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What Is a Business Plan?

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

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

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

Key Takeaways

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

Investopedia / Ryan Oakley

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

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

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

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

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

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

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

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

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

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

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

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

2 Types of Business Plans

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

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

Why Do Business Plans Fail?

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

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

What Does a Lean Startup Business Plan Include?

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

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

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

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

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

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What is a 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.

Free Business Plan Template

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

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Click this link to access this resource at any time.

Free Business Plan [Template]

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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Use This Simple Business Plan Outline to Organize Your Plan

12 min. read

Updated October 27, 2023

When starting a business, having a well-thought-out business plan prepared is necessary for success . It helps guide your strategy and prepares you to overcome the obstacles and risks associated with entrepreneurship. In short, a business plan makes you more likely to succeed.

However, like everything in business, starting is often the hardest part. What information do you need? How in-depth should each section be? How should the plan be structured?

All good questions that you can answer by following this business plan outline. 

• What is a business plan outline?

A business plan outline is similar to a template for a business plan . It lists the common sections that all business plans should include.

A traditional business plan typically includes an executive summary, an overview of your products and services, thorough market research, a competitive analysis, a marketing and sales strategy, operational and company details, financial projections, and an appendix. 

• Why is a business plan outline important?

Starting with a business plan outline helps ensure that you’re including all of the necessary information for a complete business plan. 

But, depending on what you intend to do with your plan, you may not need all of this information right away. If you’re going to speak with investors or pursue funding, then yes, you’ll need to include everything from this outline. But, if you’re using your plan to test an idea or help run your business, you may want to opt for a one-page plan . This is a simpler and faster method that is designed to be updated and used day-to-day. 

If you’re unsure of which plan is right for you, check out our guide explaining the differences and use cases for each plan type . 

• 10 key sections in a standard business plan outline

No matter the type of business plan you create, these are the ten basic sections you should include. Be sure to download your free business plan template to start drafting your own plan as you work through this outline.

1. Executive summary

While it may appear first, it’s best to write your executive summary last. It’s a brief section that highlights the high-level points you’ve made elsewhere in your business plan.

Summarize the problem you are solving for customers, your solution, the target market, your team that’s building the business, and financial forecast highlights. Keep things as brief as possible and entice your audience to learn more about your company. 

Keep in mind, this is the first impression your plan and business will make. After looking over your executive summary, your reader is either going to throw your business plan away or keep reading. So make sure you spend the time to get it just right.

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2. Products and services

Start the products and services section of your business plan by describing the problem you are solving for your customer. Next, describe how you solve that problem with your product or service. 

If you’ve already made some headway selling your solution, detail that progress here—this is called “traction”. You can also describe any intellectual property or patents that you have if that’s an important part of your business.

3. Market analysis 

You need to know your target market —the types of customers you are looking for—and how it’s changing.

Use the market analysis section of your business plan to discuss the size of your market—how many potential customers exist for your business—and if your potential customers can be segmented into different groups, such as age groups or some other demographic.

4. Competition

Describe your competition in this section. If you don’t have any direct competitors, describe what your customers currently do to solve the problem that your product fixes. 

If you have direct competition, detail what your strengths and weaknesses are in comparison, and how you’ll differentiate from what is already available. 

5. Marketing and sales

Use this business plan section to outline your marketing and sales plan —how you’ll reach your target customers and what the process will be for selling to them.

You’ll want to cover your market position, marketing activities, sales channels, and your pricing strategy. This will likely evolve over time, but it’s best to include anything that clearly details how you will sell and promote your products and services. 

6. Operations

What’s included in the operations section really depends on the type of business you are planning for. If your business has a physical location or other facilities, you’ll want to describe them here. If your business relies heavily on technology or specific equipment or tools, you should describe that technology or equipment here.

You can also use this section to describe your supply chain if that’s an important aspect of your business. 

7. Milestones and metrics

In a business, milestones are important goals that you are setting for your business. They may be important launch dates, or a timeline of when you’ll get regulatory approval—if that’s something you need for your business. Use this section of your plan to describe those milestones and the roadmap you are planning to follow.

You can also describe important metrics for your business, such as the number of sales leads you expect to get each month or the percentage of leads that will become customers.

8. Company overview and team

The company and team section of your plan is an overview of who you are.

It should describe the organization of your business, and the key members of the management team. It should also provide any historical background about your business. For example, you’ll describe when your company was founded, who the owners are, what state your company is registered in and where you do business, and when/if your company was incorporated.

Be sure to include summaries of your key team members’ backgrounds and experience—these should act like brief resumes—and describe their functions with the company. You should also include any professional gaps you intend to fill with new employees.

9. Financial plan and forecasts

Your financial plan should include a sales forecast, profit and loss, cash flow projections, and balance sheet, along with a brief description of the assumptions you’re making with your projections.

If you are raising money or taking out loans, you should highlight the money you need to launch the business. This part should also include a use of funds report—basically an overview of how the funding will be used in business operations. 

And while it’s not required, it may be wise to briefly mention your exit strategy . This doesn’t need to be overly detailed, just a general idea of how you may eventually want to exit your business. 

10. Appendix

The end of your business plan should include any additional information to back up specific elements of your plan. More detailed financial statements, resumes for your management team, patent documentation, credit histories, marketing examples, etc. 

• Detailed business plan outline

If you’re looking for greater insight into what goes into specific planning sections, check out the following outline for a business plan. It can help you develop a detailed business plan or provide guidance as to what may be missing from your current plan. 

Keep in mind that every business plan will look a bit different because every business is unique. After all, business planning is to help you be more successful, so focus on the sections that are most beneficial to your business and skip the sections that aren’t useful or don’t apply. 

To help, we’ve marked sections that are truly optional with an *.

Executive summary

Company purpose / mission statement.

A very brief description of what your business does and/or what its mission is.

Problem We Solve

A summary of the problem you are solving and an identifiable need in the market you are filling.

Our Solution

A description of the product or service you will provide to solve the problem.

Target Market

A defined customer base who will most likely purchase the product or service.

Briefly describe who is behind the business.

Financial Summary

A short overview of revenue goals and profitability timeline.

If you’ve already started selling your product or service, highlight important initial details here.

Funding Needed*

If you are raising money for your business, describe how much capital you need.

Products & Services

Problem worth solving.

A thorough description of the problem or pain points you intend to solve for your customer base. 

A thorough description of your proposed product or service that alleviates the problem for your customer base.

Describe any initial evidence that your customers are excited to spend money on your solution. Initial sales or signed contracts are good signs.

Intellectual Property/Patents*

If this is important for your business, outline it here.

Regulatory Requirements*

If government approval is required for your business, explain the details and timeline.

Future Products and Services*

What products and services might you offer in the future once your initial products and services are successful?

Market Size & Segments

How many potential customers do you have and what potential groups of customers are separated by specific characteristics?

Market Trends*

How consumers in your target market tend to act including purchasing habits, financial trends, and any other relevant factors.

Market Growth*

The perceived potential increase or decrease in the size of your target market.

Industry Analysis*

If your industry is changing or adjusting over time, describe those changes.

Key Customers*

If your business relies on certain important customers, describe who they are here.

Future Markets*

A snapshot of the potential market based on the last few sections and how your business strategy works within it.

Competition 

Current alternatives.

A list of potential competitors. Identifying the competition isn’t always obvious and it may take some digging on your part.

Our Advantages

The strategic advantage(s) that makes your target market more likely to choose you over the competition. 

Barriers to Entry*

If there’s anything that makes it more difficult for other people to start competing with you, describe those barriers.

Marketing & Sales

Market positioning.

Where do your products or services fit into the market? Are you the low-price leader or the premium option?

Unique value proposition*

What’s special about your offering that makes your customers want to choose it over the competition.

Marketing Plan

An outline of your marketing and advertising strategy including costs, advertising channels, and goals.

How do you sell your product or service? Self-serve or with a team of sales representatives?

Pricing Strategy*

Describe your pricing and how it compares to alternatives in the market.

Distribution*

Describe how your product gets in front of customers. Are you selling in stores and online? Which retailers?

SWOT Analysis*

Strengths, weaknesses, opportunities, and threats.

Location & Facilities

If you have a physical presence, describe where and what it is.

What technology is crucial for your business success?

Equipment & Tools

If special equipment or tools are needed for your business, describe them here.

Sourcing and fulfillment*

If you purchase your products or parts for your products from somewhere else, describe that sourcing and supply chain.

Partners and Resources*

If you have key partners that you work with to make your business a success, describe who they are and what services or products they provide.

Milestones and metrics

A detailed roadmap of specific goals and objectives you plan to achieve will help you manage and steer your business.

Key metrics

Performance measurements that help you gauge the overall performance and health of your business.

Company overview and team

Organizational structure.

An overview of the legal structure of your business. 

Company history and ownership

A summary of your company’s history and how it relates to planning your business.

Management team

The team that is starting or running your business and why they are uniquely qualified to make the business a success.

Management team gaps

Key positions that your business will need to fill to make it successful.

Financial plan and forecast

Projected profit and loss.

How much money you will bring in by selling products and/or services and how much profit you will make or lose after accounting for costs and expenses.

Projected cash flow

How and when cash moves in and out of your business. This also includes your overall cash position.

Projected balance sheet

Expected balances for business assets, liabilities, and equity.

Use of funds

If you are raising money either through loans or investment, explain how funds will be used. This is typically meant to be shared with investors or lenders.

Exit strategy

A brief explanation of how you intend to eventually exit from your business. This could include selling the business, going public, transitioning the business to a family member/employee, etc.

A repository for any additional information, including charts and graphs, to support your business plan.

Business plan outline FAQ

How do you organize your business plan?

There’s no real established order to business plans, aside from keeping the Executive Summary at the top. As long as you have all of the main business plan components, then the order should reflect your goals. 

If this is meant solely for your personal use, lay it out as a roadmap with similar sections grouped together for easy reference. If you’re pitching this to potential investors, lead with the stronger sections to emphasize the pitch. Then if you’re unsure of what order makes sense, then just stick to the outline in this article.

Should you include tables and charts in your business plan?

Every business plan should include bar charts and pie charts to illustrate the numbers. It’s a simple way for you, your team, and investors to visualize and digest complex financial information.

Cash flow is the single most important numerical analysis in a business plan, and a standard cash flow statement or table should never be missing. Most standard business plans also include a sales forecast and income statement (also called profit and loss), and a balance sheet.

How long should your business plan be?

There’s no perfect length for a business plan. A traditional business plan can be anywhere from 10 to 50 pages long depending on how much detail you include in each section. However, as we said before unless you intend to pursue funding, you likely don’t need a lengthy business plan at first.

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.

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About the Business Plan Template

A solid business plan is the key to the success of any project. That's why we have designed a comprehensive business plan template that makes organizing and outlining your business objectives a breeze. This template will help you streamline your process and visualize your goals, creating a roadmap for your business journey.

What's a business plan template?

A business plan template is a pre-structured framework that outlines the core aspects of a business plan. It helps organize and detail key components, providing a clear picture of what the business aims to achieve. Miro's business plan template includes:

Problem: Identify the core problem that the business plans to solve.

Solution: Outline the solution to address the problem.

Resources: Detail the resources required, including time, workforce, and materials.

Benefit: Define the benefits of implementing the proposed solution.

Risks: Analyze potential risks and how they will be mitigated.

Scope: Describe the extent and limitations of the project.

Stakeholders: List the parties involved and their interests.

Costs: Estimate the financial aspects of the project.

Metrics: Identify the key performance indicators to measure success.

How to use the business plan template in Miro

Using Miro's business plan template is an effortless and effective way to craft your business strategy. Here's a step-by-step guide to making the most of this template:

Choose the template: Select the business plan template from Miro's Template Library, tailored to fit any business type.

Define the problem: Identify the core problem your business intends to solve. Use Miro's tagging feature to add relevant tags for easy reference.

Outline the solution: Describe how your product or service addresses the problem. Use Miro's automated diagramming to create flow diagrams or charts illustrating the solution process.

List the resources: Detail all necessary resources, including time, workforce, and materials. Create categories and use color coding to organize them effectively.

Highlight the benefit: Define the benefits and why your solution is preferable. Incorporate visual aids like icons to emphasize key points.

Analyze the risks: List potential risks and their mitigation strategies. Use sticky notes to jot down thoughts and ideas collaboratively.

Describe the scope: Clarify the project's limitations and extent.

Identify stakeholders: List the parties involved using symbols or avatars to represent various stakeholders.

Estimate costs: Break down the financial aspects using tables or charts to present the information clearly.

Determine metrics: Set key performance indicators and use Miro's graphs to visualize the success measures.

Customize your plan: Add, remove, or change any fields to suit your specific project. You can expand the quadrants, adding data or other artifacts as needed.

Collaborate and share: Invite team members to collaborate in real time, adding comments and feedback. Miro's collaboration features support seamless teamwork.

To finish, prepare a presentation. With features like frames and the Presentation Mode , you can visually guide stakeholders through your strategy. And remember, ensure that all details are accurate and aligned with your goals.

With this quick guide and Miro's various sets of features, creating a business plan becomes a collaborative and creative process. The ability to visualize, tag, and present your plan ensures a rich and engaging experience for everyone involved. Whether you're a startup or an established business, Miro's business plan template offers the flexibility and robustness needed to succeed in today's competitive landscape.

Can I customize the business plan template in Miro?

Yes, add, remove, or change any fields to fit the specific needs of your project.

How can I share the business plan template with my team?

Miro's collaboration tools make it easy to share your template with team members, either through a direct link or by inviting them to your workspace.

Is the business plan template suitable for small businesses and startups?

Yes, the template is designed to be flexible and can be adapted to businesses of any size, including startups and small enterprises.

Get started with this template right now.

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A work breakdown is a project management tool that lays out everything you must accomplish to complete a project. It organizes these tasks into multiple levels and displays each element graphically. Creating a work breakdown is a deliverable-based approach, meaning you’ll end up with a detailed project plan of the deliverables you must create to finish the job. Create a Work Breakdown Structure when you need to deconstruct your team's work into smaller, well-defined elements to make it more manageable.

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The Scenario Planning Template simplifies the complex process of strategizing and envisioning various future scenarios. The template’s clear structure helps teams and individuals effectively navigate the multifaceted steps of project planning and execution. A standout benefit of this template is its capability to foster structured thinking. With its distinct sections ranging from definition to action, it ensures that ideas are organized coherently, promoting logical progression and reducing the chances of oversight, making the planning process both efficient and comprehensive.

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Consider your team’s or organization’s ideal state. Now compare it to your current real-world situation. Want to identify the gaps or obstacles that stand between your present and future? Then you’re ready to run a gap analysis. This easy-to-customize template will let your team align on what obstacles are preventing you from hitting your goals sooner, collaborate on a plan to achieve those goals, and push your organization toward growth and development. You can focus on specific gap analyses — including for skills, candidates, software, processes, vendors, data, and more.

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• Strategic planning

How a strategic planning framework can help you achieve your big goals

Don’t worry — it’s not nearly as complex as it sounds

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A strategic planning framework is a tool you and your team will use to focus on and fill in a specific element of your strategic plan.

You’ve got big ideas and bigger goals for your company. Maybe you’re set on making the world a better place (hey, aren’t we all?). Or maybe you want to be known for unmatched customer care. Regardless of your specific aim, your whole team is gung-ho about your mission. 

But now’s the hard part: How do you transform that idea into an actionable strategy?

The strategic planning process can be daunting, but a strategic planning framework can help. You’ll use your framework (or frameworks) to tackle a specific piece of the strategic planning process with zero confusion and eyerolls, and plenty of energy and enthusiasm.

Who needs a strategic planning framework?

Here’s the short answer: Anyone who’s completing a strategic plan, whether it’s a strategic plan for a single project or an entire organization.

The good news is that these frameworks are way more straightforward than you think. Anyone from your grandma to your dog will be able to use them. 

Alright, maybe not your dog…but you get it.

What is a strategic planning framework?

A strategic planning framework is a tool you and your team will use to focus on a specific element of your strategic plan. 

Your entire strategic plan needs to cover a lot, including:

• Where you are now
• Where you want to go
• How you’ll achieve those goals

Pulling all of that together can be overwhelming, but a strategic planning framework will help you chip away at that iceberg.

For example, you could use the objectives and key results (OKRs) framework to iron out the goals included in your strategic plan. Or, you might use the framework called Porter’s five forces (we’ll cover this later) to dig into your competition and understand how competitive factors will impact the future of your organization.

Strategic planning frameworks help you dig deep into a specific section of your plan, so you can create something comprehensive that actually helps you turn ideas into action.

Strategic planning frameworks vs. models: One of these things is not like the other

Many people use the terms “strategic planning framework” and “strategic planning models” interchangeably. However, the terms represent two parts of a whole.

Your strategic planning model provides a high-level overview of all of the elements of your strategic plan. Your model comes first, as it dictates the structure of your entire plan. 

Tom Wright, CEO and co-founder of Cascade Strategy, a strategy execution platform, likens it to building an airport. “A model of the airport would show you at a high-level how the approach roads connect to the departure hall, and how the departure hall connects to immigration, which then connects to the terminals, the runways, etc.,” he writes in a blog post . 

In contrast, frameworks help you fill in different elements with specific information. 

“In our airport example, we might apply a building framework that is designed to maximize the speed at which people move through the airport for efficiency,” Wright adds. “Or alternatively, we might apply a framework which is designed not to maximize speed, but rather to maximize the amount of time people spend in the airport shops.” 

The model encompasses all pieces of your strategic plan, but your framework is your approach for a specific piece. Think of your model as the forest, and your different frameworks as the trees. You’ll only use one strategic planning model, but you can use numerous frameworks.

8 strategic planning frameworks to hash out your strategy with confidence

You’ll use different frameworks for different aspects of your strategic plan, from developing your action items to evaluating your competitors. 

Here are eight of the most common strategic planning frameworks, and which piece of your strategy they can help you with. 

1. SWOT analysis

Use this framework: To grasp what internal and external factors can impact your strategy

SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors (meaning you have some control over them), while opportunities and threats are external factors (and you have little to no control). 

Get your team together for a brainstorming session where you can tackle each category. Using our customer service example, you might determine: 

• Strengths: We have a new and innovative product that people love. 
• Weaknesses: Our customer ticketing system is outdated and ineffective. 
• Opportunities: Customers have a growing interest in chat support, which we could roll out relatively easily. 
• Threats: All of our competitors are prioritizing customer service. 

You’ll use this framework at the beginning of your strategic planning process, as it helps you understand where things are going well for your company — as well as where you need to improve. That’s important information as you hash out your strategy.

2. Issue-based strategic planning

Use this framework: To build a strategic plan that addresses your organization’s biggest problems

While most of the strategic planning frameworks start with objectives (where you look to the future), this one starts with problems (where you look to the present). You’ll identify the challenges your organization is facing right now and create action plans to address them. 

This is another framework that you’ll use at the very beginning of the strategic planning process, as it will shape your entire plan. 

Start by asking: What are the biggest problems our organization is dealing with?

Perhaps you’ll realize that your customer feedback scores are plummeting. From there, your strategic plan should detail the steps you’ll take to resolve that issue.

3. Balanced scorecard

Use this framework: To define your goals and the steps you’ll take to get there

A balanced scorecard (BSC) outlines what your team or organization is trying to accomplish, as well as what work everybody needs to do in order to make it happen. It’s helpful for understanding objectives, connecting and prioritizing day-to-day work, and monitoring progress using established metrics.

With this framework, you’ll need to identify:

• Objectives:  The goal you want to achieve (i.e. be looked to as the industry standard for quality customer care)
• Measures: How you’ll define success (i.e. average customer feedback score of B+)
• Initiatives: Programs established to achieve objectives (i.e. launch a new customer ticketing system to manage your customer support cases)
• Action items: Individual steps one person or a small team will take (i.e. Rico will research ticketing software, Sarah will complete the migration from our current platform, etc.)

See how you move from the big, seemingly unattainable goal all the way down to bite-sized actions you can take? That’s the beauty of a balanced scorecard — it connects your organization-wide goals to the daily tasks of everybody on the team.

4. Strategy mapping

Use this framework: To understand how all of your company’s objectives fit together

A strategy map is often used as a supplement to your balanced scorecard. You’ll list every objective from your balanced scorecard on your strategy map. It should be represented by a shape.

Next, you’ll group objectives into different perspectives. Think of these as buckets or themes for similar goals. The most common perspectives are:

• Internal business processes
• Learning and growth

Once all of your ovals are drawn out, you’ll draw arrows between them to show cause and effect. Does one objective have a direct impact on another?

For example, perhaps boosting the expertise of your customer service team (perspective: learning and growth) directly impacts your ability to provide top-notch customer care (perspective: customer). 

Your strategy map can become a living resource, and you can color-code your objective bubbles (green, yellow, and red) to show your progress toward that objective. 

5. Objectives and key results (OKRs)

Use this framework: To keep a close eye on progress

Objectives and key results (OKRs) is a popular goal setting methodology to help teams go after audacious goals. With this framework, you’ll identify: 

• Objectives: What you want to achieve
• Key results: How you’ll measure your progress

Keep in mind that your key results need to be quantitative, measurable outcomes and not tasks or to-dos. So, sticking with our example of world-class customer service, a key result could be, “Secure 25+ five-star reviews by the end of Q2.”

OKRs are designed to be ambitious, and you don’t want to overdo it and overwhelm your team. Set only three to five at a time ( this template can help ) to make sure they’re motivating, and not anxiety-inducing.

6. Porter’s five forces

Use this framework: To understand the ins and outs of your existing and prospective competitors 

Most strategic plans include a section for competitive analysis, and Porter’s five forces is a framework you’ll use to fill in that section. The five competitive forces you’ll identify are:

• Competition in the industry: Are your competitors growing rapidly?
• Potential of new entrants into the industry: Are a lot of new players able to easily enter your market and thrive? Or is it tough to get going?
• Power of suppliers: How much bargaining power do your suppliers have to pressure you to lower costs?
• Power of customers: How much bargaining power do your customers have to pressure you to lower costs?
• Threat of substitute products: Is your product easily replaced with another product? Or are you one-of-a-kind?

Your competition will shape your strategy, and this framework will help you understand how. If you realize that there’s a high threat of substitute products, then maybe differentiating yourself needs to be a key piece of your strategic plan.

7. Gap planning

Use this framework: To determine how you’ll close the gap between where you are and where you want to be 

You have a strong vision for your organization. Maybe that vision feels like it’s within arm’s reach, or maybe it feels like it’s still miles and miles away.

Either way, bridging the gap between where you are now and where you want to be is no easy task. That messy middle is where all of the hard work happens.

That’s where gap planning (also called a needs assessment) comes in. It zeros in on everything you need to do to move from your current state to your vision. When you analyze a gap, you need to challenge yourself to think about why you haven’t achieved your ideal state. What’s the root cause? 

Here’s a very simple example of what this could look like:

Vision: Reputation for industry-leading customer service

Current state: Good customer service, but not great (average feedback score of B-)

Gap: Customer service representatives are using outdated software

Improvement: Implement a new ticketing system to support the customer service team

This framework is another way to break your vision down into more tactical steps and improvements. 

8. PEST analysis

Use this framework: To understand the external factors that can impact your company 

When drafting your strategic plan, you can’t just think about what’s happening internally — you also need to think about what’s happening externally. A PEST analysis will help you take a holistic look at the environment your company is operating in.

PEST stands for political, economic, sociocultural, and technological, and this framework requires that you determine how each of those factors could impact your company’s overall health. Here are a few (of many) examples: 

• Political: Are there a lot of government regulations that dictate how your industry can correspond with customers?
• Economic: Are customers in your industry watching their wallets closely? 
• Sociocultural: Do customers expect an increasingly fast response? 
• Technological: Are you operating with outdated customer ticketing software? 

These are important considerations to make, so you avoid hashing out a strategy that doesn’t align with what’s happening around you.

There are plenty of strategic planning frameworks to choose from, and one isn’t inherently better than the others. They all serve different purposes.

So, when you need to choose a framework, start with your goal and work backward from there. 

Do you need to identify clear action items? Then gap planning or a balanced scorecard are your best bets. Do you want to understand the impact of outside forces? Look at a PEST or SWOT analysis. 

Keep in mind that you don’t have to choose only one. You can use different frameworks for different stages and elements of your strategic planning process. Plus, strategic plans are often revisited and reevaluated. You might require a different framework as your plan and company evolve over time.

Regardless of which framework(s) you use, you’ll want to keep your strategic plan and all of your supporting documentation somewhere organized and accessible. Your strategic plan doesn’t do any good if it sits and collects digital dust. A collaborative workspace like Confluence makes it easy for your entire team to reference that information whenever they need it.

Goals require strategy (and action)

Coming up with goals is easy. The hard part is figuring out how you’ll achieve them. 

Your strategic plan takes your high-level vision and breaks it down into actionable steps you’ll take to make it happen.

The strategic planning process itself can sound dry and daunting, but a strategic planning framework makes it way easier to dig into the details of every element of your strategic plan. 

Use one (or even a few) of the eight frameworks we discussed here, and you’ll be ready to take action on your company’s most ambitious goals. 

Document all of your company’s goals, plans, challenges, and more. Check out the Confluence template gallery to make knowledge sharing even easier. 

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Business Plan Framework

OCT.27, 2013

What is a business plan framework?

A framework for business plan is a supportive outline over which the business operations and details are spread. It comprises a sequence of business plan essentials to make sure you work on each aspect of your business and no significant feature is overlooked.

As per the framework meaning in business, framework document forms the foundation for an enterprise by defining broad guidelines, goals, and strategies. From a brief ‘About Us’ page to a comprehensive cash flow analysis, the business plan framework covers it all.

Exploring the planning framework definition would reveal that it provides you with a logical way to link your strategic and financial objectives. It investigates the roadmap to utilize your capital at the maximum efficiency to achieve desired goals. It also helps you in prompt decision-making in certain circumstances such as managerial dilemmas or demands for service extension.

What are the major components of a business plan framework?

The business plan framework varies greatly as per the scope and services of a business, the basic components however remain the same. Generally, a framework for planning must include:

Executive Summary

It explains what the business is, what it aims at, and which groups it intends to target. Simply put, this part is a very brief overview of your entire setup.

Company Summary

It interprets the qualification of the business owner, their skills, and their expertise in the business domain. This portion also includes a detailed summary for planning the launch. A graphical portrayal of startup costs is also included oft-times.

Products & Services

This component clearly lays down the offerings of the business. This is to help the business owner in remaining focused on only the concerned areas.

Market Analysis

This section is developed to have a thorough insight into your target market. In a framework business plan market analysis is done after acquiring the data of the past 10 to 15 years. It helps ascertain the market size, plausible business prospects, and competition.

Sales Strategy

This segment describes how to tap into your potential to make your competitive advantages your biggest selling point. A targeting advertisement strategy is formulated as per the available resources and communication media.

Personnel Plan

This part determines your staffing needs and draws out a fair and objective criterion for recruitment.

Financial Plan

A financial plan helps regulate your investment and direct your monetary resources to earn maximum profit.

Continuity Plan

The business continuity plan framework determines the strategy to deal with unexpected events.

If you want to read more on each of these components, you may refer to organizational frameworks’ examples available on the web. You can also ask for a business plan framework sample at OGScapital.

How do you create a business plan framework?

Many business owners find it perplexing to create a business framework template for their startup. The confusion pertains to uncertain market competition and differing views on the framework’s structure and length.

To assist you in creating your business plan framework template, a stepwise procedure is provided below:

• Study strategy models frameworks of diverse businesses to understand the basics.
• Look for the business plan framework components that are most relevant to your business.
• Decide if you want to incorporate a continuity or retirement plan as well.
• Study the business models of your competitors to understand how they have developed their business plan frameworks.
• Consult some professional business plan developers or hire the services of a professional to help you with problematic parts.
• Outsource the task of creating a financial plan if you are not an expert at developing it.

How to write your business plan framework?

To write your own conceptual framework business plan, you need to comply with the following guidelines:

• Get a customizable business plan template from a reputable firm.
• Get in contact with a legal advisor to know procedural and physical limitations. Also understand the laws for taxation, registration, labor, and insurance.
• Carry out market research, estimate your resources, and explore your customers to figure out what you can offer while capitalizing on what you have.
• Think of possible advertising strategies to grab your customers’ attention.
• Take down all the tasks that need to be done to deliver your services.
• Make a list of employees to undertake the tasks. Make sure to mention the exact number of employees against work descriptions along with expected salaries.
• Plan finances and do all other evaluations related to the business by filling in the business plan template.
• Get your plan evaluated by a business plan expert if you are developing it for the first time.

For a Perfect Business Plan Today, OGS is Just a Click Away!

Whether a business boom or not depends on how well you had planned for it. A business plan framework is going to be your first guide whenever you are faced with an unexpected situation, be it an opportunity or a risk. Therefore, it is wise to spend both time and money in getting a comprehensive and precise business plan for your startup. If you are someone who is not very adept at doing business calculations, you must hire a business consultancy firm for the task.

Here’s why OGS can be your ultimate savior in developing a business plan:

• At OGS, you can get your business plan developed by certified CFAs and MBA laureates from top business schools.
• The team at OGScapital has experience working in more than 42 industries ranging from the telecommunication sector to the agriculture one.
• At OGS, 60 business plan developers are readily available to assist you with your market, geographical location, and target audience.
• , HuffPost, Entrepreneur, and Reuters are some of the die-hard admirers of OGS business planning and teamwork.
• Clutch rated OGS at TOP4 in the recent 2020 rating.

You can contact us for any business queries you have. We also provide free sample business plans on request. To hire us for business plan development, you can fill in the form and get a quote.

OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.

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The Top 7 Tried and Tested Strategy Frameworks for Businesses

Updated on: 5 January 2023

Strategy frameworks are numerous. There is one for any scenario and there’s a chance that selecting one may actually overwhelm someone new to the field.

That’s why we have rounded up the most commonly used strategy frameworks from among them to help you select the one that best suits your purpose.

What is a Strategy Framework 

Strategy frameworks are tools that help structure business thinking and guide businesses as they grow and accomplish their missions. They can also be used to analyze business issues and develop strategies. And strategy consultants often use them to communicate their solutions to their clients. 

Top Strategy Frameworks for Businesses 

When it comes to selecting a strategy framework, you need to consider what type of organization yours is, what you are trying to achieve, and your strengths and weaknesses.

Below we have listed 7 strategic frameworks for businesses, and you can decide which ones to use based on the explanations provided.  

Porter’s Five Forces

Porter’s five forces is a framework that helps an organization understand the intensity of competition in an industry, and its attractiveness and profitability level. 

Porter’s 5 forces are 

• Competitive rivalry

Threat of substitute products

• Bargaining power of buyers

Threat of new entrants 

• Bargaining power of suppliers 

When to use it

• To identify and understand the forces in your industry that can affect your profitability 
• To understand the competitiveness in your industry 
• To assess your marketplace viability and strengths and weaknesses in your position   

How to use it

Step 1: Start by gathering information on the five forces . The aspects you need to focus on are highlighted in the template below. 

Competitive rivalry  

Focusing on these aspects below you can determine how competitive and profitable the industry is. 

• How many competitors do you have? 
• who they are? Are they direct competitors? 
• What are their strengths and weaknesses?
• What’s the quality of their products and services when compared to yours? 

Supplier power

Determine the power suppliers have to increase their prices or provide low-quality material which in turn will affect your product or service. Focus on 

• How many potential suppliers are in the market? 
• How scarce are the material they provide? 
• How expensive would it be to switch from one supplier to the other? 
• Can you find substitute material? How costly are they? 

Buyer power

How much power do your customers have over you? They have the ability to drive prices low and demand higher-quality products. Here you should focus on 

• How many buyers are there?
• What’s the size of their orders? 
• How powerful are they? Are they powerful enough to dictate terms to you? 
• How much would it cost them to switch from you to another product? 

Determine how easy it is to enter and establish a business in the industry you are competing in. If an industry is profitable and only has few barriers to enter, new companies can easily establish themselves posing a threat to you. Focus on 

• How easy it is for a new business to get established in your industry? 
• How much would it cost? 
• What are the rules and regulations? Legal barriers? 
• Is it easy to get access to suppliers and distributors?

Determine how easily your customers can find a substitute product. If there are substitutes that are cheaper and can be easily purchased, that may weaken your stance. 

• How many substitutes are in the market? 
• What’s their quality and price?
• How easily can your customers find them? 
• What would it cost them to switch to a substitute? 

Step 2: Once you have collected all the information, you can use Porter’s five forces template to display them. This will make it easier to analyze and communicate them to the various stakeholders. 

Step 3: Based on your analysis and conclusions, develop efficient strategies . 

Porter’s Diamond Model

BCG Matrix 

The BCG “Boston Consultant Group” matrix is a portfolio management framework that helps businesses decide which products or services to invest in and not according to market growth and market share.

Market growth – how well the product is growing when compared to other products? 

Market share – what is the size of the market the product has captured compare to the competition? 

It’s also known as the growth-share matrix and contains four quadrants that represent different categories of the company’s offerings. The y-axis represents the rate of market growth and the x-axis represents the market share. 

• Star (high share and high growth): Products that belong to this category have a rapid growth rate and a dominant market share. They generate a lot of cash as well as require a lot of investment to ensure that they maintain their position. If they can maintain their high position, they will eventually become ‘cash cows’.
• Cash cow (high share and low growth): These are the products that are most profitable to a business. They don’t cost much for the business to maintain and generate a significant amount of income. The cash gained from them should be invested in the Star products to help them grow further. 
• Dogs (low share low growth): Products that have a low market share and operates in a slowly growing market. Since they generally generate low or negative returns and drain resources, investing in them is not worth it.  
• Question marks (high growth, low share): The future of the products that belong to this category is uncertain; as they have a low market share in a fast-growing market. It has the potential to become a Star by gaining market share, but it also has the potential to become Dogs by failing to gain market share. It’s important to keep a close eye on these. 

When to use it 

• To identify growth opportunities by deciding where to invest in and withdraw from depending on the portfolio of products 
• To gain insight into which products business should keep, sell or invest more in  
• To get a current snapshot of how the current products are performing in the market

Learn how to use this tool in more detail with our resource on the BCG Matrix . 

GE-McKinsey Nine-Box Matrix 

This strategy tool helps business portfolio planning. Multi-business corporations use it to evaluate their individual business units and prioritize investments among them systematically. 

In the matrix, the y-axis represents the market/ industry attractiveness, and the x-axis shows the strength of the business unit. The scale is high, medium and low. It generates nine industry attractiveness measures and twelve business strengths measures.  

• To plan and evaluate the business portfolio 
• To prioritize and strategize business investments
• To identify the key areas of the business portfolio that needs to be improved

Step 1: Identify the factors that contribute to the market attractiveness of your different business units. Some of them are market size, pricing trends, competition levels, market profitability and so on. 

• Once the factors have been identified assign them weights to help decide their importance to the determination of market attractiveness. The weights could range from not important (0.01) to very important (1.0). 
• The factors should now be rated for each business unit. The values can be either between 1-5 or 1-10. 
•  Multiply the weight of each factor by its rating to calculate the final scores. The final score will be used to evaluate the industry attractiveness. 

Step 2: Next evaluate the competitive strength of each business unit. This follows a similar path to step 1. First, determine the factors that contribute to competitive strength. Assign each factor a weight based on their importance in helping the company gain a competitive advantage. Then rate each factor for the different business units, before calculating the final scores. 

Step 3: Plot the information you have gathered on the GE-McKinsey matrix. When plotting the business unit in the matrix, use circles and the size of the circle can be used to show the revenue the unit generates. 

Step 4: Analyze the information. Based on the position of each of the business unit on the matrix, there are three actions the company can take;

• Invest/ Grow: Units that belong to this category have a high potential of generating massive returns. They have higher growth potential, therefore they should be allowed a large amount of investment.  
• Selectivity/ Earnings: The company can invest in these units if there are any investments left after what is spent on the Grow category. The future of these business units is uncertain. However, if the unit is important and there’s a bigger market, it might be worth it to spend on them. 
• Harvest/ Divest: The units that belong to this category are in an unattractive industry and has no competitive advantage. Investing in them may not be profitable to the company, therefore they should be divested and liquidated. However, if they show a strategic advantage, the company can spend surplus cash on them. 

Step 5: Based on the analysis, determine the future directions of the business units and determine how to prioritize the company investments among the units.  

Ansoff Matrix 

Businesses use the Ansoff matrix to analyze and plan strategies for growth and understand associated risks. According to the matrix, there are two approaches to building a growth strategy;

• By varying what is sold (product growth)
• By varying who it is sold to (market growth) 

Accordingly, the matrix delivers four strategic options that have different levels of risks;

• Market penetration: This strategic option focuses on selling existing products to the company’s existing market. It’s the one with the lowest risk as the company already knows its customers and has channels already established to reach them. Here the company can decrease prices and offer discounts to attract customers. 
• Product development: This is where the company develops new products for its existing market. To make it work the company has to rely on extensive research and provide innovative solutions to meet the needs of the customers. 
• Market development: Here the company can market its existing products to a new market. A new market may entail new geographies, different customer segments, new channels, needs, etc. It’s riskier than the other two strategies as it deals with a new market.
• Diversification: Here the company develops new products for a new market. This is the riskiest strategy of all four, however, the risk can be mitigated through related diversification (a new product that is related to the existing product) and unrelated diversification (a new product that is not related to the existing product). 
• To identify profitable growth strategies 
• To identify risks involved in growth strategies
• To communicate company strategies to stakeholders

To learn about this tool and how to use it in more detail, refer to our resource on the Ansoff matrix .   

Scenario Planning

Scenario planning involves creating and brainstorming around possible future scenarios and understand how they would affect the objectives of the company.

It helps companies develop effective strategies and adapt them where necessary, by considering the impact and discussing the responses. 

• To determine the future direction of the company
• To stay prepared for alternative futures and reduce risks
• To identify future threats and opportunities
• To foster strategic thinking and learning
• To create options for decision-making 

Learn about scenario planning in more detail with this resource . 

Value Chain Analysis

This strategy tool helps organizations analyze their internal firm activities. It helps identify which activities are most valuable to the company and which ones can be improved for competitive advantage. 

• To identify competitive advantages on both cost and differentiation
• To understand the activities needed to deliver the value proposition
• To compare your business with that of your competitor  to understand strengths and weaknesses

Additional resources: Value Chain Analysis

VRIO Analysis

VRIO analysis is used to analyze the internal resources of a company. It identifies attributes that a company’s resources must have in order to provide a competitive advantage. The analysis involves asking four questions with regard to the resources; 

Valuable: If a resource can help find opportunities or defend against threats it can be considered valuable. Moreover, a valuable resource should help increase customer value. 

Rare: If a resource can only be acquired by one or a few companies, it is considered rare. A resource that is valuable and rare will provide a significant competitive advantage. 

Costly to imitate : If other organizations that don’t have the resource can’t imitate it, buy it or find a substitute for it at a reasonable price, that resource is considered costly to imitate. 

Organized to capture value: The organization should have processes, policies, and systems in place to capture the value created by valuable, rare and costly to imitate resources. 

Learn how to do a VRIO analysis here . 

More Useful Resources on Strategy Frameworks

Here we have shared a list of resources and blog posts that discuss various other strategy frameworks. 

The Easy Guide to Performing an Effective Situation Analysis

The Easy Guide to Making a Business Plan for Presentations

SWOT Analysis: What, Why and How to Use Them Effectively

The Ultimate List of Marketing Strategy Planning Tools

5 Gap Analysis Tools to Identify and Close the Gaps in Your Business

The Easy Guide to the Strategic Planning Process

Balanced Scorecard Examples

Business Diagram Software

Strategy Diamond Template

Don’t forget to leave your feedback in the comments section below. 

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Top frameworks for strategic planning

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If you want to stay ahead in business, you need to constantly be improving. It’s how you stay relevant and remain profitable. But improvement and success don’t come just because you want them enough—you need to develop a strategic plan that details:

Where you are right now: Look at your current strategic position relative to your competition. Describe your current problems keeping you from progressing. Define your mission, vision, and values.  

Where you want to go: Describe your competitive advantage and understand where your organization is currently headed. Look for ways to solve your current problems.

How you will get there: Define your goals, objectives, and the steps you will need to take to achieve your goals.

This is an oversimplification of the strategic planning process. There are many different strategic planning models you can use that expand on these three basic elements.

Let’s look at some strategic planning frameworks that will help you to see where you can improve, define your goals, and map out the processes and procedures you will use to keep achieving your goals.

Strategic planning models vs. strategic planning frameworks

A strategic planning model maps out how your company plans to implement a strategy for improving operations, delivering quality, and meeting specific goals. It is like a template or a tool you use at the beginning of the planning process. It helps you flesh out the ideas that will take you where you want to go. 

A strategic planning framework outlines how you will conceptually approach your strategic plan. Frameworks tend to be visual and detail the activities that are performed in your organization’s strategy plan. Think of the framework as a blueprint or the foundation for your messaging and brand narrative. The idea is to communicate to internal and external stakeholders the aspirations of your strategic plan. 

Common strategic planning models

Why is a planning model important? Because it’s hard to achieve your company’s goals if your employees don’t know what the goals are or how you plan to reach them. 

Strategic planning models are the roadmaps that keep your team focused on what needs to be completed to reach your goals. And you will need to constantly monitor and review your plans to ensure that you quickly address issues and realign processes as necessary to keep your production working as smoothly as possible.

The following are a few strategic planning process models that can help you to create the roadmap your team will follow to success.

Basic model

Sometimes called the simple model, the basic model is often used by companies that:

• Are new and don’t have a lot of experience with or are new to strategic planning
• Are small and don’t have the resources to develop complex plans
• Don’t have too many serious problems to solve
• Don’t have a lot of time to create an extensive plan

This model focuses on establishing your company vision and mission statement, setting goals to make the vision a reality, outlining specific steps to take to reach the goals, and monitoring progress to keep everybody on track and to address issues when they come up.

Issue-based model

This model is also known as the goal-based model. It’s essentially an extension of the basic model. The issue-based model is more dynamic and popular with established companies to develop more comprehensive plans.

Alignment model

The goal of this model is to align your business and IT strategies with the company’s strategic goals. This model is good for organizations that need to reassess objectives or correct problem areas that impede progress.

Like the issue-based model, this model has you look at your internal operations to develop a strategy. The model involves the following steps:

• Review your vision, mission statement, and company goals.
• Determine what is currently working well and what needs to be realigned.
• Make suggestions for improving the problem areas.
• Implement changes to improve or eliminate weak areas.

Scenario model

This model looks at different outside influences that could have an impact on your organization. For example, government regulations can have a big impact on a manufacturer, such as what materials can be used to make their products. 

The idea is to look at how outside influences might impact your operations from the following perspectives: best-case scenario, worst-case scenario, and reasonable-case scenario.

These scenarios help you to figure out the best way to respond to each. Determine which would be the most likely scenario and determine how you will address it. Then add it to your strategic plan.

Organic model

This model is not linear or structured like the other models. Its focus is on your company’s shared vision and values instead of plans and processes. The idea is that a company’s vision is achieved more organically when teams are able to openly and continuously discuss what steps to take. This requires a clear understanding of the vision, frequent and consistent communication, and dialogue among various stakeholders.

The model might include the following three basic steps:

• Clarify shared vision and values.
• Based on shared values, determine the actions and responsibilities for each person so they can work toward the vision.
• Stakeholders report the results of the action plans.

The organic model can work in large organizations that can afford to take a long time to achieve their vision and who can work well in a less structured environment. 

Real-time model

This model is fluid and designed for organizations that need to react quickly to a rapidly changing work environment. Long-term, detailed plans quickly become irrelevant because of rapid changes.

Real-time strategic planning involves the following:

• Organizational strategy: Define your mission and vision, understand your competitors, and know what the current market trends are.
• Programmatic strategy: Research external environments, list opportunities and threats, and brainstorm the best ways to approach each.
• Operational strategy: Analyze internal processes, resources, and systems. Develop a strategy that addresses internal strengths and weaknesses.

Inspirational model

This model is designed to inspire your people to energize them as they work toward goals. People come together to discuss an inspirational vision for your company. Then, participants are encouraged to brainstorm far-reaching, exciting goals to realize your company vision. 

The inspirational model works well for organizations looking to lift the spirits of its staff or quickly produce a plan.

Types of strategic planning frameworks

Without a strategic framework, you risk inconsistent messaging that can confuse customers and stakeholders. If your message and purpose are not completely understood, you can alienate stakeholders and lose employee motivation.

Here are some of the different types of strategic planning frameworks that you can use:

Balanced scorecards: Works as a strategic planning and management system. The balanced scorecard helps companies to align daily tasks with long-term strategy, communicate progress, set priorities, monitor progress, and measure success.

Strategy mapping: Provides a visual document to communicate your strategic plan. A strategy map make it easy to show relationships among various takes and objectives.

Porter’s Five Forces: Helps you to assess how competitive the market is. Porter’s Five Forces focuses on your company’s ability to enter a market, similar products customers can buy instead of yours, buyer power, supplier power, and the effect a competitor’s change in strategy would have on your company.

SWOT analysis: With this strategic planning framework, you analyze your company’s strengths, weaknesses, opportunities, and threats.

PEST/PESTLE analysis: This framework looks at a business environment to see if there are any factors that could impact your organization’s health. PEST analysis includes political, economic, sociocultural, and technological factors.

Ansoff matrix: This strategic planning framework analyzes four potential opportunities for growth: market penetration, product development, market development, and diversification. Try the Ansoff matrix when seeking out new opportunities.

Objectives and key results ( OKRs ): In The objectives refer to what you want to achieve. The key results indicate how you’ll measure your progress toward your objectives.

Blue Ocean Strategy: With this framework, your company creates demand for products in an uncontested market space. You focus on differentiating your product from the competition rather than trying to beat them.

Value, Rarity, Imitability, and Organization (VRIO): This strategic planning framework answers questions concerning your product’s value, the amount of competition in your market, how easily your product can be imitated, and how well-organized your company is.

Hoshin Kanri: This framework is used to align goals with tasks, keeping everything coordinated and ensuring that everybody is working toward the same end result.

If strategic planning models and frameworks seem similar, it’s because they are. While strategic planning models outline the high-level structure of your plan, the strategic framework describes the design concepts and the plan’s details. 

It doesn’t matter which model and framework you choose to use. You can even combine aspects of several models or frameworks to meet your needs. The important thing to remember is that strategic models and frameworks are vital to creating and communicating a clear strategic plan that will keep your company relevant and competitive.

See how Lucidchart can help you through the strategic planning process, especially when it comes time to take action.

Lucidchart, a cloud-based intelligent diagramming application, is a core component of Lucid Software's Visual Collaboration Suite. This intuitive, cloud-based solution empowers teams to collaborate in real-time to build flowcharts, mockups, UML diagrams, customer journey maps, and more. Lucidchart propels teams forward to build the future faster. Lucid is proud to serve top businesses around the world, including customers such as Google, GE, and NBC Universal, and 99% of the Fortune 500. Lucid partners with industry leaders, including Google, Atlassian, and Microsoft. Since its founding, Lucid has received numerous awards for its products, business, and workplace culture. For more information, visit lucidchart.com.

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Business Frameworks – 6 Types to Elevate Business Performance

Business frameworks.

Business frameworks are models, tools, and processes used to analyse and solve complex business problems. These frameworks provide a systematic approach to decision-making, allowing organisations to assess their current situation, identify areas for improvement, and develop strategic plans for growth and success. They are often developed by industry experts and thought leaders, and are used by business leaders, consultants, and academics to guide decision-making and drive organisational change.

If you want to learn more about business frameworks join Transformation Professionals .

If you are looking for a business framework for medium to large organisations, keep reading.

The History of Business Frameworks

The use of business frameworks has been around for centuries. In ancient times, rulers and military leaders used frameworks to make strategic decisions and achieve their goals. In more modern times, business frameworks have been developed to help organisations analyse their operations, identify areas for improvement, and make strategic decisions.

One of the earliest and most well-known business frameworks is Porter's Five Forces developed by Harvard Business School professor Michael Porter in the 1970s. This framework analyses the competitive forces in an industry to help businesses understand their competitive position and develop a strategy for success.

Many other business frameworks have been developed, including SWOT analysis, the Balanced Scorecard, the McKinsey 7S Framework, the Business Model Canvas, and others. Businesses across all industries and of all sizes utilise these frameworks to attain their objectives and remain competitive in an ever-changing business environment.

Why Business Frameworks are Important

Business frameworks are important because they provide a structured approach to problem-solving and decision-making. They help businesses to analyse complex situations, identify key issues, and develop strategies for addressing them. Frameworks also provide a common language and set of tools that enable businesses to communicate and collaborate effectively, both internally and with external partners. By following a proven methodology, businesses can reduce the risk of failure and increase the likelihood of success. Additionally, frameworks allow businesses to adapt to changing circumstances and take advantage of new opportunities, ensuring their continued relevance and competitiveness in the marketplace.

Business frameworks have been integral in both the development of strategy and the execution of it, because they help inform key decisions and offer scenarios and insight on what options to adopt.

In simple terms, a business framework is a system of rules that are used to govern a process or decisions. They help ensure that the output of decisions or processes is consistent, of a high standard, and aligned with an organisation's principles, values, and goals.

There is an abundance of business frameworks available and top professionals in their field become highly proficient in using those that are relevant to their particular line of work.

What are Frameworks in Business?

Frameworks in business are tools or models that help organisations structure, organise, and approach complex business challenges. They provide a systematic way of analysing a problem, developing a solution, and implementing it in a repeatable and scalable manner. Frameworks can be used for a wide range of business functions, including strategy, innovation, marketing, project management, and more. They can be developed internally or externally, and may draw from various disciplines, such as economics, psychology, sociology, or engineering. The goal of a framework is to provide a common language and shared understanding to facilitate decision-making, communication, and action within an organisation.

What are the Elements of a Business Framework?

The elements of a business framework will vary depending on the specific framework being used, but some common elements include:

• Goals and objectives: The framework should identify the goals and objectives that the business is trying to achieve.
• Key performance indicators (KPIs): KPIs are the measurable metrics used to determine whether the business is meeting its goals and objectives.
• Processes and procedures: The framework should outline the processes and procedures that the business will use to achieve its goals and objectives.
• Roles and responsibilities: The framework should clearly define the roles and responsibilities of each individual involved in the process.
• Resources and capabilities: The framework should identify the resources and capabilities required to achieve the business's goals and objectives.
• Risks and mitigation strategies: The framework should identify potential risks and include strategies to mitigate those risks.
• Performance metrics and monitoring: The framework should include performance metrics and a monitoring plan to track progress and adjust as needed.
• Continuous improvement: The framework should be designed for continuous improvement and include mechanisms for ongoing evaluation and adjustment.

Why Some Organisations Don't Use Business Frameworks

Business frameworks can be difficult to use and implement because they often require a significant amount of time, effort, and resources to fully understand and apply. Additionally, each business framework has its own specific set of rules, processes, and terminology, which can make it challenging to choose the right one for a specific business need.

Furthermore, a lack of buy-in or support from key stakeholders within the organisation can also hinder the effective use and implementation of business frameworks. Finally, even the most well-designed business frameworks may not be effective if they are not tailored to the specific needs and context of the organisation.

Some organisations may not use frameworks simply because they are resistant to transformation and change or may be content with their current processes and methods.

Business Framework Adoption

Although individuals may have their preferred frameworks, there is no ultimate business framework. In some cases, you may need to leverage multiple frameworks to complete a project. Frameworks can expedite the process of gathering and analysing information. However, experience and sound judgement cannot be substituted by frameworks. Business frameworks can save time, but expertise in business and the ability to collaborate effectively with colleagues is what can make a difference in an organisation.

The best leaders and managers recognise the significance of well-documented frameworks that are comprehensible to everyone, and don't rely on ambiguous or unclear frameworks. Nowadays, larger organisations tend to have these well-documented frameworks, which are widely adopted and taught throughout the enterprise. As business frameworks have become more important to the way organisations work, they are now frequently mentioned in job advertisements, as well as in the CVs and resumes that applicants submit.

Introducing Half a Dozen Business Frameworks

In this article, I have chosen to highlight six of the many business frameworks that are available. However, there are a wide variety of frameworks that businesses can choose from to achieve their goals. If you work with a different framework, feel free to share it in the comments section below.

Strategy Frameworks

Strategy frameworks are models or tools used to help organisations develop and implement their strategic plans. They provide a structured approach to analysing a company's internal and external environment, identifying strengths, weaknesses, opportunities, and threats, and developing a clear and effective strategy to achieve the organisation's goals. Strategy frameworks are commonly used in areas such as business management, marketing, finance, and operations.

Strategy business frameworks help structure business thinking and guide businesses as they grow and accomplish their missions. They demonstrate how a business or department plans to use projects and other initiatives to uphold the overall vision of executive stakeholders. They can also be used to analyse business issues and develop strategies that are appropriate for a particular organisation.

Strategy Framework Example:

Porter’s Five Forces Framework

Porter's five forces framework enables organisations to comprehend the degree of competition, market attractiveness, and profitability in a given industry. The framework is based on the notion that there are five forces that determine the competitive intensity and market attractiveness. The five forces are used to identify where power lies in a business situation, helping to understand an organisation's competitive position and evaluate the strength of potential positions the organisation may consider moving into.

The framework consists of five forces, which are:

Competitive rivalry

Threat of substitute products

Bargaining power of buyers

Threat of new entrants

Bargaining power of suppliers

Innovation Frameworks

Innovation business frameworks are tools or models that provide a systematic approach to identifying, developing, and implementing innovative ideas. These frameworks help organisations to structure their innovation efforts and to focus on specific areas where they can achieve the greatest impact. Innovation frameworks can be used to identify customer needs, generate new ideas, test and validate concepts, and create a roadmap for implementation.

Businesses that do not have a well-defined innovation framework, whether it is for sustaining innovation, disruptive innovation, incremental innovation, or radical innovation, may not realise the potential of their ideas, and may miss out on valuable opportunities. In the absence of a clear innovation framework, organisations may simply be gathering ideas without recognising their true worth.

Innovation Framework Example:

Doblin’s Ten Types of Innovation

One way to design new innovations and evaluate the current pace of changes in products and services is through the Ten Types framework developed by Doblin.

These ten types of frameworks can be used in different combinations and are classified into the three categories shown below:

Category Frameworks

1) Profit Model

3) Structure

Offering Frameworks

5) Product performance

6) Product system

Experience Frameworks

10) Customer Engagement

Business Transformation Management Frameworks

One approach to managing business transformation is to use a framework that takes a holistic and process-driven approach to achieving new business outcomes. These frameworks help transformation managers and leaders to navigate the complex undertaking of managing transformations, whether they involve major overhauls or minor performance improvements.

Business Transformation Management Framework Example:

The Business Transformation Management Methodology (BTM2)

BTM² was the world's first holistic business transformation management methodology. It offers a clear framework with distinct stages, results, and corresponding techniques. This generic framework is applicable to different business transformation situations and not limited to a single industry, function, or technology.

Across the four business transformation phases of Envision, Engage, Transform, and Optimise, BTM² provides guidance on managing nine disciplines of transformation management.

Meta Management

Strategy Management

Value Management

Risk Management

Project and Programme Management

Business Process Management

IT Transformation Management

Organisational Change Management

Competence and Training Management

Digital Transformation Frameworks

A digital transformation framework is a guide for managers and leaders to adopt new business models, operating models and customer models with digital technologies to prepare their business for future. By using technology and data, innovative individuals are creating completely new ways to generate value for the business, customers, employees, and partners. Some companies are simply digitising existing processes, while others are transforming their business models and becoming leaders in the digital economy.

Digital Transformation Framework Example:

Digital Capability Framework

The Digital Capability Framework was created to assist organisations in implementing digitally enabled business transformation and fostering innovation. This framework facilitates the analysis of the current state of a company and identifies new business cases that can be enabled by technology trends.

The Digital Capability Framework enables managers and leaders to take a structured business-oriented approach to digital transformation, which results in a more collaborative relationship between the IT and Business teams.

This business framework consists of four building blocks which are:

Digital Capabilities

Digital Capability Maturity Models

Digital Use Cases

A Digital Transformation Roadmap

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Customer Centricity Frameworks

Companies use customer centricity frameworks to constantly anticipate and understand customer needs, and ensure they are met through their business processes. While it is not uncommon for companies to declare their customer focus, those that truly prioritise customer satisfaction are few and far between.

Over the past decade, customer expectations and behaviours have undergone a significant shift. Companies are now expected to meet customers' needs and expectations at every interaction to earn customer loyalty. The degree to which “customer-centricity” is ingrained in every employee in your organisation determines your ability to meet these expectations.

Customer Centricity Framework Example:

The Three-Wheel Framework of Customer-Centricity

The Three-Wheel Framework of Customer-Centricity consists of three inter-connected wheels that each represents one important phase in customer-centricity. All three wheels need to move together in a synchronous manner in order to create a customer-centric focus in the organisation.

The business framework consists of these three key components:

Know Your Customer

Build Key Insights

Take Key Actions

Project Management Frameworks

Project management frameworks refer to the processes, guidelines, and principles that are used to manage a project from its initiation to its completion. These business frameworks are designed to help project managers and their teams complete projects on time, within budget, and with the desired outcomes. They provide a structure for managing resources, identifying risks and issues, communicating progress and milestones, and ensuring that everyone is working towards the same goals. Project management frameworks vary depending on the project, organisation, and industry.

Project Management Framework Example:

The Project Management Body of Knowledge (PMBOK)

The term PMBOK stands for Project Management Body of Knowledge, which encompasses a set of recommendations, techniques, processes, and terminologies that are extensively employed throughout the project management domain. The adoption of PMBOK assists companies in implementing uniform practices across different departments, customising procedures to cater to specific requirements, and enhancing the likelihood of project success.

The Project Management Body of Knowledge (PMBOK) recommends the use of 47 project management processes, which are classified into five Process Groups:

Initiating Process Group

Planning Process Group

Executing Process Group

Monitoring and Controlling Process Group

Closing Process Group

Each of the 47 processes is specified by Inputs, Tools & Techniques, and Outputs, and are grouped into the following ten knowledge areas.

Project Integration Management

Project Scope Management

Project Time Management

Project Cost Management

Project Quality Management

Project Human Resources Management

Project Communications Management

Project Risk Management

Project Procurement Management

Project Stakeholder Management

Numerous resources such as articles, videos, and podcasts offer innovative and practical business frameworks, varying from high-level to detailed with rich information. Selecting a business framework depends on the organisation's objectives and often the preferences of key decision-makers. Employing frameworks can be beneficial for businesses to achieve their goals and is often considered an expectation for top-paid professionals in their fields.

The decision about which business frameworks are used in an organisation depends on the business objectives and the personal preferences of senior managers and executives. Although, frameworks can be highly advantageous for businesses in achieving their goals and are frequently used by top-paid professionals in their respective fields.

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• Business strategy |
• 7 strategic planning models, plus 8 fra ...

7 strategic planning models, plus 8 frameworks to help you get started

Strategic planning is vital in defining where your business is going in the next three to five years. With the right strategic planning models and frameworks, you can uncover opportunities, identify risks, and create a strategic plan to fuel your organization’s success. We list the most popular models and frameworks and explain how you can combine them to create a strategic plan that fits your business.

A strategic plan is a great tool to help you hit your business goals . But sometimes, this tool needs to be updated to reflect new business priorities or changing market conditions. If you decide to use a model that already exists, you can benefit from a roadmap that’s already created. The model you choose can improve your knowledge of what works best in your organization, uncover unknown strengths and weaknesses, or help you find out how you can outpace your competitors.

In this article, we cover the most common strategic planning models and frameworks and explain when to use which one. Plus, get tips on how to apply them and which models and frameworks work well together. 

Strategic planning models vs. frameworks

First off: This is not a one-or-nothing scenario. You can use as many or as few strategic planning models and frameworks as you like. 

When your organization undergoes a strategic planning phase, you should first pick a model or two that you want to apply. This will provide you with a basic outline of the steps to take during the strategic planning process.

During that process, think of strategic planning frameworks as the tools in your toolbox. Many models suggest starting with a SWOT analysis or defining your vision and mission statements first. Depending on your goals, though, you may want to apply several different frameworks throughout the strategic planning process.

For example, if you’re applying a scenario-based strategic plan, you could start with a SWOT and PEST(LE) analysis to get a better overview of your current standing. If one of the weaknesses you identify has to do with your manufacturing process, you could apply the theory of constraints to improve bottlenecks and mitigate risks. 

Now that you know the difference between the two, learn more about the seven strategic planning models, as well as the eight most commonly used frameworks that go along with them.

1. Basic model

The basic strategic planning model is ideal for establishing your company’s vision, mission, business objectives, and values. This model helps you outline the specific steps you need to take to reach your goals, monitor progress to keep everyone on target, and address issues as they arise.

If it’s your first strategic planning session, the basic model is the way to go. Later on, you can embellish it with other models to adjust or rewrite your business strategy as needed. Let’s take a look at what kinds of businesses can benefit from this strategic planning model and how to apply it.

Small businesses or organizations

Companies with little to no strategic planning experience

Organizations with few resources 

Write your mission statement. Gather your planning team and have a brainstorming session. The more ideas you can collect early in this step, the more fun and rewarding the analysis phase will feel.

Identify your organization’s goals . Setting clear business goals will increase your team’s performance and positively impact their motivation.

Outline strategies that will help you reach your goals. Ask yourself what steps you have to take in order to reach these goals and break them down into long-term, mid-term, and short-term goals .

Create action plans to implement each of the strategies above. Action plans will keep teams motivated and your organization on target.

Monitor and revise the plan as you go . As with any strategic plan, it’s important to closely monitor if your company is implementing it successfully and how you can adjust it for a better outcome.

2. Issue-based model

Also called goal-based planning model, this is essentially an extension of the basic strategic planning model. It’s a bit more dynamic and very popular for companies that want to create a more comprehensive plan.

Organizations with basic strategic planning experience

Businesses that are looking for a more comprehensive plan

Conduct a SWOT analysis . Assess your organization’s strengths, weaknesses, opportunities, and threats with a SWOT analysis to get a better overview of what your strategic plan should focus on. We’ll give into how to conduct a SWOT analysis when we get into the strategic planning frameworks below.

Identify and prioritize major issues and/or goals. Based on your SWOT analysis, identify and prioritize what your strategic plan should focus on this time around.

Develop your main strategies that address these issues and/or goals. Aim to develop one overarching strategy that addresses your highest-priority goal and/or issue to keep this process as simple as possible.

Update or create a mission and vision statement . Make sure that your business’s statements align with your new or updated strategy. If you haven’t already, this is also a chance for you to define your organization’s values.

Create action plans. These will help you address your organization’s goals, resource needs, roles, and responsibilities. 

Develop a yearly operational plan document. This model works best if your business repeats the strategic plan implementation process on an annual basis, so use a yearly operational plan to capture your goals, progress, and opportunities for next time.

Allocate resources for your year-one operational plan. Whether you need funding or dedicated team members to implement your first strategic plan, now is the time to allocate all the resources you’ll need.

Monitor and revise the strategic plan. Record your lessons learned in the operational plan so you can revisit and improve it for the next strategic planning phase.

The issue-based plan can repeat on an annual basis (or less often once you resolve the issues). It’s important to update the plan every time it’s in action to ensure it’s still doing the best it can for your organization.

You don’t have to repeat the full process every year—rather, focus on what’s a priority during this run.

3. Alignment model

This model is also called strategic alignment model (SAM) and is one of the most popular strategic planning models. It helps you align your business and IT strategies with your organization’s strategic goals. 

You’ll have to consider four equally important, yet different perspectives when applying the alignment strategic planning model:

Strategy execution: The business strategy driving the model

Technology potential: The IT strategy supporting the business strategy

Competitive potential: Emerging IT capabilities that can create new products and services

Service level: Team members dedicated to creating the best IT system in the organization

Ideally, your strategy will check off all the criteria above—however, it’s more likely you’ll have to find a compromise. 

Here’s how to create a strategic plan using the alignment model and what kinds of companies can benefit from it.

Organizations that need to fine-tune their strategies

Businesses that want to uncover issues that prevent them from aligning with their mission

Companies that want to reassess objectives or correct problem areas that prevent them from growing

Outline your organization’s mission, programs, resources, and where support is needed. Before you can improve your statements and approaches, you need to define what exactly they are.

Identify what internal processes are working and which ones aren’t. Pinpoint which processes are causing problems, creating bottlenecks , or could otherwise use improving. Then prioritize which internal processes will have the biggest positive impact on your business.

Identify solutions. Work with the respective teams when you’re creating a new strategy to benefit from their experience and perspective on the current situation.

Update your strategic plan with the solutions. Update your strategic plan and monitor if implementing it is setting your business up for improvement or growth. If not, you may have to return to the drawing board and update your strategic plan with new solutions.

4. Scenario model

The scenario model works great if you combine it with other models like the basic or issue-based model. This model is particularly helpful if you need to consider external factors as well. These can be government regulations, technical, or demographic changes that may impact your business.

Organizations trying to identify strategic issues and goals caused by external factors

Identify external factors that influence your organization. For example, you should consider demographic, regulation, or environmental factors.

Review the worst case scenario the above factors could have on your organization. If you know what the worst case scenario for your business looks like, it’ll be much easier to prepare for it. Besides, it’ll take some of the pressure and surprise out of the mix, should a scenario similar to the one you create actually occur.

Identify and discuss two additional hypothetical organizational scenarios. On top of your worst case scenario, you’ll also want to define the best case and average case scenarios. Keep in mind that the worst case scenario from the previous step can often provoke strong motivation to change your organization for the better. However, discussing the other two will allow you to focus on the positive—the opportunities your business may have ahead.

Identify and suggest potential strategies or solutions. Everyone on the team should now brainstorm different ways your business could potentially respond to each of the three scenarios. Discuss the proposed strategies as a team afterward.

Uncover common considerations or strategies for your organization. There’s a good chance that your teammates come up with similar solutions. Decide which ones you like best as a team or create a new one together.

Identify the most likely scenario and the most reasonable strategy. Finally, examine which of the three scenarios is most likely to occur in the next three to five years and how your business should respond to potential changes.

5. Self-organizing model

Also called the organic planning model, the self-organizing model is a bit different from the linear approaches of the other models. You’ll have to be very patient with this method. 

This strategic planning model is all about focusing on the learning and growing process rather than achieving a specific goal. Since the organic model concentrates on continuous improvement , the process is never really over.

Large organizations that can afford to take their time

Businesses that prefer a more naturalistic, organic planning approach that revolves around common values, communication, and shared reflection

Companies that have a clear understanding of their vision

Define and communicate your organization’s cultural values . Your team can only think clearly and with solutions in mind when they have a clear understanding of your organization's values.

Communicate the planning group’s vision for the organization. Define and communicate the vision with everyone involved in the strategic planning process. This will align everyone’s ideas with your company’s vision.

Discuss what processes will help realize the organization’s vision on a regular basis. Meet every quarter to discuss strategies or tactics that will move your organization closer to realizing your vision.

6. Real-time model

This fluid model can help organizations that deal with rapid changes to their work environment. There are three levels of success in the real-time model: 

Organizational: At the organizational level, you’re forming strategies in response to opportunities or trends.

Programmatic: At the programmatic level, you have to decide how to respond to specific outcomes or environmental changes.

Operational: On the operational level, you will study internal systems, policies, and people to develop a strategy for your company.

Figuring out your competitive advantage can be difficult, but this is absolutely crucial to ensure success. Whether it’s a unique asset or strength your organization has or an outstanding execution of services or programs—it’s important that you can set yourself apart from others in the industry to succeed.

Companies that need to react quickly to changing environments

Businesses that are seeking new tools to help them align with their organizational strategy

Define your mission and vision statement. If you ever feel stuck formulating your company’s mission or vision statement, take a look at those of others. Maybe Asana’s vision statement sparks some inspiration.

Research, understand, and learn from competitor strategy and market trends. Pick a handful of competitors in your industry and find out how they’ve created success for themselves. How did they handle setbacks or challenges? What kinds of challenges did they even encounter? Are these common scenarios in the market? Learn from your competitors by finding out as much as you can about them.

Study external environments. At this point, you can combine the real-time model with the scenario model to find solutions to threats and opportunities outside of your control.

Conduct a SWOT analysis of your internal processes, systems, and resources. Besides the external factors your team has to consider, it’s also important to look at your company’s internal environment and how well you’re prepared for different scenarios.

Develop a strategy. Discuss the results of your SWOT analysis to develop a business strategy that builds toward organizational, programmatic, and operational success.

Rinse and repeat. Monitor how well the new strategy is working for your organization and repeat the planning process as needed to ensure you’re on top or, perhaps, ahead of the game. 

7. Inspirational model

This last strategic planning model is perfect to inspire and energize your team as they work toward your organization’s goals. It’s also a great way to introduce or reconnect your employees to your business strategy after a merger or acquisition.

Businesses with a dynamic and inspired start-up culture

Organizations looking for inspiration to reinvigorate the creative process

Companies looking for quick solutions and strategy shifts

Gather your team to discuss an inspirational vision for your organization. The more people you can gather for this process, the more input you will receive.

Brainstorm big, hairy audacious goals and ideas. Encouraging your team not to hold back with ideas that may seem ridiculous will do two things: for one, it will mitigate the fear of contributing bad ideas. But more importantly, it may lead to a genius idea or suggestion that your team wouldn’t have thought of if they felt like they had to think inside of the box.

Assess your organization’s resources. Find out if your company has the resources to implement your new ideas. If they don’t, you’ll have to either adjust your strategy or allocate more resources.

Develop a strategy balancing your resources and brainstorming ideas. Far-fetched ideas can grow into amazing opportunities but they can also bear great risk. Make sure to balance ideas with your strategic direction. 

Now, let’s dive into the most commonly used strategic frameworks.

8. SWOT analysis framework

One of the most popular strategic planning frameworks is the SWOT analysis . A SWOT analysis is a great first step in identifying areas of opportunity and risk—which can help you create a strategic plan that accounts for growth and prepares for threats.

SWOT stands for strengths, weaknesses, opportunities, and threats. Here’s an example:

9. OKRs framework

A big part of strategic planning is setting goals for your company. That’s where OKRs come into play. 

OKRs stand for objective and key results—this goal-setting framework helps your organization set and achieve goals. It provides a somewhat holistic approach that you can use to connect your team’s work to your organization’s big-picture goals.  When team members understand how their individual work contributes to the organization’s success, they tend to be more motivated and produce better results

10. Balanced scorecard (BSC) framework

The balanced scorecard is a popular strategic framework for businesses that want to take a more holistic approach rather than just focus on their financial performance. It was designed by David Norton and Robert Kaplan in the 1990s, it’s used by companies around the globe to: 

Communicate goals

Align their team’s daily work with their company’s strategy

Prioritize products, services, and projects

Monitor their progress toward their strategic goals

Your balanced scorecard will outline four main business perspectives:

Customers or clients , meaning their value, satisfaction, and/or retention

Financial , meaning your effectiveness in using resources and your financial performance

Internal process , meaning your business’s quality and efficiency

Organizational capacity , meaning your organizational culture, infrastructure and technology, and human resources

With the help of a strategy map, you can visualize and communicate how your company is creating value. A strategy map is a simple graphic that shows cause-and-effect connections between strategic objectives. 

The balanced scorecard framework is an amazing tool to use from outlining your mission, vision, and values all the way to implementing your strategic plan .

You can use an integration like Lucidchart to create strategy maps for your business in Asana.

11. Porter’s Five Forces framework

If you’re using the real-time strategic planning model, Porter’s Five Forces are a great framework to apply. You can use it to find out what your product’s or service’s competitive advantage is before entering the market.

Developed by Michael E. Porter , the framework outlines five forces you have to be aware of and monitor:

Threat of new industry entrants: Any new entry into the market results in increased pressure on prices and costs. 

Competition in the industry: The more competitors that exist, the more difficult it will be for you to create value in the market with your product or service.

Bargaining power of suppliers: Suppliers can wield more power if there are less alternatives for buyers or it’s expensive, time consuming, or difficult to switch to a different supplier.

Bargaining power of buyers: Buyers can wield more power if the same product or service is available elsewhere with little to no difference in quality.

Threat of substitutes: If another company already covers the market’s needs, you’ll have to create a better product or service or make it available for a lower price at the same quality in order to compete.

Remember, industry structures aren’t static. The more dynamic your strategic plan is, the better you’ll be able to compete in a market.

12. VRIO framework

The VRIO framework is another strategic planning tool designed to help you evaluate your competitive advantage. VRIO stands for value, rarity, imitability, and organization.

It’s a resource-based theory developed by Jay Barney. With this framework, you can study your firmed resources and find out whether or not your company can transform them into sustained competitive advantages. 

Firmed resources can be tangible (e.g., cash, tools, inventory, etc.) or intangible (e.g., copyrights, trademarks, organizational culture, etc.). Whether these resources will actually help your business once you enter the market depends on four qualities:

Valuable : Will this resource either increase your revenue or decrease your costs and thereby create value for your business?

Rare : Are the resources you’re using rare or can others use your resources as well and therefore easily provide the same product or service?

Inimitable : Are your resources either inimitable or non-substitutable? In other words, how unique and complex are your resources?

Organizational: Are you organized enough to use your resources in a way that captures their value, rarity, and inimitability?

It’s important that your resources check all the boxes above so you can ensure that you have sustained competitive advantage over others in the industry.

13. Theory of Constraints (TOC) framework

If the reason you’re currently in a strategic planning process is because you’re trying to mitigate risks or uncover issues that could hurt your business—this framework should be in your toolkit.

The theory of constraints (TOC) is a problem-solving framework that can help you identify limiting factors or bottlenecks preventing your organization from hitting OKRs or KPIs . 

Whether it’s a policy, market, or recourse constraint—you can apply the theory of constraints to solve potential problems, respond to issues, and empower your team to improve their work with the resources they have.

14. PEST/PESTLE analysis framework

The idea of the PEST analysis is similar to that of the SWOT analysis except that you’re focusing on external factors and solutions. It’s a great framework to combine with the scenario-based strategic planning model as it helps you define external factors connected to your business’s success.

PEST stands for political, economic, sociological, and technological factors. Depending on your business model, you may want to expand this framework to include legal and environmental factors as well (PESTLE). These are the most common factors you can include in a PESTLE analysis:

Political: Taxes, trade tariffs, conflicts

Economic: Interest and inflation rate, economic growth patterns, unemployment rate

Social: Demographics, education, media, health

Technological: Communication, information technology, research and development, patents

Legal: Regulatory bodies, environmental regulations, consumer protection

Environmental: Climate, geographical location, environmental offsets

15. Hoshin Kanri framework

Hoshin Kanri is a great tool to communicate and implement strategic goals. It’s a planning system that involves the entire organization in the strategic planning process. The term is Japanese and stands for “compass management” and is also known as policy management. 

This strategic planning framework is a top-down approach that starts with your leadership team defining long-term goals which are then aligned and communicated with every team member in the company. 

You should hold regular meetings to monitor progress and update the timeline to ensure that every teammate’s contributions are aligned with the overarching company goals.

Stick to your strategic goals

Whether you’re a small business just starting out or a nonprofit organization with decades of experience, strategic planning is a crucial step in your journey to success. 

If you’re looking for a tool that can help you and your team define, organize, and implement your strategic goals, Asana is here to help. Our goal-setting software allows you to connect all of your team members in one place, visualize progress, and stay on target.

Related resources

Solve your tech overload with an intelligent transformation

9 steps to craft a successful go-to-market (GTM) strategy

Unmanaged business goals don’t work. Here’s what does.

How Asana uses work management to effectively manage goals

11.4 The Business Plan

Learning objectives.

By the end of this section, you will be able to:

• Describe the different purposes of a business plan
• Describe and develop the components of a brief business plan
• Describe and develop the components of a full business plan

Unlike the brief or lean formats introduced so far, the business plan is a formal document used for the long-range planning of a company’s operation. It typically includes background information, financial information, and a summary of the business. Investors nearly always request a formal business plan because it is an integral part of their evaluation of whether to invest in a company. Although nothing in business is permanent, a business plan typically has components that are more “set in stone” than a business model canvas , which is more commonly used as a first step in the planning process and throughout the early stages of a nascent business. A business plan is likely to describe the business and industry, market strategies, sales potential, and competitive analysis, as well as the company’s long-term goals and objectives. An in-depth formal business plan would follow at later stages after various iterations to business model canvases. The business plan usually projects financial data over a three-year period and is typically required by banks or other investors to secure funding. The business plan is a roadmap for the company to follow over multiple years.

Some entrepreneurs prefer to use the canvas process instead of the business plan, whereas others use a shorter version of the business plan, submitting it to investors after several iterations. There are also entrepreneurs who use the business plan earlier in the entrepreneurial process, either preceding or concurrently with a canvas. For instance, Chris Guillebeau has a one-page business plan template in his book The $100 Startup . 48 His version is basically an extension of a napkin sketch without the detail of a full business plan. As you progress, you can also consider a brief business plan (about two pages)—if you want to support a rapid business launch—and/or a standard business plan.

As with many aspects of entrepreneurship, there are no clear hard and fast rules to achieving entrepreneurial success. You may encounter different people who want different things (canvas, summary, full business plan), and you also have flexibility in following whatever tool works best for you. Like the canvas, the various versions of the business plan are tools that will aid you in your entrepreneurial endeavor.

Business Plan Overview

Most business plans have several distinct sections ( Figure 11.16 ). The business plan can range from a few pages to twenty-five pages or more, depending on the purpose and the intended audience. For our discussion, we’ll describe a brief business plan and a standard business plan. If you are able to successfully design a business model canvas, then you will have the structure for developing a clear business plan that you can submit for financial consideration.

Both types of business plans aim at providing a picture and roadmap to follow from conception to creation. If you opt for the brief business plan, you will focus primarily on articulating a big-picture overview of your business concept.

The full business plan is aimed at executing the vision concept, dealing with the proverbial devil in the details. Developing a full business plan will assist those of you who need a more detailed and structured roadmap, or those of you with little to no background in business. The business planning process includes the business model, a feasibility analysis, and a full business plan, which we will discuss later in this section. Next, we explore how a business plan can meet several different needs.

Purposes of a Business Plan

A business plan can serve many different purposes—some internal, others external. As we discussed previously, you can use a business plan as an internal early planning device, an extension of a napkin sketch, and as a follow-up to one of the canvas tools. A business plan can be an organizational roadmap , that is, an internal planning tool and working plan that you can apply to your business in order to reach your desired goals over the course of several years. The business plan should be written by the owners of the venture, since it forces a firsthand examination of the business operations and allows them to focus on areas that need improvement.

Refer to the business venture throughout the document. Generally speaking, a business plan should not be written in the first person.

A major external purpose for the business plan is as an investment tool that outlines financial projections, becoming a document designed to attract investors. In many instances, a business plan can complement a formal investor’s pitch. In this context, the business plan is a presentation plan, intended for an outside audience that may or may not be familiar with your industry, your business, and your competitors.

You can also use your business plan as a contingency plan by outlining some “what-if” scenarios and exploring how you might respond if these scenarios unfold. Pretty Young Professional launched in November 2010 as an online resource to guide an emerging generation of female leaders. The site focused on recent female college graduates and current students searching for professional roles and those in their first professional roles. It was founded by four friends who were coworkers at the global consultancy firm McKinsey. But after positions and equity were decided among them, fundamental differences of opinion about the direction of the business emerged between two factions, according to the cofounder and former CEO Kathryn Minshew . “I think, naively, we assumed that if we kicked the can down the road on some of those things, we’d be able to sort them out,” Minshew said. Minshew went on to found a different professional site, The Muse , and took much of the editorial team of Pretty Young Professional with her. 49 Whereas greater planning potentially could have prevented the early demise of Pretty Young Professional, a change in planning led to overnight success for Joshua Esnard and The Cut Buddy team. Esnard invented and patented the plastic hair template that he was selling online out of his Fort Lauderdale garage while working a full-time job at Broward College and running a side business. Esnard had hundreds of boxes of Cut Buddies sitting in his home when he changed his marketing plan to enlist companies specializing in making videos go viral. It worked so well that a promotional video for the product garnered 8 million views in hours. The Cut Buddy sold over 4,000 products in a few hours when Esnard only had hundreds remaining. Demand greatly exceeded his supply, so Esnard had to scramble to increase manufacturing and offered customers two-for-one deals to make up for delays. This led to selling 55,000 units, generating $700,000 in sales in 2017. 50 After appearing on Shark Tank and landing a deal with Daymond John that gave the “shark” a 20-percent equity stake in return for $300,000, The Cut Buddy has added new distribution channels to include retail sales along with online commerce. Changing one aspect of a business plan—the marketing plan—yielded success for The Cut Buddy.

Link to Learning

Watch this video of Cut Buddy’s founder, Joshua Esnard, telling his company’s story to learn more.

If you opt for the brief business plan, you will focus primarily on articulating a big-picture overview of your business concept. This version is used to interest potential investors, employees, and other stakeholders, and will include a financial summary “box,” but it must have a disclaimer, and the founder/entrepreneur may need to have the people who receive it sign a nondisclosure agreement (NDA) . The full business plan is aimed at executing the vision concept, providing supporting details, and would be required by financial institutions and others as they formally become stakeholders in the venture. Both are aimed at providing a picture and roadmap to go from conception to creation.

Types of Business Plans

The brief business plan is similar to an extended executive summary from the full business plan. This concise document provides a broad overview of your entrepreneurial concept, your team members, how and why you will execute on your plans, and why you are the ones to do so. You can think of a brief business plan as a scene setter or—since we began this chapter with a film reference—as a trailer to the full movie. The brief business plan is the commercial equivalent to a trailer for Field of Dreams , whereas the full plan is the full-length movie equivalent.

Brief Business Plan or Executive Summary

As the name implies, the brief business plan or executive summary summarizes key elements of the entire business plan, such as the business concept, financial features, and current business position. The executive summary version of the business plan is your opportunity to broadly articulate the overall concept and vision of the company for yourself, for prospective investors, and for current and future employees.

A typical executive summary is generally no longer than a page, but because the brief business plan is essentially an extended executive summary, the executive summary section is vital. This is the “ask” to an investor. You should begin by clearly stating what you are asking for in the summary.

In the business concept phase, you’ll describe the business, its product, and its markets. Describe the customer segment it serves and why your company will hold a competitive advantage. This section may align roughly with the customer segments and value-proposition segments of a canvas.

Next, highlight the important financial features, including sales, profits, cash flows, and return on investment. Like the financial portion of a feasibility analysis, the financial analysis component of a business plan may typically include items like a twelve-month profit and loss projection, a three- or four-year profit and loss projection, a cash-flow projection, a projected balance sheet, and a breakeven calculation. You can explore a feasibility study and financial projections in more depth in the formal business plan. Here, you want to focus on the big picture of your numbers and what they mean.

The current business position section can furnish relevant information about you and your team members and the company at large. This is your opportunity to tell the story of how you formed the company, to describe its legal status (form of operation), and to list the principal players. In one part of the extended executive summary, you can cover your reasons for starting the business: Here is an opportunity to clearly define the needs you think you can meet and perhaps get into the pains and gains of customers. You also can provide a summary of the overall strategic direction in which you intend to take the company. Describe the company’s mission, vision, goals and objectives, overall business model, and value proposition.

Rice University’s Student Business Plan Competition, one of the largest and overall best-regarded graduate school business-plan competitions (see Telling Your Entrepreneurial Story and Pitching the Idea ), requires an executive summary of up to five pages to apply. 51 , 52 Its suggested sections are shown in Table 11.2 .

Are You Ready?

Create a brief business plan.

Fill out a canvas of your choosing for a well-known startup: Uber, Netflix, Dropbox, Etsy, Airbnb, Bird/Lime, Warby Parker, or any of the companies featured throughout this chapter or one of your choice. Then create a brief business plan for that business. See if you can find a version of the company’s actual executive summary, business plan, or canvas. Compare and contrast your vision with what the company has articulated.

• These companies are well established but is there a component of what you charted that you would advise the company to change to ensure future viability?
• Map out a contingency plan for a “what-if” scenario if one key aspect of the company or the environment it operates in were drastically is altered?

Full Business Plan

Even full business plans can vary in length, scale, and scope. Rice University sets a ten-page cap on business plans submitted for the full competition. The IndUS Entrepreneurs , one of the largest global networks of entrepreneurs, also holds business plan competitions for students through its Tie Young Entrepreneurs program. In contrast, business plans submitted for that competition can usually be up to twenty-five pages. These are just two examples. Some components may differ slightly; common elements are typically found in a formal business plan outline. The next section will provide sample components of a full business plan for a fictional business.

Executive Summary

The executive summary should provide an overview of your business with key points and issues. Because the summary is intended to summarize the entire document, it is most helpful to write this section last, even though it comes first in sequence. The writing in this section should be especially concise. Readers should be able to understand your needs and capabilities at first glance. The section should tell the reader what you want and your “ask” should be explicitly stated in the summary.

Describe your business, its product or service, and the intended customers. Explain what will be sold, who it will be sold to, and what competitive advantages the business has. Table 11.3 shows a sample executive summary for the fictional company La Vida Lola.

Business Description

This section describes the industry, your product, and the business and success factors. It should provide a current outlook as well as future trends and developments. You also should address your company’s mission, vision, goals, and objectives. Summarize your overall strategic direction, your reasons for starting the business, a description of your products and services, your business model, and your company’s value proposition. Consider including the Standard Industrial Classification/North American Industry Classification System (SIC/NAICS) code to specify the industry and insure correct identification. The industry extends beyond where the business is located and operates, and should include national and global dynamics. Table 11.4 shows a sample business description for La Vida Lola.

Industry Analysis and Market Strategies

Here you should define your market in terms of size, structure, growth prospects, trends, and sales potential. You’ll want to include your TAM and forecast the SAM . (Both these terms are discussed in Conducting a Feasibility Analysis .) This is a place to address market segmentation strategies by geography, customer attributes, or product orientation. Describe your positioning relative to your competitors’ in terms of pricing, distribution, promotion plan, and sales potential. Table 11.5 shows an example industry analysis and market strategy for La Vida Lola.

Competitive Analysis

The competitive analysis is a statement of the business strategy as it relates to the competition. You want to be able to identify who are your major competitors and assess what are their market shares, markets served, strategies employed, and expected response to entry? You likely want to conduct a classic SWOT analysis (Strengths Weaknesses Opportunities Threats) and complete a competitive-strength grid or competitive matrix. Outline your company’s competitive strengths relative to those of the competition in regard to product, distribution, pricing, promotion, and advertising. What are your company’s competitive advantages and their likely impacts on its success? The key is to construct it properly for the relevant features/benefits (by weight, according to customers) and how the startup compares to incumbents. The competitive matrix should show clearly how and why the startup has a clear (if not currently measurable) competitive advantage. Some common features in the example include price, benefits, quality, type of features, locations, and distribution/sales. Sample templates are shown in Figure 11.17 and Figure 11.18 . A competitive analysis helps you create a marketing strategy that will identify assets or skills that your competitors are lacking so you can plan to fill those gaps, giving you a distinct competitive advantage. When creating a competitor analysis, it is important to focus on the key features and elements that matter to customers, rather than focusing too heavily on the entrepreneur’s idea and desires.

Operations and Management Plan

In this section, outline how you will manage your company. Describe its organizational structure. Here you can address the form of ownership and, if warranted, include an organizational chart/structure. Highlight the backgrounds, experiences, qualifications, areas of expertise, and roles of members of the management team. This is also the place to mention any other stakeholders, such as a board of directors or advisory board(s), and their relevant relationship to the founder, experience and value to help make the venture successful, and professional service firms providing management support, such as accounting services and legal counsel.

Table 11.6 shows a sample operations and management plan for La Vida Lola.

Marketing Plan

Here you should outline and describe an effective overall marketing strategy for your venture, providing details regarding pricing, promotion, advertising, distribution, media usage, public relations, and a digital presence. Fully describe your sales management plan and the composition of your sales force, along with a comprehensive and detailed budget for the marketing plan. Table 11.7 shows a sample marketing plan for La Vida Lola.

Financial Plan

A financial plan seeks to forecast revenue and expenses; project a financial narrative; and estimate project costs, valuations, and cash flow projections. This section should present an accurate, realistic, and achievable financial plan for your venture (see Entrepreneurial Finance and Accounting for detailed discussions about conducting these projections). Include sales forecasts and income projections, pro forma financial statements ( Building the Entrepreneurial Dream Team , a breakeven analysis, and a capital budget. Identify your possible sources of financing (discussed in Conducting a Feasibility Analysis ). Figure 11.19 shows a template of cash-flow needs for La Vida Lola.

Entrepreneur In Action

Laughing man coffee.

Hugh Jackman ( Figure 11.20 ) may best be known for portraying a comic-book superhero who used his mutant abilities to protect the world from villains. But the Wolverine actor is also working to make the planet a better place for real, not through adamantium claws but through social entrepreneurship.

A love of java jolted Jackman into action in 2009, when he traveled to Ethiopia with a Christian humanitarian group to shoot a documentary about the impact of fair-trade certification on coffee growers there. He decided to launch a business and follow in the footsteps of the late Paul Newman, another famous actor turned philanthropist via food ventures.

Jackman launched Laughing Man Coffee two years later; he sold the line to Keurig in 2015. One Laughing Man Coffee café in New York continues to operate independently, investing its proceeds into charitable programs that support better housing, health, and educational initiatives within fair-trade farming communities. 55 Although the New York location is the only café, the coffee brand is still distributed, with Keurig donating an undisclosed portion of Laughing Man proceeds to those causes (whereas Jackman donates all his profits). The company initially donated its profits to World Vision, the Christian humanitarian group Jackman accompanied in 2009. In 2017, it created the Laughing Man Foundation to be more active with its money management and distribution.

• You be the entrepreneur. If you were Jackman, would you have sold the company to Keurig? Why or why not?
• Would you have started the Laughing Man Foundation?
• What else can Jackman do to aid fair-trade practices for coffee growers?

What Can You Do?

Textbooks for change.

Founded in 2014, Textbooks for Change uses a cross-compensation model, in which one customer segment pays for a product or service, and the profit from that revenue is used to provide the same product or service to another, underserved segment. Textbooks for Change partners with student organizations to collect used college textbooks, some of which are re-sold while others are donated to students in need at underserved universities across the globe. The organization has reused or recycled 250,000 textbooks, providing 220,000 students with access through seven campus partners in East Africa. This B-corp social enterprise tackles a problem and offers a solution that is directly relevant to college students like yourself. Have you observed a problem on your college campus or other campuses that is not being served properly? Could it result in a social enterprise?

Work It Out

Franchisee set out.

A franchisee of East Coast Wings, a chain with dozens of restaurants in the United States, has decided to part ways with the chain. The new store will feature the same basic sports-bar-and-restaurant concept and serve the same basic foods: chicken wings, burgers, sandwiches, and the like. The new restaurant can’t rely on the same distributors and suppliers. A new business plan is needed.

• What steps should the new restaurant take to create a new business plan?
• Should it attempt to serve the same customers? Why or why not?

This New York Times video, “An Unlikely Business Plan,” describes entrepreneurial resurgence in Detroit, Michigan.

• 48 Chris Guillebeau. The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future . New York: Crown Business/Random House, 2012.
• 49 Jonathan Chan. “What These 4 Startup Case Studies Can Teach You about Failure.” Foundr.com . July 12, 2015. https://foundr.com/4-startup-case-studies-failure/
• 50 Amy Feldman. “Inventor of the Cut Buddy Paid YouTubers to Spark Sales. He Wasn’t Ready for a Video to Go Viral.” Forbes. February 15, 2017. https://www.forbes.com/sites/forbestreptalks/2017/02/15/inventor-of-the-cut-buddy-paid-youtubers-to-spark-sales-he-wasnt-ready-for-a-video-to-go-viral/#3eb540ce798a
• 51 Jennifer Post. “National Business Plan Competitions for Entrepreneurs.” Business News Daily . August 30, 2018. https://www.businessnewsdaily.com/6902-business-plan-competitions-entrepreneurs.html
• 52 “Rice Business Plan Competition, Eligibility Criteria and How to Apply.” Rice Business Plan Competition . March 2020. https://rbpc.rice.edu/sites/g/files/bxs806/f/2020%20RBPC%20Eligibility%20Criteria%20and%20How%20to%20Apply_23Oct19.pdf
• 53 “Rice Business Plan Competition, Eligibility Criteria and How to Apply.” Rice Business Plan Competition. March 2020. https://rbpc.rice.edu/sites/g/files/bxs806/f/2020%20RBPC%20Eligibility%20Criteria%20and%20How%20to%20Apply_23Oct19.pdf; Based on 2019 RBPC Competition Rules and Format April 4–6, 2019. https://rbpc.rice.edu/sites/g/files/bxs806/f/2019-RBPC-Competition-Rules%20-Format.pdf
• 54 Foodstart. http://foodstart.com
• 55 “Hugh Jackman Journey to Starting a Social Enterprise Coffee Company.” Giving Compass. April 8, 2018. https://givingcompass.org/article/hugh-jackman-journey-to-starting-a-social-enterprise-coffee-company/

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Top 5 Business Frameworks according to Strategy Consultants

Business Frameworks are useful tools that help you analyze business issues and structure your thinking. Strategy consultants and business analysts often use these frameworks in order to clearly communicate their recommendations to their clients. There have been thousands of scientific articles trying to come up with innovative and useful frameworks in business, management and strategy. This article will cover the five most used and most helpful frameworks in today’s business world according to strategy consultants.

Porter’s Five Forces Model

Michael Porter’s Five Forces model is probably the best-known strategy framework out there. It is especially used when analysing industries. The Five Forces model helps determining how competitive an industry is based on five different factors: the rivalry among existing competitors, the threat of new entrants (potential competitors), the threat of substitute products (alternatives), the bargaining power of suppliers, and the bargaining power of buyers. If these forces are strong, competition can be considered high. In that case, a company might want to think twice before entering that specific industry. According to this framework, industries with little competition allow for greater margins and are therefore more attractive to enter. For more information and examples on using Porter’s Five Forces, click  here .

Figure 1: Five Forces Model

Hambrick and Fredrickson’s Strategy Diamond

Unfortunately, Hambrick and Fredrickson’s Strategy Diamond hasn’t received the attention it deserves. The Strategy Diamond is an attempt to explain what strategy truly means and is a great framework to distinguish the different elements that make up a good strategy. According to this model, a strategy consist of five essential parts that together should form a unified whole: Arenas, Vehicles, Differentiators, Staging and Economic Logic. For each element concrete and deliberate choices have to be made on what to do and more importantly what NOT to do. In addition, choices made within one element should reinforce and match choices made in the other four elements. Only that way companies can achieve a sound and sustainable strategy. More information and examples on using the Strategy Diamond can be found here .

Figure 2: Strategy Diamond

Treacy and Wiersema’s Value Disciplines

The Value Disciplines framework builds upon the key message of Porter’s Generic Strategies (i.e. companies should have a clear focus in what they want to be known for and what they want to excel in). If a comany tries to excel in multiple (often contradicting) disciplines, it is likely to end up stuck somewhere in the middle. Treacy and Wiersema propose three value disciplines from which companies can choose from in order to become a market leader: Product Leadership (the best and most innovative product offering), Operational Excellence (the cheapest products through a cost-efficient production process), and Customer Intimacy (amazing customer service and customer relationship management). Choosing each one of the disciplines has tremendous consequences on how the company should be operating in terms of structure, processes and culture. More information on the Value Disciplines can be found here .

Figure 3: Value Disciplines

Ansoff Matrix

There are different ways of growing a business. Igor Ansoff identified four strategies for growth and summarized them in the so called Ansoff Matrix. The Ansoff Matrix (also known as the Product/Market Expansion Grid) allows managers to quickly summarize these potential growth strategies and compare them to the risk associated with each one. The four growth strategies are Market Penetration (offering more of the existing products to existing markets), Market Development (offering the existing products to new markets), Product Development (offering new products to existing markets) and Diversification (launching new products in new markets). The idea is that each time you move into a new quadrant (horizontally or vertically), risk increases. More information on the Ansoff Matrix can be found here .

Figure 4: Ansoff Matrix

BCG Growth-Share Matrix

The Boston Consulting Group’s product portfolio matrix (also known as BCG Growth-Share Matrix) is designed to help companies consider growth opportunities by reviewing its portfolio of products or business units in order to decide where to invest and where to divest. The matrix is divided into four quadrants based on two factors: market growth and relative market share. The four types of business units (or products) are Dogs, Question Marks, Cash Cows and Stars. Most business units start off as Question Marks with a relatively small market share in a high growth market. Depending on how well the unit and the industry is doing, it might end up as a Star or Dog. Eventually when industry growth is flattening, the unit becomes a Cash Cow that can be ‘milked’ in order to invest in more promising businesses. The BCG Matrix is therefore a great tool for portfolio analysis and corporate strategy purposes. More information and examples on using the BCG Matrix can be found here .

Figure 5: BCG Matrix

Together these five frameworks cover a wide variety of purposes in strategic management consulting. For a more extended list of business frameworks, check out this page . Let us know what your favorite business framework is in the comment section below and perhaps we will cover your framework next time as well!

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10th April, 2024

6 Tips for Cybersecurity in Manufacturing to Stay Ahead of Threats

Technology can be a double-edged sword for Australian manufacturing businesses.

Evolutions like AI and the Internet of Things (IoT) mean greater productivity, but increasing reliance on technology presents malicious actors with new opportunities. 

In 2022, Manufacturing businesses accounted for 23% of all cybersecurity attacks.

As the target of nearly 1 in 4 cyberattacks, what precautions should you take? In this guide, we’ll explain how you can improve cybersecurity in manufacturing. 

Threats to Cybersecurity in Manufacturing

So why is the manufacturing industry at increased cybersecurity risk ? Lets look at some of the areas that are unique to Manufacturing that may be a desirable target for a cybercriminal

• Industrial Internet of Things (IIoT) . Physical devices with sensors connect to your networks. Out-of-date hardware and software are easily exploited by bad actors.
• Robotics and industrial control systems . Operational technology can rely on local or network computing resources, which hackers can gain access to.
• AI and ML. Mainly used by manufacturers for predictive algorithms in supply chain management. Cyberattacks can grind production to a halt.
• 5G and cloud computing. Remote support teams using a cloud contact centre platform create new hackable surfaces. 
• Data analytics . Data warehousing and business intelligence are prime targets. Hackers may expose proprietary data or intellectual property, or undertake ransomware attacks.

6 Tips to Improve Cybersecurity in Manufacturing

Accordingly, with such a high amount of risk in the manufacturing sector, it’s vital to take steps to protect your business. Here are six tips to get you started:

Perform a risk and maturity assessment

Firstly, start by assessing the current state of your cybersecurity. Look at your current controls, policies, and procedures. When was the last time you updated these? How well trained are your staff, and is security embedded in your company’s culture?

Secondly, perform a cybersecurity risk assessment. Take note of which systems are most vulnerable to attacks, and industry best practice for mitigating those risks.

Check who has access to networks and connected devices – especially smart devices as these increase the amount of cyber risk.

Evaluate and update IT infrastructure

During your risk assessment, you might find a significant amount of legacy systems, or that you’re more reliant on monolithic architecture than you realise.

Much of this critical infrastructure may never have been intended to  connect to the internet, and are particularly at risk of cyber attack.

A cost/benefit analysis will help you understand what to replace, and what to update. An upfront investment can save you from financial loss and ensure you meet cybersecurity regulations.

Create password policies

Make sure you have clear password policies, and provide training on them. The policies should include:

• Passwords require special characters and both lower and uppercase letters.
• Use two-factor authentication (2FA) or multifactor authentication (MFA) 
• Don’t use password managers unless vetted by the IT team
• Avoid writing down passwords or hints to them
• Use unique passwords for different software applications

These solutions aren’t bulletproof. They still depend on your team following proper device and app usage policies. For example, signing into company applications on personal devices puts their password at risk.

Choose a cybersecurity framework

Any strategy works better when it’s guided by a plan.

Also, use a cybersecurity framework to instil a cybersecurity culture with a preventative approach. One example is Essential Eight, a framework developed by the Australian Cyber Security Centre (ASCS).  

Following a framework gives you a battle plan on how to mitigate data breaches and other threats. They also ensure your organisation stays compliant with local regulations. 

Write an incident response plan

The Australian Signals Directorate (ASD) responded to over 1,100 cybersecurity incidents from July 2022 to June 2023. Despite your best efforts, prepare for the worst!

Additionally, collaborate with primary stakeholders, supply chain partners, and your IT experts to create an incident response plan. Taking rapid action can help you minimise the damage and speed up the resolution process.  

Things to include in the incident response plan:

• How to communicate a cybersecurity breach to employees, customers, and others in the supply chain.
• Protocols for defining the severity and scope of cybersecurity threats
• Identify who will take the lead in areas such as public relations and IT.
• How to update those affected and follow up with compensation if needed.

Implement Cybersecurity in Manufacturing Training

Make cybersecurity training part of your onboarding and continuous learning processes. Also, consider outsourcing training to cybersecurity experts, or asking their input on your educational materials. 

You could also leverage residential proxies as part of your security infrastructure to enhance online privacy and protect sensitive data.

Additionally, they provide secure remote access and anonymous browsing, which can contribute to a safer online environment for your manufacturing operations.

Once you’ve created training materials, add them to your staff handbooks and learning management system. This way, your team will have easy access to cybersecurity best practices.

Protect Your Manufacturing Company from Cybersecurity Threats

Cybersecurity in the manufacturing industry needs your attention right now.

With money — and your reputation — at stake, it’s time to update your cybersecurity procedures and your IT infrastructure.

Also, make sure you put a framework in place and implement cybersecurity initiatives.

Change the culture of your company, and make sure everyone understands the threat landscape in industrial manufacturing.

Before you know it, armies of cyberattackers will be retreating in disappointment.

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April 8, 2024 8:46 AM

Paul Schorr

CIO, Optimas Solutions

CIO Large Corporate Finalists

Paul Schorr leads the global technology strategy for Optimas. Before joining Optimas, Paul was the founder and managing director of Strategic Outlook, a boutique CIO advisory firm. Paul has served in a CIO capacity as a consultant or full-time employee for a number of great organizations including Performance Health, Zesty Paws, Zenwise, Uni-ball and a division of Disney Home Entertainment. Paul holds a BS in MIS from Eastern Illinois University.

SUCCESS STORY

Over the past 18 months, Paul Schorr and his team have led a complete IT turnaround; financially, technically and culturally. This began with restructuring the IT organization, putting the right leaders in place, and setting a business-first culture. They then completely restructured the aging IT infrastructure and security framework. Data centers were modernized with true disaster recovery failover. Simultaneously they drove a multi-million-dollar reduction in IT spending with additional efficiencies in their 2024 plan. Most importantly, they reinvented the IT culture, rescued the IT/Business relationship, and migrated IT culture from a confrontational, non-supportive posture into a true global business partner.

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Market update – April 9, 2024

Atos announces the parameters of its refinancing framework, based on its full business perimeter of tech foundations and eviden:, €600 million of cash needed to fund the business over the 2024-25 period. funds to be provided in the form of debt and/or equity by existing stakeholders or third-party investors, €300 million in new revolving credit facility and €300 million in additional bank guarantee lines, targeting bb credit profile by 2026, which assumes a financial leverage [1] below 3x by year-end 2025 and below 2x by year-end 2026 and implies a gross debt reduction of €2.4 billion, remaining debt maturities extended by 5 years, existing stakeholders of atos se and third-party investors can submit financing proposals including new money by april 26, 2024. given the group’s needs, a global refinancing agreement will trigger significant dilution of existing shareholders., targeting to reach a refinancing agreement with financial creditors by july 2024, agreement in-principle with a group of banks, a group of bondholders and the french state on interim financing of €450 million for additional liquidity until refinancing agreement is reached, refinancing framework based on a new long-range business plan, with the following assumptions:, for 2024: revenue of circa €9.9 billion, with organic revenue evolution at circa -2%; operating margin at circa 4% and free cash flow of €-0.4 billion before the unwinding of about €1.8 billion working capital actions as of december 2023, in 2027: revenue of approximately €11.4bn, with an operating margin of around 10% and free cash flow of about €0.5 billion, paris, france – april 9, 2024.

Further to its press release dated April 2, 2024, and as part of the discussions initiated by Atos SE with its financial creditors under the aegis of the conciliator appointed on March 25, 2024, Atos SE presented its updated business plan and the parameters of its refinancing framework to its financial creditors on Monday April 8, 2024.

2024-2027 business plan of the Atos Group

Atos SE provided key strategic and prospective financial information about the Group’s 2024-2027 business plan, the details of which can be found on the Company’s website [2] .

The 2024-2027 business plan has been analyzed by the independent consulting firm Accuracy.

Key highlights 2024 [3]

The Group 2024 revenue of €9.9 billion represents an organic revenue evolution of circa -2% compared with 2023:

• Eviden revenue of €5.0 billion represents an organic growth of about +2%, reflecting the current market slowdown notably in Americas and the uncertainty facing the Group, with Digital revenue of €3.5 billion and BDS revenue of €1.6 billion.
• Tech Foundations revenue of €4.9 billion represents an approximately -6% organic decline, reflecting the impact of the financial situation of the Company on its sales momentum, which may include a slow-down of contract renewals and new client acquisitions, as well as potential termination or rescoping of existing contracts. The revenue decline also reflects the deliberate reduction of non-core activities such as Business Process Outsourcing (BPO) and Value-Added Resell (VAR).

Operating margin of €0.4 billion or 4.3% of revenue:

• Eviden operating margin of €0.3 billion represents 6.0% of revenue, a slight improvement compared with 2023 pro forma and consisting in Digital operating margin at €0.2 billion and BDS operating margin at €0.1 billion.
• Tech Foundations operating margin rate of €0.1 billion represents 2.5% of revenue, slightly below 2023 pro forma, reflecting the impact of lower revenues.

Free cash flow after interest and taxes of €-0.4 billion excludes the full unwind of the working capital actions of circa €1.8 billion, as of December 31, 2023, which will be covered from cash on the balance sheet.

Free cash flow after interest and taxes for 2024 based on the Accuracy analysis is expected to be €-0.6 billion.

Key highlights 2027 [4]

The Group’s revenue of €11.4 billion in 2027 represents a revenue CAGR [5] of +3.1% over the 2023PF [6] – 2027 period, in line with the market and reflects a recovery in commercial activities starting from the end of 2024.

• Strong market demand for generative AI solutions and cloud HPC computing capabilities;
• Increased demand, including for AI-powered cyber offerings, due to regulatory compliance and greater cyber threat intensity;
• Growth from indirect channels and marketplace for SaaS sales;
• Demand driven by continued cloud adoption and hyperscaler platform consumption;
• New controlled, trusted or sovereign cloud offerings boosted by increasing regulatory compliance and data security focus;
• Accelerated demand for digital transformation;
• New industry solutions powered by generative AI and big data analytics;
• Digital revenue growth of 5.9% CAGR and BDS growth of 12.0% CAGR.
• Tech Foundations’ revenue of €4.8 billion in 2027 represents a revenue CAGR of -1.9% over the 2023PF – 2027 period.
• Negative organic growth in 2024 and 2025 with a turnaround from 2026 onwards;
• Redefined core portfolio addressing key customer priorities, including sustainability, and capitalizing on market trends such as distributed workforce post-Covid, fast move to multi-cloud and hybrid configurations, and heightened importance of sovereign cloud and AI.

The Group’s operating margin of €1.2 billion in 2027 represents 10.3% of revenue.

• Shift to higher-margin activities, including generative AI solutions, digital cyber offerings and technology consulting;
• Increased share of subscription and maintenance revenue;
• Value based pricing, particularly on generative AI platforms, sovereign cloud capabilities and IP differentiated offerings;
• Improvement in workforce management, with labor pyramid optimization, best-shore delivery model and span of control optimization;
• Productivity improvements driven by notably to higher utilization and billability of resources, reduction of indirect support costs and tighter supply chain management;
• Digital operating margin of €0.5 billion represents 12.2% of revenue and BDS operating margin of €0.3 billion represents 12.0% of revenue.
• Delivery modernization, including restructuring in high-cost locations and data-driven autonomous operations;
• Turnover of under-performing accounts and deployment of AI-based contract management;
• Supplier consolidation and renegotiation;
• Rationalization of SG&A, including increased self-service and automations.

Free cash flow after interests and taxes of €0.5 billion in 2027 reflects a €0.9 billion improvement compared with 2024 from:

• €0.7 billion operating margin improvement;
• €0.3 billion reduction in capex;
• €-0.2 billion negative contribution from change in working capital requirements;
• €0.2 billion reduction in cash out related to other operating expenses, acquisition and separation costs;
• €0.1 increase in interests and taxes.

Group Free cash flow after interest and taxes based on Accuracy analysis is €0.3 billion in 2027.

The evolution of the Group’s revenue, operating margin, and free cash flow is summarized in the table below:

Free cash flow may vary based on interest expense related to the new refinancing solution. Please refer to the disclaimer in this press release.

Parameters of Atos’ refinancing framework

As indicated in its press release of March 26 th , 2024, Atos SE has entered into an amicable conciliation procedure in order to frame discussions with its financial creditors. This is to facilitate the emergence of a global agreement regarding the restructuring of its financial debt within a short and limited timeframe of four months, which could be further extended by one month if needed.

In this context, Atos SE presented on Monday April 8, 2024 to its financial creditors the Company’s key parameters of its refinancing framework, which included:

• €600 million of cash needed to fund the business over the 2024-25 period. Funds to be provided in the form of debt and/or equity by existing stakeholders or third party investors;
• €300m revolving credit facility, and €300m of guarantee lines;
• Targeting a BB credit profile by 2026, which implies a financial leverage [7] below 3x by year-end 2025 and below 2x by year-end 2026 and a gross debt reduction of €2.4 billion;
• A 5-year maturity extension for the residual financial debt.

These parameters are based on the Group’s current perimeter, which includes the assets of Eviden and Tech Foundations without taking into account the impact of any potential asset disposals.

These parameters act as guidelines for all interested parties who will ultimately present their proposals to the company and the conciliator.

The Group’s refinancing framework aims to achieve the following objectives:

• To protect the social interest of the Company, including its employees, clients, suppliers, shareholders, and other stakeholders and preserve the strategic interests of the French State
• Ensure business continuity of the Group and its long-term sustainability;
• Reassure clients, employees and suppliers on Atos’ counterparty credit worthiness;
• Provide adequate time to implement Atos’ strategic plan and deliver results;
• Have a fully funded business plan over the 2024-2027 period;
• Align capital structure with Company’s future cash flow generation;
• Implement a debt structure that will support future successful refinancing;
• Consistent with Atos’ quality of assets;
• Enhance access to capital markets.

The main figures of Atos’ financial debt and the coming maturities of Atos SE’s borrowings are detailed in Appendix 1 of this press release and in the presentation.

Interim financing

Atos has reached an agreement in principle with a group of banks and a group of bondholders regarding an interim financing in the amount of €400 million, consisting of:

• €300 million factoring facility provided by the banks;
• €100 million revolving credit facility provided by the bondholders.

In addition, provided the Group’s financing banks grant a waiver, the French State has agreed in principle to extend a €50 million loan through the FDES (Fonds de Développement Economique et Social) to a subsidiary of Atos, Bull SA, which controls sovereign sensitive activities. This loan shall be reimbursed in full at the closing of the refinancing.

Atos will commit, in return, to sign an agreement at the level of Bull SA for the benefit of the French State which together with the issuance of a preferred share ( action de préférence ) by Bull SA will give the French State protection rights on such sovereign sensitive activities, under a legal documentation to be finalized. This agreement in principle provides for a right for the French State to purchase sovereign sensitive activities if a third-party has acquired 10% or a multiple of 10% of Atos’ share capital or voting rights and Atos and the French State have not reached a reasonable agreement on how to protect national interests in relation to these sovereign sensitive activities (without prejudice to the application of the French FDI regime). It also provides for governance rights for the French State at the level of Bull SA (with no voting rights at this stage).

With these new facilities, Atos believes it has adequate liquidity until its long-term refinancing plan is set up.

Next steps and refinancing discussions’ process

Existing stakeholders of Atos SE and third-party investors can submit proposals for new money by April 26, 2024 in order to allow a global agreement on the new capital structure of the Company to be finalized by July 2024.

Atos will evaluate all proposals, under the aegis of the conciliator Maître Hélène Bourbouloux in the best corporate interest of the Company including its employees, clients, suppliers, shareholders, and other stakeholders, while maintaining an attractive business mix. Atos will also take into consideration the sovereign imperatives of the French state.

Atos will inform the market in due course of the progress of the refinancing discussions, which will result in a change in its capital structure arising from a final global refinancing agreement, including the potential issuance of new equity which will result in a dilution of the existing shareholders.

Shareholders and financial creditors will be consulted in compliance with French legal requirements.

Atos SE confirms that information that could be qualified as inside information within the meaning of Regulation No. 596/2014 of 16 April 2014 on market abuse and that may have been given on a confidential basis to its financial creditors in the context of the presentation held on Monday April 8, 2024 has been published to the market, either in the past or in the context of this press release, with the aim of re-establishing equal access to information relating to the Atos Group between the investors.

Conference call

Atos’ Management invites you to an international conference call on Tuesday, April 9, 2024 at 08:00 am (CET – Paris) .

You can join the webcast of the conference:

• via the following link: https://edge.media-server.com/mmc/p/r4mhigey
• by telephone with the dial-in, 10 minutes prior the starting time. Please note that if you want to join the webcast by telephone, you must register in advance of the conference using the following link: https://register.vevent.com/register/BIbb8cac21bc124265adae510d10eeb672 Upon registration, you will be provided with Participant Dial In Numbers, a Direct Event Passcode and a unique Registrant ID. During the 10 minutes prior to the beginning of the call, you will need to use the conference access information provided in the email received upon registration.

After the conference, a replay of the webcast will be available on atos.net , in the Investors section.

The debt structure of the Group as of 31 December 2023, taking into account drawings on the remaining available RCF (drawn in January 2024) is as follows:

(1) Pro Forma €320M RCF draw and maturity extension of Term Loan A to January 2025 (2) Excluding accrued interest on LT Borrowing

Note: the €1.5 billion term loan A, maturing in July 2024, provides for another 6-month extension option until January 2025 available to Atos SE under standard conditions (notably no event of default and payment of an extension fee); it should be noted that under French law, any events of defaults triggered by the opening of mandat ad hoc or conciliation proceedings are considered void.

The debt principal schedule of the Group from 31 December 2023, taking into account drawings the remaining available RCF and assuming TLA second extension option exercised would be as follows:

Maturity Profile of Gross Debt as of 31 Dec. 2023, Pro Forma(1)

(1) Pro Forma €320M RCF draw and maturity extension of Term Loan A to January 2025

Appendix 2 : expected guarantee needs

Appendix 3: fy23 actual – fy23 proforma revenue and operating margin reconciliation.

The tables below present the reconciliation between the FY 2023 actual revenue and operating margin and the 2023 pro forma revenue and operating margin, for the Group, Eviden, Tech Foundations and the two components of Eviden, Digital and BDS. Elements in reconciliation correspond to businesses disposed in 2023.

(in € million)

Appendix 4: Free cash flow reconciliations

Download the PDF document

This document contains forward-looking statements that involve risks and uncertainties, including references, concerning the Group’s expected growth and profitability in the future which may significantly impact the expected performance indicated in the forward-looking statements. These risks and uncertainties are linked to factors out of the control of the Company and not precisely estimated, such as market conditions or competitor’s behaviors. Any forward-looking statements made in this document are statements about Atos’s beliefs and expectations and should be evaluated as such. Forward-looking statements include statements that may relate to Atos’s plans, objectives, strategies, goals, future events, future revenues or synergies, or performance, and other information that is not historical information. Actual events or results may differ from those described in this document due to a number of risks and uncertainties that are described within the 2022 Universal Registration Document filed with the Autorité des Marchés Financiers (AMF) on April 21st, 2023 under the registration number D.23-0321 and within the 2023 Consolidated financial statements published by Atos SE on March 26, 2024. Atos does not undertake, and specifically disclaims, any obligation or responsibility to update or amend any of the information above except as otherwise required by law. This document does not contain or constitute an offer of Atos’s shares for sale or an invitation or inducement to invest in Atos’s shares in France, the United States of America or any other jurisdiction.

This document includes information on specific transactions that shall be considered as projects only. In particular, any decision relating to the information or projects mentioned in this document and their terms and conditions will only be made after the ongoing in-depth analysis considering tax, legal, operational, finance, HR and all other relevant aspects have been completed and will be subject to general market conditions and other customary conditions, including governance bodies and shareholders’ approval as well as appropriate processes with the relevant employee representative bodies in accordance with applicable laws.

Atos is a global leader in digital transformation with c. 95,000 employees and annual revenue of c. € 11 billion. European number one in cybersecurity, cloud and high-performance computing, the Group provides tailored end-to-end solutions for all industries in 69 countries. A pioneer in decarbonization services and products, Atos is committed to a secure and decarbonized digital for its clients. Atos is a SE (Societas Europaea), and listed on Euronext Paris.

The purpose of Atos is to help design the future of the information space. Its expertise and services support the development of knowledge, education and research in a multicultural approach and contribute to the development of scientific and technological excellence. Across the world, the Group enables its customers and employees, and members of societies at large to live, work and develop sustainably, in a safe and secure information space.

Investor relations : David Pierre-Kahn | [email protected] | +33 6 28 51 45 96

Individual shareholders : 0805 65 00 75

Press contact : [email protected]

[1] Ratio net debt pre-IFRS16 over EBITDA pre-IFR16; EBITDA computed as OMDA pre-IFRS16 minus anticipated RRI (restructuring, rationalization, interagtion) costs and Other changes

[2] Investors – Atos

[3] Please refer to the disclaimer of this press release

[4] Please refer to the disclaimer of this press release

[5] CAGR : Compound annual growth rate

[6] PF : Pro forma

[7] ratio net debt pre-IFRS16 over EBITDA pre-IFR16; EBITDA computed as OMDA pre-IFRS16 minus anticipated RRI costs and Other changes

France's Atos plunges as refinancing plan fails to reassure

• Medium Text

• Atos needs to raise 600 million euros via debt and equity
• Plans to raise another 600 million via credit lines, guarantees
• Group to reach refinancing agreement by June
• Sees revenue of 9.9 bln eur, operating margin of 4.3% for 2024
• Shares down 14% at 1045 GMT

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Multi-Stakeholder Roundtable passes a Joint Action Plan to manage and protect water resources in Chile’s Salar de Atacama Basin

• For the first time in the Salar de Atacama, around 20 stakeholders from indigenous communities, mining, tourism, agriculture, and authorities, are working on joint solutions to water challenges
• The stakeholders have joined a Multi-Stakeholder Roundtable (Mesa Multiactor) and agreed on a Joint Action Plan
• 14 measures are currently being implemented by the Mesa Multiactor, for the purpose of managing and protecting water resources in the Salar de Atacama basin
• The stakeholders are aiming to institutionalize the Mesa Multiactor to ensure their work continues

With this Joint Action Plan, participants of a Multi-Stakeholder Roundtable (Mesa Multiactor) have agreed on a framework for natural resource management in the Salar de Atacama basin in Chile. The Action Plan was one of the crucial goals of the project funded by the Responsible Lithium Partnership of BASF, BMW Group, the former Daimler AG (now Daimler Truck AG and Mercedes-Benz Group AG), Fairphone, and Volkswagen Group.

For the first time in the Salar de Atacama, around 20 organizations (among them representatives of indigenous communities, civil society, academia and the public and private sectors) are collaborating.

The ecosystem of Salar de Atacama is fragile and there is lack of scientific knowledge on the impacts of lithium mining and other economic activities. Potential risks derived from water and brine table shifts could affect ecosystems and local livelihoods. Water availability emerged as the dominant topic in the Mesa Multiactor, thus taking a central role in the project. The protection of valuable habitat and the Salar’s unique biodiversity are further key concerns.

The local participants have agreed on 30 measures in the Action Plan, including the creation of a cadastre of water rights holders on the river basin, geological and hydrological mapping, campaigns on the challenges of water scarcity, provision of drinking water to local communities, and recycling of grey water. Several of the actions are already completed, others are underway or prioritized for the future.

Furthermore, the Mesa Multiactor has addressed scientific uncertainties surrounding water in the Salar by screening and making available more than 300 studies and reports through a public and accessible library.

The participants have extended the project until February 2025, at the same time aiming to institutionalize the roundtable to ensure their work continues beyond that time.

For more information on the Mesa Multiactor and its initiatives, visit www.mesamultiactor.cl/ .

About Responsible Lithium Partnership

Responsible Lithium Partnership (April 2021-February 2025) is a project in the Salar de Atacama (Chile) commissioned by BASF, BMW Group, Daimler Truck, Fairphone, Mercedes-Benz Group and Volkswagen Group. Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH is the implementing partner in Chile.

At BASF, we create chemistry for a sustainable future. We combine economic success with environmental protection and social responsibility. Around 112,000 employees in the BASF Group contribute to the success of our customers in nearly all sectors and almost every country in the world. Our portfolio comprises six segments: Chemicals, Materials, Industrial Solutions, Surface Technologies, Nutrition & Care and Agricultural Solutions. BASF generated sales of €68.9 billion in 2023. BASF shares are traded on the stock exchange in Frankfurt (BAS) and as American Depositary Receipts (BASFY) in the United States. Further information at www.basf.com .

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