What is a Business Plan? Definition, Tips, and Templates
Published: June 07, 2023
In an era where more than 20% of small enterprises fail in their first year, having a clear, defined, and well-thought-out business plan is a crucial first step for setting up a business for long-term success.
Business plans are a required tool for all entrepreneurs, business owners, business acquirers, and even business school students. But … what exactly is a business plan?
In this post, we'll explain what a business plan is, the reasons why you'd need one, identify different types of business plans, and what you should include in yours.
What is a business plan?
A business plan is a documented strategy for a business that highlights its goals and its plans for achieving them. It outlines a company's go-to-market plan, financial projections, market research, business purpose, and mission statement. Key staff who are responsible for achieving the goals may also be included in the business plan along with a timeline.
The business plan is an undeniably critical component to getting any company off the ground. It's key to securing financing, documenting your business model, outlining your financial projections, and turning that nugget of a business idea into a reality.
What is a business plan used for?
The purpose of a business plan is three-fold: It summarizes the organization’s strategy in order to execute it long term, secures financing from investors, and helps forecast future business demands.
Business Plan Template [ Download Now ]
Working on your business plan? Try using our Business Plan Template . Pre-filled with the sections a great business plan needs, the template will give aspiring entrepreneurs a feel for what a business plan is, what should be in it, and how it can be used to establish and grow a business from the ground up.
Purposes of a Business Plan
Chances are, someone drafting a business plan will be doing so for one or more of the following reasons:
1. Securing financing from investors.
Since its contents revolve around how businesses succeed, break even, and turn a profit, a business plan is used as a tool for sourcing capital. This document is an entrepreneur's way of showing potential investors or lenders how their capital will be put to work and how it will help the business thrive.
All banks, investors, and venture capital firms will want to see a business plan before handing over their money, and investors typically expect a 10% ROI or more from the capital they invest in a business.
Therefore, these investors need to know if — and when — they'll be making their money back (and then some). Additionally, they'll want to read about the process and strategy for how the business will reach those financial goals, which is where the context provided by sales, marketing, and operations plans come into play.
2. Documenting a company's strategy and goals.
A business plan should leave no stone unturned.
Business plans can span dozens or even hundreds of pages, affording their drafters the opportunity to explain what a business' goals are and how the business will achieve them.
To show potential investors that they've addressed every question and thought through every possible scenario, entrepreneurs should thoroughly explain their marketing, sales, and operations strategies — from acquiring a physical location for the business to explaining a tactical approach for marketing penetration.
These explanations should ultimately lead to a business' break-even point supported by a sales forecast and financial projections, with the business plan writer being able to speak to the why behind anything outlined in the plan.
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Fill out the form to access your free business plan., 3. legitimizing a business idea..
Everyone's got a great idea for a company — until they put pen to paper and realize that it's not exactly feasible.
A business plan is an aspiring entrepreneur's way to prove that a business idea is actually worth pursuing.
As entrepreneurs document their go-to-market process, capital needs, and expected return on investment, entrepreneurs likely come across a few hiccups that will make them second guess their strategies and metrics — and that's exactly what the business plan is for.
It ensures an entrepreneur's ducks are in a row before bringing their business idea to the world and reassures the readers that whoever wrote the plan is serious about the idea, having put hours into thinking of the business idea, fleshing out growth tactics, and calculating financial projections.
4. Getting an A in your business class.
Speaking from personal experience, there's a chance you're here to get business plan ideas for your Business 101 class project.
If that's the case, might we suggest checking out this post on How to Write a Business Plan — providing a section-by-section guide on creating your plan?
What does a business plan need to include?
- Business Plan Subtitle
- Executive Summary
- Company Description
- The Business Opportunity
- Competitive Analysis
- Target Market
- Marketing Plan
- Financial Summary
- Funding Requirements
1. Business Plan Subtitle
Every great business plan starts with a captivating title and subtitle. You’ll want to make it clear that the document is, in fact, a business plan, but the subtitle can help tell the story of your business in just a short sentence.
2. Executive Summary
Although this is the last part of the business plan that you’ll write, it’s the first section (and maybe the only section) that stakeholders will read. The executive summary of a business plan sets the stage for the rest of the document. It includes your company’s mission or vision statement, value proposition, and long-term goals.
3. Company Description
This brief part of your business plan will detail your business name, years in operation, key offerings, and positioning statement. You might even add core values or a short history of the company. The company description’s role in a business plan is to introduce your business to the reader in a compelling and concise way.
4. The Business Opportunity
The business opportunity should convince investors that your organization meets the needs of the market in a way that no other company can. This section explains the specific problem your business solves within the marketplace and how it solves them. It will include your value proposition as well as some high-level information about your target market.
5. Competitive Analysis
Just about every industry has more than one player in the market. Even if your business owns the majority of the market share in your industry or your business concept is the first of its kind, you still have competition. In the competitive analysis section, you’ll take an objective look at the industry landscape to determine where your business fits. A SWOT analysis is an organized way to format this section.
6. Target Market
Who are the core customers of your business and why? The target market portion of your business plan outlines this in detail. The target market should explain the demographics, psychographics, behavioristics, and geographics of the ideal customer.
7. Marketing Plan
Marketing is expansive, and it’ll be tempting to cover every type of marketing possible, but a brief overview of how you’ll market your unique value proposition to your target audience, followed by a tactical plan will suffice.
Think broadly and narrow down from there: Will you focus on a slow-and-steady play where you make an upfront investment in organic customer acquisition? Or will you generate lots of quick customers using a pay-to-play advertising strategy? This kind of information should guide the marketing plan section of your business plan.
8. Financial Summary
Money doesn’t grow on trees and even the most digital, sustainable businesses have expenses. Outlining a financial summary of where your business is currently and where you’d like it to be in the future will substantiate this section. Consider including any monetary information that will give potential investors a glimpse into the financial health of your business. Assets, liabilities, expenses, debt, investments, revenue, and more are all useful adds here.
So, you’ve outlined some great goals, the business opportunity is valid, and the industry is ready for what you have to offer. Who’s responsible for turning all this high-level talk into results? The "team" section of your business plan answers that question by providing an overview of the roles responsible for each goal. Don’t worry if you don’t have every team member on board yet, knowing what roles to hire for is helpful as you seek funding from investors.
10. Funding Requirements
Remember that one of the goals of a business plan is to secure funding from investors, so you’ll need to include funding requirements you’d like them to fulfill. The amount your business needs, for what reasons, and for how long will meet the requirement for this section.
Types of Business Plans
- Startup Business Plan
- Feasibility Business Plan
- Internal Business Plan
- Strategic Business Plan
- Business Acquisition Plan
- Business Repositioning Plan
- Expansion or Growth Business Plan
There’s no one size fits all business plan as there are several types of businesses in the market today. From startups with just one founder to historic household names that need to stay competitive, every type of business needs a business plan that’s tailored to its needs. Below are a few of the most common types of business plans.
For even more examples, check out these sample business plans to help you write your own .
1. Startup Business Plan
As one of the most common types of business plans, a startup business plan is for new business ideas. This plan lays the foundation for the eventual success of a business.
The biggest challenge with the startup business plan is that it’s written completely from scratch. Startup business plans often reference existing industry data. They also explain unique business strategies and go-to-market plans.
Because startup business plans expand on an original idea, the contents will vary by the top priority goals.
For example, say a startup is looking for funding. If capital is a priority, this business plan might focus more on financial projections than marketing or company culture.
2. Feasibility Business Plan
This type of business plan focuses on a single essential aspect of the business — the product or service. It may be part of a startup business plan or a standalone plan for an existing organization. This comprehensive plan may include:
- A detailed product description
- Market analysis
- Technology needs
- Production needs
- Financial sources
- Production operations
According to CBInsights research, 35% of startups fail because of a lack of market need. Another 10% fail because of mistimed products.
Some businesses will complete a feasibility study to explore ideas and narrow product plans to the best choice. They conduct these studies before completing the feasibility business plan. Then the feasibility plan centers on that one product or service.
3. Internal Business Plan
Internal business plans help leaders communicate company goals, strategy, and performance. This helps the business align and work toward objectives more effectively.
Besides the typical elements in a startup business plan, an internal business plan may also include:
- Department-specific budgets
- Target demographic analysis
- Market size and share of voice analysis
- Action plans
- Sustainability plans
Most external-facing business plans focus on raising capital and support for a business. But an internal business plan helps keep the business mission consistent in the face of change.
4. Strategic Business Plan
Strategic business plans focus on long-term objectives for your business. They usually cover the first three to five years of operations. This is different from the typical startup business plan which focuses on the first one to three years. The audience for this plan is also primarily internal stakeholders.
These types of business plans may include:
- Relevant data and analysis
- Assessments of company resources
- Vision and mission statements
It's important to remember that, while many businesses create a strategic plan before launching, some business owners just jump in. So, this business plan can add value by outlining how your business plans to reach specific goals. This type of planning can also help a business anticipate future challenges.
5. Business Acquisition Plan
Investors use business plans to acquire existing businesses, too — not just new businesses.
A business acquisition plan may include costs, schedules, or management requirements. This data will come from an acquisition strategy.
A business plan for an existing company will explain:
- How an acquisition will change its operating model
- What will stay the same under new ownership
- Why things will change or stay the same
- Acquisition planning documentation
- Timelines for acquisition
Additionally, the business plan should speak to the current state of the business and why it's up for sale.
For example, if someone is purchasing a failing business, the business plan should explain why the business is being purchased. It should also include:
- What the new owner will do to turn the business around
- Historic business metrics
- Sales projections after the acquisition
- Justification for those projections
6. Business Repositioning Plan
When a business wants to avoid acquisition, reposition its brand, or try something new, CEOs or owners will develop a business repositioning plan.
This plan will:
- Acknowledge the current state of the company.
- State a vision for the future of the company.
- Explain why the business needs to reposition itself.
- Outline a process for how the company will adjust.
Companies planning for a business reposition often do so — proactively or retroactively — due to a shift in market trends and customer needs.
For example, shoe brand AllBirds plans to refocus its brand on core customers and shift its go-to-market strategy. These decisions are a reaction to lackluster sales following product changes and other missteps.
7. Expansion or Growth Business Plan
When your business is ready to expand, a growth business plan creates a useful structure for reaching specific targets.
For example, a successful business expanding into another location can use a growth business plan. This is because it may also mean the business needs to focus on a new target market or generate more capital.
This type of plan usually covers the next year or two of growth. It often references current sales, revenue, and successes. It may also include:
- SWOT analysis
- Growth opportunity studies
- Financial goals and plans
- Marketing plans
- Capability planning
These types of business plans will vary by business, but they can help businesses quickly rally around new priorities to drive growth.
Getting Started With Your Business Plan
At the end of the day, a business plan is simply an explanation of a business idea and why it will be successful. The more detail and thought you put into it, the more successful your plan — and the business it outlines — will be.
When writing your business plan, you’ll benefit from extensive research, feedback from your team or board of directors, and a solid template to organize your thoughts. If you need one of these, download HubSpot's Free Business Plan Template below to get started.
Editor's note: This post was originally published in August 2020 and has been updated for comprehensiveness.
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What Is a Business Plan? Definition and Planning Essentials Explained
Posted february 21, 2022 by kody wirth.
What is a business plan? It’s the roadmap for your business. The outline of your goals, objectives, and the steps you’ll take to get there. It describes the structure of your organization, how it operates, as well as the financial expectations and actual performance.
A business plan can help you explore ideas, successfully start a business, manage operations, and pursue growth. In short, a business plan is a lot of different things. It’s more than just a stack of paper and can be one of your most effective tools as a business owner.
Let’s explore the basics of business planning, the structure of a traditional plan, your planning options, and how you can use your plan to succeed.
What is a business plan?
A business plan is a document that explains how your business operates. It summarizes your business structure, objectives, milestones, and financial performance. Again, it’s a guide that helps you, and anyone else, better understand how your business will succeed.
Why do you need a business plan?
The primary purpose of a business plan is to help you understand the direction of your business and the steps it will take to get there. Having a solid business plan can help you grow up to 30% faster and according to our own 2021 Small Business research working on a business plan increases confidence regarding business health—even in the midst of a crisis.
These benefits are directly connected to how writing a business plan makes you more informed and better prepares you for entrepreneurship. It helps you reduce risk and avoid pursuing potentially poor ideas. You’ll also be able to more easily uncover your business’s potential. By regularly returning to your plan you can understand what parts of your strategy are working and those that are not.
That just scratches the surface for why having a plan is valuable. Check out our full write-up for fifteen more reasons why you need a business plan .
What can you do with your plan?
So what can you do with a business plan once you’ve created it? It can be all too easy to write a plan and just let it be. Here are just a few ways you can leverage your plan to benefit your business.
Test an idea
Writing a plan isn’t just for those that are ready to start a business. It’s just as valuable for those that have an idea and want to determine if it’s actually possible or not. By writing a plan to explore the validity of an idea, you are working through the process of understanding what it would take to be successful.
The market and competitive research alone can tell you a lot about your idea. Is the marketplace too crowded? Is the solution you have in mind not really needed? Add in the exploration of milestones, potential expenses, and the sales needed to attain profitability and you can paint a pretty clear picture of the potential of your business.
Document your strategy and goals
For those starting or managing a business understanding where you’re going and how you’re going to get there are vital. Writing your plan helps you do that. It ensures that you are considering all aspects of your business, know what milestones you need to hit, and can effectively make adjustments if that doesn’t happen.
With a plan in place, you’ll have an idea of where you want your business to go as well as how you’ve performed in the past. This alone better prepares you to take on challenges, review what you’ve done before, and make the right adjustments.
Even if you do not intend to pursue funding right away, having a business plan will prepare you for it. It will ensure that you have all of the information necessary to submit a loan application and pitch to investors. So, rather than scrambling to gather documentation and write a cohesive plan once it’s relevant, you can instead keep your plan up-to-date and attempt to attain funding. Just add a use of funds report to your financial plan and you’ll be ready to go.
The benefits of having a plan don’t stop there. You can then use your business plan to help you manage the funding you receive. You’ll not only be able to easily track and forecast how you’ll use your funds but easily report on how it’s been used.
Better manage your business
A solid business plan isn’t meant to be something you do once and forget about. Instead, it should be a useful tool that you can regularly use to analyze performance, make strategic decisions, and anticipate future scenarios. It’s a document that you should regularly update and adjust as you go to better fit the actual state of your business.
Doing so makes it easier to understand what’s working and what’s not. It helps you understand if you’re truly reaching your goals or if you need to make further adjustments. Having your plan in place makes that process quicker, more informative, and leaves you with far more time to actually spend running your business.
What should your business plan include?
The content and structure of your business plan should include anything that will help you use it effectively. That being said, there are some key elements that you should cover and that investors will expect to see.
The executive summary is a simple overview of your business and your overall plan. It should serve as a standalone document that provides enough detail for anyone—including yourself, team members, or investors—to fully understand your business strategy. Make sure to cover the problem you’re solving, a description of your product or service, your target market, organizational structure, a financial summary, and any necessary funding requirements.
This will be the first part of your plan but it’s easiest to write it after you’ve created your full plan.
Products & Services
When describing your products or services, you need to start by outlining the problem you’re solving and why what you offer is valuable. This is where you’ll also address current competition in the market and any competitive advantages your products or services bring to the table. Lastly, be sure to outline the steps or milestones that you’ll need to hit to successfully launch your business. If you’ve already hit some initial milestones, like taking pre-orders or early funding, be sure to include it here to further prove the validity of your business.
A market analysis is a qualitative and quantitative assessment of the current market you’re entering or competing in. It helps you understand the overall state and potential of the industry, who your ideal customers are, the positioning of your competition, and how you intend to position your own business. This helps you better explore the long-term trends of the market, what challenges to expect, and how you will need to initially introduce and even price your products or services.
Check out our full guide for how to conduct a market analysis in just four easy steps .
Marketing & sales
Here you detail how you intend to reach your target market. This includes your sales activities, general pricing plan, and the beginnings of your marketing strategy. If you have any branding elements, sample marketing campaigns, or messaging available—this is the place to add it.
Additionally, it may be wise to include a SWOT analysis that demonstrates your business or specific product/service position. This will showcase how you intend to leverage sales and marketing channels to deal with competitive threats and take advantage of any opportunities.
Check out our full write-up to learn how to create a cohesive marketing strategy for your business.
Organization & management
This section addresses the legal structure of your business, your current team, and any gaps that need to be filled. Depending on your business type and longevity, you’ll also need to include your location, ownership information, and business history. Basically, add any information that helps explain your organizational structure and how you operate. This section is particularly important for pitching to investors but should be included even if attempted funding is not in your immediate future.
Possibly the most important piece of your plan, your financials section is vital for showcasing the viability of your business. It also helps you establish a baseline to measure against and makes it easier to make ongoing strategic decisions as your business grows. This may seem complex on the surface, but it can be far easier than you think.
Focus on building solid forecasts, keep your categories simple, and lean on assumptions. You can always return to this section to add more details and refine your financial statements as you operate.
Here are the statements you should include in your financial plan:
- Sales and revenue projections
- Profit and loss statement
- Cash flow statement
- Balance sheet
The appendix is where you add additional detail, documentation, or extended notes that support the other sections of your plan. Don’t worry about adding this section at first and only add documentation that you think will be beneficial for anyone reading your plan.
Types of business plans explained
While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. So, to get the most out of your plan, it’s best to find a format that suits your needs. Here are a few common business plan types worth considering.
Traditional business plan
The tried-and-true traditional business plan is a formal document meant to be used for external purposes. Typically this is the type of plan you’ll need when applying for funding or pitching to investors. It can also be used when training or hiring employees, working with vendors, or any other situation where the full details of your business must be understood by another individual.
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. We recommend only starting with this business plan format if you plan to immediately pursue funding and already have a solid handle on your business information.
Business model canvas
The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea.
The structure ditches a linear structure in favor of a cell-based template. It encourages you to build connections between every element of your business. It’s faster to write out and update, and much easier for you, your team, and anyone else to visualize your business operations. This is really best for those exploring their business idea for the first time, but keep in mind that it can be difficult to actually validate your idea this way as well as adapt it into a full plan.
One-page business plan
The true middle ground between the business model canvas and a traditional business plan is the one-page business plan. This format is a simplified version of the traditional plan that focuses on the core aspects of your business. It basically serves as a beefed-up pitch document and can be finished as quickly as the business model canvas.
By starting with a one-page plan, you give yourself a minimal document to build from. You’ll typically stick with bullet points and single sentences making it much easier to elaborate or expand sections into a longer-form business plan. This plan type is 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.
Now, the option that we here at LivePlan recommend is the Lean Plan . This 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 holds all of the benefits of the single-page plan, including the potential to complete it in as little as 27-minutes . However, it’s even easier to convert into a full plan thanks to how heavily it’s tied to your financials. The overall goal of Lean Planning isn’t to just produce documents that you use once and shelve. Instead, the Lean Planning process helps you build a healthier company that thrives in times of growth and stable through times of crisis.
It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.
Try the LivePlan Method for Lean Business Planning
Now that you know the basics of business planning, it’s time to get started. Again we recommend leveraging a Lean Plan for a faster, easier, and far more useful planning process.
To get familiar with the Lean Plan format, you can download our free Lean Plan template . However, if you want to elevate your ability to create and use your lean plan even further, you may want to explore LivePlan.
It features step-by-step guidance that ensures you cover everything necessary while reducing the time spent on formatting and presenting. You’ll also gain access to financial forecasting tools that propel you through the process. Finally, it will transform your plan into a management tool that will help you easily compare your forecasts to your actual results.
Check out how LivePlan streamlines Lean Planning by downloading our Kickstart Your Business ebook .
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What is a Business Plan? Definition and Resources
8 min. read
Updated November 30, 2023
If you’ve ever jotted down a business idea on a napkin with a few tasks you need to accomplish, you’ve written a business plan — or at least the very basic components of one.
The origin of formal business plans is murky. But they certainly go back centuries. And when you consider that 20% of new businesses fail in year 1 , and half fail within 5 years, the importance of thorough planning and research should be clear.
But just what is a business plan? And what’s required to move from a series of ideas to a formal plan? Here we’ll answer that question and explain why you need one to be a successful business owner.
- What is a business plan?
A business plan lays out a strategic roadmap for any new or growing business.
Any entrepreneur with a great idea for a business needs to conduct market research , analyze their competitors , validate their idea by talking to potential customers, and define their unique value proposition .
The business plan captures that opportunity you see for your company: it describes your product or service and business model , and the target market you’ll serve.
It also includes details on how you’ll execute your plan: how you’ll price and market your solution and your financial projections .
Reasons for writing a business plan
If you’re asking yourself, ‘Do I really need to write a business plan?’ consider this fact:
Companies that commit to planning grow 30% faster than those that don’t.
Creating a business plan is crucial for businesses of any size or stage.
If you plan to raise funds for your business through a traditional bank loan or SBA loan , none of them will want to move forward without seeing your business plan. Venture capital firms may or may not ask for one, but you’ll still need to do thorough planning to create a pitch that makes them want to invest.
But it’s more than just a means of getting your business funded . The plan is also your roadmap to identify and address potential risks.
It’s not a one-time document. Your business plan is a living guide to ensure your business stays on course.
What’s your biggest business challenge right now?
Related: 14 of the top reasons why you need a business plan
What research shows about business plans
Numerous studies have established that planning improves business performance:
- 71% of fast-growing companies have business plans that include budgets, sales goals, and marketing and sales strategies.
- Companies that clearly define their value proposition are more successful than those that can’t.
- Companies or startups with a business plan are more likely to get funding than those without one.
- Starting the business planning process before investing in marketing reduces the likelihood of business failure.
The planning process significantly impacts business growth for existing companies and startups alike.
Read More: Research-backed reasons why writing a business plan matters
When should you write a business plan?
No two business plans are alike.
Yet there are similar questions for anyone considering writing a plan to answer. One basic but important question is when to start writing it.
A Harvard Business Review study found that the ideal time to write a business plan is between 6 and 12 months after deciding to start a business.
But the reality can be more nuanced – it depends on the stage a business is in, or the type of business plan being written.
Ideal times to write a business plan include:
- When you have an idea for a business
- When you’re starting a business
- When you’re preparing to buy (or sell)
- When you’re trying to get funding
- When business conditions change
- When you’re growing or scaling your business
Read More: The best times to write or update your business plan
How often should you update your business plan?
As is often the case, how often a business plan should be updated depends on your circumstances.
A business plan isn’t a homework assignment to complete and forget about. At the same time, no one wants to get so bogged down in the details that they lose sight of day-to-day goals.
But it should cover new opportunities and threats that a business owner surfaces, and incorporate feedback they get from customers. So it can’t be a static document.
For an entrepreneur at the ideation stage, writing and checking back on their business plan will help them determine if they can turn that idea into a profitable business .
And for owners of up-and-running businesses, updating the plan (or rewriting it) will help them respond to market shifts they wouldn’t be prepared for otherwise.
It also lets them compare their forecasts and budgets to actual financial results. This invaluable process surfaces where a business might be out-performing expectations and where weak performance may require a prompt strategy change.
The planning process is what uncovers those insights.
- How long should your business plan be?
Thinking about a business plan strictly in terms of page length can risk overlooking more important factors, like the level of detail or clarity in the plan.
Not all of the plan consists of writing – there are also financial tables, graphs, and product illustrations to include.
But there are a few general rules to consider about a plan’s length:
- Your business plan shouldn’t take more than 15 minutes to skim.
- Business plans for internal use (not for a bank loan or outside investment) can be as short as 5 to 10 pages.
A good practice is to write your business plan to match the expectations of your audience.
If you’re walking into a bank looking for a loan, your plan should match the formal, professional style that a loan officer would expect . But if you’re writing it for stakeholders on your own team—shorter and less formal (even just a few pages) could be the better way to go.
The length of your plan may also depend on the stage your business is in.
For instance, a startup plan won’t have nearly as much financial information to include as a plan written for an established company will.
Read More: How long should your business plan be?
What information is included in a business plan?
The contents of a plan business plan will vary depending on the industry the business is in.
After all, someone opening a new restaurant will have different customers, inventory needs, and marketing tactics to consider than someone bringing a new medical device to the market.
But there are some common elements that most business plans include:
- Executive summary: An overview of the business operation, strategy, and goals. The executive summary should be written last, despite being the first thing anyone will read.
- Products and services: A description of the solution that a business is bringing to the market, emphasizing how it solves the problem customers are facing.
- Market analysis: An examination of the demographic and psychographic attributes of likely customers, resulting in the profile of an ideal customer for the business.
- Competitive analysis: Documenting the competitors a business will face in the market, and their strengths and weaknesses relative to those competitors.
- Marketing and sales plan: Summarizing a business’s tactics to position their product or service favorably in the market, attract customers, and generate revenue.
- Operational plan: Detailing the requirements to run the business day-to-day, including staffing, equipment, inventory, and facility needs.
- Organization and management structure: A listing of the departments and position breakdown of the business, as well as descriptions of the backgrounds and qualifications of the leadership team.
- Key milestones: Laying out the key dates that a business is projected to reach certain milestones , such as revenue, break-even, or customer acquisition goals.
- Financial plan: Balance sheets, cash flow forecast , and sales and expense forecasts with forward-looking financial projections, listing assumptions and potential risks that could affect the accuracy of the plan.
- Appendix: All of the supporting information that doesn’t fit into specific sections of the business plan, such as data and charts.
Read More: Use this business plan outline to organize your plan
- Different types of business plans
A business plan isn’t a one-size-fits-all document. There are numerous ways to create an effective business plan that fits entrepreneurs’ or established business owners’ needs.
Here are a few of the most common types of business plans for small businesses:
- One-page plan : Outlining all of the most important information about a business into an adaptable one-page plan.
- Growth plan : An ongoing business management plan that ensures business tactics and strategies are aligned as a business scales up.
- Internal plan : A shorter version of a full business plan to be shared with internal stakeholders – ideal for established companies considering strategic shifts.
Business plan vs. operational plan vs. strategic plan
- What questions are you trying to answer?
- Are you trying to lay out a plan for the actual running of your business?
- Is your focus on how you will meet short or long-term goals?
Since your objective will ultimately inform your plan, you need to know what you’re trying to accomplish before you start writing.
While a business plan provides the foundation for a business, other types of plans support this guiding document.
An operational plan sets short-term goals for the business by laying out where it plans to focus energy and investments and when it plans to hit key milestones.
Then there is the strategic plan , which examines longer-range opportunities for the business, and how to meet those larger goals over time.
Read More: How to use a business plan for strategic development and operations
- Business plan vs. business model
If a business plan describes the tactics an entrepreneur will use to succeed in the market, then the business model represents how they will make money.
The difference may seem subtle, but it’s important.
Think of a business plan as the roadmap for how to exploit market opportunities and reach a state of sustainable growth. By contrast, the business model lays out how a business will operate and what it will look like once it has reached that growth phase.
Learn More: The differences between a business model and business plan
- Moving from idea to business plan
Now that you understand what a business plan is, the next step is to start writing your business plan .
If you’re stuck, start with a one-page business plan and check out our collection of over 550 business plan examples for inspiration. They’re broken out over dozens of industries—you can even copy and paste sections into your plan and rewrite them with information specific to your business.
See why 1.2 million entrepreneurs have written their business plans with LivePlan
Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.
Table of Contents
- Reasons to write a business plan
- Business planning research
- When to write a business plan
- When to update a business plan
- Information to include
- Business vs. operational vs. strategic plans
7 Min. Read
How to Write a Laundromat Business Plan + Example Templates
13 Min. Read
How to Write an Online Fitness Business Plan
9 Min. Read
How to Write a Customer Analysis
2 Min. Read
What to Include in Your Business Plan Appendix
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Business Plan: What It Is + How to Write One
Discover what a business plan includes and how writing one can foster your business’s development.
What is a business plan?
A business plan is a written document that defines your business goals and the tactics to achieve those goals. A business plan typically explores the competitive landscape of an industry, analyzes a market and different customer segments within it, describes the products and services, lists business strategies for success, and outlines financial planning.
In your research into business plans, you may come across different formats, and you might be wondering which kind will work best for your purposes.
Let’s define two main types of business plans , the traditional business pla n and the lean start-up business plan . Both types can serve as the basis for developing a thriving business, as well as exploring a competitive market analysis, brand strategy , and content strategy in more depth. There are some significant differences to keep in mind [ 1 ]:
The traditional business plan is a long document that explores each component in depth. You can build a traditional business plan to secure funding from lenders or investors.
The lean start-up business plan focuses on the key elements of a business’s development and is shorter than the traditional format. If you don’t plan to seek funding, the lean start-up plan can serve mainly as a document for making business decisions and carrying out tasks.
Now that you have a clear business plan definition , continue reading to begin writing a detailed plan that will guide your journey as an entrepreneur.
How to write a business plan
In the sections below, you’ll build the following components of your business plan:
Products and services
Marketing plan and sales strategies
Explore each section to bring fresh inspiration to the surface and reveal new possibilities for developing your business. You may choose to adapt the sections, skip over some, or go deeper into others, depending on which format you’re using. Consider your first draft a foundation for your efforts and one that you can revise, as needed, to account for changes in any area of your business.
Read more: What Is a Marketing Plan? And How to Create One
1. Executive summary
This is a short section that introduces the business plan as a whole to the people who will be reading it, including investors, lenders, or other members of your team. Start with a sentence or two about your business, your goals for developing it, and why it will be successful. If you are seeking funding, summarize the basics of the financial plan.
2. Business description
Use this section to provide detailed information about your company and how it will operate in the marketplace.
Mission statement: What drives your desire to start a business? What purpose are you serving? What do you hope to achieve for your business, the team, your customers?
Revenue streams: From what sources will your business generate revenue? Examples include product sales, service fees, subscriptions, rental fees, license fees, and more.
Leadership: Describe the leaders in your business, their roles and responsibilities, and your vision for building teams to perform various functions, such as graphic design, product development, or sales.
Legal structure: If you’ve incorporated your business or registered it with your state as a legal entity such as an S-corp or LLC, include the legal structure here and the rationale behind this choice.
3. Competitor analysis
This section will include an assessment of potential competitors, their offers, and marketing and sales efforts. For each competitor, explore the following:
Value proposition: What outcome or experience does this brand promise?
Products and services: How does each one solve customer pain points and fulfill desires? What are the price points?
Marketing: Which channels do competitors use to promote? What kind of content does this brand publish on these channels? What messaging does this brand use to communicate value to customers?
Sales: What sales process or buyer’s journey does this brand lead customers through?
Read more: What Is Competitor Analysis? And How to Conduct One
4. Products and services
Use this section to describe everything your business offers to its target market . For every product and service, list the following:
The value proposition or promise to customers, in terms of how they will experience it
How the product serves customers, addresses their pain points, satisfies their desires, and improves their lives
The features or outcomes that make the product better than those of competitors
Your price points and how these compare to competitors
5. Marketing plan and sales strategies
In this section, you’ll draw from thorough market research to describe your target market and how you will reach them.
Who are your ideal customers?
How can you describe this segment according to their demographics (age, ethnicity, income, location, etc.) and psychographics (beliefs, values, aspirations, lifestyle, etc.)?
What are their daily lives like?
What problems and challenges do they experience?
What words, phrases, ideas, and concepts do consumers in your target market use to describe these problems when posting on social media or engaging with your competitors?
What messaging will present your products as the best on the market? How will you differentiate messaging from competitors?
On what marketing channels will you position your products and services?
How will you design a customer journey that delivers a positive experience at every touchpoint and leads customers to a purchase decision?
Read more: Market Analysis: What It Is and How to Conduct One
6. Brand strategy
In this section, you will describe your business’s design, personality, values, voice, and other details that go into delivering a consistent brand experience.
What are the values that define your brand?
What visual elements give your brand a distinctive look and feel?
How will your marketing messaging reflect a distinctive brand voice, including the tone, diction, and sentence-level stylistic choices?
How will your brand look and sound throughout the customer journey?
Define your brand positioning statement. What will inspire your audience to choose your brand over others? What experiences and outcomes will your audience associate with your brand?
Read more: What Is a Brand Strategy? And How to Create One
7. Financial planning
In this section, you will explore your business’s financial future. If you are writing a traditional business plan to seek funding, this section is critical for demonstrating to lenders or investors that you have a strategy for turning your business ideas into profit. For a lean start-up business plan, this section can provide a useful exercise for planning how you will invest resources and generate revenue [ 2 ].
Use any past financials and other sections of this business plan, such as your price points or sales strategies, to begin your financial planning.
How many individual products or service packages do you plan to sell over a specific time period?
List your business expenses, such as subscribing to software or other services, hiring contractors or employees, purchasing physical supplies or equipment, etc.
What is your break-even point, or the amount you have to sell to cover all expenses?
Create a sales forecast for the next three to five years: (No. of units to sell X price for each unit) – (cost per unit X No. of units) = sales forecast
Quantify how much capital you have on hand.
When writing a traditional business plan to secure funding, you may choose to append supporting documents, such as licenses, permits, patents, letters of reference, resumes, product blueprints, brand guidelines, the industry awards you’ve received, and media mentions and appearances.
Business plan key takeaways and best practices
Remember: Creating a business plan is crucial when starting a business. You can use this document to guide your decisions and actions and even seek funding from lenders and investors.
Keep these best practices in mind:
Your business plan should evolve as your business grows. Return to it periodically, such as every quarter or year, to update individual sections or explore new directions your business can take.
Make sure everyone on your team has a copy of the business plan and welcome their input as they perform their roles.
Ask fellow entrepreneurs for feedback on your business plan and look for opportunities to strengthen it, from conducting more market and competitor research to implementing new strategies for success.
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1. US Small Business Administration. “ Write Your Business Plan , https://www.sba.gov/business-guide/plan-your-business/write-your-business-plan." Accessed April 19, 2022.
2. Inc. " How to Write the Financial Section of a Business Plan , https://www.inc.com/guides/business-plan-financial-section.html." Accessed April 14, 2022.
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As a startup, you'll need to know how to write a business plan in order to attract investors. Here are some templates and examples to help you get started.
If you're starting a new business or executing a new plan within your company, you’ll want to have a business plan. It’s a formal document that outlines your company, your project, funding options and your means of execution. There are many resources available to help you write your business plan, including countless templates you can follow depending on your goals. Below we’ve outlined some examples, including a sample plan.
[Read: How to Write a Business Plan During a Pandemic ]
Business plan template examples
While business plans can be general, it’s helpful to gear yours toward your industry. Here are five business plan templates for specific industries or situations:
- For first-time entrepreneurs: The United States Small Business Administration (SBA) .
- For getting your ideas down: $100 Startup .
- For law firms: Cilo .
- For established businesses: SCORE .
- For additional industries: LawDepot .
Sample business plan
A one-page business plan briefly states your opportunity and timeline. It’s often used as an introduction to your longer, more robust plan. Here is a brief overview of a business plan and the nine elements that should be included.
1. The business opportunity
At the top of your plan, state the endeavor you're looking to pursue. Are you a new startup or an existing company looking to grow? Describe your challenges and how you plan to work through them. This section should be a one- or two-sentence elevator pitch of your business opportunity.
[Read: How to Refine Your Business Plan for Every Stage of Your Business ]
2. Your company description
When writing your company description, assume the reader knows nothing about your company. Briefly define who you are, identifying your values and why your company is necessary right now.
Outline your timeline for launching your business or project. Timelines are always subject to change, so make sure you account for alternative scenarios and setbacks.
3. Your talent description
In this section, you’ll want to introduce your team and demonstrate why they are the right fit for your business. Talk about their relevant skills, experience and background, getting as specific as possible. Providing their track record will reassure potential investors that your business is backed by reliable professionals.
4. The industry analysis
While writing your plan, it’s important to recognize your industry's outlook and your potential within it. This will also help you identify your competitors and analyze their offerings in comparison to yours, so you can focus on how you might stand out among them. This analysis is a great way to show investors that you’ve done your research and understand how you fit into your market.
[Read: Pivoting During the Pandemic? 16 Tools That Will Help Your Business Adapt ]
5. Your target audience
In this section, you will identify your target audience, defining their demographic, location and other specific traits. Additionally, explain how your audience will benefit from your company or project, or how you will solve common problems they share.
6. The timeline
Outline your timeline for launching your business or project. Timelines are always subject to change, so make sure you account for alternative scenarios and setbacks. For your one-page business plan, talk about your general timeline, its phases and why it’s a realistic goal.
7. Your marketing plan
How will you get the word out about your new business or project? Identify the avenues you and your company will choose to explore and how you plan to meet your target audience there. For example, consider your social media efforts, digital marketing and other methods that you seek to execute.
8. The financial summary
Clearly define your cost structure and revenue streams, describing your sales methods and post-launch goals, as well as how you will achieve them. Be sure to include both your long- and short-term financial goals and benchmarks.
[Read: Smart Strategies for Presenting Your Business Plan ]
9. Your funding requirements
One of the primary reasons you write a business plan is to help obtain funding. In this section, talk about the amount of funding you'll need from investors and where that funding will go. You should also be clear about how you plan to pay back your investors through your financial plan.
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What Is a Startup?
Definition and Examples of Startups
How startups work, types of startups.
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A startup is a business that is currently in its formation stages, or early stages of growth, that works to bring a new product or service to market. Startups can be considered risky for investors because they’re not yet publicly known, so they’re often privately funded, usually by the owners or founders.
If you’re looking to venture out into the market as a startup with an innovation, it’s important to understand how the process works. Learn about the different types of startups, funding options, and general requirements for running your startup business.
Startups are new businesses launched by founders who aim to bring a new idea or product to market that can create a significant business opportunity while also making an impact. Businesses are considered startups during their formation and early stages of development or growth as they bring awareness to their brand, purpose, or product. Startup founders focus on different aspects of the business to get it started, including funding, conducting market research, choosing a business structure, and fulfilling any legal requirements for running the business.
While startup founders can be considered entrepreneurs , there are some key differences. For instance, founders launch startups with the intention to unveil an innovation, to grow, and are very hands-on. Meanwhile, entrepreneurs are typically more financially motivated, eyeing new business opportunities and investments, and figuring out how to make them profitable without directly running operations.
Startup businesses can form in various ways as there’s room for innovations in just about any industry. Businesses such as Uber and Airbnb are startups that have generated new concepts and have grown tremendously in the technology and lifestyle sectors. Some other industries that often see startups include business-to-business services, consumer media, and consumer goods.
Startups operate just as any other business, the difference being the added barrier of trying to introduce a new idea of a product or service to the market. Startup founders must be able to seek out opportunities, innovative solutions, and ultimately, investors, while minimizing the overall risk. They face the challenges of creating awareness and obtaining the funds necessary to grow the business.
To cover the startup costs , businesses must determine their funding options. Here are some common methods of raising funds :
- Bootstrapping : Many startups are privately funded in the beginning. The owners or founders often invest in the business themselves and build it from scratch, a process commonly referred to as bootstrapping.
- Family and friends : A common financing method is obtaining money from family and friends who are willing to invest in your business. In many cases, it might be best to consider this type of financing as a loan rather than a stake in your business.
- Loans : Depending on the type of business, entrepreneurs may qualify for a grant or a business loan from the Small Business Administration (SBA) or other organizations.
- Crowdfunding : Crowdfunding can help startups raise money without the hassle of transferring partial ownership; generally, those who donate funds receive early versions of products or exclusive rewards from the company.
- Equity : Startups can give up a share of ownership, or equity, in exchange for startup capital. They must prove the worth of their business to investors, a challenging task that could pay off.
Make sure to accurately calculate your startup costs so you know how much you need when requesting funds. Consider all costs of running your business, including equipment, marketing, licenses, office space, research, and any other costs relevant to your business.
Startups form their businesses with various goals and purposes, and may be categorized by their business structures, their industries, or their purposes. Business structures, or business entities , are established when businesses are formed to determine how the business operates, registration requirements, taxes, and legal protections. Depending on the number of owners and liability protection preferences, businesses can form by choosing one of several legal structures, including:
- Sole proprietorship : Sole proprietorships don’t need to be registered and generally have one owner who is personally liable for costs.
- Limited liability company (LLC) : Whether single- or multi-member, LLCs give liability protection to owners and are treated as pass-through entities, meaning they don’t pay taxes on business income. Instead, the business income is reported on the owners’ personal income taxes.
- Limited liability partnership (LLP) : LLPs have multiple owners and give each owner liability protection.
- Limited partnership (LP) : LPs give an owner unlimited liability while other partners are protected with limited liability.
- Corporation : A corporation works as a completely separate legal entity, but is generally the most expensive structure to form.
When choosing a business structure, it’s important to consider whether you’ll be seeking investors. Because limited liability also protects the assets of the investors, it’ll be easier to receive funding if you opt for a structure that offers limited liability protection.
Startups may also be categorized by purpose. Some simply aim to make a profit, while others intend to make a difference in their communities.
Small Business Startup
Small business startups are common forms of entrepreneurship. These are typically local-owned businesses such as restaurants or retailers that are aiming to profit but aren’t looking to expand into other locations or grow a franchise.
A scalable startup is a business that aims to expand much bigger than it first started off. Scalable startups believe their ideas can grow and have the drive to make the businesses succeed. These are commonly funded through venture capital and aim to eventually become publicly traded.
Social Entrepreneurship Startup
Social entrepreneurships have other goals besides profit. Their goal is to make a change or impact within the community. Many social entrepreneurships are nonprofits driven by specific missions. These startups may also use grants and sponsorships for funding.
Large Company Startup
Large company startups use innovative approaches to improve their companies. The aim is to expand a company’s already well-known brand through a new entity within that same company, such as a new product line.
- A startup is a new business working to launch a new, innovative product or service and bring it to market.
- Startups are often intertwined with entrepreneurship. However, startups are typically focused on innovation, hands-on work, and scaling for growth, while entrepreneurship can refer to all business ventures and is focused on profitability.
- Startups can use a variety of funding options, including bootstrapping, crowdfunding, bank loans, and venture capital.
- Depending on the purpose, startups can be categorized into several different types, including small business startups, scalable startups, social entrepreneurships, and large companies.
U. S. Small Business Administration. " 10 Steps To Start Your Business ." Accessed Oct. 27, 2021.
U.S. Small Business Administration. " Choose a Business Structure ." Accessed Oct. 27, 2021.
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What Is a Startup?
Understanding startups, special considerations.
- Advantages and Disadvantages
Examples of Startups
The bottom line.
- Company Profiles
What a Startup Is and What's Involved in Getting One Off the Ground
Investopedia / Laura Porter
The term startup refers to a company in the first stages of operations. Startups are founded by one or more entrepreneurs who want to develop a product or service for which they believe there is demand. These companies generally start with high costs and limited revenue, which is why they look for capital from a variety of sources such as venture capitalists .
- A startup is a company that's in the initial stages of business.
- Founders normally finance their startups and may attempt to attract outside investment before they get off the ground.
- Funding sources include family and friends, venture capitalists, crowdfunding, and loans.
- Startups must also consider where they'll do business and their legal structure.
- Startups come with high risk as failure is very possible but they can also be very unique places to work with great benefits, a focus on innovation, and great opportunities to learn.
Startups are companies or ventures that are focused on a single product or service that the founders want to bring to market. These companies typically don't have a fully developed business model and, more crucially, lack adequate capital to move onto the next phase of business. Most of these companies are initially funded by their founders.
Many startups turn to others for more funding, including family, friends, and venture capitalists. Silicon Valley is known for its strong venture capitalist community and is a popular destination for startups, but is also widely considered the most demanding arena.
Startups can use seed capital to invest in research and to develop their business plans. Market research helps determine the demand for a product or service, while a comprehensive business plan outlines the company's mission statement , vision, and goals, as well as management and marketing strategies.
The first few years are very important for startups This is the time that entrepreneurs should use to concentrate on raising capital and developing a business model.
There are a number of different factors that entrepreneurs must think of as they try to get their new business off the ground and begin operations. We've listed some of the most common ones below.
Location can make or break any business. And it's often one of the most important considerations for anyone starting up in the business world. Startups must decide whether their business is conducted online, in an office or home office , or in a store. The location depends on the product or service being offered.
For example, a technology startup selling virtual reality hardware may need a physical storefront to give customers a face-to-face demonstration of the product's complex features.
Startups need to consider what legal structure best fits their entity. A sole proprietorship is suited for a founder who is also the key employee of a business. Partnerships are a viable legal structure for businesses that consist of several people who have joint ownership, and they're also fairly straightforward to establish. Personal liability can be reduced by registering a startup as a limited liability company (LLC).
Startups often raise funds by turning to family and friends or by using venture capitalists. This is a group of professional investors that specialize in funding startups. Crowdfunding has become a viable way for many people to get access to the cash they need to move forward in the business process. The entrepreneur sets up a crowdfunding page online, allowing people who believe in the company to donate money.
Startups may use credit to commence their operations. A perfect credit history may allow the startup to use a line of credit as funding. This option carries the most risk, particularly if the startup is unsuccessful. Other companies choose small business loans to help fuel growth. Banks typically have several specialized options available for small businesses—a microloan is a short-term, low-interest product tailored for startups. A detailed business plan is often required in order to qualify.
Advantages and Disadvantages of Startups
There are a variety of advantages to working for a startup . More responsibility and opportunities to learn are two. As startups have fewer employees than large, established companies, employees tend to wear many hats, working in a variety of roles, which leads to more responsibility as well as opportunities to learn.
Startups tend to be more relaxed in nature, making the workplace more of a communal experience, with flexible hours, increased employee interaction, and flexibility. Startups tend to also have better workplace benefits, such as nurseries for children, free food, and shorter workweeks.
The work at startups can also be more rewarding as innovation is welcomed and managers allow talented employees to run with ideas with little supervision.
One of the primary disadvantages of a startup is increased risk. This primarily applies to the success and longevity of a startup. New businesses need to prove themselves and raise capital before they can start turning a profit. Keeping investors happy with the startup's progress is critical. The risk of shutting down or not having enough capital to continue operations before turning a profit is ever-present.
Long hours are characteristic of startups as everyone is working toward the same goal—to see the startup succeed. This can lead to high-stress moments and sometimes compensation that isn't commensurate with the hours worked. Competition is also always high as there tend to be a handful of startups working on the same idea.
More opportunities to learn
Innovation is encouraged
Risk of failure
Having to raise capital
Competitive business environment
Dotcoms were a common startup in the 1990s. Venture capital was extremely easy to obtain during this time due to a frenzy among investors to speculate on the emergence of these new businesses. Unfortunately, most of these internet startups eventually went bust due to major flaws in their business plans, such as lacking a path to sustainable revenue. However, a handful of companies survived when the dotcom bubble burst. Amazon ( AMZN ) and eBay ( EBAY ) are just two examples.
Many startups fail within the first few years. That's why this initial period is important. Entrepreneurs need to find money, create a business model and business plan, hire key personnel, work out intricate details such as equity stakes for partners and investors, and plan for the long run. Many of today's most successful companies—Microsoft ( MSFT ), Apple ( AAPL ), and Meta ( META ), formerly Facebook, to name a few—began as startups and ended up becoming publicly traded companies .
How Do You Start a Startup Company?
The first step in starting a startup is having a great idea. From there, market research is the next step to determine how feasible the idea is and what the current marketplace looks like for your idea. After the market research, creating a business plan that outlines your company structure, goals, mission, values, and objectives, is the next step.
One of the most important steps is obtaining funding. This can come from savings, friends, family, investors, or a loan. After raising funding, make sure you've done all the correct legal and paperwork. This means registering your business and obtaining any required licenses or permits. After this, establish a business location. From there, create an advertising plan to attract customers, establish a customer base, and adapt as your business grows.
How Do You Get a Startup Business Loan?
A startup can obtain a loan from a bank, certain organizations, or friends and family. One of the best and first options should be working with the U.S. Small Business Administration, which provides microloans to small businesses. The average SBA loan is $13,000 and the max loan amount is $50,000. These loans are usually from nonprofit community lenders and can be easier to obtain than traditional loans from banks.
What Are the Benefits of Working for a Startup?
The benefits of working at a startup include greater opportunities to learn, increased responsibility, flexible work hours, a relaxed work environment, increased employee interaction, good workplace benefits, and innovation.
How Do You Value a Startup Company?
Valuing a startup can be difficult as startups don't usually have longevity in which to determine their success. Startups also don't generate profits or even revenue for a few years after starting. As such, using the traditional financial statement metrics for valuations doesn't apply. Some of the best ways to value a startup include the cost to duplicate, market multiples, discounted cash flow, and valuation by stage.
Starting a company can be a difficult venture but a rewarding one. Having a great idea and attempting to bring it to market comes with a host of challenges, such as attracting capital, employees, marketing, legal work, and managing finances. Keep in mind, though, that startups lead to increased job satisfaction and the possibility of leaving a legacy.
Nerdwallet. " 6 Startup Business Loan Options for Entrepreneurs ." Accessed Sept. 15, 2021.
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Free Startup Business Plan Templates and Examples
By Joe Weller | May 6, 2020
In this article, we’ve rounded up a variety of the top, professionally designed startup business plan templates, all of which are free to download in PDF, Word, and Excel formats.
Included on this page, you’ll find a one-page startup business plan template , a business plan outline template for startups , a startup business planning template with a timeline , and a sample startup business plan .
Startup Business Plan Template
Download Startup Business Plan Template - Word
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This startup business plan template contains the essential components you need to convey your business idea and strategy to investors and stakeholders, but you can customize this template to fit your needs. The template provides room to include an executive summary, a financial overview, a marketing strategy, details on product or service offerings, and more.
One-Page Startup Business Plan Template
Download One-Page Startup Business Plan Template
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This one-page business plan is ideal for startup companies that want to document and organize key business concepts. The template offers an easy-to-scan layout that’s ideal for investors and stakeholders. Use this plan to create a high-level view of your business idea and as a reference as you flesh out a more detailed roadmap for your business.
For additional resources, visit " Free One-Page Business Plan Templates with a Quick How-To Guide ."
Simple Fill-In-the-Blank Business Plan Template for Startups
Download Simple Fill-in-the-Blank Business Plan Template for Startups
This comprehensive fill-in-the-blank business plan template is designed to guide entrepreneurs through the process of building a startup business plan. This template comes with a customizable cover page and table of contents, and each section includes sample content that you can modify to fit the needs of your business. For more fill-in business templates, read our "Free Fill-In-the-Blank Business Plan Templates" article.
Lean Business Plan Template for Startups
Download Lean Business Plan Template for Startups
This Lean business plan template takes a traditional business plan outline and extracts the most essential elements. Use this template to outline your company and industry overview, convey the problem you are solving, identify customer segments, highlight key performance metrics, and list a timeline of key activities.
Business Plan Outline Template for Startups
Download Business Plan Outline Template for Startups
You can use this business plan outline as a basis to create your own business plan. This template contains all the elements of a traditional business plan, including a title page, a table of contents, and information on what to include in each section. Simplify or expand this outline based on the size and needs of your startup business.
Startup Business Planning Template with Timeline
Download Startup Business Planning Template with Timeline
Excel | Smartsheet
As you create your business plan, this business planning template doubles as a schedule and timeline to track the progress of key activities. This template enables you to break down your plan into phases and provides space to include key tasks and dates for each task. For a visual timeline, shade in the cells according to each task’s start and end dates. The timeline ensures that your plan stays on track.
Business Plan Rubric Template for Startups
Download Business Plan Rubric Template for Startups
Excel | Word | PDF | Smartsheet
If you’re starting a business and want to keep all your ducks in a row, use this rubric to evaluate and score each aspect of your startup business plan. You can tailor this template to the needs of your specific business, and can also highlight areas of your plan that require improvement or expansion. Use this template as a tool to make sure your plan is clear, articulate, and organized. A sharp, insightful, well thought-out plan will definitely get the attention of potential investors and partners.
For additional resources to help support your business planning efforts, check out “Free Startup Plan, Budget, and Cost Templates.”
What’s the Best Business Plan Template for Startups?
The template you choose for your startup business depends on a number of factors, including the size and specific needs of your company. Moreover, as your business grows and your objectives change, you will need to adjust your plan (and possibly your choice of template) accordingly.
Some entrepreneurs find it useful to use a Lean business plan template design in order to jot down a business concept and see if it’s feasible before pursuing it further. Typically one to three pages, a Lean business plan template encourages you to highlight core ideas and strategic activities and remain focused on key points.
Other entrepreneurs prefer a template with a more traditional business plan design, which allows you to go into greater detail and ensure you include every detail. A traditional plan can range from 10 to 100 pages and cover both the high-level and granular particulars of your overall concept, objectives, and strategy.
There is no one-size-fits-all solution, but the following section outlines the minimum that your business plan template should include in order to gain buy-in from potential investors.
What to Include in a Startup Business Plan
Whether you choose to use a template to develop your startup business plan or decide to write one from scratch, you need to include the following elements:
- An overview of your company and the industry in which it operates
- The problem you are solving and the proposed solution
- A description of your product or service offerings, including key features
- The existing alternatives that customers use and your competitive advantage
- The target customer segments and the channels you will use to reach them
- The cost structure and revenue streams associated with your business
- A financial plan, including sales and revenue projections (ideally 3-5 years)
- If applicable, the financial requirements to get your business running, including how you will source and allocate funds
Each of the following sections provides an example of a business plan that you can use for reference as you develop your own.
One-Page Lean Business Plan Example
This Lean business plan example displays a visually appealing and scannable one-page illustration of a business plan. It conveys the key strategies you need to meet your main objectives. Each element of this concise plan provides stakeholders and potential investors with links to resources that support and expand upon the plan’s details, and it can also serve as an investor pitch deck.
Startup Business Plan Sample
This business plan sample contains all the aspects of a standard business plan. Using a fictional food truck business as the basis for a startup business plan, this sample will give you all the ideas you need to make your plan outstanding.
Download Startup Business Plan Sample - PDF
When the time comes that you need more space to lay out your goals and strategies, choose from our variety of free simple business plan templates . You can learn how to write a successful simple business plan here .
Visit this free non-profit business plan template roundup or of you are looking for a business plan template by file type, visit our pages dedicated specifically to Microsoft Excel , Microsoft Word , and Adobe PDF business plan templates. Read our articles offering free 30-60-90-day business plan templates to find more tailored options.
Top 10 Tips to Create a Startup Business Plan
Putting together a business plan can be overwhelming and time consuming, especially if you aren’t sure where to begin. Below, we share tips you can use to help simplify the process of developing a startup business plan of your own.
- Use a business plan template, or begin with a business plan outline that provides all the elements of a standard plan to get your ideas down on paper in a structured manner. (You can choose from the selection of templates above.)
- Remove sections from your outline that aren’t relevant or that aren’t necessary to launch and operate your business.
- Compile the data you have gathered on your business and industry, including research on your target market and product or service offerings, details on the competitive landscape, and a financial plan that anticipates the next three to five years. Use that information to fill in the sections of your plan outline.
- Get input and feedback from team members (e.g., finance, marketing, sales) and subject matter experts to ensure that the information you’ve included in the plan is accurate.
- Make certain that the objectives of your plan align with marketing, sales, and financial goals to ensure that all team members are moving in the same direction.
- Although this section of the plan comes first, write the executive summary last to provide an overview of the key points in your business plan.
- Prepare a pitch deck for potential clients, partners, or investors with whom you plan to meet in order to share vital information about your business, including what sets you apart and the direction you are headed.
- Who are the founders and management executives, and what relevant experience do they bring to the table?
- What is the problem you are solving, and how is your solution better than what currently exists?
- What’s the size of the market, and how much market share do you plan to capture?
- What are the trends in your market, and how are you applying them to your business?
- Who are your direct competitors, and what is your competitive advantage?
- What are the key features of your product or service that set it apart from alternative offerings, and what features do you plan to add in the future?
- What are the potential risks associated with your business, and how do you plan to address them?
- How much money do you need to get your business running, and how do you plan to source it?
- With the money you source, how do you plan to use it to scale your business?
- What are the key performance metrics associated with your business, and how will you know when you’re successful?
- Revisit and modify your plan on a regular basis as your goals and strategies evolve.
- Use a work collaboration tool that keeps key information across teams in one place, allows you to track plan progress, and captures updates in real time.
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What is a business plan? Definition, Purpose, and Types
In the world of business, a well-thought-out plan is often the key to success. This plan, known as a business plan, is a comprehensive document that outlines a company’s goals, strategies , and financial projections. Whether you’re starting a new business or looking to expand an existing one, a business plan is an essential tool.
As a business plan writer and consultant , I’ve crafted over 15,000 plans for a diverse range of businesses. In this article, I’ll be sharing my wealth of experience about what a business plan is, its purpose, and the step-by-step process of creating one. By the end, you’ll have a thorough understanding of how to develop a robust business plan that can drive your business to success.
What is a business plan?
Purposes of a business plan, executive summary, business description or overview, product and price, competitive analysis, target market, marketing plan, financial plan, funding requirements, lean startup business plans, traditional business plans, how often should a business plan be reviewed and revised, what are the key elements of a lean startup business plan.
- What are some of the reasons why business plans don't succeed?
A business plan is a roadmap for your business. It outlines your goals, strategies, and how you plan to achieve them. It’s a living document that you can update as your business grows and changes.
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These are the following purpose of business plan:
- Attract investors and lenders: If you’re seeking funding for your business , a business plan is a must-have. Investors and lenders want to see that you have a clear plan for how you’ll use their money to grow your business and generate revenue.
- Get organized and stay on track: Writing a business plan forces you to think through all aspects of your business, from your target market to your marketing strategy. This can help you identify any potential challenges and opportunities early on, so you can develop a plan to address them.
- Make better decisions: A business plan can help you make better decisions about your business by providing you with a framework to evaluate different options. For example, if you’re considering launching a new product, your business plan can help you assess the potential market demand, costs, and profitability.
What are the essential components of a business plan?
The executive summary is the most important part of your business plan, even though it’s the last one you’ll write. It’s the first section that potential investors or lenders will read, and it may be the only one they read. The executive summary sets the stage for the rest of the document by introducing your company’s mission or vision statement, value proposition, and long-term goals.
The business description section of your business plan should introduce your business to the reader in a compelling and concise way. It should include your business name, years in operation, key offerings, positioning statement, and core values (if applicable). You may also want to include a short history of your company.
In this section, the company should describe its products or services , including pricing, product lifespan, and unique benefits to the consumer. Other relevant information could include production and manufacturing processes, patents, and proprietary technology.
Every industry has competitors, even if your business is the first of its kind or has the majority of the market share. In the competitive analysis section of your business plan, you’ll objectively assess the industry landscape to understand your business’s competitive position. A SWOT analysis is a structured way to organize this section.
Your target market section explains the core customers of your business and why they are your ideal customers. It should include demographic, psychographic, behavioral, and geographic information about your target market.
Marketing plan describes how the company will attract and retain customers, including any planned advertising and marketing campaigns . It also describes how the company will distribute its products or services to consumers.
After outlining your goals, validating your business opportunity, and assessing the industry landscape, the team section of your business plan identifies who will be responsible for achieving your goals. Even if you don’t have your full team in place yet, investors will be impressed by your clear understanding of the roles that need to be filled.
In the financial plan section,established businesses should provide financial statements , balance sheets , and other financial data. New businesses should provide financial targets and estimates for the first few years, and may also request funding.
Since one goal of a business plan is to secure funding from investors , you should include the amount of funding you need, why you need it, and how long you need it for.
- Tip: Use bullet points and numbered lists to make your plan easy to read and scannable.
Types of business plan
Business plans can come in many different formats, but they are often divided into two main types: traditional and lean startup. The U.S. Small Business Administration (SBA) says that the traditional business plan is the more common of the two.
Lean startup business plans are short (as short as one page) and focus on the most important elements. They are easy to create, but companies may need to provide more information if requested by investors or lenders.
Traditional business plans are longer and more detailed than lean startup business plans, which makes them more time-consuming to create but more persuasive to potential investors. Lean startup business plans are shorter and less detailed, but companies should be prepared to provide more information if requested.
Free: Business Plan Examples
Do you need help creating a business plan? Check out these 14 free, proven business plan examples from different industries to help you write your own.
A business plan should be reviewed and revised at least annually, or more often if the business is experiencing significant changes. This is because the business landscape is constantly changing, and your business plan needs to reflect those changes in order to remain relevant and effective.
Here are some specific situations in which you should review and revise your business plan:
- You have launched a new product or service line.
- You have entered a new market.
- You have experienced significant changes in your customer base or competitive landscape.
- You have made changes to your management team or organizational structure.
- You have raised new funding.
A lean startup business plan is a short and simple way for a company to explain its business, especially if it is new and does not have a lot of information yet. It can include sections on the company’s value proposition, major activities and advantages, resources, partnerships, customer segments, and revenue sources.
What are some of the reasons why business plans don't succeed?
- Unrealistic assumptions: Business plans are often based on assumptions about the market, the competition, and the company’s own capabilities. If these assumptions are unrealistic, the plan is doomed to fail.
- Lack of focus: A good business plan should be focused on a specific goal and how the company will achieve it. If the plan is too broad or tries to do too much, it is unlikely to be successful.
- Poor execution: Even the best business plan is useless if it is not executed properly. This means having the right team in place, the necessary resources, and the ability to adapt to changing circumstances.
- Unforeseen challenges: Every business faces challenges that could not be predicted or planned for. These challenges can be anything from a natural disaster to a new competitor to a change in government regulations.
What are the benefits of having a business plan?
- It helps you to clarify your business goals and strategies.
- It can help you to attract investors and lenders.
- It can serve as a roadmap for your business as it grows and changes.
- It can help you to make better business decisions.
How to write a business plan?
There are many different ways to write a business plan, but most follow the same basic structure. Here is a step-by-step guide:
- Executive summary.
- Company description.
- Management and organization description.
- Financial projections.
How to write a business plan step by step?
Start with an executive summary, then describe your business, analyze the market, outline your products or services, detail your marketing and sales strategies, introduce your team, and provide financial projections.
Why do I need a business plan for my startup?
A business plan helps define your startup’s direction, attract investors, secure funding, and make informed decisions crucial for success.
What are the key components of a business plan?
Key components include an executive summary, business description, market analysis, products or services, marketing and sales strategy, management and team, financial projections, and funding requirements.
Can a business plan help secure funding for my business?
Yes, a well-crafted business plan demonstrates your business’s viability, the use of investment, and potential returns, making it a valuable tool for attracting investors and lenders.
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5 Tips to Write a Successful Business Plan
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Whether you’re a seasoned business owner or a new entrepreneur, a business plan is crucial to the success and growth of your business, but it can feel like an overwhelming task.
A business plan should act as a “compass,” according to Danielle Langton, a business strategist and coach based in Austin, Texas. It can help you maintain focus as you navigate the market, silence internal and external distractions, and secure business financing .
A well-written business plan will also create confidence, clarity, direction and alignment for a business owner and their team. To help you navigate the process, two business advisors share their best tips for writing a business plan.
1. Think big picture
Rather than diving into a 60-page business plan template, start by conceptualizing your business, recommends Oren Shani, a certified business advisor at Accion Opportunity Fund, a nonprofit community development financial institution based in California.
For new businesses, that means thinking about what differentiating value you bring to the market and how to turn that value into revenue, says Shani. For operating businesses, Langton says, it means understanding what worked the previous year and what didn’t.
Once you have this “bird’s-eye view,” you can more easily narrow down your action steps, which will vary based on your business, says Shani. “A lot of businesses find that they don’t need that 60-pager,” he says, noting that some businesses really only need a one-page mini-plan, or “lean plan.”
2. Factor in your lifestyle
Langton’s main advice to her clients is to prioritize the balance between business and their personal lives. Understanding and outlining your priorities outside of the business gives you clarity on how you can spend time with your business, which can ultimately make you a more efficient and effective business owner. “As you are creating a living,” she asks her clients, “are you actually also enjoying the life that it is providing, or are you just so focused on the revenue?”
To create this clarity, she recommends starting with your “nonnegotiables,” or things that you aren’t willing to sacrifice in your daily life to run your business. From there, you can build what your ideal week looks like and work your business schedule around that.
3. Make the time
As for actually sitting down to write your business plan , consider both your schedule and how you work best. For those who prefer to focus on one task at a time, Langton suggests setting aside a week, even blocking the time on your calendar if you’re having trouble making it a priority. Consider a change of scenery to clear any mental blocks or provide extra inspiration.
However, if feeling overwhelmed has kept you from starting in the first place, Shani advises against compartmentalizing. Getting something on paper, even if it’s just a bulleted list to start, is more effective than waiting for a free day with no distractions, he says. Plus, working on your business plan while running your business can provide benefits too, as real-time analysis can enhance your strategy as you go.
Langton adds that perfectionism and business plans don’t go hand in hand, especially for new business owners.
4. Embrace the living business plan
Whether you’re a new business owner or 20-year veteran, a business plan is never truly done, according to both Shani and Langton. As your understanding of your business, the market, and your customer base changes and adapts, so should your business plan.
The lengthiest part of the business plan process is the learning, rather than actually getting it on paper, says Shani. Every time a sale is made or not made, for instance, a business owner should seek to understand why or why not. This will help them identify their customers’ purchasing behaviors and how their customers engage with the business’s brand and products.
For some business owners, a monthly or quarterly cadence to check in, reprioritize and shed the things that aren’t working may make the most sense. Others may find it more useful to revisit their plan when there are new insights or significant changes to the market, such as new regulations, nearby real estate developments or fresh competitors, says Shani.
5. Leverage your busy season
For business owners expecting an upcoming holiday rush , this can be good news for your business plan, in addition to your bottom line. Leaning in during your busy season can be one of the best ways to collect data about your business, and capitalizing on that information at the end of the year can set you up well for the next, says Langton.
Not everything has to be buttoned up by the first of the year, but making observations and mental notes now will set you up to make meaningful updates to your business plan in January, she says.
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How to Write a Startup Business Plan
By Yuvika Iyer , May 28, 2022 - 10 min read
A startup business plan is an outline of your ideas and strategies for what you’ll need to do to start, manage, and even complete your startup’s mission. Creating one might sound simple enough, but because it’s a startup’s roadmap for success, it can be a complex document to create.
Writing a business plan can make a world of difference for entrepreneurs who desire external funding. It involves determining your target customers, understanding what makes them tick, and figuring out how to reach them through marketing campaigns.
In this blog post, we’ve explained why you should have a startup business plan, different types of startup business plans, and we’ve included 12 of the most effective tips for writing a startup business plan. If you’re ready to start with now, we have a product launch template to get you started quickly.
What is a startup business plan?
A startup business plan is a written document that outlines your ideas and strategies for launching, managing, and eventually exiting your new venture.
A well-constructed business plan can be crucial to the success of any entrepreneurial endeavor . As you prepare your proposal, keep in mind that it will evolve as you learn more about your market.
To start, create an outline of the most important items you'd like feedback on before writing anything down officially.
Then ask yourself these questions:
- What do I want?
- Why does my company exist?
- How will I make money?
- What are my long-term goals?
A detailed business plan helps you set milestones for measuring success. You can share the plan with investors who may want some reassurance on the viability of their investment in your company.
The best way to create a successful startup business plan is by including everything in an organized and easy-to-read document — marketing strategies, financial projections, team bios, timelines, and more.
What is a lean startup business plan?
A lean startup business plan is a method for developing products that relies on iterative experimentation to reduce uncertainty.
It has been used by companies such as Google , Amazon, and Facebook in the early stages of their development, and involves testing your idea with real customers early in development.
Lean startups are less likely to fail because they have tested their product or service with live feedback from consumers. Doing this allows them to make changes quickly without wasting resources on something no one wants.
The goal is not to build an extensive business plan but rather a "lean" one that can be changed based on customer feedback and then re-evaluated in regular intervals until it reaches market potential — or fails.
A lean startup business plan is a strategy that focuses on getting a product in front of customers as quickly and cheaply as possible. Use the lean startup business plan to validate your ideas before wasting time and resources.
Why do you need a small startup business plan?
A small startup business plan is one of the most important steps in building a company. Apart from helping you to focus on company goals, it aids in obtaining feedback from potential partners and keeps the team on the same page.
The best thing about starting small? You can change course at any time! If you need help developing or tweaking your small startup business plan, use this guide for entrepreneurs to get started.
You've built a product and you're ready to take the next step, but what's your plan? First, you need a strategy in place. Do you know how much money it will cost, or where exactly that funding should come from? What about marketing strategies for getting customers in the door?
You’ll also need to find ways to retain them afterwards so they keep coming back again and again (and spending more).
Obtain external funding
If you want to get funding from lenders or investors, you need a startup business plan. Lenders want to make sure they're investing in a company that will last and grow.
A well-organized idea shows passion for its purpose and outlines clear goals for helping customers. At the same time, having an exit strategy is also important.
Making a plan for when things don’t pan out as desired lets investors understand how much value there can be while giving customers (and yourself) peace of mind.
Understand your target market
One key piece of your business plan is knowing how to conduct a market analysis. To do this, consider the industry, target market, and competitors.
Are there any market trends or competitor factors that can affect your business? Review them closely and get ready to make required changes to your business plan.
Prioritize high ROI strategies
In business, ROI is important. Any business that doesn’t generate as much cash as it burns is likely to fail.
With a startup business plan in place, the strategies with the highest ROI become crystal clear. You'll know exactly what to tackle first and how to prioritize the rest of your tasks.
Accelerate financial health
Business plans are not crystal balls, but they can help forecast your financial health. Planning for expenses is vital to keep operations steady and identify problems as soon as possible.
Cash flow projections can help you see if goals are achievable or highlight upcoming issues that need correction before it's too late.
How to write a small startup business plan
Use this guide for entrepreneurs to develop or tweak a startup business plan. By following this easy six-step process, you'll soon have a clear path to startup success.
1. Clarify the startup vision, mission, and values
The first step to writing a startup business plan is understanding the startup itself.
Once you know what your startup does, ask yourself why. What is the startup's mission? What problem will it help customers solve? The startup's mission statement helps define its reason for existing.
It’s usually expressed in a simple sentence, but can also be written as a short paragraph.
Try to answer these questions: What does your startup do? How will it make money? How quickly do you hope it will grow? Are there any significant milestones or deadlines that need to be met?
2. Outline the executive summary
Now that you have an idea for your startup, its mission, and a vision in mind, it's time to write your startup business plan executive summary.
Keep it simple and precise. Begin by writing a one-sentence startup business plan introduction that showcases the core customer need/pain point and how you propose to solve it.
3. Develop startup goals and milestones
Next, write down the milestones and goals for your startup business plan. This is a crucial step that many entrepreneurs forget when they're starting out.
Do you want to focus on getting new customers? Or attaining a specific revenue number? Without clear short-term goals, it can be hard to know how to prioritize startup tasks.
4. Write a company description
Answer the two fundamental questions — who are you and what will you do? Then, give an introduction to why you're in business.
Provide a summary of introspective goals, clarifying intangible aspects such as values or cultural philosophies. Make sure to mention:
- Proposed business structure (limited partnership, sole proprietorship, incorporated company, or a general partnership)
- Business model
- Business vision and mission statement
- Background information of your team members
5. Conduct market analysis
Choosing the right market is crucial to your organization’s success. There are different kinds of products and services that a business can offer and each has particular requirements for a successful market fit.
If you choose one that doesn't have a large enough customer base or is not profitable enough, your company may end up struggling for every sale.
Ensure that there is a clear market niche — an ideal audience of customers with a need or a pain point that your business can help solve.
6. Develop startup partnerships and resources
When you're launching a small startup, one of the most important things that your business needs is capital. There are several ways to get going on this front.
When thinking about sources of funding for startups , consider startup grants, startup loans, startup investors, and startup accelerators.
7. Write a startup marketing plan and startup budget
Your startup business plan is almost complete! All that's left is to create a startup marketing plan and budget. Your startup marketing plan will help you define your company’s target audience and brand image.
The startup budget is an integral part of any startup that helps you take the guesswork out of writing expenses.
Examples of startup business plans
Business plans differ based on the nature of the business, target market, competitive advantage, delivery of product/service, scope, and size.
Though the core business plan template remains the same, the content and flow change. Here is an example of an accounting firm's business plan:
At our company, ABC Accounting Services LLC, we work hard to provide the best service and build a strong team. Our vision is for this brand to be recognized as #1 throughout NYC by both smaller businesses and larger corporations.
Our values are reflected in all that we do: integrity (ethical behavior), service (giving top priority to clients' needs), excellence ("doing it right"), teamwork (working together).
ABC Accounting Services LLC is the premier accounting firm in New York City and will handle various financial services. We specialize in audits, bookkeeping, tax preparation/compliance work, and budgeting assistance with high-quality consulting.
ABC Accounting Services LLC will be structured as an LLC — a Limited Liability Company in the state of New York. It will provide accounting, bookkeeping, taxation, auditing, and compliance-related services to small, medium, and large enterprises situated in New York City.
Marketing strategy and competitive advantages
Despite the fact that there are many established accounting services firms in our industry, we have a great chance of becoming successful because of the high demand for financial consulting.
Often, small businesses don't need full-time employees but would rather hire an accounting service provider like us to handle their bookkeeping and tax returns on time every year.
It is best to find a unique niche or carve out your own market in the financial consulting services industry. If you're able to create an identifiable brand identity for your accounting business, then you will likely see less competition from other firms.
ABC Accounting Services LLC will focus on delivering an exceptional client experience to grow the business and expand market share.
Startup business plan template
Here's a template you can follow when creating your startup business plan:
Top tips for writing a startup business plan
The following tips will help you create a compelling startup business plan without getting overwhelmed.
Know your audience
To write an effective business plan, tailor your language and level of detail to match the audience reading it.
Have a simple and clear goal
If you have a goal of securing funding for your business, it will be an uphill task with lots of work and research.
Simplifying and breaking down bigger goals into smaller, actionable tasks will assist you in getting through them faster.
Spend time researching
Avoid assuming anything about your target audience, product/service, or the market need.
Spending adequate time and effort on research from primary and secondary sources will help you develop an accurate business plan.
Build a startup toolkit
The process of creation becomes easier if you have the right startup tools and software by your side. Pick the right ones that will help you in your journey.
Keep it precise
Short and easy-to-read business plans are best kept within 20 pages. If you have additional documents, consider adding them as appendices or provide a link if available online.
Ensure tonal consistency
Keep the tone consistent by having just one author write your startup business plan. Otherwise, be sure to edit it thoroughly before you finalize it.
Add reference points
All information regarding the market, your competitors, and your customers should reference authoritative data points.
Be ready to pivot
A business plan should be fluid and flexible. Think of it as an evolving document that will continue to change over time.
How to create a business plan with Wrike
A good business plan is a powerful tool and can be a key predictor of future progress, but simply filling in a startup business plan won’t help you achieve success. You need to create action steps with accountability that will help you reach your goals.
Wrike’s project management software can help your organization deliver successful projects and maximize individual and team productivity, and our product launch template can help you turn your startup business plan goals into actionable steps.
Start a free trial of Wrike today to see how it can help to simplify work, showcase progress to stakeholders, and achieve startup success.
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An Effective Business Plan Can Plot the Course for Small Business Success
December is National Write a Business Plan Month. The SBA encourages you to mark the occasion by learning how to put together an efficient, high-quality plan that will increase your chances of small business success in the year ahead.
You wouldn’t try to find a new destination without mapping the route first. By the same logic, you don’t want to start a business without a plan to guide your path. A business plan can help you navigate all the roadblocks that come with getting your business up and running.
Which Type of Business Plan Should You Choose?
While some business plans may be more effective than others, there’s technically no wrong way to write one. Every business is different, and the type of plan you choose should ultimately boil down to your unique needs and goals. The two most common types of business plans are traditional and lean startup.
A traditional business plan might be right for you if:
- You’re detail-oriented.
- You want a comprehensive plan.
- You plan to request financing from traditional sources.
A traditional business plan is a great way to show you’ve done your homework, which is why it’s the preferred method of many lenders and investors. While a traditional plan may take more time to write, the extra effort is worth it in the long run. The more thorough you are, the better you’ll be able to answer questions about what your company is, how it will stack up to competitors, and why it will be a financial success. You don’t have to stick to a set structure, but the following nine sections should be included in a traditional business plan: executive summary and company description; market analysis; organization and management structure; service or product line description; marketing and sales strategy; and funding requests and financial projections.
A lean startup plan might be right for you if:
- You want to explain or start your business quickly.
- Your business is relatively simple.
- You plan to regularly change and refine your business plan.
The lean startup format is ideal for entrepreneurs who want to keep things high-level and adaptable. At their core, lean startup plans focus on only the most important details — making them a viable streamlined alternative. Lean startup business plans can take as little as an hour to write and are typically only one page. By sticking to the following basics, expressed through visual tradeoffs and fundamental facts, you leave a lot of room to fill in the blanks later: partnerships, activities, and resources; value propositions; customer experience, target market, and channels; and cost structure and potential revenue streams.
Regardless of which route you choose, the SBA is here to help. Our Business Planning Guide is easy to use and contains templates you can follow. Our “How to Write a Business Plan” course, offered through the SBA Learning Center, will show you how to plan, outline, and develop your own business plan. Of course, if you prefer a more hands-on option, an SBA resource partner is standing by. Learn more at sba.gov .
About the author
U.s. small business administration.
June 29, 2022 | Growth and Expansion
The Startup Business Plan: Why It’s Important and How You Can Create One
What is it about a business plan that makes it such an essential ingredient for success? Let’s take a closer look!
Why a Business Plan Is So Important
We’ve all read the stories of million-dollar businesses that started with a few ideas jotted on a scrap of paper or a bar napkin. But in reality, how many of those businesses grew to million-dollar sales without developing a business plan at some point? A business plan helps you answer important questions such as what is the best business model, what is the future path of the business, and how is the business going to reach its goals? Beyond that, formally-developed business plans serve a number of purposes.
Helps You Articulate Your Vision
A business plan gives you a means for capturing your entrepreneurial vision in writing. It enables you to fine-tune your aspirations and recognize where there are gaps or inconsistencies in what you want to accomplish. It also helps you spell out your business’s purpose and describe the products and services you’ll offer in detail. Rather than keep that info in your head, a business plan frees up your mind to concentrate on what you must do to fulfill your vision.
Helps You Understand Your Industry, Market, and Competition
As you work through the process of writing a business plan, you’ll have an opportunity to gain valuable knowledge about your business strengths, weaknesses, opportunities, and threats. You’ll learn a lot through conducting industry, market, and competitive research. Many entrepreneurs make assumptions about these things, and research is the only way to validate preconceived notions. A business plan helps you better understand your competition, the market you’re entering, and customer trends and preferences. It also helps you recognize possible roadblocks (which could come in many forms, such as the regulatory environment, technology, and other forces within or beyond your control).
Helps Access the Viability of Your Business Idea
According to data provided by the U.S. Bureau of Labor Statistics, only about half of private-sector businesses started in 2014 survived into 2019. Surely, the entrepreneurs who started those now-defunct businesses didn’t set out with the goal of failure. It’s more likely that they neglected to do the work involved to assess the feasibility of their business ideas and create a plan to guide them through the startup process and beyond. A business plan will help you identify red flags in advance. It’s an excellent way to do a “reality check” and recognize warning signs of impending doom. With a realistic view of whether your business idea has a chance of success, you can make an informed decision about whether to move forward, cease and desist, or alter your course.
Provides a Road Map for Launching Your Business
A business plan is also important because it provides direction as you work through the many tasks involved in starting a business. Writing a business plan helps ensure you’ve thought through all of the considerations and requirements. It forces you to think through important decisions in advance and set goals and objectives for which you want to aim. Moreover, a business plan will help keep you on track with all of the tasks required to start your business and operate it legally. For example, registering your business entity type, applying for the licenses and permits you’ll need to obtain, and other mission-critical details.
Helps Address Unseen Flaws
By capturing your vision in a business plan, you’ll be equipped to share it and get feedback. Seek the honest, unbiased thoughts and advice of trusted professionals, friends, family members, and colleagues who will be willing to give you their honest, unbiased thoughts. Doing so can help you identify problem areas that you couldn’t see on your own. From there, you can fine-tune your plan.
Helps Identify the Talent Needed for Moving Your Vision Forward
Starting a business is time-consuming and there may be tasks that will require specialized expertise or skills that you personally do not possess. Understanding legal matters, creating financial reports and forecasts, developing a website, and managing payroll are just a few of the responsibilities that you may not be able to handle on your own. A business plan will help you identify resource needs so that you can begin to look for employees, advisors, contractors, or companies with the knowledge and talent you require.
It Can Equip You to Find the Right Suppliers
A business plan will help you identify what materials you’ll need to offer your products and services. In turn, it will shed light on the criteria you must look for in potential suppliers. For example, if an entrepreneur plans to manufacture all-vegan, organic spa products, the business plan will help dictate the standards the company will look for in its vendors.
Helps You Set Priorities
By seeing all the moving parts involved in starting your business in one place, you can decide what needs your attention first and what can wait. A business plan will help you keep track of what you must do and determine how to allocate your time, energy, and resources wisely.
Helps Set Realistic Goals and Objectives
A business plan will help make you more intentional about setting goals and objectives for your company. Moreover, having goals in writing facilitates a higher level of accountability for your long-term vision. It provides an incentive to look at your business’s potential realistically and to question assumptions. By using your business plan as a guide, you will be reminded to focus attention on both the operational and financial objectives of your startup.
Helps Attract Investors and Obtain Financing
Lenders like banks and credit unions and other institutions will want to see a business plan. Investors will want to see a business plan so they can assess if the business idea will be a sound investment. A business plan is essential for securing funding (such as from bank loans or equity financing) or attracting investors (like venture capitalists or angel investors). Sure, a dazzling presentation akin to what you see on Shark Tank may pique investor interest. However, you’ll want to provide a well-written document that potential investors can review to evaluate the opportunities and risks of financing your business idea.
Helps Cultivate Sound Decisions
Having a business plan allows you to make better decisions because it helps prevent decision-making on the fly. It gives you strategic direction, so fewer outcomes are left to chance. Not only is a business plan important for startups, but it’s also a valuable tool for established businesses. All businesses change and grow. All industries evolve. Therefore, a business plan should be approached as a living, breathing document that needs to adapt to the circumstances at hand and its environment. Entrepreneurs should review and update their business plans regularly. This is especially critical when they see shifts in their market, competition, industry, company growth, financial status, and other critical areas. By keeping your business plan current, you’ll be better equipped to navigate change and make adjustments to stay on the path to success.
Serve as a Communication Tool
You can use your business plan to communicate your vision and business projections with key stakeholders. Potential lenders, investors, project partners, suppliers, key employees, major clients, etc. may rely on the details in your business plan to assess whether working with you will be a sound decision for them.
The Risks of Not Having a Business Plan
Several potential risks that entrepreneurs might face if they neglect to write a business plan for their startup include:
- Running out of money because they haven’t identified all of the startup costs involved in launching the business.
- Unable to sustain running the business down the road because they failed to identify all ongoing costs involved in operating the business.
- Selling products and services that aren’t profitable because they didn’t identify all the time and labor involved in providing them.
- Not attracting customers because there is no market need for the company’s products and services.
- Not attracting customers because competitors’ products and services are superior.
- Facing fines, penalties, and even suspension or administrative dissolution of their company because they didn’t identify their business compliance responsibilities.
All bad stuff, right? I could go on and on about possible downsides. But I believe those examples amply demonstrate why it is important to have a business plan!
Critical Questions to Consider
Like any new endeavor, developing a business plan might seem like an overwhelming task. Challenges include choosing the right verbiage, knowing what to include and what to leave out, where to find statistics and marketing information to back up your ideas and add credibility to your plan, and more.
Don’t let the details prevent you from moving forward. As with any big task, writing a business plan is less daunting if you break it down into smaller sections that are easier to execute.
Before you jump into actually writing your business plan, take a minute to answer the following questions to get your head in the right frame of mind:
- What products or services will you be selling?
- Who is your target market?
- Is your target market broken down into personas or subgroups?
- What pain points, challenges, and struggles do your future customers struggle with?
- How will your product or service help your customer solve problems?
- Who is your competition?
- How does your offering compare to what your competitors offer?
- How much will you charge for your products or service offering?
- What costs will go into the development or execution of your products or services?
- What software will you require to run your operations?
- What type of building or office space will be required for manufacturing, operations, logistics, or sales?
- What resources and staff will you need?
- What type of supplier or manufacturing relationships will be needed to secure your supply chain?
- Are there any possible spinoffs or ancillary products and services?
- How will you market your offering to prospective customers?
- What is your measure of business success (for example, number of customers or annual net income)?
- What are the obstacles to your success?
- What are your solutions to these obstacles?
Core Elements of a Startup Business Plan
These days, successful startups create business plans that come in a variety of shapes and sizes. Some take up no more than a few pages and can be explained in no more than a few minutes, while others are much longer presentations with clearly defined data points. Founders and their most trusted team members start with a predominant vision and develop goals and strategies aimed at seeing that vision come to light.
Whether they develop their own methodology or use one more methodology created and published by experienced consultants and agencies, successful startups take the time to create a plan that keeps them on track but allows them the freedom to pivot when they need to. From a guiding vision to regular checkpoints, and an expectation of accountability, these plans are the new business roadmap.
The sections of a business plan may vary for different businesses. Many business plans include the following segments.
The Executive Summary (Company Description)
Here’s your chance to make a good first impression—especially since many readers won’t read past this initial section. Concisely describe what your company does in the first paragraph of your Executive Summary. Be succinct, descriptive, and engaging, and explain the specifics of your business. Why did you choose your business name? Why did you choose your business structure ? Why is your business uniquely qualified to succeed? Is it your intellectual property, your management team’s unique and/or extensive background, your startup’s early (standout) accomplishments, your key partnerships, or favorable market trends?
In this section, you should also summarize your vision and your goals. In the beginning stages of a startup, entrepreneurs tend to improvise, and their vision may be a bit hazy. Developing a business plan helps sharpen that vision, and down the road helps the startup succeed. But keep in mind, where businesses of the past started with “what” they were going to produce, market, and sell to “whom”, modern-day businesses start with “why”. Their visions tell a story of a better world for a specific group of people. These visions are backed by core values that define what is important to the founders, the types of employees they want on their team, and the way that their organization will interact internally and with the outside world.
Products or Services
In this section, go into more detail about your service or product. Thoroughly describe your product or service and any associated intellectual property information such as patents or trademarks. Describe what makes your product or service unique and competitive in the marketplace. Most likely your business has more than one product or service, so be sure to provide a brief description of each. Use colorful photos or drawings to illustrate your business and include relevant details such as dimensions, weights, and shelf life. For service businesses, outline your menu of services and any add-ons or extras customers can purchase.
Do you have plans to add new products or services as your business grows? If so, outline the areas of opportunity you see. Explain what you plan to add to your offerings and how that will make your business more competitive.
Market or Situational Analysis
In this section, you need to provide detailed statistics and research on your target market. In a traditional business plan, this was called “SWOT Analysis”, in which companies outlined an exhaustive list of Strengths, Weaknesses, Opportunities, and Threats. In today’s market, this is can be a more fluid conversation.
Colorful visuals are important here to help highlight the key numbers and demographics supporting the validity of your business idea. Use your market research to explain why your business is different and how it will appeal to your prospective customers. Show the reader that you know your market and you understand where your best prospects lie.
Are there new markets you’ll explore in the future, new product lines you plan to add, or new services you expect to develop as the business grows? Include them here. You should also include information about your sales and marketing strategies, such as digital, print, word-of-mouth, etc.
Where to get all those facts and figures?
- The American Factfinder section of the Census Bureau website has helpful marketing research and consumer data for free. You can search for market information by specific address, by city and state, and find specific city demographics such as social, economic and housing characteristics. You can also look for business patterns statistics and key populations by county.
- eMarketer.com is a great source for information on online marketing trends.
- If you’re not finding the market research you want or you need help gathering the research, check out Ask Your Target Market . AYTM gives you the tools to conduct your own market surveys. Or, if you don’t feel you’re qualified to put the survey together, AYTM will create the survey for you.
Company Goals and Objectives
While many plans still include a 3-5 year estimate on sales, market share, and/or valuation, most goals are set in 60-120 day intervals. Personally, I prefer to use quarterly (90 day) cycles and roll that up for the purposes of a startup business plan. That allows you to significantly move the needle four times a year and accounts for typical swings in business based on the quarter. For example, retail businesses are completely different in Q4 during the holidays than they are in Q1.
The shorter time period allows you to focus everyone’s attention on a limited number of goals and resulting projects. I’d recommend no more than four major items in a quarter. If you’re launching a new business, the four goals for your first quarter might be something like:
- File incorporation documents
- Set up bank accounts
- Launch website
- Sign on the first client
Whether it’s just you, you and partner, or a whole team – if it’s not on this list (and not part of regular business operations), it doesn’t get touched. This will allow you to stick to your startup plan and get it moving quickly.
Operational Plan & Team Members
The organization and management section of the business plan tells your readers about the organizational structure of your business and which key employees or owners are responsible for key areas of the business, such as operations, sales, finances, etc. Make sure your business plan explains how each key employee adds to the success potential of your business by explaining their expertise, special skills, and prior experience.
If you’re a sole proprietor , you most likely outsource some of your work or special projects to independent contractors or freelancers. In that case, including information on their expertise, as well as that of any business consultants you regularly engage with or have on your board of advisors.
Finally, since readers want to see your potential for growth, you should also project how your org chart will develop as the business grows and what positions you plan to add in the future.
This section outlines what your business will accomplish financially over the next three to five years. The Panel Study of Entrepreneurial Dynamics II found that business plans are vital for external fundraising because a plan builds legitimacy and confidence among investors that the entrepreneur is serious. It also serves to reassure staff, suppliers, customers, and other key stakeholders.
Potential investors, creditors, and business partners want to know whether they’re making a good investment in your business. Having solid projections and supportable figures in this section of the plan is key. If you are developing a business plan to seek immediate funding, you also need to include a formal funding request. This should specify how much you need, both now and in the future, and what the money will be used for. Go over this section with your accountant to make sure everything is worded correctly and that your numbers make sense.
Supporting data and documentation that provides additional detail about what is in the other sections of the business plan.
Popular Planning Methodologies You Can Use
Planning strategies are fairly customized now. There’s not a one-size-fits-all document like the old business plan. You really are free to create a strategy that works for your organization. But, if you’d like some framework to guide you through the process, here are some popular methodologies that many startups have used to create and help execute their business plan.
- Gazelles (Scaling Up) – This well-documented program walks you through the creation of a “One Page Strategic Plan”. It covers everything from setting goals to reviewing progress and making decisions on what to do next. It serves as a blueprint for building an effective strategy. While I always modify it to fit a particular business, this is the structure I use when developing strategies for my companies, and for my clients.
- Entrepreneurial Operating System (Traction) – There are several similarities between EOS and the Gazelles’ Scaling Up program. Traction spends more time on meeting rhythms, feedback loops, process documentation, and organizing documents and workflow. Many startups tend to use EOS in conjunction with Scaling Up to flesh out the operational strategy that supports the larger and creative goals.
- The Lean Startup – For those of you that are less interested in a structured program for developing a strategic plan, and simply want to learn more about how companies are creating flexible, scalable businesses, I suggest researching and following The Lean Startup movement. Here, Eric Ries uses stories and examples to describe how executive teams can apply lean manufacturing principles to business management.
Remember to Revisit and Review Your Plan
Last but not least, your planning strategy should include a system for documenting processes and reviewing them on a regular basis. While this may sound like a tedious task that doesn’t belong in a fast-paced business, hear me out.
Documenting processes and reviewing them regularly has huge benefits:
- As you scale you’ll need to delegate tasks, projects, and accountability to more team members. If processes are documented, and not just in your head, or in your managers’ heads, they are easier to transfer to new staff.
- Reviewing processes helps founders and managers stay in the loop on how work is getting done.
- Reviewing and comparing processes allows you and your team to spot redundancies, and identify areas where processes should be combined, or split in different ways to achieve a more productive workflow.
- Reviewing processes allows you and your team to look for opportunities to automate manual processes. This often leads to cost-savings and frees up one of your team members’ time for more creative thinking.
If you skip this part of your planning strategy, you risk creating and fostering systems that are duplicated, redundant, outdated, and unnecessary because everyone continues doing what they’ve always done… because that’s the way they’ve always been done. That’s no way to grow a profitable, long-term business.
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BUSINESS PLAN FOR STARTUPS: WHAT IT IS AND HOW TO DO IT
The business plan for a startup is an indispensable economic-financial document. It is part of the fund search, even for opening a startup, and is useful for presenting your idea to investors with the utmost professionalism.
In this article, you will learn:
What is a business plan?
How to compile and make a business plan for a startup .
Are you interested? Let’s get started right away!
BUSINESS PLAN: DEFINITION
A business plan for startups can be defined as:
“It is an economic-financial plan that allows to define and summarize the business project, the strategic lines, the objectives and the patrimonial, economic and financial planning of the company.”
BUSINESS PLAN: WHAT IS IT?
The business plan of a startup is a real action plan. Where they come from:
The business plan of a startup is a real action plan. It must include:
- Competitors analyzed;
- List of the characteristics of the idea;
- Marketing strategies;
- Analyzed the market with the relative market share to be attacked;
- And much more.
The financial statement is a document the lenders want to see to touch and understand the business opportunities in relation to the market. It helps lenders know how you plan to acquire customers or users and how you plan to generate value and revenue.
WHY MAKE A BUSINESS PLAN FOR YOUR STARTUP?
It is vital to make a business plan to be clear about the goals you want to achieve and how to achieve them. In fact, the business plan defines the strategy and action plan for 1, 3, and sometimes even 5 years.
Very often, the business plan of your startup is requested by investors. Or in general, you may need a business plan when you want to finance your startup or attract new business partners or new directors.
In fact, an investor is interested in knowing how big a market you are attacking, your business model, and your marketing strategy. In addition, he wants to know how to get new customers. It’s all about understanding how worthwhile your project really is.
BUSINESS PLAN FOR A STARTUP: WHAT IS IT MADE OF?
From saying let’s move on to doing, that is to create a business plan. Many of you are wondering what a business plan for a startup consists of and how to do it.
The business plan of a startup consists of 11 parts, including the executive summary.
Compiling it in all its parts requires a considerable commitment, both time and resources. Companies generally employ even more than one resource to create it.
Assuming that you can’t even get close to venture capital without a business plan, we show you a well-structured business plan. Here, then, is how a business plan for a startup is structured:
- Executive Summary
- The company
- The Product and the Technology
- Analysis of the customer and the problem
- Market and Competition
- SWOT Analysis
- Marketing Plan
- Economic and Financial Plan
Let’s see each in detail.
The introductory page is as if it were the Home Page of your Business Plan. It is the first thing that will be seen by investors. You will have to enter the logo and full name of your startup together with the contacts with which interested parties can contact you.
The second part of your startup’s Business Plan is called the Executive Summary. It contains a summary of the business plan and what investors are about to read.
In this section, you need to enter a concise description:
- Of your startup; (when was it established? its company form? and where is the headquarters?)
- Of your business; (what it does and what problems it solves);
- Your business model and metrics achieved;
- Of your Financial Plan or the financial projections, the capital to be raised and that already raised.
In this part of the Business Plan, you have to briefly describe what the startup does or what it would like to achieve. But not only that, but you must also include the mission and vision that you have set for yourself. Moreover, also explain the market needs to which you have found a solution.
THE PRODUCT AND THE TECHNOLOGY
This is the space to deepen the description of your product and of the present and future technology. What differentiates your product from that of competitors? Do you have trademarks or patents? How do you imagine its evolution in the future?
ANALYSIS OF THE CUSTOMER AND THE PROBLEM
No investor cares about a startup that doesn’t have potential customers. In this part of the business plan, you must therefore be able to demonstrate how much customers want your product.
To do this, describe your buyer personas, their demographics, and socio-behavioral characteristics.
If you already have billing cycles, expose the analysis of these.
Also, describe the problem you want to solve.
MARKET AND COMPETITION
Here you have to talk about your target market. Discuss the market share in which your project will fit is analyzed and what are the future prospects. Usually, to do this, the analysis of the TAM SAM SOM is used.
A fundamental aspect to take into consideration when analyzing the market you want to attack is its trend.
You will also need to present the results of the competitor analysis. It helps the investors to understand what type of market you are entering. And it shows them your strengths compared to your competitors.
In this section of your startup’s business plan, you will talk about your strengths and weaknesses compared to the competition. Also, explain here the opportunities and threats you see in your project through SWOT analysis.
You must describe here:
- How do you want to position your product on the market?
- What is the pricing policy?
- How to promote it?
- Which acquisition channels to use?
- And how much you think it will cost to acquire new customers.
Now you have to show that you clearly understand the next operational steps. You can do this by defining any results and metrics already achieved or by defining a detailed map of the next steps and milestones.
No less important is your team. Within a business plan, proving that you have good people alongside can only be an advantage, and investors know this well.
Define each person’s role and skills, who are the key figures, and any advisors.
It also explains the prospective human resources plan. If and how your organization will change over time.
ECONOMIC AND FINANCIAL PLAN
And to top it off with your business plan, prepare a financial plan .
This is the numerical part of the business plan where you can enter:
- Financial strategies;
- Sales forecast;
- Loans and investments;
- Income statement;
- Financial statement;
- Pre-money evaluation.
Do not put disproportionate numbers as investors recognize a “rigged” business plan.
So try to be as honest as possible, and even if your estimates still remain estimates, make them plausible.
A badly neglected Business Plan is always worse than an unexpected success.
Often, together with the Business Plan, you will also have to prepare a pitch deck.
A brief and clear presentation of your business idea.
SOME TIPS ON HOW TO WRITE A STARTUP BUSINESS PLAN
Now you know everything about creating a business plan and what absolutely must not be missing.
Speaking instead of the form, how do you write a business plan for startups?
The rules to be respected are the following:
Business plans should always be short and concise. This is for at least two reasons:
You want them to be read, and no one will read them if it reaches 40 pages;
You must constantly use and update it to manage and grow your startup. The more concise the Business Plan, the easier it will be to review and correct it.
THINK ABOUT WHO AND WHERE TO READ
When creating content, you must always think about the audience it is intended for. This rule also applies to the Business Plan of a startup.
For example, if you’re developing a complex biological process and your potential investors aren’t scientists. So, avoid jargon or acronyms they won’t know.
Imagine being in their place and having to invest in a project whose benefits and potential you do not understand. You just wouldn’t do it, and neither would a serial investor.
DO NOT BE AFRAID
The vast majority of start-uppers are not business savvy. Their greatest school is practice and field experience.
Writing a business plan may seem like a big hurdle, but it doesn’t have to be. Know your startup. You are the ultimate expert. For this reason alone, writing a business plan should be easier.
HOW MUCH DOES A BUSINESS PLAN COST?
We at Maven Business Plan know very well that drawing up a startup’s business plan is not a joke. So if you care about your project and want an effective business plan, you can contact our specialists who dedicatedly help startups run their businesses successfully.
At this point, you are wondering, “how much does a business plan cost?” The answer varies depending on the company you are targeting and the specific characteristics of your startup. A startup that has just started will have different needs than a startup that has already been on the market for a few years.
However, we assure you that our business plan cost will not put a dent in your budget. So feel free to contact us to make a business plan for the startup.
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Business Plan: Everything You Need to Know
A business plan is a written description of your small business's future.It shows what you intend to do and the way you intend to do it. 3 min read
What Is a Business Plan?
A business plan is a written description of your small business's future. It shows what you intend to do and the way you intend to do it. Business plans are inherently strategic. Your plan reveals how you're going to start and grow your business.
This defines the marketing strategy. The executive summary ought to inform the reader of what you plan to accomplish overall in your business. Clearly state what you are expecting. Typically, it's advisable that you simply write the executive summary after you have completed the rest of the document. Ideally, this section can act as a stand-alone page that covers the highlights of your detailed plan.
It’s quite common for investors to ask for only the executive summary when they're evaluating your small business. If buyers like what they see within the abstract, they’ll usually request the whole business plan , a pitch presentation, or additional information about your small business. Ideally, your abstract will be one to two pages at the most. It should be designed to give quick information that sparks curiosity and makes your investors interested in hearing more.
The Critical Components of a Winning Executive Summary
Create a one-sentence overview of your small business that sums up the essence of what you might be doing. Doing so is usually more practical if the sentence describes what your organization truly does. This is often known as your value proposition. Describe the issue you might be fixing for your intended customer.
Present a short overview of your staff or proposed staff, and include a brief clarification of why you and your staff are the best individuals to take your idea to market. If your small business method (i.e., “the way you generate income”) needs further clarification, then say you will describe it in more detail in later sections of the business plan. In case you are generating cash to start out or to further develop your small business, you could include a small statement of what you want within the main summary. Don’t include comments on possible additional funding , however, since that can all be negotiated later.
The corporate overview will most certainly be the shortest part of your marketing strategy. The corporate overview should show your mission statement, an assessment of your organization’s structure and possessions, a short history of the business, if it’s an established one, and a mention of the business location. Your organization mission statement needs to be brief—one or two sentences at most—and it ought to embody what you are attempting to provide.
Your company overview also needs to embody a summary of your organization’s present business structure . Are you an LLC ? A C-corp? An S-corp ? A sole proprietor? A partnership ? Potential investors will want to know the structure of the enterprise before they'll consider funding.
In case you are writing a plan or marketing strategy for an existing firm, it’s acceptable to incorporate a short history of the business and spotlight the main achievements. Keep the business history part brief, though. The business history section is very helpful in providing context for the remainder of your plan.
The business description often begins with a brief description of the trade. When describing the trade, talk about the current outlook in addition to future prospects. You also need to give info on all the competitors and the market along with any new merchandise or developments that can bring profits or that can have a negative effect on your small business.
Products and Services
The products and services section is where the bulk of your plan should be. The services section is where you'll describe the issue that you are fixing, your resolution, and how your services or products match the present market. You’ll also use the services section to reveal what sets your business above others and how you intend to broaden your services or products later.
Using Your Plan
Your business plan is one thing you will use to pitch for funding, and you must keep it updated as your company develops.
If you need help with creating a business plan , you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.
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- Example of a Good Executive Summary for Business Plan
- Creating a Business Plan
- How to Write An Executive Summary for a Business Plan
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Business Startup Plan
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Trying to launch a business without a startup plan is like taking a trip along a curvy, mountain road without a map, driving at high speeds, while wearing a blindfold. Here are some key items you should include in your startup plan.
This week begins the tale of my recent foray into the world of brick and mortar and the startup lessons learned there from.
Over the next few weeks I’ll be detailing the exact steps that I took to launch my retail business and bring it to profitability within the first 30 days.
The lessons to come are many, and not just for those milling around in the brick and mortar crowd.
Whether you’re starting a retail business in a strip mall or building a virtual business online, many of the fundamentals are the same and the principles for a successful startup apply.
You must begin with what I call a “Startup Plan.”
A Startup Plan is basically the list of everything that must happen to get the business up and running from the initial idea to scouting locations to securing vendors to getting licenses to stocking the shelves to opening the doors to marketing and advertising to managing growth and on and on.
A Startup Plan is not as detailed as a business plan. It is essentially the “to do” list for starting a business, though it is every bit as important as a business plan because the Startup Plan serves as the blueprint for getting the business up and running.
Trying to launch a business without a Startup Plan is like taking a trip along a curvy, mountain road without a map, driving at high speeds, while wearing a blindfold.
You will eventually arrive at some destination, but it’s likely to not be the destination you had in mind and your trip will be anything but smooth.
I always create my Startup Plans with a simple spreadsheet and build out from there.
Start by simply listing everything that you can think of that must be done to launch the business. Once you have the list break down each task into individual action items, assign each item to a responsible party and set a target completion date. A task without a deadline will not get done.
For example, your Startup Plan for a brick and mortar business may include:
- conduct market research to validate the business idea;
- conduct industry research to gauge the viability of the industry;
- conduct a feasibility study to gauge the odds of success of locating this particular business in this particular marketplace in this particular economy;
- write the business plan;
- write the marketing plan;
- secure funding;
- establish relationships with vendors;
- create inventory list;
- scout and secure a location;
- finalize the lease;
- get plans and permits for building out the space;
- find a contractor to do the build-out;
- get the required city, county, and state licenses;
- find and hire employees;
- place orders with vendors;
- stock the shelves with inventory;
- get marketing and advertising in place for grand opening; etc.
Your Startup Plan may be different from the above (depending on your product or service and expertise) and you may prioritize the tasks in a different order.
You’ll also work many of these tasks simultaneously, not just as they are listed. Once you start working through your Startup Plan the tasks tend to prioritize themselves. Just be flexible and realistic.
Now that you have your Startup Plan go to each task and flesh it out by listing the subtasks that must be completed, who will perform or manage these tasks, and the target completion date (be realistic about completion dates; nothing ever happens on schedule).
For example, #1 on any Startup Plan should always be “conduct market research to validate the business idea.” This is the most important task you will complete because the results of your market research will tell you whether to “go or no go” on the business idea. We’ll discuss this in greater detail next week. For now, let’s break market research down into subtasks.
To complete your market research you must decide who will conduct the research and by what date will their findings be ready for your review. Will you conduct the research yourself, assign it to an employee or partner, or have a research firm do it for you?
Fortunately, doing market research has never been easier thanks to the Internet and the numerous organizations and associations who will provide you with much of the data you need to make a sound decision. More on that in next week’s column.
Another example would be #16: find and hire employees. How will you go about finding employees and who will complete this step? Will you run ads in the newspaper or use an employment firm or try to hire away employees from competitors? Will you be doing the interviewing and hiring or will someone else?
Once employees are hired will you use a payroll service or do it in-house? Will you set up a payroll tax account with the state yourself or will your accountant handle that for you? By what date will all employees be onboard and fully trained?
As with most steps on your Startup Plan there can be a number of subtasks that must be taken care of before you can mark a task off your list. Managing these tasks to completion is the key to a successful startup.
The Startup Plan is not only a great way to keep up with everything that must be done to start a business, but also to remind yourself of the little things that might fall through the crack.
Next week we look at the most important point on any startup list and that is conducting market research , a step many entrepreneurs fail to complete.
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What is a Business Plan: Definition, Tips, and Templates
by Antony W
December 5, 2022
Having a clearly defined and well-thought-out business plan is important especially when you are getting started with a startup that tends to run for a long time.
Startup enquirers, owners, and entrepreneurs are supposed to have a business plan. The best way to get finances and turn that startup into a reality is with a business plan. That said, from this post you are going to learn:
- What a business plan is
- Types of business plans
- The kind of business idea that might work best for you
- What to consider in a business plan
What is a Business Plan?
A business plan simply is a piece of document that describes in detail a business’s goals and how it plans to achieve them.
Both established and startup businesses use business plans. The document will lay out a company’s finance, marketing, and operational standpoints.
What is Business Plan for?
There are three uses of a business plan. First, it helps firms get financial support from investors.
Second, businesses will use business plans to predict the demands of the business in the future, and third, a business plan will outline a business’s game plan to carry it out long term.
Purposes of a Business Plan
Discussed below are some of the reasons why any businessperson would note down a business plan.
1. Securing Funds from Investors
Businesses will draft business plans for their firms because it’s the best way to attract capital from people who are ready to invest.
A plan will convince an investor that a startup is worth the money as it wheels around how a business tends to operate, make profits, and succeed.
So, as the capital seeker writes this document he or she should tell the potential investor how the money will be used to make the business thrive.
You should also know that investors expect at least a 10% ROI from the amount of capital they put into your business, which means the investor will want to know whether or not they will be getting their money back.
When writing this plan don’t forget to touch on the strategies and processes set by the business to reach financial goals.
2. Documenting a Company’s Strategies and Goals
There is no limit to the number of pages you can write and for that, you have an opportunity to explain what the goals of your business are and how plans are put in place to achieve them.
Leave no stone unturned, address every possible question the investors might have in mind about your business. Tell them of your marketing, sales, and operational plans.
3. Legitimizing a Business Idea
A business plan is the best way to prove to investors that a business idea is worth investing in.
A business plan is not only meant to show the investors expected returns but also supposed to tell them of a few hiccups.
Any investor who reads such a plan will know the one who wrote the plan put in hours of thinking and is so serious about his or her business idea.
4. Pass Your Business Class
On the other hand, you may be reading this post because you want business plan ideas to score an A in your business class.
Business Plan Format: The Right Structure fo r the Document
There are 10 important things you need to include in a business plan. They include a business plan subtitle, executive summary, company description, business opportunity, competitive, analysis, target market, marketing plan, financial summary, team, and funding Requirements. Let’s briefly discuss each of them:
Business Plan Subtitle
Start your business plan with a title and subtitle that is more absorbing. Even after drafting a business plan document go ahead and include a short subtitle that will give investors a brief idea of your business.
The executive summary might be the last area of a business plan to write but most investors will go through it first. The executive summary features (in brief) everything you talk on the business.
From the executive summary, you are supposed to provide your business’s vision, value proposition statement, and long-term targets.
This section of your business plan introduces you to the reader so make sure it is concise and compelling.
It will include the name of your business, the number of years its been operating (if not new), what it offers, and positioning affirmation. If you like you can go ahead and add a brief history of the business.
The Business Opportunity
Use this section to persuade investors that your business or business idea meets the market more than other businesses.
Also, use this section to point out problems in the market your business solves and how it solves them. Without forgetting, the business opportunity section also includes value propositions.
Remember, you are not the only one running your kind of business. You still have competitors even when you are the founder of that same type of business or dominate the market. Here you look at how your business appears to determine where it fits best.
The target market section explains the geographics, psychographics, demographics, and behavioristics of the ideal consumer.
Use this section in your business plan to talk about your main customers. Remember to also tell the investor why the said customers are important in the business.
The marketing strategy is broad, covering each type won’t be necessary. Instead, consider coming up with a low-cut overview of how you plan to market your proposition accompanied by strategic plans.
Back up this section with a financial outline of where your business currently is and where you want the business years to come.
Provide channels your business gets money from so that potential investors get a slight glimpse of your financial robustness.
Now that you’ve shown the potential investors the business opportunity is legit and that the market is ready to receive what you are willing to offer, it is time to introduce your team.
You don’t necessarily have to have the members on board. Simply provide roles to hire for and hire later when you get the capital.
The main goal of writing the plan is acquiring funds from investors. Use this section of your the plan to provide investors with the funding requirements you would like them to meet.
Types of Business Plans
We have various types of businesses, from businesses that are just getting started to businesses that are already established.
Every startup should have a plan no matter the size or age of operation. We have several types of business plans but here are the 4 common ones.
1. Startup Business Plan
This is a plan used for businesses that are just getting started. It is the startup plan that lays out the success of a startup .
The only thing you won’t like about a startup business plan is that you have to start writing it right from the very beginning.
Securing capital for a startup business is complicated because most of them use data from industries that already exist.
2. Business Acquisition Plan
A startup that already exists will use this type of business plan to tell the investor how an acquisition is going to impact its operations, what will remain the same after the business is bought, and why things will change while others stay the same.
It is with this startup plan that you tell investors what the present condition of the business is and the reason it is up for sale.
3. Business Repositioning Plan
This plan will recognize a business’s current situation and give a reason why the business should or must be repositioned without forgetting to provide a vision of the business’s future. Business persons will come up with a business repositioning plan they want their businesses to avoid acquisition.
4. Expansion Business Plan
An expansion startup plan is important when you are planning to stretch a successful business into other locations.
The expansion startup plan will be necessary when a potential market space has been identified by the business, the cost of this fulfilling the project will be more.
Unlike a startup business plan, the expansion business plan does not commence from the start. Rather, the expansion startup plan backs sales, revenue, and success areas that already exist.
Nonetheless, as good as the backup could be for the new business, you shouldn’t depend too much on them because they may end up failing for countless causes.
About the author
Antony W is a professional writer and coach at Help for Assessment. He spends countless hours every day researching and writing great content filled with expert advice on how to write engaging essays, research papers, and assignments.
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What is a business plan and how to write a business plan for your sme.
by Sohini Banerjee | Jun 22, 2023 | MSME
Whether you are a start-up or an established company, having a business plan is good for business. A well-written strategic business plan enables businesses to seek funding, analyse current performance and make improvements, and have a roadmap planned for the future. In this article, we take a look at the meaning of a business plan, its key contents and types, and how to write and develop a business plan for small businesses and start-ups.
Table of Contents
- Business plan meaning
- Business plan types
- Tips to write a business plan
- Importance of business plans
As a business owner, it’s imperative that you plan the activities of your business thoroughly. A business plan document comes in handy and useful in such times. Whether you are an entrepreneur, MSME, start-up or an established business, developing a business plan is essential. It charters a clear roadmap for your business across finance, operation, sales and marketing, IT infrastructure , human resources and other functions, making it possible for all stakeholders to be aligned and work towards the common goals.
In this post, we will understand the meaning of a business plan, the different types and key components. We will also look at how to write a business plan for start-ups and small businesses, and share a basic business plan format that you as a MSME owner can refer to.
Business plan definition
Let us first understand what is a business plan?
A business plan is a strategy document that outlines the roadmap of the business for the next few years (e.g., next 3 to 5 years). It highlights its goals and objectives and the strategies to achieve them. It contains details on its purpose, target market, customers and competitors, product development, go-to-market strategy, financial projections, organisation structure, management team and more. In most cases, it comes with an executive summary that contains the key points of the complete plan.
A business plan moreover is a dynamic document – that is, it should be updated from time to time based on current state, forecasts and market needs.
What are the different types of business plans?
There are different types of business plans that you can refer to. The most common 4 types of business plans include:
- Startup business plan: This is often a new business plan, i.e., for a business that is new and starting out. This plan should contain details about the company, mission/vision statement, goals, management team, products/services, market potential, customers, competitors. Financial potential and projections are vital if looking for investors. Details on market research, customer immersions and learning, should also be included. (Also read: Manufacturing business ideas for SMEs in India)
- Entrepreneurship business plan: As the name suggests, this document is for the entrepreneur. This is a comprehensive document, detailing about your company, product, services, marketing plans, market research, customer segments, operations and logistics management, financials and more. This may also include details on company registration, type of company, funding required/funding availed, debts and more. (Also read: How to register as a micro business )
- Business growth plan: A growth plan is essentially a document that provides and overview on how the company aims to expand. There is no standardised growth business plan template as it varies on the goals of the company. For instance, an MSME business plan may include details on how to expand to new markets and acquire customers. This would include details on marketing strategies, marketing collaterals , offers and discounts, sales enablement material etc.
- Strategic business plan: This can be used by new and established business. This is a top-level overview of the company’s targets and goals and key metrics, success criteria and strategies to achieve them. Ideally it should contain the activity schedule with a brief of team/department responsibilities and contributions.
How to write a business plan?
Writing a business plan is not an easy task. It requires meticulous planning, detailing, and understanding of diverse aspects of the business. It is also unlikely that investors will not see through a poorly-conceived business plan that does not project viable ROI.
Though you can find a business plan sample online for your reference, the secret to writing a winning business plan is to: write, rewrite, edit, rewrite. That is – work on it a number of times, till you are satisfied with the outcome.
In the next section, we have shared a standard business plan format that you can follow when preparing a business plan. The main content of a business plan includes:
1. Executive summary
A one-page document, the executive summary is what gets read first. It provides an overview of the company, its mission and vision, value proposition, product and/or services, and the highlights of the strategic plan for market launch, growth and expansion, product enhancement or any other.
Pro tip: This part is written last but read first and is the decider if investors will schedule a meeting with you or not.
2. Company overview
Similar to an ‘About Us’ section it provides an overview of the company – history, management team, milestones etc. It also provides details on company name, location, logo, tagline etc. – all of which will be vital for branding in business . This section should also highlight what makes you unique from your competitors.
3. Problem statement, opportunity and solve
Investors will pay attention to this section – the business problem and solve. Most start-ups fail to demonstrate clear solutions to existing problems. Solutions should be simple, easy to adopt, and accessible by all (i.e., the target audience).
A business plan example in this case would be that of ‘ Uber ’. The problem statement – it is time consuming and inconvenient to hail a taxi with hands. The solution – an application to book a taxi ride from home to destination, using technology.
This section should propose value and merit in your business idea, product and services. You may also include a section on:
- How your product/service works
- The technology used
- The pricing strategy and model (add competitor pricing here)
- A brief on SCM, operations and distribution
Details on each can be included in the relevant sections or Appendix.
( Also read: Low-investment business ideas for MSMEs )
4. Market size and target customer research
Market size is a vital piece of information – it gives readers an idea of the potential your business idea has. And accordingly your company’s valuation is done. For instance, the logistics market in India was valued at US$ 250 bn in 2021 ( Source: India Brand Equity ). As such, if you are a new logistics company, this data is vital as it shows readers the future potential and market opportunities.
What is equally important is your target audience. This section of the business plan should highlight details of your ideal customer – demographic, location, buying habits, etc.
5. Competitor analysis and market research
It’s likely that you have competitors. Being aware of them, their offering, pricing points, marketing strategies and market share will enable you to build better strategies. It will also help you to design your USPs and stand out from competitors. This will also likely build confidence among your investors in investing in your business.
For example, when the eCommerce giant ‘ Amazon ’ offered ‘ Prime’ to its customers, the idea was simple – pay a nominal amount for super fast deliveries (i.e., same day or next-day delivery ). It was not the only eCommerce player in the market, but it distinguished itself and gained competitive advantage over competitors through the promise of quick-deliveries.
It is equally important to do market research therefore – a proper SWOT analysis for customers, competitors, market size, and more to evaluate what works in your favour and what works against you.
6. Marketing, sales and operations plans
If your are writing a new business plan or a startup business plan, a go-to-market strategy is essential. Your investors need to understand how you plan to market your products/services and reach your target audience. In the end, it’s the business revenue and ROI that matters to investors (and even lenders). So, defining a sales strategy is equally necessary. For instance, customer acquisition and engagement can be a marketing strategy that investors would want to see.
Operations management plans should also be included. Based on the nature of your business, this may include activities right from procurement, to designing a raw material sourcing strategy , inventory planning, logistics and distribution, SCM, vendor and supplier management and more.
7. Financial planning and forecasting
This is the part your investors and lenders will look at in detail. If your business is a startup, then this section should give financers visibility on your business’s financial growth potential. It should include costs across all components – production, raw material, business operations, salaries, marketing, etc. and projections on annual turnover and profits.
On the other hand, if your business has been in operation for some time (e.g., 2-5 years) and you are looking at growth (hence investment), this section should also include details on:
- Profits and losses, revenue and turnover, and net profit
- Debts and borrowing, assets, liabilities, and current ratio
- Spends and expenses, gains, dues and accounts receivables
Your investors are essentially looking for your business’s ability to repay and make them profits. Pay attention to accurate details. Ideally, projection for the next 3-5 years in desirable (add charts, graphs and visual elements here).
8. Funds requirements and allocation
Whether you are seeking a business loan or investor or not, this section should be written out for your internal and external teams. This section of the financial business plan outlines how much funds your business requires, how it aims to invest the funds, the timelines and how soon to expect returns.
For instance, if you are seeking a business loan from banks or NBFCs, you will have to repay the EMI in time to avoid defaults . That is, the repayment amount and timelines are fixed.
However, if you are getting investor funding, it’s more about how your company is performing (profits, revenue, market share etc.) that will matter.
Why you need a business plan?
So, here’s the fundamental question – Why do you need a business plan? Especially if yours is a bootstrapped business and does not require funding?
The importance of a business plan cannot be overemphasised. Whether you are a start-up or an established business, a business plan enables you to document your ideas. Some of the benefits of having a strategic business plan are:
- Clarity on business’s present state and future growth roadmap
- Pitch to financers/investors for funding
- Build on a business idea (remember, a business plan is a dynamic document and should be updated from time to time)
- Analyse performance and making improvements
Also Read: Best business ideas under ₹10 lakh 12 Creative MSME business ideas How to start an automobile business? How to start a steel business in India? How to start a truck transport business in India?
FAQs – Business plans for start-ups and SMEs
In this section we take a look at some of the frequently asked questions on business plans, its key components and how to make a business plan.
How to make a business plan presentation?
- Include the important points only i.e., 5 to 10 main aspects
- Keep it short (10-15 slides), easy to read (bullets, images, graphs), to-the-point (20-30 mins)
- Business name, logo, contact details, tag line, social handles
- Management team details (short 2-3 sentences about key members, designation and contact details)
- Problem statement and solution
- Products and services (mention product USPs and overview)
- Market size, competitors, customers (and main strategies)
- Revenue model and business financial plan (basic revenue/financial details)
- Proposal (i.e., funding requirements)
How to write a business plan introduction?
- Details on the business – its products and services, value propositions
- About the business – its history, how it originated, founding members and current team
- Key distinguishing factors – its highlights, USPs and what sets your business apart from competitors
- Target audience – who are its ideal customers, markets they can be found (e.g., buyer persona)
- Current business performance and way ahead – brief about financials and what the business’s growth funnel looks like
What is a startup business plan?
What is a lean start-up business plan.
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- Business and industry
Advanced manufacturing plan
The advanced manufacturing plan sets out the actions we are taking to be the best place in the world to start and grow a manufacturing business.
PDF , 1.49 MB , 47 pages
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Advanced manufacturing plan (HTML version)
The plan will ensure the UK continues to lead in the development and deployment of clean and digital manufacturing technologies.
It will also provide businesses with a clear commitment to the longer-term success of the sector. It will take targeted and strategic action to ensure our business environment and international competitiveness remain strong.
We will meet our ambitions through the following 3 priorities:
- investing in the future of manufacturing by extending and building on our successful programmes to 2030, and forging partnerships with businesses to support market-led investment in innovation and research and development (R&D)
- cooperating internationally and increasing UK capability to build supply chain resilience, boost economic security and ensure our sectors have access to the goods that drive prosperity
- reducing costs and removing barriers to boost competitiveness and ensure the UK retains its attractiveness to international investors in the long term
HTML version of the Advanced Manufacturing Plan added to document list.
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