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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.

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Fill out the form to access your free business plan., 3. legitimizing a business idea..

Everyone's got a great idea for a company — until they put pen to paper and realize that it's not exactly feasible.

A business plan is an aspiring entrepreneur's way to prove that a business idea is actually worth pursuing.

As entrepreneurs document their go-to-market process, capital needs, and expected return on investment, entrepreneurs likely come across a few hiccups that will make them second guess their strategies and metrics — and that's exactly what the business plan is for.

It ensures an entrepreneur's ducks are in a row before bringing their business idea to the world and reassures the readers that whoever wrote the plan is serious about the idea, having put hours into thinking of the business idea, fleshing out growth tactics, and calculating financial projections.

4. Getting an A in your business class.

Speaking from personal experience, there's a chance you're here to get business plan ideas for your Business 101 class project.

If that's the case, might we suggest checking out this post on How to Write a Business Plan — providing a section-by-section guide on creating your plan?

What does a business plan need to include?

• Business Plan Subtitle
• Executive Summary
• Company Description
• The Business Opportunity
• Competitive Analysis
• Target Market
• Marketing Plan
• Financial Summary
• Funding Requirements

1. Business Plan Subtitle

Every great business plan starts with a captivating title and subtitle. You’ll want to make it clear that the document is, in fact, a business plan, but the subtitle can help tell the story of your business in just a short sentence.

2. Executive Summary

Although this is the last part of the business plan that you’ll write, it’s the first section (and maybe the only section) that stakeholders will read. The executive summary of a business plan sets the stage for the rest of the document. It includes your company’s mission or vision statement, value proposition, and long-term goals.

3. Company Description

This brief part of your business plan will detail your business name, years in operation, key offerings, and positioning statement. You might even add core values or a short history of the company. The company description’s role in a business plan is to introduce your business to the reader in a compelling and concise way.

4. The Business Opportunity

The business opportunity should convince investors that your organization meets the needs of the market in a way that no other company can. This section explains the specific problem your business solves within the marketplace and how it solves them. It will include your value proposition as well as some high-level information about your target market.

5. Competitive Analysis

Just about every industry has more than one player in the market. Even if your business owns the majority of the market share in your industry or your business concept is the first of its kind, you still have competition. In the competitive analysis section, you’ll take an objective look at the industry landscape to determine where your business fits. A SWOT analysis is an organized way to format this section.

6. Target Market

Who are the core customers of your business and why? The target market portion of your business plan outlines this in detail. The target market should explain the demographics, psychographics, behavioristics, and geographics of the ideal customer.

7. Marketing Plan

Marketing is expansive, and it’ll be tempting to cover every type of marketing possible, but a brief overview of how you’ll market your unique value proposition to your target audience, followed by a tactical plan will suffice.

Think broadly and narrow down from there: Will you focus on a slow-and-steady play where you make an upfront investment in organic customer acquisition? Or will you generate lots of quick customers using a pay-to-play advertising strategy? This kind of information should guide the marketing plan section of your business plan.

8. Financial Summary

Money doesn’t grow on trees and even the most digital, sustainable businesses have expenses. Outlining a financial summary of where your business is currently and where you’d like it to be in the future will substantiate this section. Consider including any monetary information that will give potential investors a glimpse into the financial health of your business. Assets, liabilities, expenses, debt, investments, revenue, and more are all useful adds here.

So, you’ve outlined some great goals, the business opportunity is valid, and the industry is ready for what you have to offer. Who’s responsible for turning all this high-level talk into results? The "team" section of your business plan answers that question by providing an overview of the roles responsible for each goal. Don’t worry if you don’t have every team member on board yet, knowing what roles to hire for is helpful as you seek funding from investors.

10. Funding Requirements

Remember that one of the goals of a business plan is to secure funding from investors, so you’ll need to include funding requirements you’d like them to fulfill. The amount your business needs, for what reasons, and for how long will meet the requirement for this section.

Types of Business Plans

• Startup Business Plan
• Feasibility Business Plan
• Internal Business Plan
• Strategic Business Plan
• Business Acquisition Plan
• Business Repositioning Plan
• Expansion or Growth Business Plan

There’s no one size fits all business plan as there are several types of businesses in the market today. From startups with just one founder to historic household names that need to stay competitive, every type of business needs a business plan that’s tailored to its needs. Below are a few of the most common types of business plans.

For even more examples, check out these sample business plans to help you write your own .

1. Startup Business Plan

As one of the most common types of business plans, a startup business plan is for new business ideas. This plan lays the foundation for the eventual success of a business.

The biggest challenge with the startup business plan is that it’s written completely from scratch. Startup business plans often reference existing industry data. They also explain unique business strategies and go-to-market plans.

Because startup business plans expand on an original idea, the contents will vary by the top priority goals.

For example, say a startup is looking for funding. If capital is a priority, this business plan might focus more on financial projections than marketing or company culture.

2. Feasibility Business Plan

This type of business plan focuses on a single essential aspect of the business — the product or service. It may be part of a startup business plan or a standalone plan for an existing organization. This comprehensive plan may include:

• A detailed product description
• Market analysis
• Technology needs
• Production needs
• Financial sources
• Production operations

According to CBInsights research, 35% of startups fail because of a lack of market need. Another 10% fail because of mistimed products.

Some businesses will complete a feasibility study to explore ideas and narrow product plans to the best choice. They conduct these studies before completing the feasibility business plan. Then the feasibility plan centers on that one product or service.

3. Internal Business Plan

Internal business plans help leaders communicate company goals, strategy, and performance. This helps the business align and work toward objectives more effectively.

Besides the typical elements in a startup business plan, an internal business plan may also include:

• Department-specific budgets
• Target demographic analysis
• Market size and share of voice analysis
• Action plans
• Sustainability plans

Most external-facing business plans focus on raising capital and support for a business. But an internal business plan helps keep the business mission consistent in the face of change.

4. Strategic Business Plan

Strategic business plans focus on long-term objectives for your business. They usually cover the first three to five years of operations. This is different from the typical startup business plan which focuses on the first one to three years. The audience for this plan is also primarily internal stakeholders.

These types of business plans may include:

• Relevant data and analysis
• Assessments of company resources
• Vision and mission statements

It's important to remember that, while many businesses create a strategic plan before launching, some business owners just jump in. So, this business plan can add value by outlining how your business plans to reach specific goals. This type of planning can also help a business anticipate future challenges.

5. Business Acquisition Plan

Investors use business plans to acquire existing businesses, too — not just new businesses.

A business acquisition plan may include costs, schedules, or management requirements. This data will come from an acquisition strategy.

A business plan for an existing company will explain:

• How an acquisition will change its operating model
• What will stay the same under new ownership
• Why things will change or stay the same
• Acquisition planning documentation
• Timelines for acquisition

Additionally, the business plan should speak to the current state of the business and why it's up for sale.

For example, if someone is purchasing a failing business, the business plan should explain why the business is being purchased. It should also include:

• What the new owner will do to turn the business around
• Historic business metrics
• Sales projections after the acquisition
• Justification for those projections

6. Business Repositioning Plan

When a business wants to avoid acquisition, reposition its brand, or try something new, CEOs or owners will develop a business repositioning plan.

This plan will:

• Acknowledge the current state of the company.
• State a vision for the future of the company.
• Explain why the business needs to reposition itself.
• Outline a process for how the company will adjust.

Companies planning for a business reposition often do so — proactively or retroactively — due to a shift in market trends and customer needs.

For example, shoe brand AllBirds plans to refocus its brand on core customers and shift its go-to-market strategy. These decisions are a reaction to lackluster sales following product changes and other missteps.

7. Expansion or Growth Business Plan

When your business is ready to expand, a growth business plan creates a useful structure for reaching specific targets.

For example, a successful business expanding into another location can use a growth business plan. This is because it may also mean the business needs to focus on a new target market or generate more capital.

This type of plan usually covers the next year or two of growth. It often references current sales, revenue, and successes. It may also include:

• SWOT analysis
• Growth opportunity studies
• Financial goals and plans
• Marketing plans
• Capability planning

These types of business plans will vary by business, but they can help businesses quickly rally around new priorities to drive growth.

Getting Started With Your Business Plan

At the end of the day, a business plan is simply an explanation of a business idea and why it will be successful. The more detail and thought you put into it, the more successful your plan — and the business it outlines — will be.

When writing your business plan, you’ll benefit from extensive research, feedback from your team or board of directors, and a solid template to organize your thoughts. If you need one of these, download HubSpot's Free Business Plan Template below to get started.

Editor's note: This post was originally published in August 2020 and has been updated for comprehensiveness.

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How To Write A Business Plan (2024 Guide)

Updated: Apr 17, 2024, 11:59am

Table of Contents

Brainstorm an executive summary, create a company description, brainstorm your business goals, describe your services or products, conduct market research, create financial plans, bottom line, frequently asked questions.

Every business starts with a vision, which is distilled and communicated through a business plan. In addition to your high-level hopes and dreams, a strong business plan outlines short-term and long-term goals, budget and whatever else you might need to get started. In this guide, we’ll walk you through how to write a business plan that you can stick to and help guide your operations as you get started.

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Drafting the Summary

An executive summary is an extremely important first step in your business. You have to be able to put the basic facts of your business in an elevator pitch-style sentence to grab investors’ attention and keep their interest. This should communicate your business’s name, what the products or services you’re selling are and what marketplace you’re entering.

Ask for Help

When drafting the executive summary, you should have a few different options. Enlist a few thought partners to review your executive summary possibilities to determine which one is best.

After you have the executive summary in place, you can work on the company description, which contains more specific information. In the description, you’ll need to include your business’s registered name , your business address and any key employees involved in the business. 

The business description should also include the structure of your business, such as sole proprietorship , limited liability company (LLC) , partnership or corporation. This is the time to specify how much of an ownership stake everyone has in the company. Finally, include a section that outlines the history of the company and how it has evolved over time.

Wherever you are on the business journey, you return to your goals and assess where you are in meeting your in-progress targets and setting new goals to work toward.

Numbers-based Goals

Goals can cover a variety of sections of your business. Financial and profit goals are a given for when you’re establishing your business, but there are other goals to take into account as well with regard to brand awareness and growth. For example, you might want to hit a certain number of followers across social channels or raise your engagement rates.

Another goal could be to attract new investors or find grants if you’re a nonprofit business. If you’re looking to grow, you’ll want to set revenue targets to make that happen as well.

Intangible Goals

Goals unrelated to traceable numbers are important as well. These can include seeing your business’s advertisement reach the general public or receiving a terrific client review. These goals are important for the direction you take your business and the direction you want it to go in the future.

The business plan should have a section that explains the services or products that you’re offering. This is the part where you can also describe how they fit in the current market or are providing something necessary or entirely new. If you have any patents or trademarks, this is where you can include those too.

If you have any visual aids, they should be included here as well. This would also be a good place to include pricing strategy and explain your materials.

This is the part of the business plan where you can explain your expertise and different approach in greater depth. Show how what you’re offering is vital to the market and fills an important gap.

You can also situate your business in your industry and compare it to other ones and how you have a competitive advantage in the marketplace.

Other than financial goals, you want to have a budget and set your planned weekly, monthly and annual spending. There are several different costs to consider, such as operational costs.

Business Operations Costs

Rent for your business is the first big cost to factor into your budget. If your business is remote, the cost that replaces rent will be the software that maintains your virtual operations.

Marketing and sales costs should be next on your list. Devoting money to making sure people know about your business is as important as making sure it functions.

Other Costs

Although you can’t anticipate disasters, there are likely to be unanticipated costs that come up at some point in your business’s existence. It’s important to factor these possible costs into your financial plans so you’re not caught totally unaware.

Business plans are important for businesses of all sizes so that you can define where your business is and where you want it to go. Growing your business requires a vision, and giving yourself a roadmap in the form of a business plan will set you up for success.

How do I write a simple business plan?

When you’re working on a business plan, make sure you have as much information as possible so that you can simplify it to the most relevant information. A simple business plan still needs all of the parts included in this article, but you can be very clear and direct.

What are some common mistakes in a business plan?

The most common mistakes in a business plan are common writing issues like grammar errors or misspellings. It’s important to be clear in your sentence structure and proofread your business plan before sending it to any investors or partners.

What basic items should be included in a business plan?

When writing out a business plan, you want to make sure that you cover everything related to your concept for the business,  an analysis of the industry―including potential customers and an overview of the market for your goods or services―how you plan to execute your vision for the business, how you plan to grow the business if it becomes successful and all financial data around the business, including current cash on hand, potential investors and budget plans for the next few years.

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Julia is a writer in New York and started covering tech and business during the pandemic. She also covers books and the publishing industry.

Kelly Main is a Marketing Editor and Writer specializing in digital marketing, online advertising and web design and development. Before joining the team, she was a Content Producer at Fit Small Business where she served as an editor and strategist covering small business marketing content. She is a former Google Tech Entrepreneur and she holds an MSc in International Marketing from Edinburgh Napier University. Additionally, she is a Columnist at Inc. Magazine.

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What Is a Business Plan? Definition and Planning Essentials Explained

Posted february 21, 2022 by kody wirth.

What is a business plan? It’s the roadmap for your business. The outline of your goals, objectives, and the steps you’ll take to get there. It describes the structure of your organization, how it operates, as well as the financial expectations and actual performance. 

A business plan can help you explore ideas, successfully start a business, manage operations, and pursue growth. In short, a business plan is a lot of different things. It’s more than just a stack of paper and can be one of your most effective tools as a business owner. 

Let’s explore the basics of business planning, the structure of a traditional plan, your planning options, and how you can use your plan to succeed. 

What is a business plan?

A business plan is a document that explains how your business operates. It summarizes your business structure, objectives, milestones, and financial performance. Again, it’s a guide that helps you, and anyone else, better understand how your business will succeed.  

Why do you need a business plan?

The primary purpose of a business plan is to help you understand the direction of your business and the steps it will take to get there. Having a solid business plan can help you grow up to 30% faster and according to our own 2021 Small Business research working on a business plan increases confidence regarding business health—even in the midst of a crisis. 

These benefits are directly connected to how writing a business plan makes you more informed and better prepares you for entrepreneurship. It helps you reduce risk and avoid pursuing potentially poor ideas. You’ll also be able to more easily uncover your business’s potential. By regularly returning to your plan you can understand what parts of your strategy are working and those that are not.

That just scratches the surface for why having a plan is valuable. Check out our full write-up for fifteen more reasons why you need a business plan .  

What can you do with your plan?

So what can you do with a business plan once you’ve created it? It can be all too easy to write a plan and just let it be. Here are just a few ways you can leverage your plan to benefit your business.

Test an idea

Writing a plan isn’t just for those that are ready to start a business. It’s just as valuable for those that have an idea and want to determine if it’s actually possible or not. By writing a plan to explore the validity of an idea, you are working through the process of understanding what it would take to be successful. 

The market and competitive research alone can tell you a lot about your idea. Is the marketplace too crowded? Is the solution you have in mind not really needed? Add in the exploration of milestones, potential expenses, and the sales needed to attain profitability and you can paint a pretty clear picture of the potential of your business.

Document your strategy and goals

For those starting or managing a business understanding where you’re going and how you’re going to get there are vital. Writing your plan helps you do that. It ensures that you are considering all aspects of your business, know what milestones you need to hit, and can effectively make adjustments if that doesn’t happen. 

With a plan in place, you’ll have an idea of where you want your business to go as well as how you’ve performed in the past. This alone better prepares you to take on challenges, review what you’ve done before, and make the right adjustments.

Pursue funding

Even if you do not intend to pursue funding right away, having a business plan will prepare you for it. It will ensure that you have all of the information necessary to submit a loan application and pitch to investors. So, rather than scrambling to gather documentation and write a cohesive plan once it’s relevant, you can instead keep your plan up-to-date and attempt to attain funding. Just add a use of funds report to your financial plan and you’ll be ready to go.

The benefits of having a plan don’t stop there. You can then use your business plan to help you manage the funding you receive. You’ll not only be able to easily track and forecast how you’ll use your funds but easily report on how it’s been used. 

Better manage your business

A solid business plan isn’t meant to be something you do once and forget about. Instead, it should be a useful tool that you can regularly use to analyze performance, make strategic decisions, and anticipate future scenarios. It’s a document that you should regularly update and adjust as you go to better fit the actual state of your business.

Doing so makes it easier to understand what’s working and what’s not. It helps you understand if you’re truly reaching your goals or if you need to make further adjustments. Having your plan in place makes that process quicker, more informative, and leaves you with far more time to actually spend running your business.

What should your business plan include?

The content and structure of your business plan should include anything that will help you use it effectively. That being said, there are some key elements that you should cover and that investors will expect to see. 

Executive summary

The executive summary is a simple overview of your business and your overall plan. It should serve as a standalone document that provides enough detail for anyone—including yourself, team members, or investors—to fully understand your business strategy. Make sure to cover the problem you’re solving, a description of your product or service, your target market, organizational structure, a financial summary, and any necessary funding requirements.

This will be the first part of your plan but it’s easiest to write it after you’ve created your full plan.

Products & Services

When describing your products or services, you need to start by outlining the problem you’re solving and why what you offer is valuable. This is where you’ll also address current competition in the market and any competitive advantages your products or services bring to the table. Lastly, be sure to outline the steps or milestones that you’ll need to hit to successfully launch your business. If you’ve already hit some initial milestones, like taking pre-orders or early funding, be sure to include it here to further prove the validity of your business. 

Market analysis

A market analysis is a qualitative and quantitative assessment of the current market you’re entering or competing in. It helps you understand the overall state and potential of the industry, who your ideal customers are, the positioning of your competition, and how you intend to position your own business. This helps you better explore the long-term trends of the market, what challenges to expect, and how you will need to initially introduce and even price your products or services.

Check out our full guide for how to conduct a market analysis in just four easy steps .  

Marketing & sales

Here you detail how you intend to reach your target market. This includes your sales activities, general pricing plan, and the beginnings of your marketing strategy. If you have any branding elements, sample marketing campaigns, or messaging available—this is the place to add it. 

Additionally, it may be wise to include a SWOT analysis that demonstrates your business or specific product/service position. This will showcase how you intend to leverage sales and marketing channels to deal with competitive threats and take advantage of any opportunities.

Check out our full write-up to learn how to create a cohesive marketing strategy for your business. 

Organization & management

This section addresses the legal structure of your business, your current team, and any gaps that need to be filled. Depending on your business type and longevity, you’ll also need to include your location, ownership information, and business history. Basically, add any information that helps explain your organizational structure and how you operate. This section is particularly important for pitching to investors but should be included even if attempted funding is not in your immediate future.

Financial projections

Possibly the most important piece of your plan, your financials section is vital for showcasing the viability of your business. It also helps you establish a baseline to measure against and makes it easier to make ongoing strategic decisions as your business grows. This may seem complex on the surface, but it can be far easier than you think. 

Focus on building solid forecasts, keep your categories simple, and lean on assumptions. You can always return to this section to add more details and refine your financial statements as you operate. 

Here are the statements you should include in your financial plan:

• Sales and revenue projections
• Profit and loss statement
• Cash flow statement
• Balance sheet

The appendix is where you add additional detail, documentation, or extended notes that support the other sections of your plan. Don’t worry about adding this section at first and only add documentation that you think will be beneficial for anyone reading your plan.

Types of business plans explained

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

Traditional business plan

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

This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix. We recommend only starting with this business plan format if you plan to immediately pursue funding and already have a solid handle on your business information. 

Business model canvas

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

The structure ditches a linear structure in favor of a cell-based template. It encourages you to build connections between every element of your business. It’s faster to write out and update, and much easier for you, your team, and anyone else to visualize your business operations. This is really best for those exploring their business idea for the first time, but keep in mind that it can be difficult to actually validate your idea this way as well as adapt it into a full plan.

One-page business plan

The true middle ground between the business model canvas and a traditional business plan is the one-page business plan. This format is a simplified version of the traditional plan that focuses on the core aspects of your business. It basically serves as a beefed-up pitch document and can be finished as quickly as the business model canvas.

By starting with a one-page plan, you give yourself a minimal document to build from. You’ll typically stick with bullet points and single sentences making it much easier to elaborate or expand sections into a longer-form business plan. This plan type is useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.

Now, the option that we here at LivePlan recommend is the Lean Plan . This is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance.

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

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

Try the LivePlan Method for Lean Business Planning

Now that you know the basics of business planning, it’s time to get started. Again we recommend leveraging a Lean Plan for a faster, easier, and far more useful planning process. 

To get familiar with the Lean Plan format, you can download our free Lean Plan template . However, if you want to elevate your ability to create and use your lean plan even further, you may want to explore LivePlan. 

It features step-by-step guidance that ensures you cover everything necessary while reducing the time spent on formatting and presenting. You’ll also gain access to financial forecasting tools that propel you through the process. Finally, it will transform your plan into a management tool that will help you easily compare your forecasts to your actual results. 

Check out how LivePlan streamlines Lean Planning by downloading our Kickstart Your Business ebook .

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Business Plan: What It Is + How to Write One

Discover what a business plan includes and how writing one can foster your business’s development.

What is a business plan? 

Think of a business plan as a document that guides the journey to start-up and beyond. Business plans are written documents that define your business goals and the strategies you’ll use to achieve those goals. In addition to exploring the competitive environment in which the business will operate, a business plan also analyses a market and different customer segments, describes the products and services, lists business strategies for success, and outlines financial planning.  

How to write a business plan 

In the sections below, you’ll build the following components of your business plan:

Executive summary

Business description 

Products and services 

Competitor analysis 

Marketing plan and sales strategies 

Brand strategy

Financial planning

Explore each section to bring fresh inspiration and reveal new possibilities for developing your business. Depending on your format, you may adapt the sections, skip over some, or go deeper into others. Consider your first draft a foundation for your efforts and one you can revise, as needed, to account for changes in any area of your business.  

1. Executive summary 

This short section introduces the business plan as a whole to the people who will be reading it, including investors, lenders, or other members of your team. Start with a sentence or two about your business, development goals, and why it will succeed. If you are seeking funding, summarise the basics of the financial plan. 

2. Business description 

You can use this section to provide detailed information about your company and how it will operate in the marketplace. 

Mission statement: What drives your desire to start a business? What purpose are you serving? What do you hope to achieve for your business, the team, and your customers? 

Revenue streams: From what sources will your business generate revenue? Examples include product sales, service fees, subscriptions, rental fees, licence fees, and more. 

Leadership: Describe the leaders in your business, their roles and responsibilities, and your vision for building teams to perform various functions, such as graphic design, product development, or sales.  

Legal structure: If you’ve incorporated your business, include the legal structure here and the rationale behind this choice. 

3. Competitor analysis 

This section will assess potential competitors, their offers, and marketing and sales efforts. For each competitor, explore the following: 

Value proposition: What outcome or experience does this brand promise?

Products and services: How does each solve customer pain points and fulfill desires? What are the price points? 

Marketing: Which channels do competitors use to promote? What kind of content does this brand publish on these channels? What messaging does this brand use to communicate value to customers?  

Sales: What sales process or buyer’s journey does this brand lead customers through?

4. Products and services

Use this section to describe everything your business offers to its target market. For every product and service, list the following: 

The value proposition or promise to customers, in terms of how they will experience it

How the product serves customers, addresses their pain points, satisfies their desires, and improves their lives

The features or outcomes that make the product better than those of competitors

Your price points and how these compare to competitors

5. Marketing plan and sales strategies 

In this section, you’ll draw from thorough market research to describe your target market and how you will reach it. 

Who are your ideal customers?   

How can you describe this segment according to their demographics (age, ethnicity, income, location, etc.) and psychographics (beliefs, values, aspirations, lifestyle, etc.)? 

What are their daily lives like? 

What problems and challenges do they experience? 

What words, phrases, ideas, and concepts do consumers in your target market use to describe these problems when posting on social media or engaging with your competitors?  

What messaging will present your products as the best on the market? How will you differentiate messaging from competitors? 

On what marketing channels will you position your products and services?

How will you design a customer journey that delivers a positive experience at every touchpoint and leads customers to a purchase decision?

6. Brand strategy 

In this section, you will describe your business’s design, personality, values, voice, and other details that go into delivering a consistent brand experience. 

What are the values that define your brand?

What visual elements give your brand a distinctive look and feel?

How will your marketing messaging reflect a distinctive brand voice, including tone, diction, and sentence-level stylistic choices? 

How will your brand look and sound throughout the customer journey? 

Define your brand positioning statement. What will inspire your audience to choose your brand over others? What experiences and outcomes will your audience associate with your brand? 

7. Financial planning  

In this section, you will explore your business’s financial future. Suppose you are writing a traditional business plan to seek funding. In that case, this section is critical for demonstrating to lenders or investors you have a strategy for turning your business ideas into profit. For a lean start-up business plan, this section can provide a valuable exercise for planning how to invest resources and generate revenue [ 1 ].  

Use past financials and other sections of this business plan to begin your financial planning, such as your price points or sales strategies. 

How many individual products or service packages do you plan to sell over a specific period?

List your business expenses, such as subscribing to software or other services, hiring contractors or employees, purchasing physical supplies or equipment, etc.

What is your break-even point or the amount you must sell to cover all expenses?

Create a sales forecast for the next three to five years: (No. of units to sell X price for each unit) – (cost per unit X No. of units) = sales forecast

Quantify how much capital you have on hand.

When writing a traditional business plan to secure funding, you may append supporting documents, such as licences, permits, patents, letters of reference, resumes, product blueprints, brand guidelines, the industry awards you’ve received, and media mentions and appearances.

Business plan key takeaways and best practices

Remember: Creating a business plan is crucial when starting a business. You can use this document to guide your decisions and actions and even seek funding from lenders and investors. 

Keep these best practices in mind:

Your business plan should evolve as your business grows. Return to it periodically, such as quarterly or annually, to update individual sections or explore new directions your business can take.

Make sure everyone on your team has a copy of the business plan, and welcome their input as they perform their roles. 

Ask fellow entrepreneurs for feedback on your business plan and look for opportunities to strengthen it, from conducting more market and competitor research to implementing new strategies for success. 

Start your business with Coursera 

Ready to start your business? Watch this video on the Lean approach from the Entrepreneurship Specialisation on Coursera: 

Article sources

Inc. “ How to Write the Financial Section of a Business Plan ,   https://www.inc.com/guides/business-plan-financial-section.html.” Accessed April 15, 2024.

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How to Write a Business Plan, Step by Step

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What is a business plan?

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

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

ZenBusiness

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

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

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

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

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

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

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

Your business’s registered name.

Address of your business location .

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

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

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

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

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

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

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

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

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

You should include the following:

An explanation of how your product or service works.

The pricing model for your product or service.

The typical customers you serve.

Your supply chain and order fulfillment strategy.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

NerdWallet’s picks for setting up your business finances:

The best business checking accounts .

The best business credit cards .

The best accounting software .

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

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

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

Licenses and permits.

Equipment leases.

Bank statements.

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

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

How much do you need?

with Fundera by NerdWallet

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

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

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

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

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

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

On a similar note...

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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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What is a Business Plan and why do you NEED one?

• EntrepreneursGateway.com Team
• October 31, 2018

If you want your business to be successful, you’ll need to produce a business plan.

In this article, we will explore why every company needs a business plan as well as how you can identify which business plan is right for you. We will cover:

• What a business plan is
• Why having one is so important
• What components you should include in it
• Different types of business plans you can have

Whether  you need a one-page business plan or something more in-depth, this ultimate business planning guide has you covered!

We will walk you through all the steps necessary to impress your investors and guarantee business success.

Ready? Let’s go.

What you need to know before writing your plan

It’s all about the 7 Ps!

P rior P reparation and P lanning P revents P i** P oor P erformance!!!

Bottom Line:

This article tells you exactly what you need to know before writing your business plan.

This article is part of the Business Planning Hub , where you’ll find lots of guides and resources to help you create the perfect business plan!

Table of Contents

Keep in mind:

It is a MUST for all businesses to have a business plan – no matter if you are looking for investment, if you’re a one-person business, or a multi-national million-dollar company.

It has been proven in studies that   companies that have a business plan grow 30% faster than those that don’t – while 3 in 5 business go bust in their first 2 years of trading.

As the adage goes, if you fail to plan, you’re planning to fail…

Let’s get started.

Businesses who have a #businessplan grow 30% faster than those who don't have one. Tweet

#1 What is a Business Plan?

To put it simply, a business plan is a written document that outlines your core business objectives and how you are planning to achieve them over a period of time.

Think of it as a roadmap.

It explains the nature of a business, sales, goals, marketing technique, strategy and also financial history, as well as consisting of a forecast revenue and loss declaration.

Your business plan ought to comply with the standards pertaining to form and content. There are important areas that should include certain components and address appropriate concerns that individuals who review your plan are most likely to ask.

So, if you’ve ever had that business idea but are short for ways on how to realize it … this section is for you.

How long should my business plan be?

A business plan can vary from a few pages to hundreds pages (usually for large businesses).

If you have a fairly small business (like a cosmetic or bakery one, for example), you should keep your plan as brief and concise as possible – ideally under 30 pages. Even more so if you are planning to submit it to investors or bankers to secure funding!

The business plan that most of us need is what is known as the “ Lean Business Plan ”.

This is something created only  for internal use within the organization, and has bullet points and projections. It’s essential to keep this up to date.

Compiling a Lean Business Plan is a much less daunting task, because it makes the planning process a lot easier. 

Just keep it simple and let it grow organically.

#2 How should you present your business plan?

You don’t necessarily have to print out your business plan (unless on special occasions such as sharing with third parties).

K eep in mind:

A business plan is never a finished document.

If you are using it correctly, you are going to keep tweaking it while checking the health of your business.

#3 What should be included in a formal business plan?

If it is funding or investment that you are looking for , then you will need to do a more formal business plan.

In a formal business plan, you need to include:

• The Executive Summary
• Company Overview
• Information about your Management Team and what they bring to the Company
• Information about your products and/or services
• Marketing Plan
• Your Company Milestones
• A Financial Plan with graphs and charts to illustrate your financial information.

How frequently should you update your business plan?

Updating your business plan is key if you want to grow your business successfully.

Studies show that people who write business plans not only grow their companies faster , but also have a greater chance of getting the resources they need and reach their sale targets more quickly. They are also more likely to deal with product development successfully, and are less likely to see their business fail.

According to William Gartner, Clemson University Entrepreneurship Professor: “Business plans are all about walking the walk.”

PRO TIP : Why not schedule a repeat event on your calendar app? This can be, say, the last Wednesday of every month.

Whatever you choose, be sure to set aside a day each month to have your monthly plan review meeting.

By reviewing your actual financial health compared to your financial projections, you will be sure to have an overview of your business growth and make sure it’s always on track .

A #businessplan is never a finished document. It’s always going to need tweaking to support the #health of your business. Tweet

#4 Who needs a Business Plan?

Do i need a business plan.

The short answer is:

The long anwer is…

It might depend on your situation. If you’re simply looking to pick up the odd bit of freelance work to boost your monthly earnings, then you can do without a business plan.

If this is a venture that is going to take a lot of time, resources, and money, then you will need a business plan.

 This will be critical to your success.

ALL businesses should have a business plan , regardless of the stage they are in.

If you’re already an established business, how can you keep track of ever-changing market conditions and any new opportunities that are out there without a plan? A business plan is just as important to a company that’s over 10 years old and looking to grow, as it is to a start-up that’s looking to raise funds.

All businesses should have both long and short term goals and Sales & Marketing budgets .

1. Business Plan for Start-ups

If you’re a start-up business, having a business plan will help you break uncertainty down into meaningful pieces – such as your projected sales, your milestones, budget expenses and tasks.

With this kind of plan, you can explain what your company is looking to do, how it plans to accomplish its goals, what amount of money it needs to start with, as well as what people are qualified to do the job.

2. Business Plan for Existing Businesses

If you’re already in business, having a business plan will help you to steer your company and take advantage of any new opportunities in the market .

Existing businesses will use their plan to track their results, reinforce their strategy, manage their resources and responsibilities.

Having a business plan can also be a great competitive advantage and help you spot any potential problems.

People investing in a business plan see their business grow 30% faster. #ultimatebusinessplanguide Tweet

#5 Choosing the Right Business Plan for your Requirements

Before even starting to write  your business plan, it’s vital that you think about the following:

• What are your goals for your plan?
• What’s your audience ?

It’s important to explain that the format of your business plan can vary depending upon the business type and the audience .

For example:

If you are writing a Restaurant business plan , you might want to include the location of the restaurant and any renovation work that needs doing.

If you are writing a Medical Center business plan , you may well need to go into details regarding government approval processes, etc.

Of course the language that you would use for the medical centre would be a lot more technical than that for the restaurant.

Business Plans also differ in:

• Presentation 

Business Plans that are created solely for internal use would use much more causal language and wouldn’t need a polished finish.

If you are looking for investment, your business plan will need to be of the highest spec.

#6 The most common types of business plans:

1. one-page business plan.

The purpose of a one-page business plan is simply to be a great ‘introductory’ tool for you to use with outsiders, for example potential investors. 

It is simply a short, quick business summary that fits on one page . It’s very concise and to the point.

You will need a much more detailed plan later, but initially, this is a great way to get that ‘first meeting’ and your foot in the door.

Having your summary on one page is also a great way to be able to see your company concept at a quick glance, so that it’s easy to refine.

Learn more about creating a  One Page Business Plan .

2. The Lean Business Plan

  A Lean Business Plan is slightly more detailed than the one-page business plan, as it includes some financial information; but it’s nowhere near as in depth as a traditional business plan.

The main purpose of having a Lean Plan would be for internal use, such as using it as a strategic planning tool.

The main aspects a Lean Business Plan focuses on are:

• Business Strategy

With a Lean Plan , you tend to skip out sections such as the history of the company and your management team. (If its main purpose is for internal use, you don’t need this information.)

We recommend you review your lean plan at least every month. If you do this regularly, you would only need an hour or two every month to revise it.

Lean Business Plans are a great management tool that can guide both start-up companies and existing businesses. They help you direct your business growth, make you think about your business strategically, and measure your progress.

3. The Standard Business Plan (External Business Plan)

In this section, you can find the more formal of business plans , which are meant for outsiders to read. This is primarily for businesses who are looking for investment.

The Standard Business Plan should be considered an extension of the Lean Business Plan , but it should be much better presented with a lot more attention to detail. 

See our example standard business plans

If you’re looking for a more detailed plan, why not take a look at our business plan examples:

• Ecommerce Business Plan sample
• Bar & Restaurant Business Plan sample
• Medical Center Business Plan sample
• Outdoor Activity Business Plan sample
• Advertising Agency Business Plan sample
• Real Estate Business Plan sample
• Boutique Business Plan sample
• Baker Business Plan sample

#7 What you should include in your Formal Business Plan

What are the components of a business plan? Well, this will vary from plan to plan. However, when writing a formal business plan , there are some elements that definitely need to be included.

1. Executive Summary

The Executive Summary section of your business plan usually goes at the beginning of your business plan and outlines what your business does.

It’s an overview.

It summarizes your key points and prepares the rest of the business plan content.

It’s vital that you provide a solid case for your business idea, which is why your executive summary is so important . Many potential investors may never read more than this section.

Be sure to include the problem your business is going to solve, the target market, any key financial highlights, and an overview of the key management team members.

Remember: The key is to hook the reader.

2. The opportunity

This section of the plan describes the following:

• Target Market
• Market Analysis
• Projections

Competition

Your target market.

You need to define who you are going to sell to, and especially: you need to understand who your target market is , so that you can market to them. 

Market Trends

You need to be able to know if there are any changes happening in your target market, and explain if these trends will go in your favour.

Market Growth

You need to be able to show whether your target market has grown or shrunk over the past few years. Do your research: you can use the Internet, as well as trade associations and any journalists and articles to gauge the market growth.

It’s encouraging to show there is a growing market, which in turn shows there is a stronger demand for your products/services.

It’s good to research your competition.What other options are out there that address your customers’ needs? Why is your solution a better choice? What makes you stand out?

3. Execution

Products and services.

This section outlines the core of your achievements. You detail the actual problem you want to solve, how you plan to solve it, your competitive landscape and competitive edge.

Marketing and Sales

This informs the reader how you plan to reach your target market. How you plan to price your products/services, what methods you will use to promote your products/services as well as the sales processes you have put in place.

You can include how you plan to operate the business. This can mean your office locations, any technology such as software systems etc, and any regulatory issues.

Milestones and Metrics

Having milestones lays out specific tasks which you plan to achieve. Set realistic dates for when they need to be complete and assign a person to these tasks to make them accountable.

You should also give details of key metrics which will help track your business growth. This includes:

• Generated Sales Leads
• Visitors to your website

This all helps in determining your business health.

Company overview

For an external business plan, your company overview gives a brief summary of the following:

• Legal structure
• Mission Statement.

For Internal plans, this is not required.

4. Management Team

This section should show all key management team players and include a biography of them to show it is made up of the right type of people.

Business plans not only help identify the strengths of a business, but also any areas that need to be improved. If you identify any gaps within the management team, it shows not only knowledge, but also foresight.

5. Financial plan

This is a crucial part of your business plan. To be successful in your business, you need to pay close attention to how much money you are bringing in and how much money is going out.

If you’re starting a business, having a financial plan enables you to know how much you need to get your business up and running, and then know what to ask a bank or investor.

A financial plan typically includes:

• Sales Forecast
• Personnel Plan
• Profit and Loss Statement
• Cash Flow Statement
• Balance Sheet.

#8 Your Business Plan is a Management Tool

Having a business plan doesn’t guarantee success.

Think of it as your ongoing management tool.

Ensure you constantly review it.

Additional Resources

To help you even further in creating your business plan, why not check out the following articles to help you in writing the perfect plan to impress:

• 40 Common Business Plan Mistakes
• How to Write a Business Proposal in 5 Easy Steps
• 10 FREE Business Name Generator Tools to find your perfect business name
• Understanding your Business Model
• How to write a One Page business plan FAST
• Which type of Business Plan is best for you?

Now, over to you...

Now I’d love to hear from you:

Are you still unsure of which business plan you need?

Maybe you have written a business plan and would like us to review it?

Leave any comments below and I will be sure to answer as soon as they come in!

Useful Links

Leave a comment cancel reply.

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1.1: Chapter 1 – Developing a Business Plan

• Last updated
• Save as PDF
• Page ID 21274

• Lee A. Swanson
• University of Saskatchewan

Learning Objectives

After completing this chapter, you will be able to

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

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

Purposes for Developing Business Plans

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

Internal Purposes

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

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

External Purposes

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

Business Plan Development Principles

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

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

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

General Guidelines for Developing Business Plans

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

As You Write Your Business Plan

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

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

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

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

1. First main heading

1.1 First subheading under the first main heading

1.1.1. First sub-subheading under the first subheading

2. Second main heading

2.1 First subheading under the second main heading

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

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

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

8 Business Plan Templates You Can Get for Free

8 min. read

Updated April 10, 2024

A business plan template can be an excellent tool to simplify the creation of your business plan. 

The pre-set structure helps you organize ideas, covers all critical business information, and saves you time and effort on formatting.

The only issue? There are SO many free business plan templates out there. 

So, which ones are actually worth using? 

To help remove the guesswork, I’ve rounded up some of the best business plan templates you can access right now. 

These are listed in no particular order, and each has its benefits and drawbacks.

What to look for in a business plan template

Not all business plan templates are created equal. As you weigh your options and decide which template(s) you’ll use, be sure to review them with the following criteria in mind:

• Easy to edit: A template should save you time. That won’t be the case if you have to fuss around figuring out how to edit the document, or even worse, it doesn’t allow you to edit at all.
• Contains the right sections: A good template should cover all essential sections of a business plan , including the executive summary, product/service description, market/competitive analysis, marketing and sales plan, operations, milestones, and financial projections. 
• Provides guidance: You should be able to trust that the information in a template is accurate. That means the organization or person who created the template is highly credible, known for producing useful resources, and ideally has some entrepreneurial experience.
• Software compatibility: Lastly, you want any template to be compatible with the software platforms you use. More than likely, this means it’s available in Microsoft Word, Google Docs, or PDF format at a minimum. 

1. Bplans — A plan with expert guidance

Since you’re already on Bplans, I have to first mention the templates that we have available. 

Our traditional and one-page templates were created by entrepreneurs and business owners with over 80 years of collective planning experience. We revisit and update them annually to ensure they are approachable, thorough, and aligned with our team’s evolving best practices.  

The templates, available in Word, PDF, or Google Doc formats, include in-depth guidance on what to include in each section, expert tips, and links to additional resources. 

Plus, we have over 550 real-world sample business plans you can use for guidance when filling out your template.

Download: Traditional lender-ready business plan template or a simple one-page plan template .

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2. SBA — Introduction to business plans

The U.S. Small Business Administration (SBA) offers two different business plan templates along with a short planning guide. 

While not incredibly in-depth, it’s enough to help you understand how traditional and lean plans are structured and what information needs to be covered. The templates themselves are more like examples, providing you with a finished product to reference as you write your plan.

The key benefit of using these templates is that they were created by the SBA. While they may provide less guidance, you can be assured that the information and structure meet their expectations.

Explore: The SBA’s planning guide and free templates

3. SCORE — Planning workbook

SCORE’s template is more like a workbook. It includes exercises after each section to help you get your ideas down and turn them into a structured plan.

The market research worksheets are especially useful. They provide a clear framework for identifying your target market and analyzing competitors from multiple angles. Plus, they give you an easy way to document all the information you’re collecting.

You will likely have to remove the exercises in this template to make it investor-ready. But it can be worth it if you’re struggling to get past a blank page and want a more interactive planning method.

Download: SCORE’s business plan template

4. PandaDoc — A template with fillable forms

PandaDoc’s library offers a variety of industry-specific business plan templates that feature a modern design flair and concise instructions. 

These templates are designed for sharing. They include fillable fields and sections for non-disclosure agreements, which may be necessary when sending a plan to investors.  

But the real benefit is their compatibility with PandaDoc’s platform. Yes, they are free, but if you’re a PandaDoc subscriber, you’ll have far more customization options. 

Out of all their templates, the standard business plan template is the most in-depth. The rest, while still useful, go a bit lighter on guidance in favor of tailoring the plan to a specific industry.

Explore: PandaDoc’s business plan template library  

5. Canva — Pitch with your plan

Canva is a great option for building a visually stunning business plan that can be used as a pitch tool. It offers a diverse array of templates built by their in-house team and the larger creative community, meaning the number of options constantly grows.

You will need to verify that the information in the template you choose matches the standard structure of a traditional business plan. 

You should do this with any template, but it’s especially important with any tool that accepts community submissions. While they are likely reviewed and approved, there may still be errors.

Remember, you can only edit these templates within Canva. Luckily, you only need a free subscription, and you may just miss out on some of the visual assets being used. 

To get the most value, it may be best to create a more traditional planning document and transfer that information into Canva. 

Explore: Canva’s business plan gallery

6. ClickUp — The collaborative template

Out of all the project management tools that offer free business plan templates, ClickUp’s is the most approachable.

Rather than throwing you into all the features and expecting you to figure it out—ClickUp provides a thorough startup guide with resource links, images, and videos explaining how to write a plan using the tool. 

There’s also a completed sample plan (structured like an expanded one-page plan) for you to reference and see how the more traditional document can connect to the product management features. You can set goals, target dates, leave comments, and even assign tasks to someone else on your team. 

These features are limited to the ClickUp platform and will not be useful for everyone. They will likely get in the way of writing a plan you can easily share with lenders or investors. 

But this is a great option if you’re looking for a template that makes internal collaboration more fluid and keeps all your information in one place.

Sign Up: Get a free trial of ClickUp and explore their template library

7. Smartsheet — A wide variety of templates

I’m including Smartsheet’s library of templates on this list because of the sheer number of options they provide. 

They have a simple business plan template, a one-page plan, a fill-in-the-blank template, a plan outline, a plan grading rubric, and even an Excel-built project plan. All are perfectly usable and vary in visual style, depth of instructions, and the available format.

Honestly, the only drawback (which is also the core benefit) is that the amount of templates can be overwhelming. If you’re already uncertain which plan option is right for you, the lengthy list they provide may not provide much clarity.

At the same time, it can be a great resource if you want a one-stop shop to view multiple plan types.

Explore: Smartsheet’s business plan template library  

8. ReferralRock affiliate marketing business plan

I’m adding ReferralRock’s template to this list due to its specificity. 

It’s not your standard business plan template. The plan is tailored with specific sections and guidance around launching an affiliate marketing business. 

Most of the template is dedicated to defining how to choose affiliates, set commissions, create legal agreements, and track performance.

So, if you plan on starting an affiliate marketing business or program, this template will provide more specific guidance. Just know that you will likely need to reference additional resources when writing the non-industry sections of your plan.

Download: ReferralRock affiliate marketing business plan template

Does it matter what business plan template you use?

The short answer is no. As long as the structure is correct, it saves you time, and it helps you write your business plan , then any template will work. 

What it ultimately comes down to, is what sort of value you hope to get from the template. 

• Do you need more guidance? 
• A simple way to structure your plan? 
• An option that works with a specific tool?
• A way to make your plan more visually interesting?

Hopefully, this list has helped you hone in on an option that meets one (or several) of these needs. Still, it may be worth downloading a few of these templates to determine the right fit. 

And really, what matters most is that you spend time writing a business plan . It will help you avoid early mistakes, determine if you have a viable business, and fully consider what it will take to get up and running. 

If you need additional guidance, check out our library of planning resources . We cover everything from plan formats , to how to write a business plan, and even how to use it as a management tool . 

If you don’t want to waste time researching other templates, you can download our one-page or traditional business plan template and jump right into the planning process.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Kody Wirth is a content writer and SEO specialist for Palo Alto Software—the creator's of Bplans and LivePlan. He has 3+ years experience covering small business topics and runs a part-time content writing service in his spare time.

Table of Contents

• Qualities of a good template
• ReferralRock
• Does the template matter?

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• 1. BUSINESS PLAN Prepared By: Nijaz N
• 2. BUSINESS PLAN • A written document that outlines the future activity for an existing or proposed business venture. • Is the formal written expression of the entrepreneurial vision, describing the strategy and operations of the proposed venture. • A business plan is a document that brings together the key elements of a business that include details about the products and services, the cost, sales and expected profits. • Blue Print
• 3. Purpose of a Business Plan • Alignment of team(s) • Operating plan • Communication across company, division, department, business partners • Investment capital • Expansion capital (banks, leases) • Merger/acquisition process
• 4. BUSINESS PLAN Drivers Clear Vision of Purpose  The direction the business venture wants to achieve. A long term view Satisfy Real Customers Needs & Serve Real Customers  Exceptional customer service that results in the loyalty of customers, repeat purchases by them and greater customer retention. Differentiate from Competitors  Positioning unique differentiating factors. Continuously making improvements to sustain a leadership position. Resource Focus, Organization & Commitment to satisfy Customer needs  Resources should be optimally utilized to ensure that maximum possible value gets added to satisfy customer needs.
• 5. What Investors Look For • How does the team think? • How detail oriented is the team? • How big is this market? • Is there sustainable competitive advantage? • What’s the growth plan? • What does the technology roadmap look like, short term or long term play
• 6. Financial Projections • Build 5 years • Detail near years, extrapolate out years • Build from single unit economics • Document assumptions • Compare against top down • Validate with market comparables
• 7. 10 Must Answer Questions • How large is your addressable market? • How fast is the market growing? • Who’s make up your management team? • What’s your “secret sauce?” • What are the barriers to entry/competitive advantage? • What do your 5 year financials look like? • What’s your path to profitability? • Why is this a company versus a product/service? • Who’s your competition and how do you beat them? • Why can’t Microsoft or Google do this? (or name any big, established company…)
• 8. Creating Your Company’s Strategy • Building a strategy is harder work than building your product • Think about – What do you want your business to be when it grows up – Looking back from 5 years in future – Perspectives of all stakeholders – Anything that could go wrong • Hope is not a strategy
• 9. Competitive Analysis • You always have competitors • Dig deep, be detailed, be honest • Compare features and benefits • Technology comparison • Whole product offering (pricing, support, etc.) • Channels, funding, customers…
• 10. Sustainable Competitive Advantage • Create barriers to entry • Continually add value for your customers (and your investors) • Anticipate competition and make plans for dealing with it – Better widget, price erosion, market share, different business model….. • Avoid the trap of believing that your main competitor is your exit strategy
• 11. Format of Business Plan • TITLE PAGE  Name of the business  Owner /Owners  Contact Details (Addresses, Phone & email etc)  EXECUTIVE SUMARY  Business ideas & Goals : Over view of business  Marketing : Products & services being sold?  Operations : Business Location & staff  Finances : Breakeven period, finance required.
• 12. Format of Business Plan • BACKGROUND  Mission Statement  Company history ( existing business)  Business Goals (Short term/Long term)  MARKETING  Market Research  Market Analysis (Industry / Seasonality /Competitors /SWOT )  Marketing Plan (Target market/ distribution channel /pricing)  Evaluation of Marketing
• 13. Format of Business Plan • OPERATIONS & PRODUCTION  Legal & Licensing requirements  Management details  Organization structure & staffing  Insurance & Security needs  FINANCIAL PROJECTIONS  Income & Expenses  Financial forecasts  IMPLEMENTATION TIME TABLE  Time needed to set up & run the business

Mark Cuban Applauds 10-Year-Old Entrepreneur's Innovative Business Plan: 'What A Great Idea'

Entrepreneur and “Shark Tank” investor Mark Cuban recently praised a business idea proposed by a 10-year-old.

What Happened : On Wednesday, Cuban took to X, formerly Twitter, to express his admiration for a business plan detailed by a young entrepreneur’s father. The plan involved a service where, for $100 per year, the kid would take care of customers’ trash twice a week.

Cuban’s said, “🔥🔥🔥 what a great idea”, showed his approval of the innovative concept.

See Also: UPS Earnings Show The Weight Of $170,000 Salaries While It Learns To Navigate Shipping Slump

Startup founder Bill Smith explained his 10-year-old’s idea in detail in the post, which garnered Cuban’s reaction.

In the post, he shared a personal anecdote about guiding his son through a sales endeavor. Smith’s son initially feels disheartened after knocking on 40 doors and only securing one customer, falling short of his goal of three.

However, Smith encourages his son not to give up and asks when he plans to follow up. Despite his confusion about the concept, he diligently follows up with everyone, even those who initially expressed uncertainty.

His persistence pays off, as he gains five more customers, bringing his total to 13, with many coming from referrals.

Smith said, “Most people only ask once. They give up too early. Don't forget how powerful just following up is.”

This isn’t the first time Cuban has shown his support for young entrepreneurs. Known for his early entrepreneurial ventures, including selling garbage bags door-to-door at age 12, Cuban often shares business advice and encourages entrepreneurial spirit.

Why It Matters : Cuban’s endorsement of the business plan is significant given his successful track record in business and investment.

Cuban’s business advice is highly valued. His belief in the importance of sales and perseverance in entrepreneurship is well-documented. His recent tweet further emphasizes his belief in the power of innovative ideas and the potential of young entrepreneurs.

Cuban shared his strategy for success, stating that with just a phone and $500 , he could rebuild his fortune. This latest endorsement of a young entrepreneur’s business plan aligns with his belief in the potential of simple, yet innovative ideas.

Photo by Joe Seer on Shutterstock

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This article Mark Cuban Applauds 10-Year-Old Entrepreneur's Innovative Business Plan: 'What A Great Idea' originally appeared on Benzinga.com .

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Malika Sawadogo ’24’s Burkina Faso-inspired clothing line won the 2024 Freirich Entrepreneurship Competition and exemplified the creative, entrepreneurial spirit behind Skidmore College’s “Shark Tank”-like competition.

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Skidmore’s creative entrepreneurs solve real-world problems

What makes the annual Kenneth A. Freirich Entrepreneurship Competition such a rewarding experience for Skidmore’s passionate student entrepreneurs each year?  

Is it the invaluable mentorship fostered among students, staff, and alumni mentors, who bring real-world feedback and insight to the “Shark Tank”-like competition? Maybe it’s the thrill of anticipating who will be awarded cash prizes that will help take students’ ideas to the next level? Or maybe it’s being part of an exciting Skidmore tradition that is now in its 15th year?  

The answer has to do with all of the above and more: Skidmore is a place where creativity, innovation, and entrepreneurship are celebrated; where a supportive community including past competition winners, alumni mentors, classmates, faculty and staff, parents, and judges from successful enterprises come together to cheer on students and ensure that student projects shine.  

That talent and creativity went on full display at this year’s competition finals held on April 12.  

From clothing lines with social and environmental impacts, to apps that make trip planning or listening to favorite music easier, all eight business plans that qualified for the 2024 finals worked to find creative, entrepreneurial solutions to solving challenging problems while also making a world of difference.  

And the winner is ... 

Malika Sawadogo ’24 celebrates after winning the 2024 Kenneth A. Freirich Entrepreneurship Competition.

MESTH Collection  

Malika Sawadogo ’24 captivated the audience with her showcase of quality, affordable clothing inspired by the beauty of her homeland, Burkina Faso. Her presentation not only highlighted the thoughtfully sourced fabrics from her hometown but also featured a vibrant fashion show showcasing the line’s men's and women’s wear.  

MESTH’s unique clothing and bags not only exude beauty but also serve a greater purpose of supporting the community that inspired the fashion line. With a commitment to giving back, 5% of proceeds will be directed toward aiding widows and orphans in Sawadogo’s home country of Burkina Faso. Looking ahead, she envisions establishing a foundation that will provide even more support to the community. 

Here's a buyer's secret: Sawadogo aims to offer consumers a sense of individuality through her limited design brand approach. By choosing a MESTH piece, not only will you adorn yourself with a handmade, traditional African design, but you'll also own a style that's truly one of a kind. 

Second to none ... 

Justice Ripinga ’24, who placed second, presents his business plan for Quatam, a ride-sharing app for minibus taxis in South Africa.

Quatam 

Quatam is a ride-sharing app with a mission to revolutionize public transportation efforts in South Africa. According to its founder, Justice Ripinga ’24, upward of 70% of South Africans face challenges, such as long waits, associated with the minibus taxi, the country's main form of transportation. Quatam allows passengers to accurately locate a seat on the nearest minibus while optimizing routes for drivers to ensure efficient pickups. 

Ripinga is a member of the African Leadership Academy ,which seeks to transform young leaders into the next generation of entrepreneurs.  

Time for third ... 

Azizul Hakim ’26 (left), Fiker Tadesse ’26 (center), Jacob Kriss ’25 (behind Tadesse), and Casey Rueda ’24 (right), who placed third, present their business plan.

QuickThought 

College students understand the time crunch as well as anyone, and QuickThought  provides a solution. Azizul Hakim ’26, Casey Rueda ’24, Fiker Tadesse ’26, and Jacob Kriss ’25 developed the schedule-syncing application to help people optimize free time and improve group planning efforts. 

The third-place winner is a faster, simpler, and personalized platform that not only helps find and coordinate time, but also integrates multiple calendars into one place and offers suggestions on how to spend free time based on an individual’s energy level, social battery, and budget. 

Entrepreneurship at Skidmore ... 

Skidmore’s liberal arts curriculum encourages students to think outside of the box and consider how they might connect the dots among seemingly disparate concepts and ideas. Students are encouraged to think through how they can solve problems creatively, improve their communities, and use entrepreneurial approaches to pressing issues.  

“To be an entrepreneur is to embody the liberal arts. Freirich is a business plan competition, but also a larger constellation of entrepreneurial experiences ... At Skidmore, we want all our students to hone creative, innovative, and entrepreneurial skills,” President Marc C. Connor said, noting the competition was open to students from all majors.  “Here, you can be an artist, scientist, French or dance major... and an entrepreneur.” 

Business plan bonus ...  

The Freirich Competition isn’t the only place where Skidmore students have put their entrepreneurial talents on recent display.

In the weeks leading up to Freirich, a student team presented their business plan, FarmHub NY , at the New York State Business Plan Competition. The results: second place in the agricultural track and advancing to finals at the end of April. Founded by Sophie Sacco ’24 and business partner Noa Berger ’24, FarmHub NY was created with a mission to connect consumers with small local farmers.  

Related News

Conrad School competition roundup: winter 2024

As the winter 2024 term comes to a close, it’s time for a competition roundup to celebrate the successes of Conrad School students!

Graduate students in the  Master of Business, Entrepreneurship and Technology  (MBET) program and undergraduate students in  BET 300  or  Enterprise Co-op  (E Co-op) performed splendidly in both on- and off-campus competitions!

In total, we had 25 Conrad School students compete this term! Congratulations to all!

The Odlum Brown Forum Pitch Semi-Final

Part-time MBET student, Aileen Agada, made it to the semi-finals for her venture BeBlended in the Odlum Brown Forum Pitch competition at the end of February.

The Odlum Brown Forum Pitch, which is for women entrepreneurs, addresses the barrier of access to capital and offers education, mentorship, specialized resources, and more!

APEX Startup Challenge at UNB Fredericton

Aileen Agada, part-time MBET and founder of BeBlended placed first and took home the Entrepreneurial Powerhouse award!

Full-time MBET students Osose Itua and Youssef Ben Ammar and their startup Foodage placed first in the Elevator Pitch.

Texas Christian University - Richards Barrentine Values and Ventures Competition

Earlier this month, BET 320 student Christy Lee alongside her teammates made their way to Texas for the 14th annual TCU Richards Barrentine Values and Ventures Competition. The team took home $500 for the Investor Challenge.

Canadian Venture Capital Investment Competition (VCIC)

Among several other University of Waterloo students, a graduate team participated in the Canadian Venture Capital Investment Competition ( VCIV) in early April.  The team consisted of Hufsah Khan, Zia Baig, Viershaar Ragavan, and Rran Trainor from MACC, Hisham Ismail from MBET, and Leo Zhang from AFM.

This is the University's first time winning at the graduate level, beating out MBA teams from Queens, Rotman, Schulich, Alberta and UNB!

Read more about the VCIC from MBET student Hisham Ismail on our blog !

Stu Clark New Venture Competition

Conrad School was well represented at the recent Stu Clark New Venture Competition in Winnipeg.

• BET 320 student Christy Lee and her co-founders Valerie Liu and Ethan Alvizo won third place for their startup PatientCompanion as well as second place in the video pitch.
• Enterprise Co-op student Humza Ahmed won fourth place for his venture AutomaxAI.
• The Social Entrepreneurship Award went to PhD Fellow and part-time MBET student Eugenia Dadzie for MetaCycler BioInnovations.

Velocity Semi-Finals

Conrad School was well represented at the Velocity Semi-Final Pitch Competition in March with ten startups being pithed! The semi-finalists included both current and past Enterprise Co-op students, BET 300 and BET 320 students, as well as some of our part-time MBET and PhD Fellowship students, and full-time MBET students!

Day One Teams:

• Automax AI: Humza Ahmed, current E Co-op
• foresAIt: Ibukun Elebute , part-time MBET and Salman Lari, PhD fellow and part-time MBET )
• Montere: current BET 300 students J enny Ho, Jakob Leville, Coleton Myers, and Matthew Xu.
• FarmicleGrow: full-time MBET Lydia Madintin Konlan
• GreaseTech: full-time MBET students Jesurun Ramesh and Minaal Butt.
• SheepIt: BET 300 student Josiah Plett.

Day Two Teams:

• BatBall: Wahaab Ali, Eco-op 2023
• PatientCompanion: Christy Lee, current BET 320
• Wygo: Jocelyne Murphy, former E Co-op 2023)
• LendN: Arsen Stepanyan and Muztahid Azim, full-time MBET students

Velocity Finals

Three of the winning teams in the Velocity finals this term were student co-founders from the Conrad School. We are proud to celebrate with our graduate and undergraduate students.

GreaseTech : Jesurun Ramesh and Minaal Butt, both currently enrolled in the full-time Master of Business, Entrepreneurship and Technology (MBET) program, co-founded GreaseTech to reduce human error and costly failures in manufacturing lines. The two pitched their startup at the winter 2024 Velocity Pitch Competition and won $5,000 to turn their innovative approach to industrial machinery maintenance into a business!

PatientCompanion : Christly Lee, a BET 320 student, pitched her startup PatientCompanion which streamlines the patient triaging system for optimal care coordination. PatientCompanion won $5,000 in the finals!

SheepIt : Josiah Plett, a BET 300 student, credits his motivation to participate in the Velocity pitch competition to the ecosystems around campus. His startup SheepIt is a herd management software for small sheep farmers – inspired by his sister who started her own sheep farm out west. Plett took home a  $5,000 prize.

Ivey Business Plan Competition, Western University

Full-time Master of Business, Entrepreneurship and Technology (MBET) students Jesurun Ramesh and Minaal Butt won third place for their startup GreaseTech at the Ivey Business Plan Competition at Western University.

GreenHouse Social Impact Showcase

PharmaChill – $8,000: Adedayo Adefarakan, a full-time Master of Business, Entrepreneurship and Technology (MBET), founded PharmaChill to provide transparency and visibility in the last-mile delivery of temperature-sensitive pharmaceuticals in Nigeria. 

EchoNotes – $1,000: Computer science and BET 320 student, Josiah Plett won $1,000 with his startup EchoNotes, which is a self-messaging platform designed to naturally and easily connect you to your future self. 

CareConnect – $1,000: Full-time Master of Business, Entrepreneurship and Technology (MBET) student Kevin Ye and his co-founder from the part-time MBET and PhD Fellow Aosen Xiong developed CareConnect, a platform that connects clients with caregivers seamlessly to arrange in-home health care. CareConnect is focused on providing flexible solutions for both their clients and caregivers.

Proteus Pitch Competition

Current Enterprise Co-op student Dylan Tan and BET 300 alumni Monica Tsang won first place and took home the $5000 prize at the Proteus Pitch Competition in March!

" Monica Tsang and I pitched a new technology developed by Dr.  Jennifer A. A. Lavoie  at  Wilfrid Laurier University . The Virtual Reality - Mental Health Crisis Response Training (VR-MHCRT) is the first de-escalation program for police officers that is backed by clinical research and input from persons with mental illness (PMI). 80% of fatal police encounters involve a PMI and our current training methods are not equipped to handle these cases. Dr Lavoie saw these gaps and took it upon herself to completely alter the entire landscape of police training" says Tan. "I first want to thank  Conrad School of Entrepreneurship and Business  for exposing me to the Enterprise Co-op program, had I not enrolled I'd never even have heard about this opportunity. Thank you to  Wayne Chang  who's been a key advisor to me these past months."

Keep an eye out: upcoming competitions

Lydia Konlan, full-time Master of Business, Entrepreneurship and Technology (MBET) student and founder of FarmicleGrow has made it to the finals of the Social Impact Enterprise Track at the Dobson Cup at McGill University in Montreal on May 1!

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JW Pei’s Bags Are a Hit With Celebrities. Can They Catch on With Everyone Else?

A year after launching accessories label JW Pei, husband and wife duo Yang Pei and Stephanie Li were faced with a choice: Go up or down.

When the two launched their brand, which sells bags, shoes and other accessories, in 2018, it sat squarely within the accessible luxury category, selling bags like its now discontinued Fiona Bag for $300. But after launch, it had found only “lukewarm success,” Pei said, as the contemporary sector, which sits in the often-tough middle between luxury and fast fashion, was becoming increasingly saturated, with labels like Staud, Danse Lente and Rouje.

To differentiate, contemporary brands like Isabel Marant hiked their prices so they could sell to higher-earning customers who are usually less vulnerable to economic downturns. JW Pei, however, did the opposite.

The accessories label’s hero product, the Gabbi handbag, which features a ruched shoulder strap and hobo shape, is priced at $89.

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“We can keep prices low because we function like a tech company,” said Pei, the label’s chief executive. “We only make what the data tells us will sell.”

In deciding what bags to produce, JW Pei looks at what bags are added to cart and which “eventually turn into a sale,” Pei said, and orders product accordingly to eliminate excess inventory. Plus, the brand owns its entire supply chain – pillars which Pei says have allowed the brand to grow profitably. Last year, the brand grew sales 50 percent over 2022 to $50 million.

More than just profitable growth, the brand has earned a crop of high-profile fans. Stars including Gigi Hadid, Megan Fox and Emily Ratajkowski have been spotted carrying JW Pei bags. The label’s bags have also made it onto the red carpet, with actress Selena Gomez wearing a sparkly Gabbi bag to this year’s Golden Globes.

To drive further growth, JW Pei wants to use artificial intelligence to speed up its design process and expand its geographic footprint with new store openings. Meanwhile, its parent company, PL Brands Group, is acquiring its competitors, like Danse Lente, betting that it can build a network of affordable bags that feel a bit more luxe than fast fashion.

“Consumers are feeling pressure across their entire wallet,” said Kristen Classi-Zummo, industry analyst for apparel at Circana. “Consumers are trading down to fast fashion or to dupes. For those trading up, their ceiling is much lower and has landed in contemporary fashion.”

Generating Buzz

For consumers like New York City-based writer Jacquelyne Germain, who owns three JW Pei bags, the brand feels like “a step-up from Zara” with a price tag much easier to swallow than a designer label.

According to Pei, that mix of “high quality materials” with trendy design details has been instrumental to the brand’s growth.

“We had quietly built a community on Instagram where our products really shine,” said Li, the brand’s creative director. “The buzz had been organic largely because I believe we’re fun and playful, but also, the bags can be worn over and over and in different situations.”

Another boost to that buzz has been the brand’s circle of celebrity fans. Former first daughter Ivanka Trump was one of the first known names to place an order on the brand’s site, prompting Pei and Li to begin sending their bags to celebrity stylists, eventually landing on the arms of Hadid, Hailey Bieber and more. Since then, Pei says, the brand’s growth has been exponential.

“Any $600 bag or a Birkin can be seen on a model, but the press, paparazzi and social media pay attention when the bag is less than $100,” said Pei. “It’s a win-win for us and the stylists.”

Celebrity placement remains its primary tool for driving conversation online, and the brand is exclusively looking to connect with massive names like Hadid and Bieber.

“We’re a little-known brand, but everyone in the world would instantly know who Gigi Hadid is,” Pei said. “That is our leverage when we enter new markets like Japan and Korea or work with new retailers. Working with local celebrities would not be as effective.”

What’s Next

Relying on a data-driven product strategy and celebrity endorsements has gotten the brand this far, but JW Pei is looking beyond those tactics in 2024.

This year, the company will launch a ready-to-wear line and begin experimenting with artificial intelligence in the design process. JW Pei will use generative AI programme Midjourney to assist in fashion design research — so it can more quickly identify emerging trends and silhouettes — as well as sketching the designs. The label’s human designers, led by Li, will use the research to inform new colourways, material selection and produce collections.

The goal is to shorten production times to get trendy items to consumers faster, Li added.

Later this year, the brand — which sells via its own e-commerce platform and wholesale partners like Nordstrom and Selfridges — is set to open its first brick-and-mortar shop in New York’s SoHo neighbourhood in the autumn. The store’s stock will be determined by data: Prior to opening the shop, JW Pei will launch an online marketing campaign designed to determine which products and styles New York consumers want to buy. Only those products will be sold in store.

The plan is to repeat this process in other locations, and open 20 stores in the US as well as locations in London, Dubai and Hong Kong in the next three to five years.

But perhaps JW Pei’s greatest ambition is to expand the reach of its parent PL Brands Group, which is owned by Pei and Li.

The company acquired Danse Lente, a London-based accessories label and one of JW Pei’s competitors, in December 2023, and wants to apply the same approach it took with JW Pei to the label: Expanding into new categories, entering wholesale and of course, lowering prices. Because it also owns China-based manufacturing and distribution firm Lo Monte International, it controls the supply chain for both brands, giving the company more control over pricing, materials and labour costs.

“Danse Lente has great brand value but their prices are too high,” said Pei. “With our factories, we’ll be able to drive the prices down, test new styles online and ensure the brand keeps growing.”

This year, it hopes to add three new brands to its arsenal, whether through an internal launch or acquisition. In keeping the strategies that have proved fruitful so far at the heart of their business, Pei believes it can keep expanding.

“Everybody has the capability to design bags, have beautiful images and strong marketing, which is why the $300 price point or the contemporary market is a dead zone,” said Pei. “In a few years, the biggest differentiator will be the supply chain and how well a company is situated to get the consumer’s attention in new ways.”

Yola Mzizi is the Editorial Apprentice at The Business of Fashion (BoF). She is based in New York and provides operational support to the New York team and writes features for BoF and The Business of Beauty.

• Danse Lente
• Mergers & Acquisitions
• Artificial Intelligence

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Capital gains tax change draws ire from some Canadian entrepreneurs worried it will worsen brain drain

Some say government sending wrong message while others say tax hike is only fair.

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A chorus of Canadian entrepreneurs and investors is blasting the federal government's budget for expanding a tax on the rich. They say it will lead to brain drain and further degrade Canada's already poor productivity.

In the 2024 budget unveiled Tuesday, Finance Minister Chrystia Freeland said the government would increase the inclusion rate of the capital gains tax from 50 per cent to 67 per cent for businesses and trusts, generating an estimated $19 billion in new revenue.

Capital gains are the profits that individuals or businesses make from selling an asset — like a stock or a second home. Individuals are subject to the new changes on any profits over $250,000.

The government estimates that the changes would impact 40,000 individuals (or 0.13 per cent of Canadians in any given year) and 307,000 companies in Canada.

However, some members of the business community say that expanding the taxable amount will devastate productivity, investment and entrepreneurship in Canada, and might even compel some of the country's talent and startups to take their business elsewhere.

Federal budget adds billions in spending, hikes capital gains tax

Benjamin Bergen, president of the Council of Canadian Innovators (CCI), said the capital gains tax has overshadowed parts of the federal budget that the business community would otherwise be excited about.

"There were definitely some other stars in the budget that were interesting," he said. "However, the ... capital gains piece really is the sun, and it's daylight. So this is really the only thing that innovators can see."

The CCI has written and is circulating an open letter signed by more than 1,000 people in the Canadian business community to Trudeau's government asking it to scrap the tax change.

Shopify CEO Tobi Lütke and president Harley Finkelstein also weighed in on the proposed hike on X, formerly known as Twitter.

We need to be doing everything we can to turn Canada into the best place for entrepreneurs to build 🇨🇦<br><br>What's proposed in the federal budget will do the complete opposite. Innovators and entrepreneurs will suffer and their success will be penalized -- this is not a wealth tax,… &mdash; @harleyf

Former finance minister Bill Morneau said his successor's budget disincentivizes businesses from investing in the country's innovation sector: "It's probably very troubling for many investors."

• Bill Morneau slams Freeland's budget as a threat to investment, economic growth

Canada's productivity — a measure that compares economic output to hours worked — has been relatively poor for decades. It underperforms against the OECD average and against several other G7 countries, including the U.S., Germany, U.K. and Japan, on the measure. 

Bank of Canada senior deputy governor Carolyn Rogers sounded the alarm on Canada's lagging productivity in a speech last month, saying the country's need to increase the rate had reached emergency levels, following one of the weakest years for the economy in recent memory.

The government said it was proposing the tax change to make life more affordable for younger generations and fund efforts to boost housing supply — and that it would support productivity growth.

A challenge for investors, founders and workers

The change could have a chilling effect for several reasons, with companies already struggling to access funding in a high interest rate environment, said Bergen.

He questioned whether investors will want to fund Canadian companies if the government's taxation policies make it difficult for those firms to grow — and whether founders might just pack up.

The expanded inclusion rate "is just one of the other potential concerns that firms are going to have as they're looking to grow their companies."

He said the rejigged tax is also an affront to high-skilled workers from low-innovation sectors who might have taken the risk of joining a startup for the opportunity, even taking a lower wage on the chance that a firm's stock options grow in value.

• Your questions answered about the proposed capital gains tax changes
• Freeland's new federal budget hikes taxes on the rich to cover billions in new spending

But Lindsay Tedds, an associate economics professor at the University of Calgary, said the tax change is one of the most misunderstood parts of the federal budget — and that its impact on the country's talent has been overstated.

"This is not a major innovation-biting tax change treatment," Tedds said. "In fact, when you talk to real grassroots entrepreneurs that are setting up businesses, tax rates do not come into their decision."

As for productivity, Tedds said Canadians might see improvements in the long run "to the degree that some of our productivity problems are driven by stresses like housing affordability, access to child care, things like that."

'One foot on the gas, one foot on the brake'

Some say the government is sending mixed messages to entrepreneurs by touting tailored tax breaks — like the Canada Entrepreneurs' Incentive, which reduces the capital gains inclusion rate to 33 per cent on a lifetime maximum of $2 million — while introducing measures they say would dampen investment and innovation.

"They seem to have one foot on the gas, one foot on the brake on the very same file," said Dan Kelly, president of the Canadian Federation of Independent Business.

How could capital gains tax increases impact Canadian small businesses? | Power & Politics

A founder may be able to sell their successful company with a lower capital gains treatment than otherwise possible, he said.

"At the same time, though, big chunks of it may be subject to a higher rate of capital gains inclusion."

Selling a company can fund an individual's retirement, he said, which is why it's one of the first things founders consider when they think about capital gains.

Dennis Darby, president and CEO of Canadian Manufacturers & Exporters, says he was disappointed by the change — and that it sends the wrong message to Canadian industries like his own.

He wants to see the government commit to more tax credit proposals like the Canada Carbon Rebate for Small Businesses, which he said would incentivize business owners to stay and help make Canada competitive with the U.S.

"We've had a lot of difficulties attracting investment over the years. I don't think this will make it any better."

Tech titan says change will only impact richest of the rich

Toronto tech entrepreneur Ali Asaria will be one of those subject to the expanded capital gains inclusion rate — but he says it's only fair.

"It's going to really affect the richest of the rich people," Asaria, CEO of open source platform Transformer Lab and founder of well.ca, told CBC News.

"The capital gains exemption is probably the largest tax break that I've ever received in my life," he said. "So I know a lot about what that benefit can look like, but I've also always felt like it was probably one of the most unfair parts of the tax code today."

• 2024 federal budget's key takeaways: Housing and carbon rebates, students and sin taxes
• Analysis With its eighth budget, the Liberal government tries to re-win the fairness fight

While Asaria said Canada needs to continue encouraging talent to take risks and build companies in the country, taxation policies aren't the most major problem.

"I think that the biggest central issue to the reason why people will leave Canada is bigger issues, like housing," he said.

"How do we make it easier to live in Canada so that we can all invest in ourselves and invest in our companies? That's a more important question than, 'How do we help the top 0.13 per cent of Canadians make more money?'"

Corrections

• A previous version of this article stated that Lindsay Tedds was an associate professor at Carleton University. In fact, she works at the University of Calgary. Apr 19, 2024 11:00 AM ET

ABOUT THE AUTHOR

Jenna Benchetrit is a senior writer with the business content unit at CBC News. She has also covered entertainment and education stories. A Montrealer based in Toronto, Jenna holds a master's degree in journalism from Toronto Metropolitan University. You can reach her at [email protected].

With files from Nisha Patel and Laura MacNaughton

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How to Write a Business Plan Learn the essential elements of writing a business plan, including advice and resources for how to write and conduct each section of your business plan.

No business can be successful without a solid business plan. In fact, a business plan could be the thing that makes or breaks your entrepreneurial enterprise, especially if you haven't started a successful business in the past.

Let's break down what a business plan is, why it's important, and a step-by-step guide on how to write one in detail.

What Is a Business Plan?

Put simply, a business plan is a detailed outline explaining what a business will be, how it will work, and how it will bring in money. Business plans can range heavily in terms of length and complexity, but they all include an explanation of what the business will do and how it will turn a profit, dealing with everything from financial statements and pricing to potential customer segments and business development.

Think of business plans as the guiding documents for for-profit organizations. A business plan guides business owners and employees or other executives at existing businesses and helps inspire investor confidence when seeking financing in the earliest days of a business's life. There are a few types of business plans, but they all do the same things.

Related: An Introduction to Business Plans

Why Is a Business Plan Important?

A small business plan is important for any new enterprise, regardless of industry or niche. Why?

By far, the most crucial thing a good business plan does is improve investor confidence. When an entrepreneur or startup executive needs to secure funding and business loans, they have to convince investors that their business is worth investing in. It's impossible to do that without a solid business plan explaining:

• What the business will provide or make
• How the business will make money (i.e., financial projections for a new business)
• Who the business will advertise to
• And similar forecasts or discussions lenders need to see

By looking through a business plan, investors (both individuals and large firms) can tell whether a business owner (or would-be entrepreneur) has a good idea or is merely flailing in the wind.

In addition, a business plan is important since it will help guide your actions as a business owner and executive. With a business plan to keep your head on straight, you'll know what to do, how to scale your business, and what objectives you need to meet in order to achieve the goals outlined in your business plan.

Elements of a Traditional Business Plan

Business plans are usually comprised of several key elements. These include:

• A title page , which breaks down a rough overview of the startup business and its name
• An executive summary, which essentially describes what you want the business to achieve as its owner
• The business description, which describes the business, its structure, what it sells or produces, and related information. It should also include the value proposition and any intellectual property you have for your business idea
• Market research and strategies, which will help convince potential investors that you know how you will market and sell your products to your target audience
• Management and personnel, which should outline your projections for the employees or labor force you'll need to achieve your business goals. If you plan to hire team members, don't worry about stating too much about them here
• Financial documents, including any capital you have already raised, the funding you need to get your business off the ground, and so on. This can include a balance sheet or cash flow statements if you already have a financial plan or have operated your business for some time
• A competitive analysis page , breaking down the status of your competitors in the same industry. This can include company descriptions or business models based on what you know
• A design and development plan, exploring how you will design and develop your business for ultimate success. Think of this as a roadmap or mission statement for how your brand will hit milestones and gain a competitive advantage over other brands
• An operations and management plan , which should explore and explain how you will run and operate your business as its owner or chief executive

With each section of your business plan, an investor or venture capitalist can determine the viability of your sole proprietorship, LLC, or other business.

Related: How to Write a Business Plan

Now that you understand why you need a business plan and you've spent some time doing your homework gathering the information you need to create one, it's time to roll up your sleeves and get everything down on paper. The following pages will describe in detail the seven essential sections of a business plan: what you should include, what you shouldn't include, how to work the numbers and additional resources you can turn to for help. With that in mind, jump right in.

Executive Summary

Within the overall outline of the business plan, the executive summary will follow the title page. The summary should tell the reader what you want. This is very important. All too often, what the business owner desires is buried on page eight. Clearly state what you're asking for in the summary.

Related: How to Start a Business With (Almost) No Money

Business Description

The business description usually begins with a short description of the industry. When describing the industry, discuss the present outlook as well as future possibilities. You should also provide information on all the various markets within the industry, including any new products or developments that will benefit or adversely affect your business.

Business Plan Guide "

Before writing your plan.

• How Long Should Your Plan Be?
• When Should You Write It?
• Who Needs A Business Plan?
• Why Should You Write A Business Plan?
• Determine Your Goals and Objectives
• Outline Your Financing Needs
• Plan What You'll Do With Your Plan
• Don't Forget About Marketing

Writing Your Business Plan

• How To Write A Business Plan
• The Ingredients of a Marketing Plan
• Updating Your Business Plan
• Enhancing Your Business Plan

Business Plan Tools

• Business Plan Software
• Books and How-to Manuals

Business Plan Templates

• Sample Business Plans

Market Strategies

Market strategies are the result of a meticulous market analysis. A market analysis forces the entrepreneur to become familiar with all aspects of the market so that the target market can be defined and the company can be positioned in order to garner its share of sales.

Competitive Analysis

The purpose of the competitive analysis is to determine the strengths and weaknesses of the competitors within your market, strategies that will provide you with a distinct advantage, the barriers that can be developed in order to prevent competition from entering your market, and any weaknesses that can be exploited within the product development cycle.

Design & Development Plan

The purpose of the design and development plan section is to provide investors with a description of the product's design, chart its development within the context of production, marketing and the company itself, and create a development budget that will enable the company to reach its goals.

Operations & Management Plan

The operations and management plan is designed to describe just how the business functions on a continuing basis. The operations plan will highlight the logistics of the organization such as the various responsibilities of the management team, the tasks assigned to each division within the company, and capital and expense requirements related to the operations of the business.

Financial Factors

Financial data is always at the back of the business plan, but that doesn't mean it's any less important than up-front material such as the business concept and the management team.

Want to see some of these principles in action? You can check out business plan templates in this detailed guide . Feel free to use some of these templates when drawing up business plans for your organization in the future!

As you can see, business plans aren't as complex as you may have initially thought. Furthermore, they are important parts of any business enterprise. Don't forget to write a business plan for your upcoming endeavor before seeking funding!

For more guides, resources, and information, check out Entrepreneur !

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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Wednesday, April 24, 2024

Could the ftc’s noncompete ban jumpstart entrepreneurship.

The Federal Trade Commission says its new ban on noncompete agreements could lead to a rise in entrepreneurship, estimating the new rule could lead to more than 8,500 new businesses being launched, Inc. reports .

“[M]any potential entrepreneurs wrote to the Commission to describe how they wanted to strike out on their own, but a noncompete prevented them from doing so,” the FTC writes in its sprawling 570-page rule issued on Tuesday.

In one instance, the FTC recounts how a veterinarian said they were forced to sell their home and leave their state because of a noncompete. The noncompete prevented this veterinarian from opening a practice within 30 miles of any of the four locations of the practice where they once worked.

The only exception carved out in the new rule applies to preexisting noncompetes for senior executives, who are defined as those earning an annual salary above $151,164 and who are in a “policy-making position.” Any new agreements for those holding that position, however, would be banned.

Read the full story from Inc . A subscription may be required.