

The length of your business plan fully depends on what you intend to do with it. From the SBA and traditional lender point of view, a business plan needs to be whatever length necessary to fully explain your business. This means that you prove the viability of your business, show that you understand the market, and have a detailed strategy in place.

If you intend to use your business plan for internal management purposes, you don’t necessarily need a full 25-50 page business plan. Instead, you can start with a one-page plan to get all of the necessary information in place.

What are the different types of business plans?

While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. 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 when applying for funding or pitching to investors. This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix.

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.

One-page business plan: This format is a simplified version of the traditional plan that focuses on the core aspects of your business. You’ll typically stick with bullet points and single sentences. It’s most useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.

Lean Plan: The Lean Plan is less of a specific document type and more of 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, test, review, refine, and take action based on performance. It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.

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

A business plan covers the “who” and “what” of your business. It explains what your business is doing right now and how it functions. The strategic plan explores long-term goals and explains “how” the business will get there. It encourages you to look more intently toward the future and how you will achieve your vision.

However, when approached correctly, your business plan can actually function as a strategic plan as well. If kept lean, you can define your business, outline strategic steps, and track ongoing operations all with a single plan.

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Table of Contents

• Use AI to help write your plan
• Common planning mistakes
• Manage with your business plan
• Templates and examples

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

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

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

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

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

Let’s get started.

What Do You Need A Business Plan For?

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

1. Secure Funds

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

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

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

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

2. Monitor Business Growth

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

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

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

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

3. Measure Business Success

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

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

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

4. Document Your Marketing Strategies

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

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

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

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

How to Write a Business Plan Step-by-Step

1. create your executive summary.

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

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

A good executive summary should do the following:

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

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

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

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

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

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

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

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

2. Add Your Company Overview

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

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

Your company overview should contain the following:

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

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

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

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

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

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

• Mission Statement

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

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

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

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

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

Business Objectives

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

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

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

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

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

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

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

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

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

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

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

Market Analysis

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

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

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

• Market Research

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

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

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

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

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

How to Quantify Your Target Market

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

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

What Does a Good Market Analysis Entail?

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

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

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

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

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

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

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

Competitive Analysis

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

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

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

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

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

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

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

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

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

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

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

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

Direct vs Indirect Competition

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

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

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

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

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

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

Factors that Differentiate Your Business from the Competition

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

1. Cost Leadership

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

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

2. Product Differentiation

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

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

3. Market Segmentation

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

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

4. Define Your Business and Management Structure

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

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

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

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

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

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

Management Team

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

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

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

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

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

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

Key Questions to Answer When Structuring Your Management Team

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

Additional Tips for Writing the Management Structure Section

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

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

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

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

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

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

Organizational Chart

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

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

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

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

5. Describe Your Product and Service Offering

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1. Avoid Technical Descriptions and Industry Buzzwords

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

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

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

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

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

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

3. Long or Short Products or Services Section

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

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

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

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

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

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

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

4. Describe Your Relationships with Vendors or Suppliers

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

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

5. Your Primary Goal Is to Convince Your Readers

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

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

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

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

Key Questions to Answer When Writing your Products and Services Section

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

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

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

6. Show and Explain Your Marketing and Sales Plan

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

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

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

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

Outline Your Business’ Unique Selling Proposition (USP)

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

Target Market and Target Audience

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

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

Creating a Smart Marketing and Sales Plan

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

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

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

Your Positioning Statement

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Basic Rules to Follow When Pricing Your Offering

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

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

Pricing Strategy

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

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

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

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

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

Advertising

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

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

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

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

Public Relations

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

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

Content Marketing

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

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

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

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

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

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

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

Social Media

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

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

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

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

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

Strategic Alliances

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

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

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

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

Steps Involved in Creating a Marketing and Sales Plan

1. Focus on Your Target Market

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

2. Evaluate Your Competition

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

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

These questions can help you know your competition.

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

3. Consider Your Brand

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

4. Focus on Benefits

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

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

5. Focus on Differentiation

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

Key Questions to Answer When Writing Your Marketing and Sales Plan

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

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

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

7. Clearly Show Your Funding Request

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

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

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

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

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

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

Funding Request: Debt or Equity?

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

Case for Equity

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

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

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

Case for Debt

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

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

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

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

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

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

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

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

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

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

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

8. Detail Your Financial Plan, Metrics, and Projections

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

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

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

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

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

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

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

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

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

Use Graphs and Charts

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

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

Address the Risk Factors and Show Realistic Financial Projections

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

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

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

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

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

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

1. Sales Forecast

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

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

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

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

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

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

2. Personnel Plan

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

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

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

3. Income Statement

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

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

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

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

4. Cash Flow Statement

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

5. Balance Sheet

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

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

6. Exit Strategy

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

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

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

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

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

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

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

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

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

9. Add an Appendix to Your Business Plan

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

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

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

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

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

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

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

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

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

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

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

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

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

Tips and Strategies for Writing a Convincing Business Plan

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

1. Know Your Audience

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

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

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

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

2. Get Inspiration from People

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

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

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

3. Avoid Being Over Optimistic

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

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

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

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

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

4. Keep it Simple and Short

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

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

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

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

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

5. Make an Outline and Follow Through

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

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

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

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

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

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

6. Ask a Professional to Proofread

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

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

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

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

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

1. hubspot's one-page business plan.

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

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

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

2. Bplan’s Free Business Plan Template

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

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

3. HubSpot's Downloadable Business Plan Template

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

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

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

4. Business Plan by My Own Business Institute

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

The comprehensive template consists of a whopping 15 sections.

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

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

5. Score's Business Plan Template for Startups

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

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

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

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

6. Minimalist Architecture Business Plan Template by Venngage

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

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

7. Small Business Administration Free Business Plan Template

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

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

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

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

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

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

9. PandaDoc’s Free Business Plan Template

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

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

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

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

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

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

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

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

Alternatives to the Traditional Business Plan

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

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

Business Model Canvas (BMC)

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

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

Segments of the Business Model Canvas

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

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

Lean Canvas

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

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

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

Startup Pitch Deck

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

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

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

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

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

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

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

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

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

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

Business Plan FAQ

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

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

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

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

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

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

Exlore Further

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

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Martin luenendonk.

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

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

Small Business Resources is now the Center for Business Empowerment.

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

February 02, 2023 | 14 minute read

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

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

What is a business plan?

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

Why are business plans important?

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

What questions should a business plan answer?

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

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

How to write a business plan in 11 steps

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

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

1. Executive summary

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

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

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

2. Business overview

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

3. Business goals and vision

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

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

4. Management and organization

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

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

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

5. Service or product line

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

6. Market/industry analysis

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

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

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

7. Sales and marketing

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

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

8. Financials

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

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

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

9. Financial projections

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

10. Funding request

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

11. Appendix

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

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

Tips for creating an effective business plan

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

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

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

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

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

Updating an existing business plan

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

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

Final thoughts

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

Business plan FAQs

What are common mistakes when writing a business plan.

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

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

What are the different types of business plans?

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

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

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

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

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

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

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

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

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

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

Explore more

Editable business plan workbook

Starting a new business

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

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

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Writing a business plan: Your step-by-step guide

Learn how to write a sound business plan to help set up your business for success.

Learning how to write a sound business plan is an essential first step toward creating a successful business. Simply put, a business plan outlines your business’s overall goals, strategies, and operations, providing a long-term vision and plan for your entire business. It’s not to be confused with a business proposal, which is a sales document that pitches a specific business idea or product to a potential client or investor. A business plan can help you clarify what you want to achieve and lay out exactly how to reach those goals. This, in turn, can help you motivate your team, promote your business, and make key decisions.

A strong business plan serves as an important communication tool to potential investors and lenders. It will allow you to articulate your current financial status, sources of revenue, and how you plan to meet revenue projections. Although a business plan isn’t always required when applying for all types of credit, it often plays a significant role in SBA loan applications . While no two business plans are alike, every plan should cover the following elements.

Executive summary: Define your business

Your plan’s executive summary is your chance to introduce the business — so it needs to be concise and compelling. The summary should give a brief recap of the history and background of your business in a manner that will make the reader want to learn more about your plan. Sometimes it’s helpful to write this last — after you’ve spent some time contemplating and articulating all the details of your business.

Company summary: Delve into the details

Your business plan should explain what your product or service is and why people and businesses will want to purchase it. Be sure to highlight areas where your product or service has a clear advantage over the competition. Also, include details about pending or established copyrights or trademarks, and present or future plans for research and development (R&D).

Market analysis: Outline your strategy

A market analysis centers on the marketability of your business, who your competitors are and how you fit into the competitive landscape. In the analysis, give detailed information about your business’s industry, including the size of the market, your target market, the market need, and barriers to entry such as supply issues and regulation. Also, include information on any market tests you have conducted and identify your direct and indirect competition.

Marketing plan: Identify your niche

Here, you’ll highlight how you plan to promote your business and generate revenue. Describe in detail what your product or service does and how it will help consumers. Explain how your product is unique from others on the market, and how you will promote your business and generate revenue. Also, provide details about the product life cycle and any intellectual property issues. (Note: Some of this may reiterate or expand upon information elsewhere in your business plan.) You can protect your intellectual property , which can include names, designs and automated process, through trademarks, copyrights, non-disclosure agreements and more.

Management overview: Introduce your leaders

To highlight your human capital, describe how your business will be organized in terms of structure and leadership. Let your reader know who does what and what qualifications they have. Summarize this in your writeup, but consider providing relevant resumes, too.

Financial summary: Develop your financial plan

The financial summary, which includes details about your company’s funding sources, existing debt, any grants , as well as financial analysis, are crucial areas to lay out in detail. Explain the amount of funding your business needs and provide supporting financial data as well as financial projections . Include documents that communicate your business’s current financial status, such as income statements, balance sheets , and cash flow statements. List your expectations for revenues as well as the cost of your goods, rent, fuel, utilities, salaries, and other expenses.

The final step: Organize it logically

There are many ways you can organize the information mentioned above so you can share it with potential investors and lenders, current and prospective team members and managers, and anyone else who needs to understand your vision.

Do your research and find a business plan format that works for your business. There can be different types of plans for different types of readers, i.e. investors vs. employees, so you can modify your plan depending on your audience.

A few things to keep in mind:

• Make it easy to find key info . Create a cover page and table of contents, so information is easy to find. Also consider using dividers with tabs if you’re printing it out and putting it in a binder.
• Add more details as they emerge . Depending on what you do or sell, you may also want to add a section on Action Plans, which includes information on regulations, legal and compliance issues, safety processes, operational and management plans, an employee handbook, delineations of job descriptions of your staff, and anything else you’ve put on paper (or into a digital document).
• Consider using an Appendix . This is where you can store any supporting documents, including financial and market analyses, logo and branding examples, team resumes, and so on.

Your business plan should reflect changes in your business, the industry or the market. Make changes as necessary to incorporate the changing needs of customers or changing economic conditions in order to keep your plan current. Treating your business plan as a living document — and revising it regularly — can help you stay ahead of the competition and exceed your dreams.

Learn more:

For additional support, make an appointment with a Wells Fargo banker who can help you develop your business plan. There are also several resources available to get you started with your business and business plan. Here are a few:

• U.S. Small Business Administration
• America’s Small Business Development Centers Network
• SCORE Association

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

Published: February 06, 2024

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

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

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

Table of Contents

Business Plan Format

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

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

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

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

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

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

1. Executive Summary

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

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

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

Company Description

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

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

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

Products and Services

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

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

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

Executive Summary Business Plan Examples

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

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

Image Source

Tips for Writing Your Executive Summary

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

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

2. Market Opportunity

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

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

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

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

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

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

Market Opportunity Business Plan Example

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

Tips for Writing Your Market Opportunity Section

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

3. Competitive Landscape

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

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

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

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

Competitive Landscape Business Plan Example

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

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

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

Tips for Writing Your Competitive Landscape

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

4. Target Audience

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

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

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

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

Target Audience Business Plan Example

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

Tips for Writing Your Target Audience Section

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

5. Marketing Strategy

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

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

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

Marketing Strategy Business Plan Example

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

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

Tips for Writing Your Marketing Strategy

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

6. Key Features and Benefits

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

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

Key Features and Benefits Business Plan Example

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

Tips for Writing Your Key Features and Benefits

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

7. Pricing and Revenue

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

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

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

Pricing and Revenue Business Plan Example

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

Tips for Writing Your Pricing and Revenue Section

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

8. Financials

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

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

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

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

Financials Business Plan Example

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

Tips for Writing Your Financials Section

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

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

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

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

1. Startups

Startup business plans are for proposing new business ideas.

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

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

2. Feasibility Studies

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

3. Internal Use

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

4. Strategic Initiatives

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

5. Business Acquisition or Repositioning

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

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

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

1. HubSpot's One-Page Business Plan

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

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

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

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

Why I Like It

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

2. HubSpot's Downloadable Business Plan Template

We also created a business plan template for entrepreneurs.

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

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

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

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

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

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

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

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

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

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

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

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

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

4. ThoughtCo’s Sample Business Plan

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

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

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

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

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

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

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

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

7. HubSpot’s Complete Guide to Starting a Business

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

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

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

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

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

8. Panda Doc’s Free Business Plan Template

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

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

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

9. Small Business Administration Free Business Plan Template

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

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

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

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

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

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

Let’s take a look.

1. LiveFlow

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

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

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

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

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

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

2. Lula Body

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

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

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

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

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

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

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

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

4. Vesta Home Automation

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

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

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

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

5. NALB Creative Center

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

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

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

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

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

6. Curriculum Companion Suites (CSS)

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

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

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

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

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

7. Culina Sample Business Plan

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

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

8. Plum Sample Business Plan

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50 Best Small-Business Ideas to Start in 2024

Meredith Wood is a member of the small-business team at NerdWallet. Prior to this, she was a VP at Fundera where she founded the Fundera Ledger. She has specialized in financial advice for small-business owners for over a decade.

Ryan Lane is an editor on NerdWallet’s small-business team. He joined NerdWallet in 2019 as a student loans writer, serving as an authority on that topic after spending more than a decade at student loan guarantor American Student Assistance. In that role, Ryan co-authored the Student Loan Ranger blog in partnership with U.S. News & World Report, as well as wrote and edited content about education financing and financial literacy for multiple online properties, e-courses and more. Ryan also previously oversaw the production of life science journals as a managing editor for publisher Cell Press. Ryan is located in Rochester, New York.

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The best small business to start is one that fills a market need or offers a unique product, service or solution. But a winning idea also plays to your strengths and interests.

This list of business ideas can help you brainstorm your next move. From there, you can take preliminary steps, like conducting a market analysis and calculating potential startup costs .

Potentially easy business ideas may have smaller price tags; consulting, tutoring, personal training and pet sitting are businesses you can likely launch with less than $1,000 in your pocket. Other endeavors will require significant capital. Either way, expect to work hard and invest a lot of time — so choose an idea you’re passionate about.

» MORE: How to start a business in 15 steps

50 best small businesses to start

1. accounting and bookkeeping.

Are you a licensed CPA or a business accounting software wizard? Use your expertise to help other entrepreneurs keep their personal and business finances in order.

As a bookkeeper, you'll process invoices and payroll, compile expense reports and more. If you have a CPA license, you can help business owners file taxes, generate balance sheets and other accounting documents and make your professional recommendations about your client’s bottom line.

2. Business consulting

If you’ve been in the business world for a long time, folks might be clamoring for your knowledge and expertise within your industry. Why not turn all that know-how into a new career as an independent consultant? You can get paid to speak at industry conferences or events, serve on a board of advisors for a fledgling business or lend your expertise to shape the strategy of an existing business on a contract basis.

» MORE: How to start a consulting business

3. Marketing services

As an independent marketing professional, you can work with small businesses who don’t have the in-house bandwidth to execute their marketing plans. Write their blogs, firm up their SEO strategy, generate ad campaigns and deploy inbound marketing tactics.

4. Real estate business

If property is your passion, start your own real estate agency, working with businesses or private citizens to find the office space, house or apartment that's right for them.

You can also buy property of your own (if you have the business funding, of course) and become a property manager or landlord, renting out residential or office space to tenants, maintaining the property and serving as their point of contact for any potential issues.

5. Event planning

Event planners manage the design, logistics and coordination of a variety of major events, from corporate retreats and fundraisers to weddings and birthday parties. If you’re detail-oriented and have a roster of vendor connections, offer your services to businesses and families in your community or personal network.

6. Video production

Demand for those who can shoot, edit and package videos is high. And a video production business can meet many needs — like wedding or event videos, brand and marketing content or social media videos for TikTok or Instagram — or focus on one specific niche.

7. Podcasting

For those who have something to say or important stories to tell, you might consider starting a podcasting business. With the popularity of podcasts from newspapers and other media providers, private individuals have been able to jump on the trend — turning a hobby into a fully fledged business.

Podcasting will require an initial investment in some audio equipment and editing software. But once you get started, you'll be able to grow as fast as you can talk, produce, and of course market your podcast. Moreover, if you're specifically interested in online business ideas , podcasting can be done from home, and completely online.

8. IT consulting

Do you have experience with computers and other types of technology? If so, use this knowledge to your advantage and consider starting an IT consulting business. With limited budgets and resources, many small businesses are apt to hire an outside consultant to help assist them with installing, managing, updating, and troubleshooting their technology. As an IT consultant, you can offer remote services as well as on-site assistance, giving you freedom and flexibility while working in a field that's in high demand.

9. Catering

If you're a professional chef but tired of the restaurant grind, starting a catering service is a great opportunity to strike out into the world of self-employment. You’ll need access to a commercial kitchen, a part-time staff of servers and a couple of assistant cooks to start. But compared to opening your own restaurant, the overhead costs of starting and running a catering company are much more manageable.

10. Social media management

Social media marketing is a marketing specialty that most business owners know they need, but few are capable of doing well. If you’re on top of the latest TikTok and Instagram trends, have a knack for creating viral videos or can convert social views into sales, consider cultivating a client base of business owners who need help managing their brand’s social media platforms.

» MORE: 5 simple ways to step up your business’s TikTok game

11. Business planning service

One of the best small-business ideas for seasoned business owners ready for their next venture is a business planning service. You can offer guidance and networking connections as businesses seek funding or scale, and provide services for startups like writing a business plan — including business funding plans, market analysis and competitor research.

12. Tax consulting

Filing and staying on top of business taxes can be one of the most complicated parts of running a business, so if you have experience in all things tax-related (and are a CPA or enrolled agent), business owners will be willing to hire you for your services. Plus, unlike individual taxes, many businesses are going to need a tax advisor to support them year-round, meaning your services will be in demand through tax season and beyond.

Ready to get started? Here's what to do next

Open a business bank account.

Start keeping the books.

Build your website.

Protect yourself from liability.

13. PR agency

Have a background in public relations and an extensive network of media and business contacts? Consider striking out on your own and offer your services to other small businesses. Your agency can assist entrepreneurs and companies with their public image and presence — including business marketing, events, press releases, outreach and more. If you have a network of contacts in a specific industry, your services will be even more attractive to businesses in that industry.

Plus, you can start your own PR business without too much initial financial investment and can bring on employees or rent office space as it grows.

14. Professional organizing

Organizing professionals work with businesses and individuals alike to offer tips and strategies for organization based on their space, as well as get hands-on and help them sort through the clutter. With the time and effort it often takes to clean up a room, house or office, professional organizing has become a service that people are willing to pay for.

15. Photography

Professional photographers are in high demand for weddings, corporate events, family portraits and more. Plus, because you can build this business out of your home (with the right tools, of course), a freelance photography business has relatively low startup costs. Moreover, you're in charge of your client load and schedule, so professional photography is a great way to build a side hustle while working full time elsewhere.

» MORE: How to start a photography business

16. Event space

Take a look at your local market: If there's a demand for weddings, birthdays, corporate events and fundraisers, but few venues to host those events, seize the opportunity and start an event space yourself. You can offer planning services along with the venue, or partner up with another local event-planning business to become the ultimate party-planning team.

17. Interior decorating

Rather than redecorating your living room for the 14th time, apply your love of design to an interior decorating business . To start out, leverage your personal network to offer help decorating residential and commercial spaces. You can charge an hourly fee to clients for your work, partner with your favorite furniture stores or manufacturers to work on commission or do a combination of the two.

18. Woodworking or furniture building

Do you love working with your hands to build beautiful, custom furniture? Start your own custom woodworking business. You can take commissions, focus on a set of in-demand items or sell semi-custom options via Etsy or another online platform. You might start working weekends out of your garage, but as your business takes off, you’ll be well on your way to your own shop and a brand new, full-time career doing what you love.

» MORE: How to start an Etsy shop in 8 steps

19. Graphic design

With just a few handy computer programs — think Adobe, Sketch or Canva — you could be operating this lucrative business out of your home in weeks. You do need to find clients though, so try networking with small businesses in your community. Everyone could use a well-designed website, online materials, email campaigns, physical print work and more.

20. Clothing boutique

For the fashion-forward entrepreneurs out there, consider opening your own clothing boutique. Although you'll need some startup funding for this business idea , it can be successful if you find the perfect inventory and right market. Competing against large clothing retailers can be challenging, but if you can find a specific niche, like starting a T-shirt business or locally based store, you can use your creativity to stand out amongst all of the other generic options out there.

21. Bed and breakfast

Do you live in an interesting tourist destination? Does your home have a guest house, mother-in-law suite or even just a spare bedroom? Do you love to cook and entertain guests? If so, one of the best small business ideas for you might be to turn your home into your own B&B. Sites like VRBO and AirBnB have made it easier than ever to market your home to travelers in need, and you may even make new friends along the way.

22. Food truck

Food trucks are hugely popular, often offering unique, specialty foods that might not sell as easily in brick-and-mortar restaurants. Take your mom’s famous dumpling recipe or your off-the-wall dessert idea and hit the road to local events, farmer’s markets, your local town square, large corporate complexes at the lunchtime rush — wherever you’re likely to draw a crowd. Keep in mind that to run a food truck , you usually have to meet a special set of ordinances and safety compliance standards, so contact your local health department to determine what your mobile restaurant will require.

» MORE: Best point-of-sale systems for food truck businesses

23. Restaurant or cafe

Opening a restaurant is one of the more risky and expensive business ideas on our list. But if you're truly culinarily (and entrepreneurially) ambitious, the risk may be worth the rewards. Restaurateurs can test the waters with popups or a ghost kitchen before investing in a full-fledged brick-and-mortar deli, diner, cafe or full-service restaurant. Or you can open a franchise of an established restaurant chain, and reap the benefits of an already popular brand.

24. Craft brewery

Craft breweries, aka microbreweries, are booming in the United States. So, if you've been tinkering with beer-brewing in your garage, calling it official and opening up a microbrewery can be a great way to monetize your hobby.

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25. Ice cream shop

Ice cream shops are the perfect small town or neighborhood business idea — though this type of business can be prone to big seasonal revenue fluctuations. You will need some funding to get this kind of endeavor started, but an ice cream shop typically requires less of an investment than other food-service businesses.

26. Personal chef

Similar to a catering business, but less involved and perhaps more flexible, you might start your own business as a personal chef. You can use your culinary expertise to cook for families or individuals, as well as help them with meal planning and recipes. With this kind of service business, you'll get more personal with your cooking, giving you the opportunity to work one-on-one with all different kinds of people and navigating their dietary restrictions, likes and dislikes.

27. Landscape services

If you have a green thumb and an eye for design, starting a landscaping business could be your next move. You'll mow lawns, plant and maintain flowers, trees and shrubs, and even design elaborate landscape plans for homes and office complexes.

28. Pet grooming

Animal enthusiasts can probably think of nothing better than hanging out with pets all day. It might take some time to build up the funding to open up your own pet-grooming facility. So, keep overhead low in the beginning by offering a mobile service, and bring your grooming skills and tools directly to your clients' homes. You can also offer dog walking services to supplement your grooming business.

29. Florist

If you have a green thumb and eye for arrangements, open a flower shop and use your skills to connect with your community. In addition to creating beautiful bouquets, florists can also design big-ticket arrangements for weddings and events, or host in-person or virtual flower arranging classes.

» MORE: How to start a florist business

30. Massage therapist

As an occupation, massage therapy is in high demand: The U.S. Bureau of Labor Statistics predicts an 18% growth in massage therapy jobs between 2022 and 2032, a much higher rate than average.

You’ll need special training and licensing to legally operate as a massage therapist, so check your state requirements to make sure you’re operating within local laws. But once you’ve jumped through the licensing hoops, you’ll be free to open an in-home studio, travel to your clients or eventually open your own facility.

» MORE: Business insurance for massage therapists

31. Nutritionist

Nutritionists can help clients improve their relationship with food and build health goals and habits. Launching a nutrition business requires first getting trained and certified as a registered dietician. From there, you can offer custom meal plans or virtual nutrition coaching to help people achieve their nutrition goals.

32. Personal trainer or fitness instructor

If you're the first one in the gym every morning, or dream of taking over from your yoga instructor, the next step might be to take that physical energy and put it toward becoming a licensed trainer. As a licensed personal trainer, you can offer private training sessions in your own home or in clients’ homes, lead group sessions in local parks, become a certified instructor for a whole host of workouts (Zumba, anyone?) and, eventually, even open your own fitness studio or gym.

» MORE: A step-by-step guide to starting a fitness business

33. Beauty services

The beauty profession isn’t just for trained cosmetology graduates (though a degree can help). Thanks to social media, even self-taught makeup artists can develop a following — and build a business — giving makeup tutorials on TikTok and YouTube. Opening or working in a salon, or hiring out your services for events, typically requires you to have the appropriate licenses.

34. Life coach

If you have a passion for helping people reach their true potential, becoming a life coach might be the perfect small-business idea for you. As a life coach, you'll work with clients to sort through problems or parts of their lives that they'd like to change and help them create plans to move forward and reach their goals. Although you don't necessarily need a certification to become a life coach, getting certified can help you as you start out looking for clients.

Once you've marketed your services, and your clients can attest to your skills, however, you'll be well on your way to a successful business.

» MORE: How to become a life coach

Private tutors can earn between $40 to $80 an hour, depending on your location, as well as factors like the subjects and grade levels you’re teaching. You can opt to be a solopreneur, offering freelance in-person or online tutoring. Or enlist some equally qualified, eager-to-teach partners and establish a full-service tutoring business.

36. Daycare provider

Opening a home-based daycare or full-fledged daycare center can be a solid business idea for someone who has a passion for early childhood development. You can focus on a specific teaching approach, such as Montessori, or offer language immersion if you’re fluent in another language. Read up on the licensing and reporting requirements in your area before diving in; these can vary by state, city and municipality.

» MORE: How to start a daycare

37. Senior care provider

As the baby boomer population ages, more and more senior citizens are in need of at-home care. These needs range from medically specific requirements to simple companionship or help with cooking, tidying up or transportation to and from appointments. This is a great option for anyone with nursing experience who would like to move into working for themselves.

38. Interpreter or translator

If you can speak multiple languages, this is an easy and inexpensive way to start a small business where you can utilize those skills. If you become an interpreter or translator, you can work with individuals, businesses or even simply online clients — translating meetings, phone calls, articles and more. As you work successfully with more and more clients, they'll continue to turn to you when they require these kinds of services — and you'll be continuing to grow your language abilities on top of it all.

39. Housecleaning

Everyone wants to keep a clean house. If you have a great work ethic and you’re willing to get your hands dirty, you could start a cleaning business on the cheap. Or, if you have dreams of a larger enterprise, hire a few employees or contractors and you can manage several cleaning teams. Overhead might include equipment, marketing costs and wages for personnel, but otherwise starting a cleaning service is a relatively low-cost enterprise.

Start Your Dream Business

40. Automotive repair

From oil changes and engine repairs, to tire services and bodywork, to interior and exterior deep-cleans, automotive repair businesses run the gamut of all things car-care. Alternatively, car repair businesses can focus on an automotive specialty, such as foreign cars, antique cars or specific brands. Whatever niche you choose for your car repair business, watch out for state licensing or insurance requirements to make sure your venture complies with local laws.

41. Handyman services

With a handyman (or woman) business, you can offer services ranging from small repairs and painting to more specialized trade work like plumbing, electrical, locksmith, home security installment or HVAC work. It all depends on your skill set, and on whether you have, or are willing to earn, special licensing (your state might require a contractor's license to do certain repair work). Once you've established a client base, you can hire a team of handymen with complementary skills to your own.

» MORE: How to get handyman business insurance

42. Dry cleaners

Starting a dry cleaning business will certainly require a storefront, some startup funding and supplies. But you can quickly become a go-to service in an area, especially with the right marketing and word-of-mouth recommendations.

43. Hardware store

Another local small-business staple, if you want to extend your handyman services into a storefront, you should consider opening a hardware store . When residents are doing home projects or spring cleaning, they're always going to find themselves in need of certain tools or supplies — and probably won't want to wait for online delivery. Your hardware store can service your local area and all the better if you can offer advice and tips along with the physical products you sell.

44. Self-storage business

Starting a self-storage business can be lucrative, especially close to a city — where apartments are small and people are going to need access to space to store their extra belongings. You'll certainly need the capital and real estate to get started in the self-storage game, but once you've gotten set up, it can be relatively simple to maintain this kind of business, especially once you've started bringing in clients and filling up your space.

45. Freelance copywriting and content creation

A copywriting or content creation business can be a great option for self-motivated wordsmiths who want to work from home full time. The startup cost for this business idea is low, but the time investment can be high as you build up a roster of regular clients to keep a steady income.

46. Rideshare driver

As a rideshare driver, you use your own car and mobile device and choose your own hours. If you don't mind driving, this can be a quick and easy way to make money—whether on the side or as a full-time gig.

47. Website development and design

Every business needs at least a basic website to succeed, but many business owners don’t know how to set one up for themselves. So, if you're an IT and design wizard, you'll have endless opportunities to custom-build websites. Use a platform like Upwork or Envato to gain your first clients, then use your portfolio and word-of-mouth recommendations to grow your client base (and eventually boost your prices).

48. Sell clothes online

Thanks to online marketplaces like eBay, Amazon and Etsy, and apps like Poshmark, it's easier than ever to sell custom-made, vintage or secondhand clothing online. Opening an e-commerce clothing store helps minimize overhead costs — you don’t need to lease or staff a storefront — and you can reach customers beyond your immediate area.

49. SEO consultant

Search engine optimization (SEO) is the process of improving a website or webpage's rank for specific keywords in organic search engine results. An SEO agency is tasked with improving a client's organic search results to generate more inbound visitors and thus leads for top-of-funnel keywords by optimizing the client's website, building links to the website and/or optimizing the website technically.

50. App development

Launching a successful app is no easy task — but there have never been more resources at your disposal to help you get started, including AI tools that can help with potential technological roadblocks. Whether you want to develop apps for Android or iOS, there are large markets available for games, productivity tools and much more.

Want to start a business?

NerdWallet has rounded up some of our best information on starting a business, including structuring and naming your company, creating a solid plan and much more. We’ll help you do your homework and get started on the right foot.

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What Is a Business Plan?

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

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

• How to Start a Business: A Comprehensive Guide and Essential Steps
• How to Do Market Research, Types, and Example
• Marketing Strategy: What It Is, How It Works, How To Create One
• Marketing in Business: Strategies and Types Explained
• What Is a Marketing Plan? Types and How to Write One
• Business Development: Definition, Strategies, Steps & Skills
• Business Plan: What It Is, What's Included, and How to Write One CURRENT ARTICLE
• Small Business Development Center (SBDC): Meaning, Types, Impact
• How to Write a Business Plan for a Loan
• Business Startup Costs: It’s in the Details
• Startup Capital Definition, Types, and Risks
• Bootstrapping Definition, Strategies, and Pros/Cons
• Crowdfunding: What It Is, How It Works, and Popular Websites
• Starting a Business with No Money: How to Begin
• A Comprehensive Guide to Establishing Business Credit
• Equity Financing: What It Is, How It Works, Pros and Cons
• Best Startup Business Loans
• Sole Proprietorship: What It Is, Pros & Cons, and Differences From an LLC
• Partnership: Definition, How It Works, Taxation, and Types
• What is an LLC? Limited Liability Company Structure and Benefits Defined
• Corporation: What It Is and How to Form One
• Starting a Small Business: Your Complete How-to Guide
• Starting an Online Business: A Step-by-Step Guide
• How to Start Your Own Bookkeeping Business: Essential Tips
• How to Start a Successful Dropshipping Business: A Comprehensive Guide

A business plan is a document that outlines a company's goals and the strategies to achieve them. It's valuable for both startups and established companies. For startups, a well-crafted business plan is crucial for attracting potential lenders and investors. Established businesses use business plans to stay on track and aligned with their growth objectives. This article will explain the key components of an effective business plan and guidance on how to write one.

Key Takeaways

• A business plan is a document detailing a company's business activities and strategies for achieving its goals.
• Startup companies use business plans to launch their venture and to attract outside investors.
• For established companies, a business plan helps keep the executive team focused on short- and long-term objectives.
• There's no single required format for a business plan, but certain key elements are essential for most companies.

Investopedia / Ryan Oakley

Any new business should have a business plan in place before beginning operations. Banks and venture capital firms often want to see a business plan before considering making a loan or providing capital to new businesses.

Even if a company doesn't need additional funding, having a business plan helps it stay focused on its goals. Research from the University of Oregon shows that businesses with a plan are significantly more likely to secure funding than those without one. Moreover, companies with a business plan grow 30% faster than those that don't plan. According to a Harvard Business Review article, entrepreneurs who write formal plans are 16% more likely to achieve viability than those who don't.

A business plan should ideally be reviewed and updated periodically to reflect achieved goals or changes in direction. An established business moving in a new direction might even create an entirely new plan.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. It allows for careful consideration of ideas before significant investment, highlights potential obstacles to success, and provides a tool for seeking objective feedback from trusted outsiders. A business plan may also help ensure that a company’s executive team remains aligned on strategic action items and priorities.

While business plans vary widely, even among competitors in the same industry, they often share basic elements detailed below.

A well-crafted business plan is essential for attracting investors and guiding a company's strategic growth. It should address market needs and investor requirements and provide clear financial projections.

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

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

The length of a business plan can vary greatly from business to business. Regardless, gathering the basic information into a 15- to 25-page document is best. Any additional crucial elements, such as patent applications, can be referenced in the main document and included as appendices.

Common elements in many business plans include:

• 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 : Describe the products and services the company offers or plans to introduce. Include details on pricing, product lifespan, and unique consumer benefits. Mention production and manufacturing processes, relevant patents , proprietary technology , and research and development (R&D) information.
• Market analysis : Explain the current state of the industry and the competition. Detail where the company fits in, the types of customers it plans to target, and how it plans to capture market share from competitors.
• Marketing strategy : Outline the company's plans to attract and retain customers, including anticipated advertising and marketing campaigns. Describe the distribution channels that will be used to deliver products or services to consumers.
• Financial plans and projections : Established businesses should include financial statements, balance sheets, and other relevant financial information. New businesses should provide financial targets and estimates for the first few years. This section may also include any funding requests.

Investors want to see a clear exit strategy, expected returns, and a timeline for cashing out. It's likely a good idea to provide five-year profitability forecasts and realistic financial estimates.

2 Types of Business Plans

Business plans can vary in format, often categorized into traditional and lean startup plans. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These are detailed and lengthy, requiring more effort to create but offering comprehensive information that can be persuasive to potential investors.
• Lean startup business plans : These are concise, sometimes just one page, and focus on key elements. While they save time, companies should be ready to provide additional details if requested by investors or lenders.

Why Do Business Plans Fail?

A business plan isn't a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections. Markets and the economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All this calls for building 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 its nature. Updating your business plan is crucial due to changes in external factors (market trends, competition, and regulations) and internal developments (like employee growth and new products). While 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 ideal for quickly explaining a business, especially for new companies that don't have much information yet. Key sections may include a value proposition , major activities and advantages, resources (staff, intellectual property, and capital), partnerships, customer segments, and revenue sources.

A well-crafted business plan is crucial for any company, whether it's a startup looking for investment or an established business wanting to stay on course. It outlines goals and strategies, boosting a company's chances of securing funding and achieving growth.

As your business and the market change, update your business plan regularly. This keeps it relevant and aligned with your current goals and conditions. Think of your business plan as a living document that evolves with your company, not something carved in stone.

University of Oregon Department of Economics. " Evaluation of the Effectiveness of Business Planning Using Palo Alto's Business Plan Pro ." Eason Ding & Tim Hursey.

Bplans. " Do You Need a Business Plan? Scientific Research Says Yes ."

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

Harvard Business Review. " How to Write a Winning Business Plan ."

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

SCORE. " When and Why Should You Review Your Business Plan? "

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How to Raise Capital for Your Small Business (10 Effective Ways)

• August 13, 2023
• by Epifania

If you’re running a small business or nurturing a fresh startup, you’re likely all too familiar with the trials and tribulations of raising capital. It’s not unlike scaling a mountain: daunting at first glance, demanding in execution, but spectacularly rewarding when you finally reach the summit. As you’re scrambling for funds, the seemingly monumental task of raising capital can sometimes feel like the ‘Everest’ of entrepreneurship.

Small businesses are the engine room of economies worldwide. They’re nimble, innovative, and driven by ambitious dreamers. However, as any seasoned entrepreneur will tell you, dreams alone won’t keep the lights on or the production line humming. That’s where capital comes into play.

Capital is the lifeblood of any business. It’s the fuel that keeps the entrepreneurial engine purring, the essential resource that turns the gears of commerce. In the world of small business, securing enough capital can mean the difference between steady growth and being stuck in the startup blocks. It’s the crux of your business, allowing you to purchase inventory, invest in equipment, pay staff, fund marketing efforts, and cover the multitude of other expenses that inevitably crop up.

Yet, the paradox is clear: while capital is crucial for small businesses to thrive, it’s often the most challenging thing to secure. Traditional lenders can be hesitant to invest in new, untested ventures, and the complexities of navigating venture capital can be mind-boggling. Moreover, the rise of the digital era has brought a whole new set of opportunities – and obstacles – for small businesses seeking capital.

In short, raising capital is a multifaceted challenge, but don’t let the task deter you. It may be one of the most strenuous stages of running a small business, but remember – every successful business that exists today once faced the same uphill climb. In this blog post, we’re going to share the ropes, the routes, and the crucial gear you’ll need to scale your own capital-raising mountain. Let’s embark on this ascent together!

Table of Contents

Self-Funding: The Art of Bootstrapping

Considered the entrepreneurial equivalent of learning to swim by jumping in the deep end, self-funding, also known as ‘bootstrapping’, is the first stop on our capital-raising journey. Bootstrapping is where it all begins for many business owners, who dip into their savings or reinvest profits to fund their ventures.

Self-funding presents an attractive alternative to traditional funding sources, primarily because it allows you to maintain control. You get to call the shots, make decisions, and steer your ship without external interference or pressure to provide immediate returns to investors.

However, the journey of bootstrapping is not without its bumps. The financial risks rest squarely on your shoulders, and your personal savings can quickly evaporate if things don’t go as planned.

5 Pros of Self-Funding a Business

• Full Control: You retain full ownership and decision-making authority in your business. There’s no need to compromise with investors or lenders.
• No Equity Dilution: You won’t have to share your business’s profits with external investors since there are none.
• No Repayment Obligation: Unlike loans, self-funding doesn’t need to be repaid, freeing you from debt obligations.
• Flexibility: You have more flexibility to pivot your business direction as you’re not bound by investor expectations or loan conditions.
• Privacy: You can maintain privacy about your business operations and financial status since there are no external parties involved.

5 Cons of Self-Funding a Business

• Limited Resources: Your funding is limited to your personal savings or the business’s profits, which may not be enough for larger investments or expansion.
• Personal Financial Risk: You’re putting your own money on the line. If the business fails, you could lose your personal savings.
• Slow Growth: Due to limited funds, growth might be slower compared to businesses with external funding.
• Missed Opportunities: You may miss out on valuable networks, advice, and market credibility that investors can provide.
• Stress: Self-funding can cause significant stress, as the financial success of your business directly impacts your personal financial security.

10 Tips on Saving and Budgeting for Self-Funding

• Detailed Budgeting: Establish a comprehensive and detailed budget. Keep track of every expense, no matter how small, and plan for both fixed and variable costs.
• Separate Personal and Business Finances: Maintain a clear distinction between your personal and business finances to avoid confusion and ensure accountability.
• Prioritize Necessary Costs: Prioritize your spending on necessary costs that will help generate revenue or reduce other costs, such as essential equipment or marketing.
• Reduce Non-Essential Expenses: Eliminate or reduce non-essential expenses. This may include anything from unnecessary subscriptions to expensive office spaces.
• Automate Savings: If possible, set up automated savings transfers to a separate account designated for business expenses. This helps to build your business fund consistently over time.
• Negotiate with Vendors: Try to negotiate better deals with your suppliers and vendors. Every dollar saved is a dollar that can be reinvested into your business.
• Monitor Cash Flow: Keep a close eye on your cash flow to ensure you always have enough funds to cover your expenses and any unexpected costs.
• Invest in Growth: When you do spend, focus on areas that can drive growth, such as marketing or product development.
• Review and Adjust Regularly: Regularly review your budget and make adjustments as necessary. Your business’s needs will change over time, and your budget should reflect this.
• Stay Disciplined: Above all, stay disciplined. It may be tempting to splurge on non-essentials or bypass your budget, but the success of self-funding relies heavily on disciplined financial management.

The key to successful bootstrapping is smart budgeting and saving. Treat your business funds like a frugal squirrel treats its acorns. Prioritize essential expenses, cut back on non-essentials, and always be on the lookout for cost-effective alternatives. Remember, the goal of bootstrapping is not just to stay afloat, but to generate enough profits to reinvest in your business’s growth.

This scrappy, resilient approach to business can be as rewarding as it is challenging. As you venture into the world of self-funding, remember to paddle before you dive. Plan wisely, spend judiciously, and embrace the thrill of steering your own ship.

Friends and Family: A Closer-to-Home Funding Solution

From the historical pages of famous enterprises like Walmart and Amazon to your local bakery, friends and family have often played the part of financial fairy godmothers (and godfathers). Their willingness to support your entrepreneurial dream can provide the critical initial push needed to move your business from concept to reality.

10 Tips for Preserving Relationships When Borrowing from Family and Friends

Approaching those closest to you for funding might feel like tiptoeing through a minefield of potential misunderstandings and damaged relationships. However, there are ways to ease the process while keeping the bond intact. First and foremost, be transparent about your business plans, risks involved, and the likelihood of repayment. Remember, honesty is the best policy when it comes to money and relationships.

• Transparency: Be clear about your business plans, how the funds will be used, and the risks involved. Honesty can help avoid misunderstandings and build trust.
• Formal Agreement: Treat the loan like a business transaction. Create a written agreement detailing the terms of the loan, including the amount, repayment schedule, and interest.
• Open Communication: Maintain open lines of communication throughout the lending period. Regular updates about your business’s progress and financial status can reassure your lenders and keep them involved.
• Professionalism: Always behave professionally. Respect the transaction as a business agreement, not just a personal favor.
• Realistic Expectations: Only borrow what you genuinely believe you can repay and establish a realistic repayment plan. Over-promising and under-delivering can lead to resentment.
• Fair Interest: If you agree on interest, ensure it’s fair. It shouldn’t be so high it strains your finances or so low it devalues their contribution.
• Prioritize Repayment: Make repaying the loan a priority. Even if your business faces financial difficulties, show that you are committed to honoring your agreement.
• Gratitude: Show appreciation for their support. A simple thank you can go a long way in maintaining positive relationships.
• Legal Consultation: Consult with a lawyer to ensure your agreement aligns with local laws and regulations, which can help avoid legal complications down the line.
• Plan for the Worst: Discuss what happens if you can’t repay the loan. It’s tough but necessary to address this scenario upfront to avoid future conflicts.

Necessary paperwork and legalities involved

It’s essential to treat the funding arrangement as you would with a formal lender. Draft an agreement outlining the loan terms, such as the amount, repayment schedule, interest, and what happens if you can’t repay the loan. This document will help avoid any potential misunderstanding and keep everyone on the same page.

When it comes to legalities, consider seeking advice from a lawyer to ensure your agreement abides by applicable laws and regulations. They can help you navigate issues like potential tax implications, or the transition from a loan to equity if the circumstances change.

Keep in mind, borrowing from friends and family is about more than just securing funds; it’s about honoring their faith in you by putting their hard-earned money to good use and striving for the success of your business. Always approach these transactions with the utmost respect, professionalism, and intention to repay. As the adage goes, “borrowed bread is sweet, but it’s better to return the loaf.”

When done correctly, raising capital from friends and family can be an effective, and often more flexible, way to fund your small business, while also strengthening your support network for the challenging entrepreneurial journey ahead.

Crowdfunding: Harnessing the Power of the Crowd

Crowdfunding is a unique and democratic approach to raising funds, enabling entrepreneurs to turn their ideas into reality. It functions as a digital marketplace where creators meet supporters, presenting business proposals or projects with set financial goals. 

The success of a crowdfunding campaign relies on a compelling narrative that resonates with potential backers, who can range from local enthusiasts to global philanthropists. Supporters contribute funds, sometimes receiving rewards such as early access to products or equity in the business. 

Crowdfunding not only generates capital, but it also validates business ideas, creates a supportive community, and builds brand awareness.

However, crowdfunding is not a straightforward process of setting up a page and awaiting fund influx. It demands careful planning, an appealing pitch, rewarding returns, and regular communication with backers. This tool can be a catalyst for small businesses, transforming ideas into profitable realities. 

Multiple types of crowdfunding exist, each offering unique benefits and risks. For instance, donation-based crowdfunding is typically for social causes, while rewards-based crowdfunding allows backers to pre-order a product or service. 

Equity-based crowdfunding gives supporters shares in the company, whereas debt-based (or peer-to-peer lending) involves lending money to businesses for interest and loan amount returns. 

Finally, revenue and royalty-based crowdfunding see backers receiving a percentage of ongoing gross revenues or product/service profits, respectively.

4 Pros of Crowdfunding

• Validation: It’s a great way to test the viability of your business or idea in the market. If people are willing to contribute to your campaign, it’s a good indication that there’s interest and demand for what you’re offering.
• Marketing: A crowdfunding campaign can act as a promotional tool. By spreading the word about your campaign, you’re also creating awareness for your business.
• Customer Base: You can build an early customer base who are emotionally invested in your product or service. These early backers can become your brand ambassadors and provide valuable feedback.
• Funding Without Debt: Unlike loans, you don’t have to repay the money raised through crowdfunding (unless it’s debt-based crowdfunding). This can make it a more attractive option for new businesses.

4 Cons of Crowdfunding

• All-or-Nothing: Many platforms follow an all-or-nothing model where if you don’t meet your funding goal, you won’t receive any funds. This can be risky if you rely heavily on this method for capital.
• Public Exposure: Your business plan and operations are in the public domain, which can be a double-edged sword. While it increases visibility, it also exposes you to potential copycats.
• Time-Consuming: Running a successful crowdfunding campaign can be a full-time job. It requires significant time and effort in marketing, customer service , reward fulfillment, etc.
• Potential Damage to Reputation: If your campaign fails to deliver on promises, it can damage your reputation. It’s essential to keep backers updated about any challenges or changes in plans to maintain trust.

In summary, crowdfunding provides entrepreneurs with an opportunity to validate their ideas, engage with potential customers, and garner necessary funds. It emphasizes the importance of community building, transparency, and effective communication. Proper planning, realistic goal setting, crafting an appealing story, and building a strong marketing strategy are critical to success. Therefore, crowdfunding is not just a fundraising tool; it’s a stepping stone to turning dreams into thriving businesses.

Angel Investors

Imagine if you had a guardian angel who not only believed in your business idea but also had the resources to finance it. In the business world, these guardian angels exist and are known as angel investors.

Angel investors are typically high-net-worth individuals who provide financial backing for small startups or entrepreneurs, often in exchange for ownership equity or convertible debt. They are “angels” in the sense that they are willing to invest in businesses when other potential investors might see too much risk. Angel investors often have a personal interest in the industry or technology behind the business they’re investing in, and they may provide value beyond capital, such as industry connections or mentorship.

Angel investors are different from venture capitalists, who invest other people’s money rather than their own. They often support businesses in early stages, taking more significant risks in the hope of gaining substantial returns when the business succeeds.

6 Steps to Attract Angel Investors

• Build a Strong Business Plan: Angels want to see a comprehensive business plan that includes details about your market, products or services, business model, and strategies for growth.
• Show a Proven Track Record: If you can demonstrate past successes, even on smaller projects, you’ll be more attractive to angel investors.
• Have a Unique Value Proposition: Angel investors are often looking for businesses that offer something new or different. Make sure your business stands out.
• Assemble a Skilled Team: The strength of your team is often as important as the strength of your idea.
• Network: Angel investors often rely on referrals, so attending business events and joining entrepreneurial communities can increase your chances of meeting the right people.
• Show Potential for High Returns: Angel investors are looking for businesses that can grow quickly and deliver a high return on investment.

But, before you engage with an angel investor, it’s essential to understand that they may expect a degree of control in your business, depending on the terms of the investment. This could range from a board seat to decision-making powers in certain aspects of the business. While their experience and advice can be valuable, you must consider whether you’re comfortable with this level of involvement.

In conclusion, angel investors can provide not only the much-needed capital but also valuable expertise and connections to turbocharge your small business. With a compelling business plan, proven track record, unique value proposition, and a strong team, you can attract the right angels who can help your business take flight.

Venture Capitalists

Venture Capitalists (VCs) may sound like explorers on a quest for lucrative business ventures, and that’s not far from the truth. They are financial explorers, searching for the next big business idea to fund and, in turn, to gain a considerable return on their investment.

Venture capitalists are typically firms or funds that invest other people’s money in startups or small businesses that have the potential for high growth. Unlike angel investors who often invest their own money, VCs manage the pooled money of others in a professionally-managed fund. They usually invest in exchange for equity, intending to exit their investment via an IPO or sale of the business further down the line.

Before we delve into how to pitch to and negotiate with venture capitalists, let’s consider the pros and cons of VC funding:

Pros of Venture Capitalism:

• Large Funding Amounts: VCs often invest large sums, allowing businesses to accelerate their growth quickly.
• Expertise and Connections: VCs often bring industry knowledge, experience, and extensive networks to the table.
• Long-term Investment: Venture capitalists generally take a long-term view of their investments, often several years.

Cons of Venture Capitalism:

• Loss of Control: To protect their investment, VCs often demand a degree of control in the business, which may involve decision-making power or board seats.
• High Expectations: VCs invest with the expectation of substantial returns, which means intense pressure for the business to perform.
• Complex and Time-consuming: The process of obtaining VC funding can be complicated and lengthy.

If you think VC funding is the right path for your business, you need to make an effective pitch. This process begins long before you’re in the meeting room. Do your homework, understand the VC’s investment preferences, their portfolio, and how your business fits in.

When you’re pitching, remember that it’s not just about your product or service. Venture capitalists invest in the team as much as the idea. Show them you have the skills, drive, and adaptability to make the business successful. Make sure you have a robust business plan, and be ready to answer detailed questions about your market, competition, financial projections, and growth strategies.

Negotiating with venture capitalists can be complex. It’s not just about the amount of money they’re willing to invest, but also about the value of your company, the percentage of equity they will hold, and the degree of control they will have. Remember that it’s okay to negotiate, but also be realistic about what you can achieve.

Venture Capital funding isn’t for every business, but if you’re looking for significant investment and are willing to share control to supercharge your company’s growth, it could be the perfect match.

Bank Loans: A Traditional Path to Business Financing

When it comes to funding your small business, one of the first options that may spring to mind is a traditional bank loan. Banks have been financing businesses for centuries, and while there are many other types of funding available today, bank loans remain a popular choice. Why? They often offer lower interest rates and can provide substantial capital for various business needs, such as working capital , equipment purchases, or expansion.

Understanding Interest Rates and Repayment Plans

To make the most of a bank loan, it’s essential to understand interest rates and repayment plans. The interest rate is the cost of borrowing money and is typically expressed as a percentage of the loan amount per year. A lower interest rate means you’ll pay less back in addition to your loan amount.

Repayment plans outline how you’ll pay back the loan, including the amount of each payment and the frequency of payments. This could range from monthly to quarterly or annual payments, depending on the loan terms. Understanding these elements is crucial to ensure you can meet your repayment obligations without straining your business’s cash flow.

Making Your Business Appealing to Banks

Just like you would pitch to an investor, you need to present a compelling case to the bank to secure a loan. Here’s how to make your business appealing to banks:

1. Strong Business Plan: A well-crafted business plan is a must. It should clearly outline your business’s nature, market research, financial projections, and strategies for growth.

2. Good Credit History: Banks will check both your business and personal credit history. A good credit score can increase your chances of securing a loan and potentially get you a better interest rate.

3. Collateral: Banks often require some form of collateral for the loan. This could be business assets, personal assets, or both. Having collateral reduces the risk for the bank and can make your loan application more appealing.

4. Financial Statements: Up-to-date, well-organized financial statements can show the bank that your business is financially healthy and capable of repaying the loan. This includes income statements, balance sheets, and cash flow statements.

Remember, while bank loans can be a great way to fund your small business, they do come with obligations and risks. Be sure to thoroughly evaluate your business’s financial situation and consider all your financing options before deciding on the best path forward.

Small Business Grants and Their Benefits

If you’ve ever dreamed of receiving money to help your small business grow without the stress of repayment, then small business grants might be your golden ticket. Unlike loans, grants provide funds for your business that you typically do not have to pay back, making them an attractive option for business financing.

The benefits of grants extend beyond the financial aspect. Winning a grant can significantly enhance your business’s credibility, opening doors to more opportunities. Additionally, the process of applying for a grant can help you fine-tune your business plan and better understand your business’s objectives and goals.

How To Find and Apply for Suitable Small Business Grants

Small business grants are often highly competitive and come with specific eligibility requirements. To improve your chances of securing a grant, you’ll need to know where to look and how to apply effectively. Many grants are industry-specific or targeted towards businesses owned by individuals of specific demographic groups.

Start by searching for grants on local, state, and federal government websites. Additionally, numerous private companies and nonprofits offer grants. Be thorough in your research, and create a list of potential grants that align with your business and personal circumstances.

When it comes to applying, attention to detail is crucial. Ensure your business meets all the eligibility criteria, follow the application instructions to the letter, and submit your application by the deadline. Take your time to craft compelling, concise answers to any questions or prompts, focusing on how your business aligns with the grant’s purpose and the impact the grant funds would have on your business.

Real Examples of Small Business Grants Available

There are numerous grants available for small businesses across various sectors. Here are a few examples:

Federal Small Business Innovation Research (SBIR) Program: This competitive grant program encourages domestic small businesses to engage in federal research and development that has the potential for commercialization.

National Association for the Self-Employed (NASE) Growth Grants: NASE members can apply for these grants to finance a particular small business need.

Eileen Fisher Women-Owned Business Grant Program: This program supports innovative, women-owned companies that are beyond the start-up phase and ready to expand their business and their potential for positive social and environmental impact.

FedEx Small Business Grant Contest: FedEx awards grants and services to innovative small businesses in an annual competition.

These are just a few examples. The availability of grants can change, so it’s crucial to continually research and apply to maximize your chances of receiving a grant. Remember, each grant application takes time and effort, but the potential rewards can be substantial.

Business Credit Cards: A Flexible Source of Capital

In the fast-paced world of small business, having a flexible source of capital at your fingertips can be invaluable. This is where business credit cards come into play. Similar to personal credit cards, they provide a line of credit that you can use for various business expenses. This can include everything from office supplies and software subscriptions to travel expenses and even small equipment purchases.

One of the main benefits of business credit cards is their flexibility. Unlike loans, which are typically one-off lump sums that you repay over time, credit cards give you continuous access to a set amount of funds, as long as you’re paying off your balance. They can be particularly useful for handling cash flow gaps and unexpected expenses.

Understanding Credit Card Terms and Conditions

Before applying for a business credit card, it’s crucial to understand the terms and conditions. One of the most critical aspects is the interest rate, which can vary widely between cards. While most cards offer a grace period during which you can pay off your balance without incurring interest, if you carry a balance from month to month, you’ll be charged interest.

Other critical terms include the card’s credit limit, any annual or monthly fees, and the penalties for late or missed payments. Additionally, many business credit cards offer rewards programs, such as cashback or points for certain types of purchases, which can provide additional value.

6 Tips for Managing Credit and Avoiding Debt Pitfalls

While business credit cards can be a handy tool, it’s essential to use them responsibly to avoid potential debt pitfalls. Here are some tips:

1. Keep business and personal expenses separate: This makes it easier to track your business expenses and can simplify your accounting.

2. Pay off your balance each month: If possible, avoid carrying a balance from month to month to minimize interest charges.

3. Regularly review your statements: This can help you spot any errors or fraudulent charges and keep track of your spending.

4. Don’t exceed your credit limit: Going over your limit can result in fees and could negatively impact your credit score.

5. Make payments on time: Late payments can result in penalties and can harm your credit score.

6. Use rewards wisely: If your card offers rewards, make sure you’re using them to your advantage, whether that’s by strategically making certain purchases with your card or regularly redeeming your rewards.

Remember, while business credit cards can provide a valuable source of capital, they should be part of a broader financial strategy that also includes other funding sources and good financial management practices.

Microloans: Small Sums with Big Impact

In the landscape of business financing, sometimes smaller is better. This is the philosophy behind microloans, small loans that are often used by startups and small businesses that need access to a modest amount of capital. Microloans can range from a few hundred dollars up to $50,000, but are typically in the $500 to $10,000 range. These loans can provide essential funding for equipment purchases, inventory, or working capital, often at competitive interest rates.

One of the key benefits of microloans is their accessibility. Unlike traditional bank loans, which often require a solid business history and significant collateral, microloans are often more flexible in their requirements, making them ideal for newer businesses or those with less traditional business models.

Microloan Programs for Small Businesses

There are various microloan programs designed to support small businesses. Here are a few:

1. The U.S. Small Business Administration (SBA) Microloan Program: The SBA offers microloans up to $50,000 through intermediary lenders, often non-profit organizations. These loans can be used for working capital, inventory, supplies, and equipment .

2. Kiva: Kiva is a non-profit that offers microloans up to $15,000 at 0% interest for U.S. entrepreneurs . These loans are crowdfunded by a community of supporters worldwide.

3. Accion Opportunity Fund: This non-profit lender provides loans ranging from $300 to $100,000 to underserved business owners, including minorities, women , and businesses in low-income communities.

Applying for a Microloan: A Step-by-Step Guide

Before diving into the application process, remember that each lender will have its specific requirements. However, here are general steps you can expect:

Step 1: Assess Your Needs and Eligibility

Determine how much you need to borrow and what you’ll use the funds for. Research different lenders to see if you meet their eligibility criteria.

Step 2: Prepare Your Business Plan

Most lenders will want to see a comprehensive business plan that details your business model, market research, financial projections, and how you plan to use the loan funds.

Step 3: Gather Necessary Documents

This typically includes financial statements, tax returns, and legal documents like your business license. It may also include personal financial information.

Step 4: Submit Your Application

You’ll usually need to fill out an application form detailing your business information, loan request, and how you plan to repay the loan. Some lenders allow online applications.

Step 5: Interview and Negotiation

Some lenders may require an interview or meeting to discuss your application. If approved, you’ll then discuss the terms of the loan, including interest rate and repayment schedule.

Step 6: Loan Disbursement

If everything goes well, you’ll sign a loan agreement, and the funds will be disbursed. You can then start using them as planned.

Remember, while microloans can provide a valuable source of capital for small businesses, they are still loans and need to be repaid. Be sure to understand the terms and only borrow what you can afford to repay.

Equipment Financing: A Practical Route to Capital

When we speak about raising capital for your business, it doesn’t always have to come in the form of cash. Instead, equipment financing provides you with the machinery, technology, or other necessary tools you need to grow and enhance your operations. Essentially, equipment financing is a loan or lease that helps you purchase or rent business equipment, from computers to construction machinery.

One of the most significant advantages of equipment financing is that it allows you to get your hands on vital business tools without the significant upfront costs. Plus, the equipment itself serves as collateral, which means you typically don’t need to put additional assets on the line. This opens doors to businesses that may not have extensive credit histories or additional collateral.

How to Secure Equipment Financing

Here’s a basic roadmap to secure equipment financing:

Step 1: Evaluate Your Needs

Define the specific equipment you need, its cost, and how it will contribute to your business.

Step 2: Shop Around

Compare terms and rates from various lenders. Be sure to look beyond interest rates and examine the total cost of financing.

Step 3: Check Your Credit

While the equipment serves as collateral, lenders will still look at your credit history. Ensure your credit report is accurate and up-to-date.

Step 4: Gather Your Documents

Lenders may require your financial statements, tax returns, and a detailed business plan.

Step 5: Apply

Once everything is in order, submit your application.

Mitigating Risks in Equipment Financing

While equipment financing can be a valuable resource, it also comes with potential risks. One such risk is that the equipment may become outdated before you finish paying it off, leaving you paying for equipment that’s no longer competitive. To mitigate this, consider the lifespan of the equipment and align it with the term of your loan.

You also need to account for the total cost of the loan, including interest and fees, which can add up over time. Be sure to thoroughly read and understand the loan agreement before signing.

Lastly, remember that failure to repay the loan can result in the lender seizing the equipment. Therefore, it’s essential to realistically assess your ability to repay the loan within the set timeline. If in doubt, consider consulting with a financial advisor to help make the most suitable decision for your business circumstances.

In essence, while equipment financing may not boost your bank balance, it does boost your business’s capabilities, which can be just as valuable when it comes to driving growth and success.

Conclusion: Multiple Avenues to Capital

Over this journey, we’ve explored an extensive range of paths that lead to the same destination – raising capital for your small business. We’ve delved into the nuts and bolts of self-funding, embraced the warmth of friends and family, and surfed the waves of crowdfunding. We’ve met the angel investors with their keen eyes and open checkbooks, and stepped into the fast-paced world of venture capitalists.

We’ve understood the dependable steadiness of bank loans and the buoyant promise of business grants. We’ve wielded the power of business credit cards, discovered the humble yet potent microloans, and equipped ourselves with the understanding of equipment financing. In essence, the road to capital is vast and varied, and understanding these various routes is the first step towards your destination.

Yet, the important takeaway isn’t just the sheer variety of options available, but rather the understanding that each option comes with its own set of benefits, requirements, and potential challenges. Therefore, it’s crucial to not just seek out capital, but to carefully analyze your business’s specific needs, risk tolerance, and long-term objectives before identifying the most suitable funding strategy.

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19 Most Profitable Small Business Ideas Worth Starting in 2024

• by Lightspeed

minute read

This year, you’ll need to be prepared to adapt to shifting customer expectations, global conditions and economic realities. 

Thinking about starting a business this year? Here’s what you need to know.

What’s considered a “small” business?

How many small businesses are there in the united states and canada as of 2024, how can i start a small business, what is a good business to start in 2024, prepare your business for the future of commerce.

Download our free playbook and learn how to sell on different channels, boost loyalty and increase foot traffic with technology.

The SBA defines a small business as any company that either employs fewer than 500 employees or falls beneath a specific annual receipts cap. 

Most small businesses in the U.S. are much smaller—the average small business employs 1 to 19 people .

Recent statistics tell us that there were about 33.2 million small businesses in the United States and over 1.35 million in Canada. That’s a whopping 99.9% and 98.1% respectively of the total number of businesses in each country. 

Small business owners employ 61.6 million people, or almost half of the workforce in the US. In Canada, small businesses employ 5.7 million individuals across the country— just under 47% of the total private labor force.

So you’re ready to be your own boss? Here’s what you need to do.

• Research your small business idea.
• Make sure to research wider economic conditions and outlook and the general health and makeup of businesses in your area.
• Start planning your business. Download a business plan and start filling it out. Be as detailed as possible. The more solid your business plan, the stronger foundation you have to start your small business.
• Secure funding . Start approaching sources of funding, like banks and investors. They’ll want to see your business plan.
• Make sure the legal parts are covered . What certificates do you need? What permits? What laws should you be aware of? Get the right approvals.
• Secure a location, if you need one. You should have scouted potential locations while making your business plan. Now that you have your funding, sign a lease.
• Get your business management software.
• If you’re opening a retail store or charging for services, you’ll need a point of sale system . If you have employees, you’ll need payroll management. No matter what, you’ll need accounting software.  
• Acquire inventory.  Find wholesalers for small businesses from which to source your products and start contacting them. Expos and online supplier directors are great places to start.  
• Build a team. If you’re just starting, you may be able to run your business on your own. But as things progress, you’ll need to bring in part-time or full-time employees. Be sure to research average wages in your area.  
• Build your website. Having an online presence is crucial, even if you’re not planning to sell anything online. Build a site and open your social accounts.

Want more advice?  Check out our in-depth article to starting a small business here.

What small business idea is most profitable?

There isn’t one answer to this question. The most profitable business idea changes depending on the economic environment you’re in. 

In an economic boom, profitable small businesses include luxury goods, travel and real estate.

In a recession, repair and resale retail are more likely to be profitable .

No matter what, for a business to be profitable, the return needs to be higher than the investment. That doesn’t always mean a low investment is guaranteed to pay off—some of the most lucrative businesses require high initial capital. 

However, businesses that require a high initial investment are always a higher risk. If you’re opening your first small business, a low investment business idea is probably going to be safer.

What businesses make a lot of money?

A business in a high-growth industry with low startup costs, less competition and a good long-term outlook is most likely to be profitable. Examples are financial services, personal services (like personal training or pet care), pet and baby supplies and well-positioned retail stores. 

No matter the industry, profitable businesses are well run, in demand and with a cost of goods sold (or COGS) that doesn’t completely overpower revenue. A business without a lot of competition can fail, and a business with a ton of competition can out-compete the others. 

If you want your business to make money, you need data. 

Before you start your business, you need data about the economic climate, the demographics of where you want your business to be based, the outlook and tactics of competitors and the cost of supplies, technology and labor.

Once your business is open, you need your own data. For example, if you open a retail store, you can use tools like Lightspeed’s built-in reports and Advanced Reporting to monitor your sales, trends and margins. With that data in hand, you can make decisions about profitability instead of relying on anecdotes and educated guesses. 

Without data, your small business might run into expensive potholes you never saw coming, and you might make decisions that aren’t in your best interest.

Which business will be most profitable in the future?

Innovation is key to keeping your business profitable in the future.

Again, this is where data is important. The way things have always been done isn’t always the best way. If you’re setting and measuring goals and key performance indicators, you can innovate and stay on top of what your customers need and how they’re evolving.

Consider financial services, for example. Everyone needs financial services, so it’s likely to still be a profitable industry in the future. But as more and more digital natives—people born after the internet took over our daily lives—grow up, how they interact with financial services will change. 

Is your financial services company equipped to serve clients online? It should be.

If you’re focused on the hottest business right now, you may not set yourself up for the long run. Don’t just throw yourself into the latest fads—they won’t always set you up for future profitability if you don’t address them properly. 

Take the retail industry for an example. As concern for the environment grows, fewer shoppers want plastic in their goods. Right now, vegan leather is a huge trend and is growing , which means it may be a good bet at the moment, but a lot of vegan leather is actually plastic . 

To ride the vegan leather wave now and into the future, it’d be best to carry vegan leather made from sources other than plastic. That way, you’re catering to current demand and future-proofing against growing consumer concerns at the same time.  

Which business is most profitable for beginners?

If you’re a first time business owner, you’ll want:

• Reasonable startup costs. Every business has some startup cost, but there’s a difference between funding a small operation and funding a huge, specialized business. Keep in mind that startup costs should be reasonable, but not always as low as possible. Forgoing a physical location might make it harder to get off the ground, and opting for pen-and-paper instead of a cloud point of sale system will just add extra work.  
• Manageable overhead costs. Once a business is established, you’ll need the operating costs to be reasonable.
• Maximized inventory, if applicable. This doesn’t mean a lot of inventory. It means being smart about it—everything you order should be done with a strategy to sell it within six months (give or take, depending on the industry).

Examples of businesses that fit the bill are food trucks, cleaning companies, online stores,  drop shipping and pet services like grooming or walking. 

19 small business ideas you can try

1. home improvement services.

While the housing market has slowed down in recent months , new homeowners often want to fix up their homes, which creates a demand for home improvement services. 

Individuals who have recently purchased a home may lack the necessary skills or knowledge to successfully carry out renovations, leading them to seek out the assistance of a professional. 

Services related to home improvement encompass a wide range of tasks such as interior design, carpentry, contracting, plumbing and landscaping. 

These services typically require specific training and access to specialized equipment and materials, resulting in relatively high startup costs. Additionally, the demand for such businesses may vary depending on the region, with some areas experiencing higher levels of home purchases and renovations than others.

2. Cleaning services

Cleaning services offer essential opportunities to both residential and commercial properties, helping to manage tasks many people do not enjoy or do not have time to complete. These services can function as home-based support one or more times per week, or as a daily resource for commercial operations. 

With a cleaning service, no physical office is required, equipment costs are low and can be billed back to the client and hours of operation are flexible. That’s why enterprising entrepreneurs can find success in this industry.

3. Tutoring services

Starting a tutoring service is a great way to help those struggling with core concepts or gain further mastery in a specific area. Here’s a sample list of the subject areas that your tutoring business could specialize in:

• SAT/ACT prep
• College essay prep
• Sciences (biology, chemistry, physics)
• Foreign languages
• Mathematics
• Computer science

Thanks to Zoom and other remote learning tools, there’s no need to hold lessons in person—all you need is a phone, tablet or computer, making the startup costs for this type of business relatively low. Depending on your location and level of education, your tutoring service could charge anywhere from $40 to $65 an hour.

4. Personal training and fitness instructors

Fitness trends change, but the demand for trainers and good content remains. Today, trainers can connect with clients on platforms like YouTube, TikTok, and Instagram Live. They use social media to find clients and offer personalized workout programs at a price that works for them.

Getting started in personal training can be fairly simple. You can take a formal certification exam. In some cases, just being a self-taught fitness nerd is enough to break into the industry.

5. Delivery services

Food delivery services have grown tremendously.

To ride this wave, you could offer your own local courier service to deliver groceries, medications or run other essential errands. In addition to charging a standard rate, you could charge additional fees for lengthier deliveries, rush orders or delivering heavy or bulky items.

6. Baby supplies

No matter the economic outlook, babies need clothes and supplies, and children need child care. 

You don’t need any formal training to open a retail store or sell online, but you do need the right tools. 

For a baby supply store, that can include loyalty programs to help parents save when they pick you over the competition.

7. Pet store

The pet store industry grew to $261 billion in 2022 , and is on track to hit $350 billion globally by 2027. As more and more people adopt pets ( 66% of American households have pets , which is about 86 million households), more people will need pet supplies. 

Opening and running a pet store is a lot like a baby supply store. Pet owners will appreciate loyalty programs to save when they shop with you, which will help you build a loyal customer base for your new small business.

Tipping can also be a factor when your business does a little bit more than retail. In San Diego, South Bark Dog Wash offers grooming services in addition to pet supplies and training classes. Lisa Vella, the co-owner of South Bark, says that “a lot of people tip us on retail purchases. So with tipping through Lightspeed Payments , tips have gone up about 11% with people tipping on retail purchases, not just grooming.”

8. Digital marketing services

Having an online storefront is crucial… but not everyone knows how to build a website. 

To help small businesses build their brand and digital presence online, you can create your own digital marketing agency. 

A digital marketing agency typically offers services such as writing, social media management, web development and assistance with paid social media advertising.

Running an agency from home is simple and doesn’t require much money to start. You can work alone or hire experts in areas where you need help.

9. App development

Businesses are looking to go digital, and some may even seek to build their own apps to reach customers. 

App developers can help businesses make their visions a reality by building a custom iPhone or Android app. 

App development doesn’t require a formal degree, but prior training and experience building apps are important to have if you’re planning to break into the field. There are coding bootcamps and free online courses that can help you learn the fundamentals and get started.

10. 3D printing services

There’s rapidly growing demand for 3D printing services. In fact, this market is expected to grow to US$135.4 billion by 2033 . 

This growth is driven by the increasing adoption of 3D printing in various industries like healthcare, automotive, and aerospace for its ability to create complex, customized, and lightweight components. 

But it can also be used for making 3D-printed figurines. Toronto’s Selftraits produces 3D selfies for individuals. That means people can use their tiny selves as cake toppers, to commemorate a special occasion, or anything else.

11. Accounting services

Individuals and businesses alike rely on accounting services every year to file tax returns , and assist with bookkeeping and financial planning. This consistent demand is definitely a plus if you’re looking to start a business and have the right skill set. 

There are very minimal overhead start-up costs for accounting, and the job is easily done from home. 

Accounting requires a lot of education and certifications. Most accountants have a college degree and some have additional licenses. Those with more qualifications can earn more money.

12. Fashion resale

While sales of new apparel rise and fall with economic conditions, the popularity of fashion resale is on the rise. 

With a projected 127% growth by 2026—eight times faster than overall apparel marketing in North America—if you want to open an apparel store, you should be considering fashion resale. 

It’s a good bet in both weaker and stronger economic conditions, thanks to discounts and a desire for sustainable fashion.

To start a fashion resale company, you’ll need a business license, some initial stock and a venue for sales—that could be online, your own brick and mortar or a spot in a marketplace. The financial barrier to entry can vary.

13. Bike store (with repairs)

More and more people are picking up their bikes. Hobbyists and serious cyclists both are driving growth globally . That means if you want to open a retail store, you might consider a bike store.

Think about a bike shop that does repairs. Repairs can help your business during both good and bad times. When the economy is slow, people are less likely to buy new bikes and more likely to fix their old ones. If you offer repairs, customers will come to you for help.

14. Auto parts and repairs

At some point, every car needs a little maintenance. 

You’ll need robust inventory management if you start this small business. With all the possible parts you could carry or order in for your customers, you don’t want anything to go uncounted. Make sure you have a point of sale that can handle that inventory from day one. 

15. Electronics repair

Seeing a pattern?

Repair shops help people hold onto their devices, and electronics repair is no different. 

With growing concerns about the use of rare materials to build electronics, more customers are looking to fix their phones instead of replacing them. 

While there may not be formal certifications needed to open an electronics repair store in your area, you still need to know how to do it (or you need to hire people who do). You might want to take a course in electronics repair before opening this business.

16. Dental offices

Dental health is an important part of overall wellness. 

The dental industry offers room for success for those with the right qualifications. Dentists must earn both a bachelor’s degree and a doctorate in dentistry, and most dental hygienist roles require a minimum of two years of specialized training. Consider, also, the cost of dental equipment. 

Still, dental procedures are also often expensive and can include added costs for fillings, x-rays, extractions, and root canals. Your dental practice could earn substantial profits from common treatments.

17. Candy store

This sweet idea could be your ticket to small business success. 

Candy stores are great for experiential retail . You can hold candy making classes and showcase the candy making process on the shop floor to entice customers. 

As more people want to be entertained when they shop, a candy store could be the answer. 

18. Discount store

Shoppers love a good deal. Across North America, major retailers are investing in discount stores—particularly budget-friendly groceries . 

You have room to be creative in this category. Do you want to open an independent dollar store? A liquidation store? What about discounted used inventory?

Do some research on your area to determine the best fit. Once you’ve got your idea, make a plan for how you’ll acquire inventory. Will you work with wholesalers offering discounted goods, or will you buy damaged and unsold inventory from other retailers?

19. Dropshipping

Finally, there is dropshipping, the ultimate side business and one of the most popular small business ideas.

Dropshipping is the practice of opening an online store and offering products for sale, but never physically stocking the item yourself. You interface with the wholesaler, and the wholesaler ships the product to the customers.

Dropshipping saves on inventory storage costs, as well as shipping fees. You just need an online store to get started.

However, dropshipping is competitive—a lot of people are selling online, and a lot of them could be selling the same things you are. If you want to go this route, make sure you have other unique selling points (or USPs) to ensure customers pick you. Like with baby supplies and pet stores, a strong loyalty program might help. 

Positioning your small business for profit

There are many elements to a successful small business idea: a good plan, powerful POS tools , business savviness and experience. 

While no industry is a guaranteed success, those that are flexible, resilient, in high demand and with good margins are a solid bet. This list of small business ideas is a starting point to get you inspired this year.

If you’re inspired to open a business and you’re looking for a POS that will work with you every step of the way, let’s chat !

Frequently Asked Questions

What type of small business is the most profitable.

Small businesses in consulting, online education, and digital marketing are usually very profitable. They have low costs and can charge high fees for their specialized services.

Which small business generates the most income?

Tech small businesses like software development and IT consulting make a lot of money. They offer valuable services to clients worldwide, bringing in a lot of revenue.

What small business is in high demand?

Small businesses in the health and wellness, home improvement, and eCommerce sectors are currently in high demand.

What is the cheapest, most profitable small business to start?

Businesses that require minimal upfront investment and can be operated from home are affordable and can be profitable. For example, freelance writing, virtual assistant services and dropshipping businesses can be started with a computer and an internet connection.

What is the easiest small business to start?

The easiest small businesses to start are those that require minimal technical skills and capital: pet sitting, house cleaning and personal shopping services are some examples.

What small business industry is expected to boom in 2024?

Ecommerce in specialized markets is expected to boom in 2024. As consumers continue to favor online shopping, small businesses that offer unique products or cater to specific niches are likely to see significant growth.

Editor’s note: Nothing in this blog post should be construed as advice of any kind. Any legal, financial or tax-related content is provided for informational purposes only and is not a substitute for obtaining advice from a qualified legal or accounting professional. Where available, we have indicated the first-hand sources of the information contained in this blog post. While we strive to provide accurate content, we cannot be held responsible for any actions or omissions based on such content. Lightspeed does not undertake to complete further verifications or keep this blog post updated over time.

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How to Find the Best Small-Cap Stocks to Buy

Wall Street's best small-cap stocks to buy include biotech, real estate and industrials names.

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The second half of 2024 could be much more favorable for stockpickers looking for the best small-cap stocks to buy. 

That might sound counterintuitive after the way small caps performed through the first half of the year. After all, small caps as an asset class have been a dud. They went nowhere as mega-cap stocks pushed the broader market to record highs seemingly every other day.

To recap: the S&P 500 gained almost 15% on a price basis through the first half of the year, while the tech-heavy Nasdaq Composite rose nearly 18%. The Dow Jones Industrial Average rose just 4%, hurt by its price-weighted construction. 

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But while select Magnificent 7 stocks such as Nvidia ( NVDA ), Apple ( AAPL ) and Microsoft ( MSFT ) drove the majority of the market's gains, small caps – which tend to be more sensitive to the economic cycle and interest rates – traded sideways. Indeed, the small-cap benchmark Russell 2000 Index – struggling to stay positive for months – was slightly negative as we closed out the first half.

"Since the bull market began, a glaring feature has been the dominance of large caps (proxied by the S&P 500) and the lack of meaningful upside for small caps (proxied by the Russell 2000)," writes Liz Ann Sonders, chief investment strategist at Charles Schwab . "We think the fact that higher rates are putting more pressure on small companies' profitability is driving the performance gap."

Small-cap stocks are cheap

If there is a sliver of a silver lining to the Russell 2000's underperformance, it's that small caps are now trading at bargain basement prices. 

"Small caps stocks are historically cheap versus just about every other equity asset class," writes Grant Engelbart, investment strategist at Carson Group . "While this large valuation discount does not provide any sense of timing, it is still a tailwind for the asset class."

The strategist adds that small company earnings growth appears to have "troughed over the past year, setting up future year expectations in a big way." According to current estimates, analysts see small-cap earnings growth surpassing that of S&P 500 companies in 2025 and 2026.

And with the Federal Reserve expected to enact at least one quarter-point cut to the federal funds rate before year-end, small caps should have at least one catalyst on the horizon.

Best small-caps stocks to buy

In order to find the best small-cap stocks to buy now, we started by screening the Russell 2000 for Wall Street analysts' top-rated names.

Here's how the process works: S&P Global Market Intelligence surveys analysts' stock ratings and scores them on a five-point scale, where 1.0 equals Strong Buy and 5.0 means Strong Sell. Any score of 2.5 or lower means that analysts, on average, rate the stock a Buy. The closer the score gets to 1.0, the stronger the Buy call.

In other words, lower scores are better than higher scores.

We further limited ourselves to stocks with at least 10 Strong Buy recommendations (in order to ensure adequate analyst coverage and sample size). Lastly, we dug into research, fundamental factors, valuation, analysts' estimates and other data on the top names.

Our screen of the Street's best small-cap stocks served up a list dominated by the healthcare sector, mostly pharmaceutical and biotechnology companies. That's to be expected, and investors should always do their own due diligence when considering, say, a clinical-stage biotech firm, which is essentially a speculative investment. 

In other cases, some of these names – a couple of industrials stocks and a REIT – might just surprise you. 

And with that, have a look at the table below to see Wall Street's best small-cap stocks to buy now. 

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Dan Burrows is Kiplinger's senior investing writer, having joined the august publication full time in 2016.

A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.

Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.

In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics, demographics, real estate, cost of living indexes and more.

Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.

Disclosure: Dan does not trade stocks or other securities. Rather, he dollar-cost averages into cheap funds and index funds and holds them forever in tax-advantaged accounts. 

Micron Technology, Walgreens Boots Alliance and Levi's were three of Thursday's biggest movers.

By Karee Venema Published 27 June 24

Levi Strauss stock is lower Thursday after the denim company's top line missed estimates amid a "cautious" consumer environment.

By Joey Solitro Published 27 June 24

Walgreens Boots Alliance stock is tanking Thursday the pharmacy retailer came up short of earnings expectations and slashed its full-year outlook. Here's what you need to know.

Micron stock is lower Thursday as the memory chipmaker's soft current-quarter revenue outlook offsets a fiscal Q3 beat. Here's what you need to know.

Another hot inflation reading from overseas and some real estate weakness at home made for a choppy session.

By Dan Burrows Published 26 June 24

Southwest Airlines stock is choppy Wednesday after the company cut its revenue guidance for the second quarter. Here's what you need to know.

By Joey Solitro Published 26 June 24

Rivian stock is surging after news broke that Volkswagen Group will invest a total of $5 billion into the EV maker. Here's what you need to know.

FedEx stock is higher Wednesday after the logistics giant's impressive earnings results and upbeat outlook. Here's what you need to know.

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• Small Business

The Single Best Business to Start Right Now

Published on June 20, 2024

By: Chris Neiger

• Technology is one of the fastest-growing industries.
• E-commerce, AI, and software development could be good bets.
• Most entrepreneurs are happy running their own business.

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If you have an idea for a small business, it pays to do some research before you launch. And it can be especially helpful to learn which industries are most in demand.

Technology businesses are one of the fastest growing

Aside from the healthcare industry, "computer and mathematical" is the fastest-growing occupational group. That means, for most people, tech is the best bet. Or, you could spend over 10 years becoming a doctor and launch your own practice -- your choice!

Tech jobs are estimated to grow 15.2% between 2022 and 2032. But where should you start in the vast tech industry? Here are a few industry segments that could make great businesses.

1. Artificial intelligence

There's a lot of hype around AI right now, but many legitimate businesses can be started using this technology. Earlier this year, 22% of software jobs were AI-related. Many companies will need guidance on implementing AI into their business, so if you have some experience with artificial intelligence, then starting an AI consulting business could be worth exploring.

2. E-commerce

Business credit card comparison.

Consider these business credit cards that offer a convenient and efficient way to separate personal and business expenses, simplifying accounting and tax reporting.

Additionally, business cards can provide valuable perks such as rewards points, cashback, and expense tracking tools, enhancing financial management and the potential to help save money in the long run.

3. Software development

I know several people who've either started their own software development businesses or done freelancing work, both of which kept them very busy. And AI is helping some developers improve their efficiency. I talked to a guy at a coffee shop recently who has his own software development businesses and he and his team use AI to speed up their work.

How to get started

Before you launch your business, you should have a plan to give yourself the best chance of success. Here are a few general suggestions for getting started:

• Create a business plan
• Research the market
• Decide if this will be a side hustle first

This isn't an exhaustive list. But doing market research will help you know if there's a need for your product or services, and creating a solid business plan will help you figure out which steps to take to launch your business. So spend some time thinking through the details, like how you'll manage your money in a business checking account or how much you'll need to earn to transition from a side hustle to a full-time business.

Many small business owners also overlook the finer points of managing taxes and accounting. While it's not as exciting as thinking about ideas for businesses, choosing the right accounting software upfront can help you more easily manage your money at every stage of your business.

Starting a small business in tech or any other industry is nothing to rush into, but the good thing is that those who start their own business are generally very happy they did so. A recent American Express survey shows that 95% of small business owners are "overwhelmingly happy" as owners.

Compare that with just over half of workers who are highly satisfied in their jobs, and it's clear why so many people are willing to take on the extra work of launching and running their own businesses.

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Chris Neiger is a full-time freelance writer with more than 10 years' experience covering personal finance and investing-related topics. He was also a writer for the BBC for three years and marketing manager for two non-profits.

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Ackman's Pershing Square USA to offer shares at $50 in NY listing

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Vietnam Q2 GDP growth accelerates; inflation pressure rises

Vietnam's economic growth accelerated in the second quarter on robust exports, government data showed on Saturday, but rising inflation remained a challenge for the Southeast Asian country.

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‘It’s All Happening Again.’ The Supply Chain Is Under Strain.

As Houthi rebels intensify strikes on vessels headed for the Suez Canal, global shipping prices are soaring, raising fears of product shortages and delays.

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By Peter S. Goodman

Peter Goodman has reported extensively on the global supply chain since the early months of the Covid-19 pandemic.

Stephanie Loomis had hoped that the chaos besieging the global supply chain was subsiding. The floating traffic jams off ports . The multiplying costs of moving freight . The resulting shortages of goods . All of this had seemed like an unpleasant memory confined to the Covid-19 pandemic.

No such luck.

As head of ocean freight for the Americas at Rhenus Logistics, a company based in Germany, Ms. Loomis spends her days negotiating with international shipping carriers on behalf of clients moving products and parts around the globe. Over the last few months, she has watched cargo prices soar as a series of disturbances have roiled the seas.

Late last year, Houthi rebels in Yemen began firing on ships entering the Red Sea en route to the Suez Canal , a vital artery for vessels moving between Asia, Europe and the East Coast of the United States. That prompted ships to avoid the waterway, instead moving the long way around Africa, lengthening their journeys by as much as two weeks.

Then, a severe drought in Central America dropped water levels in the Panama Canal , forcing authorities to limit the number of ships passing through that crucial conduit for international trade.

In recent weeks, dockworkers have threatened to strike on the East and Gulf Coasts of the United States, while longshore workers at German ports have halted shifts in pursuit of better pay. Rail workers in Canada are poised to walk off the job, imperiling cargo moving across North America and threatening backups at major ports like Vancouver, British Columbia.

The intensifying upheaval in shipping is prompting carriers to lift rates while raising the specter of waterborne gridlock that could again threaten retailers with product shortages during the make-or-break holiday shopping season. The disruption could also exacerbate inflation, a source of economic anxiety animating the American presidential election.

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New sba pilot program increases credit line for small businesses.

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Los Angeles, CA - Isabella Casillas Guzman, Administrator, U.S. Small Business Administration, looks ... [+] at merchandise at Haley Solar women's apparel store in Eagle Rock (Photo by Hans Gutknecht/MediaNews Group/Los Angeles Daily News via Getty Images)

One of the constant challenges small business owners face is accessing capital, especially through traditional channels. To help meet this need, the U.S. Small Business Administration (SBA) recently announced the upcoming launch of the 7(a) Working Capital Pilot Program. This program will offer a competitively priced line of credit of up to $5 million, designed to meet a gap in financing and give businesses greater flexibility when compared to a term loan.

“Small businesses require working capital through competitively-priced lines of credit to operate efficiently and fund their pursuit of growth opportunities – which is why the SBA is meeting the market needs, especially in a higher interest rate environment, by adding the 7(a) Working Capital Pilot Program to our suite of loan products,” said SBA Administrator Isabel Casillas Guzman.

Small business loans are typically designed to give businesses either a lump sum of working capital or the means to buy property or other assets. However, these term loans require the business to take debt up front and to pay it off in a certain period of time and may have penalties for doing so early. Term loans are not always the best option, especially for short-term financing needs. For example, electricians, plumbers, and other small contractors may only need a line of credit to perform work where payment will be available at the end of the project, but there are few current options that meet that need.

The Working Capital Pilot Program can fill this void because it creates a line of credit product built around a new annual SBA upfront guaranty fee that allows small businesses to customize the loan to their individual needs. This can greatly reduce the cost of loans with shorter maturities. Through the program, small businesses can access a line of credit to fund individual projects or orders. In addition, they can also get asset-based loans that will allow them to borrow working capital against their assets, potentially allowing them to better manage their cash flow.

SBA says the program will launch this year, and complete details on the program soon being posted at www.sba.gov . Lenders interested in the Working Capitol Pilot Program can also receive one-on-one counseling from SBA’s team of export finance managers.

These Are The Likely Democratic Presidential Candidates If Biden Drops Out—As Rough Debate Prompts Calls To Stand Down

‘bridgerton’ dethroned in netflix’s top 10 list by a new show, biden loses train of thought and corrects himself repeatedly in debate with trump.

“As the Biden-Harris Administration doubles down on its commitment to help entrepreneurs achieve their American Dreams of business ownership, this newly structured line of credit will empower more small businesses to pursue opportunities from President Biden’s Investing in America agenda, create jobs, and grow their businesses,” said Administrator Guzman.

The Covid-19 pandemic and today’s high interest rate environment have highlighted the need for small businesses to be able to access capital in a way that meets their specific needs. SBA’s Working Capital Pilot has the potential to help give businesses more options.

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8564 / What tax credit is available for small business retirement plan start-up costs?

Eligible small employers (under IRC Section 408(p)(2)(C)(1)) who provide an eligible auto-enrollment feature are eligible for an additional $500 per year credit (for the first three years the auto-enrollment feature is offered).

Planning Point: The credit for auto-enrollment can be claimed even if a new auto-enrollment feature is added to an existing plan.

Planning Point: Starting with the 2025 tax year, the SECURE Act 2.0 will require employers that establish new 401(k) or 403(b) plans to auto-enroll employees in the savings plans. The minimum auto-enrollment contribution rate will range from 3% to 10%. Each year, the minimum contribution rate will then increase by 1% until the rate reaches 15%. Under the law, small business employers with 10 or fewer employees and new businesses will be exempt from the auto-enrollment requirement.

A tax credit for qualified retirement plan start-up costs is available to small business owners. A small business employer is eligible if, during the preceding tax year, it employed 100 or fewer employees who received at least $5,000 in annual compensation from the employer (the same definition that generally applies for SIMPLE retirement plans). 1 The plan must be available to at least one employee who is a non-highly compensated employee (a highly compensated employee is one who owns 5 percent of the business or who has earned more than $155,000 in 2024). 2

Importantly, the small business employer is only eligible for the credit if its employees were not able to participate in another retirement plan sponsored by the employer, a member of a controlled group or a predecessor of either within three years of establishing the new plan (essentially, this requirement ensures that the plan truly is a newly-established retirement plan). 3

The credit is equal to 50 percent of the ordinary and necessary costs of starting up the retirement plan, including both the costs of setting up and administering the plan and costs related to educating employees about the plan, up to a maximum credit of $500 per year. 4 The credit is available for three years, with the option of first claiming the credit in the year before the year in which the plan becomes effective. 5

Beginning in 2023, the 50 percent limit was increased to 100 percent under the SECURE Act 2.0 for small employers with 50 or fewer employees. The law also creates an additional tax credit for a percentage of the employer's contributions made to employees with compensation that does not exceed $100,000 for the year. The additional credit cannot exceed $1,000 per employee and will phase out over a five-year period. The additional credit also phases out for employers with between 51 and 100 employees, and the credit is reduced by 2 percent for each employee that exceeds the 50-employee limit in the prior year.

Employers who join an existing multiple employer plan (MEP) will also now be eligible to receive the tax credit for small employers even if the MEP has been in existence for several years (this provision is effective retroactively, for 2020 and all later tax years). If the entire value of the plan cannot be maximized in a single year, the small business employer has the option of carrying it back or forward to another tax year, so long as that tax year does not begin prior to January 1, 2002. To claim the credit, the taxpayer must file Form 8881 with the IRS. 6

[1] . IRS Pub. 560 (2019).

[2] . IRC §45E(d)(1), IR014-99 (Oct.23, 2014), Notice 2022-38.

[3] . IRC § 45E(c).

[4] . IRC §§ 38, 45E (a), 45E(b).

[5] . IRC § 45E(b).

[6] . IRS Pub. 560 (2019).