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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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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.

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What is a Business Plan? Definition, Tips, and Templates

Published: June 07, 2023

In an era where more than 20% of small enterprises fail in their first year, having a clear, defined, and well-thought-out business plan is a crucial first step for setting up a business for long-term success.

Business plans are a required tool for all entrepreneurs, business owners, business acquirers, and even business school students. But … what exactly is a business plan?

In this post, we'll explain what a business plan is, the reasons why you'd need one, identify different types of business plans, and what you should include in yours.

What is a business plan?

A business plan is a documented strategy for a business that highlights its goals and its plans for achieving them. It outlines a company's go-to-market plan, financial projections, market research, business purpose, and mission statement. Key staff who are responsible for achieving the goals may also be included in the business plan along with a timeline.

The business plan is an undeniably critical component to getting any company off the ground. It's key to securing financing, documenting your business model, outlining your financial projections, and turning that nugget of a business idea into a reality.

What is a business plan used for?

The purpose of a business plan is three-fold: It summarizes the organization’s strategy in order to execute it long term, secures financing from investors, and helps forecast future business demands.

Business Plan Template [ Download Now ]

Working on your business plan? Try using our Business Plan Template . Pre-filled with the sections a great business plan needs, the template will give aspiring entrepreneurs a feel for what a business plan is, what should be in it, and how it can be used to establish and grow a business from the ground up.

Purposes of a Business Plan

Chances are, someone drafting a business plan will be doing so for one or more of the following reasons:

1. Securing financing from investors.

Since its contents revolve around how businesses succeed, break even, and turn a profit, a business plan is used as a tool for sourcing capital. This document is an entrepreneur's way of showing potential investors or lenders how their capital will be put to work and how it will help the business thrive.

All banks, investors, and venture capital firms will want to see a business plan before handing over their money, and investors typically expect a 10% ROI or more from the capital they invest in a business.

Therefore, these investors need to know if — and when — they'll be making their money back (and then some). Additionally, they'll want to read about the process and strategy for how the business will reach those financial goals, which is where the context provided by sales, marketing, and operations plans come into play.

2. Documenting a company's strategy and goals.

A business plan should leave no stone unturned.

Business plans can span dozens or even hundreds of pages, affording their drafters the opportunity to explain what a business' goals are and how the business will achieve them.

To show potential investors that they've addressed every question and thought through every possible scenario, entrepreneurs should thoroughly explain their marketing, sales, and operations strategies — from acquiring a physical location for the business to explaining a tactical approach for marketing penetration.

These explanations should ultimately lead to a business' break-even point supported by a sales forecast and financial projections, with the business plan writer being able to speak to the why behind anything outlined in the plan.

Free Business Plan Template

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

• Outline your idea.
• Pitch to investors.
• Secure funding.
• Get to work!

You're all set!

Click this link to access this resource at any time.

Free Business Plan [Template]

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

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

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

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

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

4. Getting an A in your business class.

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

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

What does a business plan need to include?

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

1. Business Plan Subtitle

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

2. Executive Summary

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

3. Company Description

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

4. The Business Opportunity

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

5. Competitive Analysis

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

6. Target Market

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

7. Marketing Plan

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

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

8. Financial Summary

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

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

10. Funding Requirements

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

Types of Business Plans

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

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

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

1. Startup Business Plan

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

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

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

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

2. Feasibility Business Plan

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

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

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

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

3. Internal Business Plan

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

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

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

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

4. Strategic Business Plan

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

These types of business plans may include:

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

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

5. Business Acquisition Plan

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

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

A business plan for an existing company will explain:

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

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

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

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

6. Business Repositioning Plan

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

This plan will:

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

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

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

7. Expansion or Growth Business Plan

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

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

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

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

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

Getting Started With Your Business Plan

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

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

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

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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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Home > Business > Business Startup

How To Write a Business Plan

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Starting a business is a wild ride, and a solid business plan can be the key to keeping you on track. A business plan is essentially a roadmap for your business — outlining your goals, strategies, market analysis and financial projections. Not only will it guide your decision-making, a business plan can help you secure funding with a loan or from investors .

Writing a business plan can seem like a huge task, but taking it one step at a time can break the plan down into manageable milestones. Here is our step-by-step guide on how to write a business plan.

Table of contents

• Write your executive summary
• Do your market research homework
• Set your business goals and objectives
• Plan your business strategy
• Describe your product or service
• Crunch the numbers
• Finalize your business plan

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Step 1: Write your executive summary

Though this will be the first page of your business plan , we recommend you actually write the executive summary last. That’s because an executive summary highlights what’s to come in the business plan but in a more condensed fashion.

An executive summary gives stakeholders who are reading your business plan the key points quickly without having to comb through pages and pages. Be sure to cover each successive point in a concise manner, and include as much data as necessary to support your claims.

You’ll cover other things too, but answer these basic questions in your executive summary:

• Idea: What’s your business concept? What problem does your business solve? What are your business goals?
• Product: What’s your product/service and how is it different?
• Market: Who’s your audience? How will you reach customers?
• Finance: How much will your idea cost? And if you’re seeking funding, how much money do you need? How much do you expect to earn? If you’ve already started, where is your revenue at now?

Step 2: Do your market research homework

The next step in writing a business plan is to conduct market research . This involves gathering information about your target market (or customer persona), your competition, and the industry as a whole. You can use a variety of research methods such as surveys, focus groups, and online research to gather this information. Your method may be formal or more casual, just make sure that you’re getting good data back.

This research will help you to understand the needs of your target market and the potential demand for your product or service—essential aspects of starting and growing a successful business.

Step 3: Set your business goals and objectives

Once you’ve completed your market research, you can begin to define your business goals and objectives. What is the problem you want to solve? What’s your vision for the future? Where do you want to be in a year from now?

Use this step to decide what you want to achieve with your business, both in the short and long term. Try to set SMART goals—specific, measurable, achievable, relevant, and time-bound benchmarks—that will help you to stay focused and motivated as you build your business.

Step 4: Plan your business strategy

Your business strategy is how you plan to reach your goals and objectives. This includes details on positioning your product or service, marketing and sales strategies, operational plans, and the organizational structure of your small business.

Make sure to include key roles and responsibilities for each team member if you’re in a business entity with multiple people.

Step 5: Describe your product or service

In this section, get into the nitty-gritty of your product or service. Go into depth regarding the features, benefits, target market, and any patents or proprietary tech you have. Make sure to paint a clear picture of what sets your product apart from the competition—and don’t forget to highlight any customer benefits.

Step 6: Crunch the numbers

Financial analysis is an essential part of your business plan. If you’re already in business that includes your profit and loss statement , cash flow statement and balance sheet .

These financial projections will give investors and lenders an understanding of the financial health of your business and the potential return on investment.

You may want to work with a financial professional to ensure your financial projections are realistic and accurate.

Step 7: Finalize your business plan

Once you’ve completed everything, it's time to finalize your business plan. This involves reviewing and editing your plan to ensure that it is clear, concise, and easy to understand.

You should also have someone else review your plan to get a fresh perspective and identify any areas that may need improvement. You could even work with a free SCORE mentor on your business plan or use a SCORE business plan template for more detailed guidance.

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The takeaway

Writing a business plan is an essential process for any forward-thinking entrepreneur or business owner. A business plan requires a lot of up-front research, planning, and attention to detail, but it’s worthwhile. Creating a comprehensive business plan can help you achieve your business goals and secure the funding you need.

Related content

• 5 Best Business Plan Software and Tools in 2023 for Your Small Business
• How to Get a Business License: What You Need to Know
• What Is a Cash Flow Statement?

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How to make a business plan

Table of Contents

How to make a good business plan: step-by-step guide.

A business plan is a strategic roadmap used to navigate the challenging journey of entrepreneurship. It's the foundation upon which you build a successful business.

A well-crafted business plan can help you define your vision, clarify your goals, and identify potential problems before they arise.

But where do you start? How do you create a business plan that sets you up for success?

This article will explore the step-by-step process of creating a comprehensive business plan.

What is a business plan?

A business plan is a formal document that outlines a business's objectives, strategies, and operational procedures. It typically includes the following information about a company:

Products or services

Target market

Competitors

Marketing and sales strategies

Financial plan

Management team

A business plan serves as a roadmap for a company's success and provides a blueprint for its growth and development. It helps entrepreneurs and business owners organize their ideas, evaluate the feasibility, and identify potential challenges and opportunities.

As well as serving as a guide for business owners, a business plan can attract investors and secure funding. It demonstrates the company's understanding of the market, its ability to generate revenue and profits, and its strategy for managing risks and achieving success.

Business plan vs. business model canvas

A business plan may seem similar to a business model canvas, but each document serves a different purpose.

A business model canvas is a high-level overview that helps entrepreneurs and business owners quickly test and iterate their ideas. It is often a one-page document that briefly outlines the following:

Key partnerships

Key activities

Key propositions

Customer relationships

Customer segments

Key resources

Cost structure

Revenue streams

On the other hand, a Business Plan Template provides a more in-depth analysis of a company's strategy and operations. It is typically a lengthy document and requires significant time and effort to develop.

A business model shouldn’t replace a business plan, and vice versa. Business owners should lay the foundations and visually capture the most important information with a Business Model Canvas Template . Because this is a fast and efficient way to communicate a business idea, a business model canvas is a good starting point before developing a more comprehensive business plan.

A business plan can aim to secure funding from investors or lenders, while a business model canvas communicates a business idea to potential customers or partners.

Why is a business plan important?

A business plan is crucial for any entrepreneur or business owner wanting to increase their chances of success.

Here are some of the many benefits of having a thorough business plan.

Helps to define the business goals and objectives

A business plan encourages you to think critically about your goals and objectives. Doing so lets you clearly understand what you want to achieve and how you plan to get there.

A well-defined set of goals, objectives, and key results also provides a sense of direction and purpose, which helps keep business owners focused and motivated.

Guides decision-making

A business plan requires you to consider different scenarios and potential problems that may arise in your business. This awareness allows you to devise strategies to deal with these issues and avoid pitfalls.

With a clear plan, entrepreneurs can make informed decisions aligning with their overall business goals and objectives. This helps reduce the risk of making costly mistakes and ensures they make decisions with long-term success in mind.

Attracts investors and secures funding

Investors and lenders often require a business plan before considering investing in your business. A document that outlines the company's goals, objectives, and financial forecasts can help instill confidence in potential investors and lenders.

A well-written business plan demonstrates that you have thoroughly thought through your business idea and have a solid plan for success.

Identifies potential challenges and risks

A business plan requires entrepreneurs to consider potential challenges and risks that could impact their business. For example:

Is there enough demand for my product or service?

Will I have enough capital to start my business?

Is the market oversaturated with too many competitors?

What will happen if my marketing strategy is ineffective?

By identifying these potential challenges, entrepreneurs can develop strategies to mitigate risks and overcome challenges. This can reduce the likelihood of costly mistakes and ensure the business is well-positioned to take on any challenges.

Provides a basis for measuring success

A business plan serves as a framework for measuring success by providing clear goals and financial projections . Entrepreneurs can regularly refer to the original business plan as a benchmark to measure progress. By comparing the current business position to initial forecasts, business owners can answer questions such as:

Are we where we want to be at this point?

Did we achieve our goals?

If not, why not, and what do we need to do?

After assessing whether the business is meeting its objectives or falling short, business owners can adjust their strategies as needed.

How to make a business plan step by step

The steps below will guide you through the process of creating a business plan and what key components you need to include.

1. Create an executive summary

Start with a brief overview of your entire plan. The executive summary should cover your business plan's main points and key takeaways.

Keep your executive summary concise and clear with the Executive Summary Template . The simple design helps readers understand the crux of your business plan without reading the entire document.

2. Write your company description

Provide a detailed explanation of your company. Include information on what your company does, the mission statement, and your vision for the future.

Provide additional background information on the history of your company, the founders, and any notable achievements or milestones.

3. Conduct a market analysis

Conduct an in-depth analysis of your industry, competitors, and target market. This is best done with a SWOT analysis to identify your strengths, weaknesses, opportunities, and threats. Next, identify your target market's needs, demographics, and behaviors.

Use the Competitive Analysis Template to brainstorm answers to simple questions like:

What does the current market look like?

Who are your competitors?

What are they offering?

What will give you a competitive advantage?

Who is your target market?

What are they looking for and why?

How will your product or service satisfy a need?

These questions should give you valuable insights into the current market and where your business stands.

4. Describe your products and services

Provide detailed information about your products and services. This includes pricing information, product features, and any unique selling points.

Use the Product/Market Fit Template to explain how your products meet the needs of your target market. Describe what sets them apart from the competition.

5. Design a marketing and sales strategy

Outline how you plan to promote and sell your products. Your marketing strategy and sales strategy should include information about your:

Pricing strategy

Advertising and promotional tactics

Sales channels

The Go to Market Strategy Template is a great way to visually map how you plan to launch your product or service in a new or existing market.

6. Determine budget and financial projections

Document detailed information on your business’ finances. Describe the current financial position of the company and how you expect the finances to play out.

Some details to include in this section are:

Startup costs

Revenue projections

Profit and loss statement

Funding you have received or plan to receive

Strategy for raising funds

7. Set the organization and management structure

Define how your company is structured and who will be responsible for each aspect of the business. Use the Business Organizational Chart Template to visually map the company’s teams, roles, and hierarchy.

As well as the organization and management structure, discuss the legal structure of your business. Clarify whether your business is a corporation, partnership, sole proprietorship, or LLC.

8. Make an action plan

At this point in your business plan, you’ve described what you’re aiming for. But how are you going to get there? The Action Plan Template describes the following steps to move your business plan forward. Outline the next steps you plan to take to bring your business plan to fruition.

Types of business plans

Several types of business plans cater to different purposes and stages of a company's lifecycle. Here are some of the most common types of business plans.

Startup business plan

A startup business plan is typically an entrepreneur's first business plan. This document helps entrepreneurs articulate their business idea when starting a new business.

Not sure how to make a business plan for a startup? It’s pretty similar to a regular business plan, except the primary purpose of a startup business plan is to convince investors to provide funding for the business. A startup business plan also outlines the potential target market, product/service offering, marketing plan, and financial projections.

Strategic business plan

A strategic business plan is a long-term plan that outlines a company's overall strategy, objectives, and tactics. This type of strategic plan focuses on the big picture and helps business owners set goals and priorities and measure progress.

The primary purpose of a strategic business plan is to provide direction and guidance to the company's management team and stakeholders. The plan typically covers a period of three to five years.

Operational business plan

An operational business plan is a detailed document that outlines the day-to-day operations of a business. It focuses on the specific activities and processes required to run the business, such as:

Organizational structure

Staffing plan

Production plan

Quality control

Inventory management

Supply chain

The primary purpose of an operational business plan is to ensure that the business runs efficiently and effectively. It helps business owners manage their resources, track their performance, and identify areas for improvement.

Growth-business plan

A growth-business plan is a strategic plan that outlines how a company plans to expand its business. It helps business owners identify new market opportunities and increase revenue and profitability. The primary purpose of a growth-business plan is to provide a roadmap for the company's expansion and growth.

The 3 Horizons of Growth Template is a great tool to identify new areas of growth. This framework categorizes growth opportunities into three categories: Horizon 1 (core business), Horizon 2 (emerging business), and Horizon 3 (potential business).

One-page business plan

A one-page business plan is a condensed version of a full business plan that focuses on the most critical aspects of a business. It’s a great tool for entrepreneurs who want to quickly communicate their business idea to potential investors, partners, or employees.

A one-page business plan typically includes sections such as business concept, value proposition, revenue streams, and cost structure.

Best practices for how to make a good business plan

Here are some additional tips for creating a business plan:

Use a template

A template can help you organize your thoughts and effectively communicate your business ideas and strategies. Starting with a template can also save you time and effort when formatting your plan.

Miro’s extensive library of customizable templates includes all the necessary sections for a comprehensive business plan. With our templates, you can confidently present your business plans to stakeholders and investors.

Be practical

Avoid overestimating revenue projections or underestimating expenses. Your business plan should be grounded in practical realities like your budget, resources, and capabilities.

Be specific

Provide as much detail as possible in your business plan. A specific plan is easier to execute because it provides clear guidance on what needs to be done and how. Without specific details, your plan may be too broad or vague, making it difficult to know where to start or how to measure success.

Be thorough with your research

Conduct thorough research to fully understand the market, your competitors, and your target audience . By conducting thorough research, you can identify potential risks and challenges your business may face and develop strategies to mitigate them.

Get input from others

It can be easy to become overly focused on your vision and ideas, leading to tunnel vision and a lack of objectivity. By seeking input from others, you can identify potential opportunities you may have overlooked.

Review and revise regularly

A business plan is a living document. You should update it regularly to reflect market, industry, and business changes. Set aside time for regular reviews and revisions to ensure your plan remains relevant and effective.

Create a winning business plan to chart your path to success

Starting or growing a business can be challenging, but it doesn't have to be. Whether you're a seasoned entrepreneur or just starting, a well-written business plan can make or break your business’ success.

The purpose of a business plan is more than just to secure funding and attract investors. It also serves as a roadmap for achieving your business goals and realizing your vision. With the right mindset, tools, and strategies, you can develop a visually appealing, persuasive business plan.

Ready to make an effective business plan that works for you? Check out our library of ready-made strategy and planning templates and chart your path to success.

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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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What is a business plan? Definition, Purpose, and Types

In the world of business, a well-thought-out plan is often the key to success. This plan, known as a business plan, is a comprehensive document that outlines a company’s goals, strategies , and financial projections. Whether you’re starting a new business or looking to expand an existing one, a business plan is an essential tool.

As a business plan writer and consultant , I’ve crafted over 15,000 plans for a diverse range of businesses. In this article, I’ll be sharing my wealth of experience about what a business plan is, its purpose, and the step-by-step process of creating one. By the end, you’ll have a thorough understanding of how to develop a robust business plan that can drive your business to success.

What is a business plan?

Purposes of a business plan, what are the essential components of a business plan, executive summary, business description or overview, product and price, competitive analysis, target market, marketing plan, financial plan, funding requirements, types of business plan, lean startup business plans, traditional business plans, how often should a business plan be reviewed and revised, what are the key elements of a lean startup business plan.

• What are some of the reasons why business plans don't succeed?

A business plan is a roadmap for your business. It outlines your goals, strategies, and how you plan to achieve them. It’s a living document that you can update as your business grows and changes.

Looking for someone to write a business plan?

Find professional business plan writers for your business success.

These are the following purpose of business plan:

• Attract investors and lenders: If you’re seeking funding for your business , a business plan is a must-have. Investors and lenders want to see that you have a clear plan for how you’ll use their money to grow your business and generate revenue.
• Get organized and stay on track: Writing a business plan forces you to think through all aspects of your business, from your target market to your marketing strategy. This can help you identify any potential challenges and opportunities early on, so you can develop a plan to address them.
• Make better decisions: A business plan can help you make better decisions about your business by providing you with a framework to evaluate different options. For example, if you’re considering launching a new product, your business plan can help you assess the potential market demand, costs, and profitability.

The executive summary is the most important part of your business plan, even though it’s the last one you’ll write. It’s the first section that potential investors or lenders will read, and it may be the only one they read. The executive summary sets the stage for the rest of the document by introducing your company’s mission or vision statement, value proposition, and long-term goals.

The business description section of your business plan should introduce your business to the reader in a compelling and concise way. It should include your business name, years in operation, key offerings, positioning statement, and core values (if applicable). You may also want to include a short history of your company.

In this section, the company should describe its products or services , including pricing, product lifespan, and unique benefits to the consumer. Other relevant information could include production and manufacturing processes, patents, and proprietary technology.

Every industry has competitors, even if your business is the first of its kind or has the majority of the market share. In the competitive analysis section of your business plan, you’ll objectively assess the industry landscape to understand your business’s competitive position. A SWOT analysis is a structured way to organize this section.

Your target market section explains the core customers of your business and why they are your ideal customers. It should include demographic, psychographic, behavioral, and geographic information about your target market.

Marketing plan describes how the company will attract and retain customers, including any planned advertising and marketing campaigns . It also describes how the company will distribute its products or services to consumers.

After outlining your goals, validating your business opportunity, and assessing the industry landscape, the team section of your business plan identifies who will be responsible for achieving your goals. Even if you don’t have your full team in place yet, investors will be impressed by your clear understanding of the roles that need to be filled.

In the financial plan section,established businesses should provide financial statements , balance sheets , and other financial data. New businesses should provide financial targets and estimates for the first few years, and may also request funding.

Since one goal of a business plan is to secure funding from investors , you should include the amount of funding you need, why you need it, and how long you need it for.

• Tip: Use bullet points and numbered lists to make your plan easy to read and scannable.

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Business plans can come in many different formats, but they are often divided into two main types: traditional and lean startup. The U.S. Small Business Administration (SBA) says that the traditional business plan is the more common of the two.

Lean startup business plans are short (as short as one page) and focus on the most important elements. They are easy to create, but companies may need to provide more information if requested by investors or lenders.

Traditional business plans are longer and more detailed than lean startup business plans, which makes them more time-consuming to create but more persuasive to potential investors. Lean startup business plans are shorter and less detailed, but companies should be prepared to provide more information if requested.

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A business plan should be reviewed and revised at least annually, or more often if the business is experiencing significant changes. This is because the business landscape is constantly changing, and your business plan needs to reflect those changes in order to remain relevant and effective.

Here are some specific situations in which you should review and revise your business plan:

• You have launched a new product or service line.
• You have entered a new market.
• You have experienced significant changes in your customer base or competitive landscape.
• You have made changes to your management team or organizational structure.
• You have raised new funding.

A lean startup business plan is a short and simple way for a company to explain its business, especially if it is new and does not have a lot of information yet. It can include sections on the company’s value proposition, major activities and advantages, resources, partnerships, customer segments, and revenue sources.

What are some of the reasons why business plans don't succeed?

• Unrealistic assumptions: Business plans are often based on assumptions about the market, the competition, and the company’s own capabilities. If these assumptions are unrealistic, the plan is doomed to fail.
• Lack of focus: A good business plan should be focused on a specific goal and how the company will achieve it. If the plan is too broad or tries to do too much, it is unlikely to be successful.
• Poor execution: Even the best business plan is useless if it is not executed properly. This means having the right team in place, the necessary resources, and the ability to adapt to changing circumstances.
• Unforeseen challenges:  Every business faces challenges that could not be predicted or planned for. These challenges can be anything from a natural disaster to a new competitor to a change in government regulations.

What are the benefits of having a business plan?

• It helps you to clarify your business goals and strategies.
• It can help you to attract investors and lenders.
• It can serve as a roadmap for your business as it grows and changes.
• It can help you to make better business decisions.

How to write a business plan?

There are many different ways to write a business plan, but most follow the same basic structure. Here is a step-by-step guide:

• Executive summary.
• Company description.
• Management and organization description.
• Financial projections.

How to write a business plan step by step?

Start with an executive summary, then describe your business, analyze the market, outline your products or services, detail your marketing and sales strategies, introduce your team, and provide financial projections.

Why do I need a business plan for my startup?

A business plan helps define your startup’s direction, attract investors, secure funding, and make informed decisions crucial for success.

What are the key components of a business plan?

Key components include an executive summary, business description, market analysis, products or services, marketing and sales strategy, management and team, financial projections, and funding requirements.

Can a business plan help secure funding for my business?

Yes, a well-crafted business plan demonstrates your business’s viability, the use of investment, and potential returns, making it a valuable tool for attracting investors and lenders.

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

By Joe Weller | October 11, 2021

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

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

What Is a Business Plan?

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

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

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

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

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

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

Business Plan Steps

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

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

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

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

Do I Need a Simple or Detailed Plan?

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

How to Choose the Right Plan for Your Business

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

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

Is the Order of Your Business Plan Important?

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

The Difference Between Traditional and Lean Business Plans

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

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

How to Write a Business Plan Step by Step

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

Step 1: Executive Summary

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

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

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

Step 2: Description of Business

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

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

Step 3: Market Analysis

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

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

Step 4: Competitive Analysis

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

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

Step 5: Description of Organizational Management

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

Step 6: Description of Products or Services

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

Questions to answer in this section are as follows:

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

Step 7: Marketing Plan

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

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

Step 8: Sales Plan

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

Start by answering the following questions:

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

Step 9: Funding Details (or Request for Funding)

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

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

Step 10: Financial Projections

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

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

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

Business Plan Template

Download Business Plan Template

Microsoft Excel | Smartsheet

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

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

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

How to Write a Simple Business Plan

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

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

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

Simple Business Plan Template

Download Simple Business Plan Template

Microsoft Excel |  Microsoft Word | Adobe PDF  | Smartsheet

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

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

How to Write a Business Plan for a Lean Startup

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

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

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

Lean Business Plan Template for Startups

Download Lean Business Plan Template for Startups

Microsoft Word | Adobe PDF

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

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

How to Write a Business Plan for a Loan

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

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

Download free financial templates to support your business plan.

Tips for Writing a Business Plan

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

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

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

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

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

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

Resources for Writing a Business Plan

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

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

How a Business Plan Helps to Grow Your Business

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

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

Streamline Your Business Planning Activities with Real-Time Work Management in Smartsheet

Empower your people to go above and beyond with a flexible platform designed to match the needs of your team — and adapt as those needs change. 

The Smartsheet platform makes it easy to plan, capture, manage, and report on work from anywhere, helping your team be more effective and get more done. Report on key metrics and get real-time visibility into work as it happens with roll-up reports, dashboards, and automated workflows built to keep your team connected and informed. 

When teams have clarity into the work getting done, there’s no telling how much more they can accomplish in the same amount of time.  Try Smartsheet for free, today.

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

May 24, 2021

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

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

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

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

What Is a Business Plan?

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

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

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

Get a Business Idea

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

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

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

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

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

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

Conduct Market Analysis

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

Product and Service Demand

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

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

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

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

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

Identify Demographics of Target Market

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

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

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

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

How to Write a Business Plan

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

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

• Business Plan Cover Page
• Table of Contents
• Executive Summary
• Company Description
• Description of Products and Services
• SWOT Analysis
• Competitor Data
• Competitive Analysis
• Marketing Expenses Strategy 
• Pricing Strategy
• Distribution Channel Assessment
• Operational Plan
• Management and Organizational Strategy
• Financial Statements and/or Financial Projections

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

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

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

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

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

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

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

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

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

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

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

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

Mike told us,

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

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

It consists of three basic parts:

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

Example of an informal executive summary 

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

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

What should I include in an executive summary for investors?

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

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

Successful business plan examples

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

Here’s the interview with the owner of Urbanity:

When to write an executive summary?

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

What mistakes do people make when writing an executive summary?

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

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

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

How to Write a Business Plan Step 4. Company Description

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

• Mission statement
• Philosophy and vision
• Company goals

Target market

• Legal structure

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

Mission Statement

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

Company Philosophy and Vision

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

What makes your company different?

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

Examples of core values

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

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

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

What is a vision statement?

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

Example vision statements

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

A world without Alzheimer’s Disease and other dementia.

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

Business Goals

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

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

How far in advance should a business plan?

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

Example of great business goals

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

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

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

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

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

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

Industry resources

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

• Trade Associations
• Federal Reserve
• Bureau of Labor Statistics

Legal Structure

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

• Sole proprietorships
• Limited Liability Companies (LLC)

Partnerships

Corporations.

• Franchises.

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

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

Sole Proprietorship

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

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

Limited Liability Company (LLC)

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

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

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

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

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

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

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

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

Questions to answer about your products and services

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

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

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

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

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

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

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

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

SWOT Examples

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

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

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

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

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

Include Competitor Data in Your Business Plan

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

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

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

Marketing Strategy

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

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

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

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

Advertising Strategy

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

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

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

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

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

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

Some common pricing strategies are:

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

HubSpot has a great calculator and blog on pricing strategies.

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

Distribution Plan

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

Supply Chain Examples

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

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

Examples of Supply Chains

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

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

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

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

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

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

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

Quality Control

• Legal environment

Let’s look at each for some insight.

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

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

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

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

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

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

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

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

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

Legal Environment

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

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

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

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

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

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

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

How to Write a Business Plan Step 8. Financial Statements 

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

Provide All Financial Income from an Existing Business

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

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

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

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

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

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

Financial Projections For A Startup Business Plan

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

Mike gave the following advice in his interview:

Financial Forecasting Mistakes

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Ways to get funding for a small business

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

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

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

How funding will be used

When asking for business financing make sure to include:

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

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

How to Write a Business Plan Resources

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

• Sample plan

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

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

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

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

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

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

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

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

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EIN Lookup: 12 Places to Find Your EIN (2024)

• EINs and Other Tax Identification Numbers
• Why Your Business Needs an EIN
• How to Lookup Your EIN
• Ways to Lookup the EIN for Another Business
• Frequently Asked Questions About an EIN (with Answers)

What Is an  Employer Identification Number (EIN)?

What is an fein number.

• South Dakota
• New Hampshire

Is there a difference between an EIN and an FEIN?

What is a federal tax identification number.

• Social Security number " SSN "
• Employer Identification Number " EIN "
• Individual Taxpayer Identification Number " ITIN "
• Taxpayer Identification Number for Pending U.S. Adoptions " ATIN "
• Preparer Taxpayer Identification Number " PTIN "

What is my tax ID number?

• When a baby is born
• Upon entry to a new country (needed to work)
• When you start a business

Is there a difference between an EIN and a TIN?

When do i need an ein number.

• The business hires employees.
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• Your business employs a nonresident alien and pays taxes on non-wage income paid.
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• Non-profit organization
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When does a Sole Proprietorship need an EIN number?

• They hire employees.
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Do I need an EIN if I’m self-employed?

• Hiring employees
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How to Find My EIN Number

Location 1: how to lookup my ein number.

Location 2. Business licenses and tax permits

Location 3. tax returns and other irs documents.

• Box D of a 1040 or 1040-SR
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• W-2 Block B
• W-3 Block Box E
• 1099 Second box from top on the left 
• 1096 Box 1 Source
• Form 940 Top box
• Form 945 Top right box

Location 4. Internal Revenue Service phone number

• Corporate officer
• Sole proprietor
• Trustee of a trust
• Partner in a partnership
• Executor of an estate

Location 5. Bank

Location 6. Loan applications

How do i find my ein number online, location 7. websites.

Location 8. Credit reporting agencies

• The responsible party
• Any bankruptcy proceeding over the past three years
• Entity type
• Business tax ID number
• Number of employees
• How it performs compared to the rest of the industry
• All the business trade lines
• Dun & Bradstreet (D&B): At over 200 years old, this is one of the oldest business credit bureaus in the world. It’s the main one that people suggest using for your EIN lookup. It runs about $15 to $40 per month for a subscription. 
• Experian Business : You can order your credit report from Experian, too. They offer one time purchases for about $40 to $50, or you can choose monthly business credit reporting for under $200 per year.

How to Lookup EIN Number: Other Companies

• Size : Larger companies are more likely to be found with a quick Google Search.
• Publicly traded : It’s easier to find the EIN for public companies than it is for a sole proprietorship because corporations send reports to the Security and Exchange Commission (SEC).
• Relationship to company : If you are an employee, there are different routes to get an EIN lookup free than if you have no relationship with the company.
• Use a Google search (all companies).
• Check SEC Reports (corporations only).
• Check the IRS database (nonprofits only).
• Contact the company’s accountant or a business owner.
• Buy a business credit report.

Location 9. Google search

Location 10. Securities and Exchange Commission (SEC) EIN lookup

• Quarterly reports (Form 10-Q)
• Annual reports (Form 10-K)
• Current reports (Form 8-K)
• Visit the SEC Statutes, Rules, and Forms page for a full list of filing documents.

Location 11. IRS database for nonprofits

Location 12. federal tax id number lookup company, did you verify ein number sources.

How to Start a Business: The Ultimate Guide (2024)

Did you know that one of the easiest paths to financial freedom is learning how to start a business?

In fact, self-employed families have nearly four times the net worth of those who work for someone else. That’s why we look for ways to make it easier for you to become a small business owner.

We talked to two of the most successful small business owners we could find, Mike Andes and Paul Akers, to help you learn how to start a business. Hours of interviews were conducted to get this information about starting a successful business. We’re going to share it all with you!

Mike Andes turned a childhood lawn care business into one of Entrepreneur’s top 500 franchises. Augusta Lawn Care Services has more than 40 franchisees across the U.S. In addition, Mike has gone on to get an MBA, write multiple books, and teach others how to create a successful business.

Paul Akers turned an idea for easy screw covers for cabinets into a successful business that launches 30 new products a year. Fast Cap has been introducing new products to increase the efficiency of cabinetry for nearly 25 years and has developed a reputation as an expert in lean manufacturing.

[su_note note_color="#dbeafc"]

Click on any of the links below to find out what you want to know about how to start a small business.

• Step #1. Plan your business

Step #2. Launch your own business

Step #3. manage your business, step #4. grow your business.

• Turn Your Ideas Into a Successful Business [/su_note]

How to Start a Business in 4 Steps

The Small Business Administration (SBA) breaks down the process of starting a business into 11 steps, which include:

• Conduct market research
• Write your business plan

Fund your business

Pick a business location, choose a business structure, choose the business name, register your business, get federal and state tax ids, apply for licenses and permits, open a business bank account.

• Open your business

These steps are more easily broken into four distinct phases you’ll progress through as you discover how to start a small business. The business startup cycle consists of:

• Plan your business
• Launch your business
• Manage your business
• Grow your business

We’ll cover all of these steps to show you how to start a business.

Step #1. Plan Your business

Research business ideas

When thinking about how to start a business, it’s important to remember that every business is a solution to a problem. If you have the problem, someone else probably does, too.

If you are doing something and think, There’s a better way— follow that! Research it. Find a way to make it better. There’s a business idea.

Mike told us:

[su_quote]Look for ways to improve in your everyday life. There are problems to be solved every day. If it saves you time, it will save others time. The more time people save, the more they’ll pay for something.[/su_quote]

Here are some questions that people have that may give you some ideas on how to start a business .

How can I start a business with no money?

Starting a company doesn’t have to cost a lot of money—or any for that matter. We asked Mike this question, and here’s what he told us:

[su_quote]In the landscaping industry, you can’t start a lawn mowing business without money ’cause you need a lawnmower, but you can sell your time and start a weed-pulling business.[/su_quote]

So if you don’t have a lot of money, look at what you have available and ask yourself, How do I start a business with what I have?

What is the easiest business to start?

The easiest business to start will typically be a cleaning business, pet sitting business, rideshare business, or freelancing business.

• A house cleaning business is super easy. You should have all the supplies you need to open a cleaning business at your house. Find out how Cristobal Mondragon turned less than $2K into a $125K-a-month cleaning business .
• Starting a pet-sitting business is also super easy. Just check out our definitive guide on starting a pet business.
• Rideshare apps like Uber and Lyft hire people as independent contractors. All you need is a car, a good driving record, and a business license. There are people who make up to $1,000 a day. These apps provide low-pressure, low-cost ways to learn how to start a small business.
• Freelancing on sites like Upwork and Fiverr are also good ways to start if you have skills in writing, research, programming, or other in-demand fields.
• Review our list of business idea resources below.

Business idea resources

We’ve interviewed many business owners and done even more research about small businesses and what it takes to succeed. Check out some of our small business ideas blogs:

• Small Business Ideas List: Our longest list of small business ideas . Great for inspiration, but we don’t go as in-depth about each one.
• Online Businesses: Start a business online and make a great living.
• Professional Services: Find a service business idea you like.
• Low Startup Costs: You don’t have to spend a lot of money to start these businesses .
• Business Ideas For Teens: Check out 61 teenage businesses .
• Million Dollar Startups: Check out startups that make millions .
• Women-Owned Businesses: Want to know what businesses women succeed in? Check these out!
• Most Profitable Businesses: We break down the most profitable businesses to start in this blog.

Read on for the next step in starting your small business.

Market research and competitive analysis

Next, you’ll conduct market research before starting a business. Market research is simply identifying the amount of demand for the products or services the business will offer.

Mike spends quite a bit of time discussing the benefits and how to conduct thorough market research. He demonstrates how easy it is to conduct research by surveying his employees. Watch how simple it can be.

He discusses aspects such as demographics, target market, focus groups, online surveys, and target markets. Let’s look at each of these terms to better understand how to start a business.

What are demographics?

Demographics are characteristics of the people who buy a product or service. You’ll want to consider:

• Other interests
• Marital status

Later, We’ll provide a link to a breakdown of all the ways you can improve your targeting on Facebook. It will be a great guide for how well you should specify your demographics. But first, find out how to identify your potential customers.

How do I find out who my potential customers are?

If you have a new business idea, it might not be obvious who your potential customers are. You might need to use marketing tools, like surveys and focus groups, to establish what demographics are drawn to your small business idea.

Once upon a time, this research was really costly because you had to conduct focus groups, do in-person surveys, or do phone surveys. Each option is fairly costly.

Drive Research estimates that focus groups cost $4,000-$12,000 for two focus groups—and you normally need multiple groups for good data. That’s almost $500 per person based on their information.

The publication Entrepreneur gives a good breakdown of survey costs . Most methods will cost at least a couple of grand given the time it takes to create surveys and contact people, plus compensating participants for their time.

Meanwhile, Facebook Ad Center can normally get the results you want for less than $1 per action. Even if you pay each respondent $5 for their time, that’s still 2,000 responses for the same price as a focus group that might have just 25 people.

Pro Tip: PowerAdSpy has a great blog on how to use Facebook ads for market research campaigns.

Identifying your target market

A successful business needs to know who its ideal client is. Since you’ve just come up with your business idea, you’ll need to figure out who buys the product or services you are selling.

Facebook has got this down to a science, but their ads can be complex to use if you don’t know what you’re doing.

Pro Tip: WordStream has a great infographic on all of Facebook’s targeting options . If you want to get your target market as precise as possible, spend some time learning about each of the options.

[su_quote]If you are offering lawn care services, people who own a home are going to be your potential customers. Renters won’t. [/su_quote]

We dig even deeper in our market research blog . Bookmark it and keep reading for tips on how to write a business plan.

Write a business plan

Mike explains in detail how to write a solid business plan you’ll actually use. Download our free business plan template and work through it while watching the video below.

You’ll want to include the following and go into as much detail as possible:

• Marketing Plan
• Marketing Expenses Strategy

Check out our blog about writing a solid business plan to go through all the steps.

The biggest thing to remember about writing a business plan is it should be easy to understand, well-documented, and as short as possible.

[su_quote]Venture capitalists and big banks will want every piece of information possible, but most people can’t write a business plan that meets their expectations. A new business will most likely have to use alternative methods of funding, so make sure the business plan works for guiding your decision-making.[/su_quote]

Calculate your startup costs

Your startup costs are the amount of money you’ll need to get the business up and running. In an ideal world, you’d have enough to cover the upfront costs and the ongoing expenses until you make enough to cover your entire cost of doing business and your cost of living, but we don’t live in an ideal world.

Just do the best you can.

How much does it cost to start a business?

We wanted to know how much it costs to start a business, so we did a ton of research. We established that most people can start a business for under $50K, but you could need up to $2 million, depending on your circumstances. Find out more about real business startup costs .

Establish business credit

You’ll want to start building business credit ASAP. Most small business loans will require either a 650+ personal credit score or an 80 business credit score from D&B. The following credit providers are normally very friendly to small business owners.

• ARCO Fleet Card

Next, you’ll want to secure funding for your small business.

You should already have an idea of your business costs, but where will you get the funding for starting a business?

Most small business owners get the funds for starting a business from the following sources:

Bootstrapping

• Borrowing money from family or friends

Small business loans from local banks and credit unions

Credit cards.

As noted in previous sections, Mike said the following types of funding have high hurdles:

• Venture capitalists

Small Business Administration loans

Small business grants, crowdfunding.

Let’s explore funding options to find ones that make sense for your new business idea.

Both Mike and Paul Akers think bootstrapping is the best way to start a new business. All you have to do is spend less and make sacrifices for what you really want.

[su_quote] Self-financing is the easiest way to start a business as you don’t have the additional cost of debt and other people’s expectations pushing you to move faster. [/su_quote]

Paul told us:

[su_quote] There are four ways to spend money:

• The most efficient way is for you to spend your money: You earn it and spend it.
• You earn your money and spend it on someone else.
• You earn the money, you give it to someone else, and they spend it.
• You earn it, you give it to the government, and the money gets wasted. [/su_quote]

Hear more from Paul below:

Borrow money from family or friends

Some people are able to get money to start a business from friends and family.

If you are, that’s awesome!

Just make sure that you have an agreement in writing because nothing can strain a relationship like a lender expecting to get it back and the borrower thinking the startup capital is a gift.

Also, don’t use your parents’ house (or anyone else’s!) for a secured small business loan when starting a business.

Neither Mike nor Paul particularly loves getting loans when considering how to start a business. Paul told us:

[su_quote]When you’re spending other people’s money, you don’t know what it took to earn it. That means you spend it more recklessly.[/su_quote]

That said, if you have a bank account with a local bank or credit union, they are more likely to lend to small business owners in their local community than larger banks.

Just research “credit unions near me” to find local banks and credit unions.

Be aware that they may expect you to have the business formation already completed. They also may want you to have a business bank account to prevent you from mixing your personal assets and your business assets.

When just starting a business, they may expect you to take on some personal liability, even if you are a limited liability company (LLC), before you have built business credit.

If that is the case, make sure it’s not an amount that would cause you immense problems should you decide to close the business in the future.

Alternatively, you can try applying with our loan partners to get a business loan.

How to get a loan to start a business

Follow the links above and make sure to have the following ready:

• Business formation documents
• Tax documents (Personal and Business if both are available)
• Your business plan
• How the business plans to use the funds
• An idea of your personal current debt-to-income ratio or your small business’s Net Working Capital (These impact your ability to get a loan.)

Many people use credit cards to start small businesses, but you need to make sure that the return on investment will be worth it.

[su_quote]If your interest is 15%, you have to make a return of greater than 15% to justify it. Otherwise, you’re losing money.[/su_quote]

Despite Paul’s concern, consider applying for a business credit card so that you can start building your business credit.

Pro Tip: Having a business bank account and business credit card at the same bank as your personal accounts can help to strengthen the relationship as your business grows.

You could also get a credit card from a company you are interested in doing business with. If you are looking for cards that are likely to approve you, use Credit Karma , which also suggests loans for your small business.

For the best rates and perks, check out Nerd Wallet’s credit card recommendations .

Next, let’s look at some of the other options for getting funding when starting a business.

Get funding from a venture capitalist

Funding from a venture capitalist is typically something that only the most unique of small businesses are offered in their business formation process.

Working with a venture capitalist is similar to getting a business partner, but on a much larger scale. They look for businesses that will change the world and will turn thousands into billions of dollars.

Neither Mike nor Paul encourage this option when considering how to start your own business.

Both prefer full control because it allows them to make decisions based on their goals. As soon as you sell equity, other people have expectations that might be different than yours.

[su_quote]If you sell equity, make sure you own at least 51% of the shares. Any less, and you don’t control the company.[/su_quote]

Here’s the input Paul gave us:

[su_quote]I own 100% of my company because I don’t want anyone else telling me how to run it.[/su_quote]

Watch our interview with Keith before approaching a venture capitalist.

Be careful, though, because too many startups fail to understand the terms that this capital comes with.

Make sure to review your contract with a contract lawyer you trust. If you don’t know one, ask your friends or other business owners for a reference.

Banks like Bank of America , Wells Fargo , and CitiBank are some of the larger banks that you can get loans or lines of credit from.

They offer a variety of business products to help business owners, but many of them require $50K a year in revenue and a minimum of two years in business. That’s not exactly helpful for those wondering how to start a business from scratch.

Let’s look at other options.

Small Business Administration loans are a great way to start a business if you can get one. They offer three main products:

• 7(a) loans - Up to $5M with up to 85% guaranteed by SBA, capped interest rate, and capped fees. Best for real estate.
• 504 loans - Up to $5M for fixed assets that will increase job growth.
• Microloans - Under $50K to help with smaller business needs.

You can learn more about each on the SBA website. The 7(a) is the most commonly distributed loan.

The following charts are organized to make it easier to find the bank that best suits your needs. All statistics are modified from the 100 most active SBA 7(a) lenders for the fiscal year 2021 up to June 30, 2021.

The chart below ranks the top 10 lenders by the number of loans originated.

If you are interested in them by total approval amount, the list changes some. Five of them are the same and five are new entries.

I’ve also created tables showing the five highest and five lowest average approval values. It should be noted that the banks with the lowest average approvals also happen to be the ones that originate the most total loans.

I have personally done business with four of the 10 banks that originate the most loans. Of them, I personally preferred the service from Huntington National Bank .

There are grants available to some industries, regions, or groups of people. Most people won’t qualify, but check the SBA for grants .

Partnerships are similar to a sole proprietor but for more than two people. They are most common in law firms. If one partner provides the work and the other the funding, it can be a nice arrangement for each.

Crowdfunding is raising money from a lot of smaller investments to start a company. The owner of Pooch Selfie talked to us about crowdfunding and going on Shark Tank. Check out his interview below.

Find out about 17 ways to fund a business or keep reading to learn about buying an existing business.

Buy an existing business or franchise

There are numerous reasons why you might want to buy an existing business or franchise. We’ll cover the:

• Differences between buying an existing business or franchise

Benefits of buying an existing business

Downfalls of buying a franchise or business, tips for buying a business, what’s the difference between buying a business and a franchise.

Buying a business means you have full control of the business, how it operates, and what you do with the assets. Meanwhile, buying a franchise grants you the rights to operate using the company name, systems, and procedures.

A franchise has more disclosures and requirements governing the business structure than an existing business, so you will normally be able to get more information than when buying a small business unless the business owner has kept detailed records.

Buying an existing business or franchise can be a great way to get into business for yourself without having to start from scratch. There are many advantages to buying an existing business , including:

• A proven track record: You can see how the business has performed in the past, which can give you a good idea of its potential for success.
• Established customer base: The business will already have a customer base, which can save you the time and expense of building one from scratch.
• Operating systems and procedures in place: The business will already have systems and procedures in place, which can save you the time and effort of developing them yourself.
• Experienced staff: The business will already have employees who are familiar with the business and its operations.

There are also some potential disadvantages of buying an existing business, including:

• The price may be high: The seller may be asking a high price for the business, which could be a barrier to entry.
• The business may have hidden problems: There may be problems with the business that you are not aware of, such as financial problems or legal issues.
• You may not be able to change the business as you see fit: The business may have certain restrictions in place, such as non-compete clauses or franchise agreements, which may limit your ability to make changes to the business.

Overall, buying an existing business or franchise can be a great way to get into business for yourself. However, it is important to do your research carefully and to ask questions before making a purchase.

Here are some tips for buying an existing business or franchise:

• Do your research: Before you start looking at businesses to buy, it is important to do your research and understand the industry you want to be in. This will help you narrow down your search and identify businesses that are a good fit for you.
• Get professional help: It is important to get professional help when buying a business. A business broker can help you find the right business for you and negotiate the terms of the sale. An attorney can help you review the purchase agreement and make sure that you are protected.
• Be prepared to pay a premium: Buying an existing business is usually more expensive than starting your own business from scratch. This is because you are buying the assets of the business, including its goodwill, customer base, and employees.
• Be prepared to put in the work: Buying a business does not mean that you can sit back and relax. You will still need to work hard to run the business and make it successful.

If you are considering buying an existing business or franchise , be sure to do your research and get professional help. With careful planning and execution, buying a business can be a great way to achieve your financial goals.

Learn more about buying franchises . Next, let’s look at how to turn your business idea into a real small business.

You’re done planning and now you need to form the business. Launching a business requires

• Picking a business location
• Choosing a business structure
• Choosing the business name
• Registering your business
• Getting federal and state tax IDs
• Applying for business licenses
• Opening a business bank account
• Getting business insurance

Let’s look at how to choose a business location.

Your business location impacts how well your business does. The choices you make about opening a brick-and-mortar business or launching an online store impact your legal requirements, revenue, and taxes.

For an office, it’s good to have at least 300 square feet that you can work in, and it should be quiet. Whether it’s at home or somewhere else doesn’t matter. If you need help finding a business location, contact your local realtor .

Realtors will be able to help you find a place that works and, if needed, puts you near the customers your business serves.

If you expect customers to come to the location, try to get a space with high foot traffic. That increases people’s awareness of your company.

In addition, you may need space to store parts or inventory. Make sure to consider how many products you’ll be storing and how much space you’ll need.

Most products will need at least three square feet of space, but if you are using shelves, you can normally get two to four products in the same space. You’ll also want at least three feet between storage displays. Four to five feet gives both you and your customers more room to navigate.

Search for commercial interior designers to find someone to advise you before making a decision on a space.

Check out our information on finding a business location and home-based businesses for more useful considerations.

The legal structure you choose for your business will impact your business registration requirements, how much you pay in taxes, and your personal liability.

Sole proprietorship

A sole proprietorship is the easiest way to meet small business legal requirements, but the structure doesn’t protect the owner’s personal assets from legal issues.

That means if something goes wrong, you could lose both your company and your home.

This structure should only be used if you can’t afford an LLC because most businesses have liabilities that could be costly if you operate as a sole proprietor.

To start a sole proprietorship, fill out a special tax form called a Schedule C .

Pro Tip: Sole proprietors can also join the American Independent Business Alliance .

Limited Liability Corporation (LLC)

An LLC is the most common business structure used in the United States because the company protects the owner’s personal assets. An LLC protects many business owners’ assets because it is a separate entity.

It’s similar to partnerships and corporations but can be a single-member LLC in most states. An LLC requires a document called an operating agreement.

Each state has different requirements. Here’s a link to find your state’s requirements . People may register in specific states due to the cost of doing business.

Delaware and Nevada are common states to file an LLC because of their business-friendly laws. Here’s a blog on the top 10 states to get an LLC.

This will typically be the best business structure for most small business ideas. Learn more about registering a business .

Partnerships and corporations

Partnerships and corporations are typically for massive organizations or legal firms.

Unless there is a specific reason you need a partnership, it is better to do a multi-person LLC. Investopedia has good information about partnerships and corporations .

Mike specified that the difference between an S-Corp and a C-Corp is the number of shareholders it can have, among other things.

[su_quote]If you want to have a bunch of stockholders, you’ll need to be a C-Corp.[/su_quote]

There are a ton of other business structures , too. Find the one that works for you!

Mike emphasizes the importance of a name. He personally suggested using a name generator to get ideas for your business.

Pro Tip: We created our own name generator. Find your business name today!

Mike points out how you can add different words for the generator to come up with a name, like the city you live in and the type of company you’re starting, to get some good ideas.

I suggest making sure it doesn’t get shortened to curse words, slang that you wouldn’t want associated with a business, or negative statements.

For instance, Bold & Daring could be shortened to BAD, and you might not want that.

Read our blog about naming a business for more information.

Once you’ve picked the perfect business name, it’s time to register your business name with the government to protect your brand. You may need to register with state, local, and federal governments. Learn more about registering your business .

You’ll use your employer identification number ( EIN ) to open a bank account and pay taxes. You get the Federal EIN (or FEIN) from the Internal Revenue Service. It’s like a social security number for your business.

Some states require an EIN from the state in addition to the Federal EIN.

Legal compliance is important to keep your business running smoothly.

Each location has different licenses, permits, and tax forms required. Use the SBA License and Permits page to identify what requirements your business needs to meet.

Pro Tip: Check out our walkthrough of the business licensing process .

You’ll want a business bank account to separate your personal and business finances. A small business checking account will make legal, payroll, and taxes easier than commingling the business earnings with your personal funds.

In addition to a business bank account, you’ll want to get business insurance.

Get business insurance

Unemployment insurance

The U.S. Chamber of Commerce has a ton of information on unemployment insurance (UI) and also offers links to each state agency that handles state unemployment.

When you have employees, you’ll have to pay $420 per employee on a federal level plus any state UI.

Workers compensation

Workers compensation is basically insurance against injury or disability. Each state has different requirements. Check your state requirements .

Business and general liability insurance

Contact your current insurance agent and ask them if they can provide these. Most will be able to provide a quote or refer you to someone who can. I personally prefer Simply Business .

Basically, you want $1 to $2 million in general liability coverage unless you have reason to need more. Protecting personal assets or higher local requirements are the most common reasons to buy more.

If you own valuable machinery, work in fields that could cause personal liability (for instance, gas furnace installers can be held personally liable for explosions), or collect sensitive information, you may want other types of insurance to protect your business success, too.

Check out our walkthrough on how to get business insurance and keep reading for tips on how to run a business.

You’re a small business owner now. You chose a business model and got your LLC and business license. Now you have a business to run. Get ready to:

Manage your finances

Hire and manage employees, stay legally compliant, buy assets and equipment, marketing and sales, strengthen your cybersecurity, prepare for emergencies, recover from disasters, close or sell your business, hire employees with disabilities.

Managing your business finances is all about knowing how much money you have coming in and going out. That means you’ll want to keep your personal finances separate from your business expenses.

Most new business owners use QuickBooks accounting software because it has all the tools you need to manage your finances as a small business owner. Plus it integrates with most other software.

Hiring employees includes posting jobs, conducting interviews, compensation, paying taxes, following labor laws, scheduling, and payroll.

Job posting

Hiring people requires posting “Now Hiring” signs and posting on prominent job boards. Some places you can start posting job requirements are:

• ZipRecruiter

Preparing a list of questions for interviews will make hiring the right people easier. Indeed offers a variety of resources to help you make better hiring decisions. Read their How to Hire Your First Employee guide.

Compensation

Employees are typically a company’s biggest expense. There are three common pay structures in business. Each fits different scenarios. Let’s take a closer look.

This is a flat weekly or monthly rate based on a person working a specific number of hours. It’s typically reserved for owners, managers, and some admin roles. You might want to assign this to yourself for budgeting purposes.

This pay structure simply tracks the hours an employee works and pays them a set hourly rate. This pay structure is solely based on time, not performance.

Commission-based pay is typically used in sales to give employees a percentage of revenue. It is a strictly performance-based compensation model.

Hybrid models

Hybrid models combine two pay structures: for instance, hourly plus commission to compensate for time and performance. The hourly rate will typically be lower than an hourly rate without commission, but the commission should make it so good performing employees make more than they would without commission. These structures also help reduce the variability of pay from week to week.

Paying employees an hourly wage works for most positions, but depending on your business structure, a commission or hybrid payment model might make sense.

Pro Tip: Entrepreneur’s article on how to create a pay structure that promotes team and company growth offers some insights into thinking about pay structure.

Tax filing and withholding

Federal and state tax filing requirements apply to new employers. You must keep records of employment taxes for at least four years, including special forms and accounting for state taxes.

Don’t worry! We’ve got you covered! Check out the IRS guide for employers here .

Federal employment and labor law posters

All employers must display Workplace Posters , which you can download from the Department of Labor website.

Other requirements may include:

• Employment eligibility verification (Form I-9)
• State’s new hire program requirements
• Worker’s compensation insurance
• Disability insurance—varies by state
• Occupational Safety and Health Administration (OSHA) requirements

Scheduling employees can become complicated depending on your company’s hours of operation. Labor laws in the U.S. define work that occurs after an employee has clocked 40 hours in a week as overtime, meaning you’ll have to pay 1.5 times their hourly wage if they work over 40 hours.

If your business is open for nine hours a day (with an hour lunch), five days a week , you can hire exactly enough people to meet the company’s needs. Once it exceeds that, you’ll need more employees and have to schedule based on their needs as well.

Pro Tip: 7Shifts has a great blog on scheduling and also offers scheduling software. Check them out.

Paying your employees will normally occur on a weekly, every two weeks, bi-monthly, or monthly period. Most employees like being paid weekly because cash flow management is easier, but it costs less to pay less frequently.

You can pay by check or direct deposit, and you can hire payroll companies to manage payroll for you. ADP is the most well-known payroll company, but Inc. provides a list of payroll companies to check out.

If you handle it yourself, your accounting software can integrate with your bank and your timesheets to make the management of payroll easier.

Personally, I don’t love this section because government spending is wasteful, but as a business owner, you are required to pay taxes. You may have to pay:

• Sales tax: Most states have sales tax you have to pay, but some have income taxes instead. Make sure to collect sales tax if necessary.
• Payroll taxes: When you hire employees or pay yourself a salary, you’ll have to pay these. To do so you’ll have to have an employer identification number (EIN).
• Income tax: Every business entity will have to pay income tax to the federal government through either a corporate tax filing or a personal tax return. Depending on your legal structure, the self-employment tax may be deducted from your earnings as an expense.

Pro Tip: Look for a great accountant who can help you find ways to make your taxable income as close to zero as possible. It’s better to reinvest in the business than send the government money.

Every business idea and business model will have different government regulations you have to follow. Those who don’t may find themselves dealing with lawsuits, fines, and in some cases, criminal charges.

You’ll need the tools to do the job. Most businesses will need:

• Office space
• Social media platforms
• Business website
• Payment processor
• Customer relationship management software
• Industry-specific tools
• Inventory management software

We’ve written blogs for many business ideas. In each we include suggestions for the assets and tools you need for that specific small business idea. Just use the search function near the top of this blog to find blogs that discuss your business idea.

You’ll need a budget for business marketing that leverages:

• Social media accounts
• Search engine optimization (SEO)
• Paid advertising on Google and social media platforms
• Vehicles and buildings
• Business cards
• Loyalty programs

You’ll also need to consider things like how to accept credit card payments and how to communicate with your target audience. Each of these will change depending on whether you run an eCommerce store, a brick-and-mortar business, or a home service company.

Useful marketing tools

There are some useful marketing tools that small business owners use to market their companies:

• Canva: Simplify graphic design with Canva . Get access to thousands of templates for website and social media for as low as $4.99 per month.
• SurferSEO: Write blog content faster and rank higher on search engines with SurferSEO .
• MailChimp: Email and SMS marketing automation is one of the keys to success that many small business owners mention. Get started with Mailchimp .

As your online business grows, you will become a target for hackers trying to gain access to information like your business credit card, customer cards, and intellectual property. You’ll want to start paying for better cyber security and insurance to protect against losses.

One of the easiest ways to do this is hosting your web assets on Google, Amazon, or Azure servers because they have a dedicated team of cybersecurity professionals working around the clock to protect against attacks.

You can also get business insurance to protect against the cost of attacks.

As your business grows, there are going to be times when things occur that could severely harm your business. Natural disaster, death of a valuable employee, lawsuits, and suffering a personal injury are all things that take your attention away from the business.

When these occur, you need a plan in place to handle them. This plan might include having a public relations person on retainer, buying business interruption insurance to protect against lost business income, or training a manager to take over in case of emergency.

Check out the SBA’s emergency planning content for more information.

Business recovery from disasters is all about implementing your emergency preparedness plan.

• Assess the damage. The first step is to assess the damage to your business. This includes both physical damage to your property and equipment as well as financial losses.
• Contact your insurance company. If you have business insurance, contact your insurance company as soon as possible to file a claim.
• Get help from the government. There are a number of government programs that can help businesses recover from disasters. Contact your local government to find out what assistance is available.
• Rebuild your business. Once you have assessed the damage and taken care of any insurance claims, it’s time to start rebuilding your business. This may involve repairing or replacing damaged property, hiring new employees, and marketing your business again.
• Learn from the experience. Once your business is back on track, take some time to reflect on the experience. What, if anything, could you have done to prevent the disaster? What can you do to be better prepared for the future?

In some cases, like a hurricane or wildfires, you may have some warning to help prepare the business to help itself and others. You can also work with fundraisers to help raise money to help the community. Doing so will create goodwill, which is one of a company’s most valuable assets.

Recovering from a disaster can be a long and difficult process, but it is possible. By following these tips, you can give your business the best chance of success.

Every business owner reaches a point where business exit planning needs to occur. Often it is because the business grows too slowly and they have to abandon it, but many people also reach retirement or succeed enough that a competitor makes an offer to buy their business.

Keeping detailed records, maintaining a CRM for your business website, and documenting procedures are all good steps to take to make sure you can exit the small business idea and it can carry on without you.

It’s also good to keep employees, your target audience, and investors in the loop when you are implementing an exit plan. They’ll all want reassurance that your small business idea will not leave them in a problematic scenario.

When you hire employees, there are incentives for hiring certain individuals. These incentives can include tax credits (meaning the right hires could take your taxable consequences below zero).

You have to screen to get potential employees qualified before hiring them, but some of the groups that are incentivized include:

• People convicted of a felony
• Some SSA recipients
• Empowerment zone or rural renewal county residents
• Job rehabilitation participants
• SNAP recipients
• Long-term unemployed
• People with disabilities

Check out the Work Opportunity Tax Credit to see if it is something you want to implement. Hiring qualifying individuals can save you up to $9,600 per employee during their first year as long as they work more than 400 hours a year.

This is a great way to reduce the cost of doing business and improve your chances of success. Once you have implemented everything you need, it’s time to look at the different ways to help your business model grow.

Once you’ve done everything to become a successful business owner, you’ll reach a point where you want to meet new goals. There are a ton of ways you can expand a business to challenge yourself more. Some common ways to grow a business include:

• Get more business funding

Expand to new locations

• Mergers and acquisitions (M&A)

Become a federal contractor

Export products.

• Qualify For special business incentives

Let’s start by looking at how to get more funding.

Get more funding

Business financing is normally much easier once you reach three years in business and over $100K in annual revenue. More lenders are willing to offer business loans after this point.

You’ll normally need:

• Your business license
• Employer identification number
• Solid business plan
• Separate business bank account
• Plan for earning returns on the money

We got the chance to pick the brain of Joseph Camberato, who started National Business Capital and has helped businesses secure over $2 billion in financing. Check out our interview with him below.

Once your revenue peaks at a single location, you may want to convert your good small business idea into a chain or franchise. When should you choose each, though?

Start a chain

Turning your single location into a chain can work if you live in a large city and can operate many locations. Running corporate locations in other cities can be a real challenge if you don’t have people you trust in those locations. That’s why many business owners choose a different route.

Start franchising your successful business

Franchising means allowing other business owners to use your business name, intellectual property, and processes to skip many of the trials new business owners face. You’ll need processes for each of these areas of business:

• Inventory management
• Social media and marketing
• Accounting software and processes
• Uniforms and brand guidelines
• Payroll and benefits
• Customer service and quality

You provide the systems to be successful for an initial fee and recurring commission while the franchisee runs the franchise and manages employees and customers. The franchisor normally gets less than 10% of revenue and the franchisee keeps the profits.

Make sure both corporate offices and franchises comply with all laws, rules, and regulations.

Pro Tip: Does franchising sound like a fit? Find out how to franchise a business.

Merge and acquire businesses

Mergers and acquisitions (M&A) are common with large corporations, but you can grow your business by buying or merging with a smaller business, too. The process is similar to starting a new business but has some unique benefits and challenges.

Benefits of M&A

Mergers have some benefits that save money and increase profit margins. Some of the unique benefits of a merger or acquisition include:

• Elimination of some of the accounting software costs
• Gaining the ownership of any intellectual property
• Reduction of duplicate business roles
• Improved route efficiencies for some types of businesses
• Both businesses gain access to new customers
• Reduction of duplicate insurance policies

Meanwhile, there are also challenges when two companies become one.

Challenges of M&A

If a merger or acquisition is not handled well, you may face some challenges over opening new locations like:

• Losing employees
• Changes in business culture
• Losing customers
• Poor integration of accounting software and other business systems
• Government intervention for large mergers

Every business should move with caution when bringing two companies together. If the costs of lost customers and talent exceed the benefits from cost savings, you may end up writing off the purchase.

Federal contracting is big business. The federal government provides assistance to encourage small businesses to bid on contracting opportunities. Find out how to become a federal contractor from the SBA.

Another way to grow your business is exporting goods. There are a ton of resources that are helpful for online business ideas that involve expansion to selling internationally.

Pro Tip: Research exporting products by checking out SBA resources.

Qualify for special business incentives

There are small business grants and other business incentives for the following types of business owners:

• Native Americans
• Rural locations

Women-owned businesses

There are plenty of resources for women about how to start a business. There are specific loans for female entrepreneurs . Plus, women can get training and funding opportunities from the SBA.

Native American-owned businesses

Native Americans can benefit from opportunities the federal government provides including contracting, business development, and other programs. Learn more .

Veteran-owned businesses

Get information on what the SBA offers veterans to help support business ownership. You’ll find training, funding programs, and federal contracting opportunities.

LGBTQ-owned businesses

There are lots of opportunities for the LGBTQ community on the SBA website .

Rural businesses

Rural small businesses are the lifeblood of small towns. That’s why the SBA offers resources to support local economies and communities. Learn more about SBA resources for rural businesses.

Minority-owned businesses

Minority-owned businesses receive support to improve resources in underserved communities . Find out how the SBA provides support for development and growth.

Turn Your Ideas Into a Successful Business

We’ve shared tons of information about how to start a business, but there is so much more for you to do. Most business owners find it easiest to start an online business like an eCommerce store or social media management company because they have low barriers to entry.

Just remember, even though it seems like a lot, it only takes four steps:

• Create your business plan.
• Start your business.
• Develop your business systems.
• Grow your business.

What business are you going to start? Let us know in the comments below.

How To Start $500K/Year Cupcake Business (2024)

A Little Bit About Craig’s Company 

1. Have Clarity About What You Want to Do 

2. come up with a name .

• Your state's business records 
• Federal and state trademark records 
• Social media platforms                                                                                                                                                           

3. Get an Employer Identification Number (EIN) 

4. open a business bank account , 5. get insurance , 6. stand out from the competition .

[su_quote]Quality[/su_quote]

7. Decide on Your Business Structure 

• SOLE PROPRIETORSHIP : This is an unincorporated business with a single owner. Personal income tax is paid on profits earned from the company.
• PARTNERSHIP : is a formal arrangement by two or more parties to manage and operate a business and share its profits. 
• LIMITED LIABILITY COMPANY : is a legal entity with the attributes of both a corporation and a partnership. It offers its owners corporation-like protection from legal liability.
• CORPORATION : is a group of people allowed by law to act as a single entity.

8. Choose Your Location 

• Brick-and-mortar store 
• Delivery truck 
• Food truck 

9. Get Your Permits and Licenses 

10. purchase your equipment .

• Commercial mixers
• Wooden spoons 
• Rubber spatulas 
• Baking pans 
• Cupcake molds 
• Decorating bags and tips
• Mixing bowls
• Non-stick cupcake trays 
• Digital scales 
• Cupcake cooling racks
• Measuring spoons 
• Cupcake display cases 
• Cupcake stands 
• Carryout boxes

11. Keep Your Costs Down 

Pos system .

12. Get a Website 

13. get ranked on google , other ways to do marketing , how do you do that.

[su_youtube url="https://www.youtube.com/watch?v=j2_xwBgyFFU"]

14. Harness the Power of Social Media

15. expand your product line, 16. learn entrepreneurial hacks, 17. identify your biggest challenges .

18. Continue to Grow and Scale

19. work hard.

[su_quote]Hard work.[/su_quote]

Craig’s Top Three Tips

How much money will you need to start a cupcake business.

How to Start A Cupcake Business with No Money 

Final thoughts .

nice work https://binarychemist.com/

My Name is PRETTY NGOMANE. A south African female. Aspiring to do farming. And finding a home away from home for the differently abled persons in their daily needs.

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550+ Business Plan Examples to Launch Your Business

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

Find your business plan example

Accounting, Insurance & Compliance Business Plans

• View All 25

Children & Pets Business Plans

• Children's Education & Recreation
• View All 33

Cleaning, Repairs & Maintenance Business Plans

• Auto Detail & Repair
• Cleaning Products
• View All 39

Clothing & Fashion Brand Business Plans

• Clothing & Fashion Design
• View All 26

Construction, Architecture & Engineering Business Plans

• Architecture
• Construction
• View All 46

Consulting, Advertising & Marketing Business Plans

• Advertising
• View All 54

Education Business Plans

• Education Consulting
• Education Products

Business plan template: There's an easier way to get your business plan done.

Entertainment & Recreation Business Plans

• Entertainment
• Film & Television
• View All 60

Events Business Plans

• Event Planning
• View All 17

Farm & Agriculture Business Plans

• Agri-tourism
• Agriculture Consulting
• View All 16

Finance & Investing Business Plans

• Financial Planning
• View All 10

Fine Art & Crafts Business Plans

Fitness & Beauty Business Plans

• Salon & Spa
• View All 36

Food and Beverage Business Plans

• Bar & Brewery
• View All 77

Hotel & Lodging Business Plans

• Bed and Breakfast

Finish your plan faster with step-by-step guidance, financial wizards, and a proven format.

IT, Staffing & Customer Service Business Plans

• Administrative Services
• Customer Service
• View All 22

Manufacturing & Wholesale Business Plans

• Cleaning & Cosmetics Manufacturing
• View All 68

Medical & Health Business Plans

• Dental Practice
• Health Administration
• View All 41

Nonprofit Business Plans

• Co-op Nonprofit
• Food & Housing Nonprofit
• View All 13

Real Estate & Rentals Business Plans

• Equipment Rental

Retail & Ecommerce Business Plans

• Car Dealership
• View All 116

Technology Business Plans

• Apps & Software
• Communication Technology

Transportation, Travel & Logistics Business Plans

• Airline, Taxi & Shuttle
• View All 62

View all sample business plans

Example business plan format

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

Executive summary

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

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

Products & services

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

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

Market analysis

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

Competition

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

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

Marketing & sales

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

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

Milestones & metrics

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

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

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

Company & team

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

Financial projections

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

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

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

Types of business plans explained

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

Traditional business plan

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

Business model canvas

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

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

One-page business plan

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

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

Growth planning

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

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

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

Download a free sample business plan template

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

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

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

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

Choose a business plan example from a similar type of company

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

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

Use a business plan example as a guide

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

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

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

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

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

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

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

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

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

Prepare to pitch your business

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

Your pitch deck and pitch presentation are likely some of the first things that an investor will see to learn more about your company. So, you need to be informative and pique their interest. Luckily, just like you can leverage an example business plan template to write your plan, we also have a gallery of over 50 pitch decks for you to reference.

With this gallery, you have the option to view specific industry pitches or get inspired by real-world pitch deck examples.

Ready to get started?

Now that you know how to use an example business plan to help you write a plan for your business, it's time to find the right one.

Use the search bar below to get started and find the right match for your business idea.

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Russia may not start an all-out war with NATO, but already has plans to destroy it from within

• Politicians say Russia poses the gravest threat to European security since World War II. 
• But Russia is weakened by the Ukraine war and is in no position to attack NATO, experts say.
• Instead, the Russian president wants to weaken and undermine NATO from within, analysts believe. 

The era of relative peace and prosperity the West has enjoyed since the end of World War II may fast be coming to an end.

In March, Poland's Prime Minister, Donald Tusk, said Europe was in a "pre-war" era and that Russia must not defeat Ukraine for the security of the continent.

"I don't want to scare anyone, but war is no longer a concept from the past," Tusk said in an interview with several European media outlets . "It is real. In fact, it already started more than two years ago," referencing the Russian invasion of Ukraine.

It's one of a series of increasingly stark warnings that the war in Ukraine could be a prelude to a much bigger conflict.

German military planning documents leaked in January imagined Russia launching a massive 2024 offensive to take advantage of waning Western support in Ukraine.

The documents, obtained by Bild , then envisage Russia turning its sights on NATO members in Eastern Europe, with it seeking to destabilize its enemies through cyberattacks and internal chaos in the Baltic states of Estonia, Lithuania, and Latvia .

Germany isn't the only one. Late last year, Poland's national security agency estimated that Russia could attack NATO within three years.

The members of the 32-member NATO alliance are each sworn to protect each other from attack under Article 5 of the Washington Treaty. That means a Russian attack on one member could spark a war involving several nuclear-armed states.

But whether Putin really does intend to attack NATO and what an attack might look like remains unclear.

In March, Putin denied having any plans to attack NATO members, describing such claims as "complete nonsense."

Western military chiefs are not convinced, however. A month earlier, Putin menaced the West with the prospect of a nuclear attack over its support for Ukraine.

He alluded to a recent suggestion by French President Emmanuel Macron that NATO could send troops to Ukraine to support its fight against the Russian invasion.

Analysts told Business Insider that Russia is weakened by the toll of the Ukraine war and in no position to attack the alliance.

But Putin is playing a long game, and the outcome of the Ukraine war and Russia's long-standing bid to undermine and corrode NATO will be key factors in deciding whether Russia strikes.

Putin plots to corrode NATO

Putin has a key advantage over the West, Philip Ingram, a former UK military intelligence officer, told BI.

While Western leaders plan within election cycles of around four years, Putin is an authoritarian leader with no serious challengers to his power. That means he can look decades ahead.

"He does not want, at this moment, a direct confrontation with NATO," said Ingram. "But he thinks in a different way and plans in a different way to we do in the West, and therefore the way NATO countries do."

"So, his ambition in growing is not going to be that he will attack NATO and NATO countries next year. But he will set the conditions to be able to, " Ingram said.

Analysts like Ingram believe that Putin realizes attacking NATO now would exact a vast and punishing cost on Russia. Instead, Putin will seek to weaken NATO from within to create soft spots he can strike in the future if he chooses.

Related stories

To do this, Putin will likely intensify Russia's so-called "hybrid warfare" against NATO countries.

As NATO puts it, hybrid warfare "often plays out in gray zones below the threshold of a conventional war."

"The instruments or tools employed and fused together to unleash hybrid warfare are often difficult to discern, attribute, and corroborate."

They can include spreading conspiracy theories and disinformation, boosting extremist parties in certain countries, stoking terror threats, and launching cyber attacks to undermine the foundation of Western societies.

"The threat posed by Russia to NATO is unlikely to be an invasion, it's more likely to come from a range of other military and non-military threats - what are often called hybrid threats," Ruth Deyermond, an expert on the Russian military at King's College London told BI.

A core aim is to prise away the US from its commitment to defend its European allies, either by hoping it gets embroiled in another costly military campaign elsewhere, or tires of the NATO project.

"For this reason, I expect we'll see Russia using all of the tricks and capabilities in its cupboard to undermine Western unity over the years to come," Bryden Spurling, an analyst with the RAND Corporation, told BI.

A covert war is already underway

Russia, some point out, is already engaged in a war with NATO, albeit covertly.

Only days ago, a group of men in the UK were accused of conducting arson attacks on a Ukraine-linked business on behalf of Russian intelligence. This is just one example of "hybrid warfare" tactics.

In recent months, Russia has also been accused of being behind the scrambling of GPS plane navigation systems in northern Europe and the Baltics, in what some claim could be part of a "hybrid warfare" attack.

Robert Dover, a professor of international security at the University of Hull in the UK, said the question of whether Russia will attack NATO is already redundant. "Russia is already engaged in a meaningful conflict with NATO countries and their allies," he pointed out.

The Ukraine war exposed serious limits to NATO's military power. The alliance has struggled to produce enough artillery shells and ammunition for Ukraine.

During the recent block in US aid, European NATO countries were unable to make up the shortfall, and Ukraine's forces were being outfired at a rate of 10-one on parts of the front line, which were close to collapse.

The US recently released the aid, but the problems the situation exposed run deep, said Spurling, the RAND analyst. This, he said, is a weakness Russia could seek to exploit if not remedied.

"This conflict has exposed how underprepared Western militaries are for war that's not on their terms," he added. "While we maintain that fragility, there is a greater risk that Russia thinks it could chance its arm," he said.

Russia is weakened by the Ukraine war

But Russia also faces massive problems of its own. Its military has been devasted by the Ukraine invasion. According to US estimates, its entire pre-war invasion force of around 300,000 men has been killed or injured (though it has replenished those numbers), its stock of armored vehicles has been devastated, and its commanders have made consistently bad decisions.

"It's hard to imagine a near- or medium-term scenario in which the Russian government has the resources to engage in another war on anything like the scale of Ukraine," Deyermond, the expert on the Russian military at King's College London, told BI.

Any potential attack on NATO would come at such a devastating cost it could imperil Putin's grip on power.

"War with NATO would destroy Russia, as Putin will know very well, and even if he thinks there's a possibility that the US might not step up to defend a fellow NATO member from a Russian invasion, he shows no sign of wanting to find out by playing nuclear Russian roulette," said Deyermond.

But however long it takes, Putin is determined to achieve some form of victory in Ukraine so that he can use it as a platform to plan Russia's next campaign, said Ingram.

After Ukraine, Putin will survey the field and be keen to exploit further opportunities to expand Russian power.

As Ingram puts it: "He wants the Soviet Union back in the hands of a Russian leader, and that's his ultimate goal."

Watch: What's next for the war in Ukraine?

• Main content

Apple, Google and Venmo fight new U.S. plan to monitor payment apps

Their lobbying campaign targets a federal push to subject some tech companies to the same rigorous oversight as banks. one company — block, which owns cash app — is also under investigation..

The U.S. government is weighing whether to treat Apple, Google and PayPal-owned Venmo more like banks — and regularly inspect some of their operations — in a move meant to protect millions of Americans who now use their smartphones to pay at the register and send money to family and friends.

But the prospect of heightened federal oversight has sparked deep and wide-ranging unease throughout the tech industry, triggering a lobbying offensive that aims to limit the government’s power to monitor mobile wallets, accounts or other digital payment services.

The spats have occurred with little fanfare on Capitol Hill and at the Consumer Financial Protection Bureau, which unveiled its proposal for new tech scrutiny in November. The agency seeks to subject the largest payment apps and services — from money-transferring tools like Cash App, for example, to the smartphone wallets offered by Apple and Google — to the same rigorous checkups as their brick-and-mortar predecessors.

In practice, the CFPB would gain the ability to conduct on-site reviews at these companies and examine their private documents and communications, a form of monitoring — known as supervision — meant to ensure the stewards of Americans’ money have sound financial practices. Major banks, such as Bank of America, Chase and Wells Fargo, are already subject to such federal inspections.

The CFPB has portrayed its proposal as a response to rising complaints from smartphone users, who say they struggle to resolve fraudulent charges, restore missing balances and address myriad other troubles with many popular digital payment services. While the agency’s rules are not final, regulators have also explored ways to invoke their existing authorities so that they can inspect select tech companies on a case-by-case basis, according to two people familiar with the matter, who spoke on the condition of anonymity to discuss the confidential rule-writing process.

But the tech industry has been unsparing in its opposition, arguing there is no proof that their products harm consumers. An executive at the lobbying group TechNet, which represents Apple, Google and PayPal, told lawmakers at a congressional hearing in March that the government’s proposal is legally “defective.” Other tech lobbyists have expressed fears that the CFPB stands to gain unprecedented access to their businesses, potentially enabling the government to open probes and levy punishments if it finds misconduct even outside of payment apps.

The fierce resistance suggests the tech industry would sooner sue the CFPB than submit to greater federal oversight of digital payments, foreshadowing yet another rift between government regulators and the tech and financial heavyweights under their watch.

“These are not services that a few people are using. These are products that are becoming almost a standard part of how people transact, so it’s pretty urgent,” said Adam Rust, director of financial services at the Consumer Federation of America, which has encouraged the CFPB to act. “There’s widespread use and systematic inconsistency in [oversight].”

Apple, Google and PayPal each declined to comment. Carl Holshouser, executive vice president at TechNet, said the organization does not oppose federal oversight. But he said the CFPB wrote its rules so broadly that small and medium-size businesses could face unnecessary inspections, too.

“I think the CFPB’s intent is to have a much wider regulatory purview, which will give them the ability to regulate all of the tech industry,” he said.

Rohit Chopra, the director of the CFPB, said in a statement that the agency’s proposed rules would ensure “large payment companies of all types get the appropriate oversight,” adding: “Families should get the same consumer protections regardless of whether their payments are handled by a Wall Street bank or a Silicon Valley tech giant.”

The new scrutiny in Washington reflects the rapid sea change in the way Americans spend cash. Mobile wallets, like Apple Pay, are now commonplace, and peer-to-peer money transfer apps, including Venmo, have experienced a meteoric rise over the past decade. An estimated 159 million Americans made such transactions in 2023, according to data from eMarketer , which projects that just under 75 percent of all smartphone owners will use such tools by 2027.

Spanning a vast array of services, payment apps and platforms are regulated by a patchwork of laws, from state money-transfer licenses to federal rules that govern deposits, data and consumer disputes. While some states already supervise tech companies, the extent of their reviews — and the nature of their enforcement efforts — can vary dramatically across the country, according to Christopher Odinet, a law professor at the University of Iowa who specializes in consumer finance.

“These regulators, they come in many different shapes and sizes,” he said, noting some have “really thin staffs and really lean budgets.”

But the tech companies that offer these products are not banks, so they may not receive the same federal scrutiny as other financial institutions even when their offerings are indistinguishable to the average consumer. If a user were to store money in their account on PayPal, for example, that cash isn’t always federally insured — whereas a traditional bank deposit would be guaranteed by the government and regulated accordingly.

Citing these disparity, the CFPB issued rules in November meant to subject tech giants to tougher oversight. The agency proposed supervising the largest digital consumer payment companies — those with more than 5 million transactions annually — to ensure they follow federal laws, including those that prohibit deceptive practices and protect consumers’ data.

With more aggressive monitoring, the CFPB said, it could more easily spot and address violations because the supervision process empowers the government to seek changes to companies’ practices — or take legal action. The agency’s plan arrived roughly two years after Chopra ordered some of the same companies to turn over data related to their payment apps.

“The traditional lines we drew within the financial sector have become fuzzy over the past several decades,” Chopra said in a speech before the proposed rules were released. “Big Tech companies are now taking advantage of that blurring as they move into finance, threatening the fundamental separation between banking, money and payments on one side and our real economy on the other.”

While the agency did not identify companies it would target, officials estimated that about 17 digital payment services would be subject to enhanced oversight. But the tech industry fiercely rebuked the idea, saying the CFPB would saddle a much wider array of products and services with costly, unnecessary scrutiny.

In January, lobbyists for Block, which owns Cash App, and for other services including Venmo, told the government its proposal is “without justification” and conflates many types of apps and services. Some criticisms echoed the complaints that companies tend to levy at the CFPB before suing, though the leader of the group said it was too soon to comment on next steps.

“Knowing the atmosphere, I wouldn’t be surprised if someone doesn’t legally challenge this rule,” said Penny Lee, the president of the Financial Technology Association.

Many financial technology companies faulted the CFPB for rules that could ultimately cover many more companies than portrayed — as many as 180, according to TechNet’s Holshouser, who blasted it as a “power grab to regulate.” Lobbyists for some of the most popular cryptocurrencies , crypto wallet services and their investors, meanwhile, told the CFPB it had no authority over their industry.

Some of the largest tech companies, including Apple, Amazon and Google, also flagged the “significant costs” they would face under greater federal oversight. Speaking through one of their top Washington voices — the Computer and Communications Industry Association — they fretted that the CFPB could gain unprecedented visibility into their inner workings. The tech giants said that the rules would “allow the agency to supervise and examine other activities,” even outside of payment apps, potentially opening the door for other federal investigations and punishments.

Already, Apple, Amazon and Google are facing separate federal lawsuits that accuse them of violating antitrust laws, and all three companies have been sanctioned or faced complaints related to their handling of consumers’ data. In its own filing, Amazon told the CFPB it shouldn’t be covered by the new rules at all, arguing there are no “consumer risks” with tools like its Amazon Pay service, which helps users pay for goods on other merchants’ websites and doesn’t store customers’ cash. (Amazon founder and former chief executive Jeff Bezos owns The Washington Post.)

The lobbying campaign stands in stark contrast to the thousands of complaints filed in recent years by aggrieved consumers, who have consistently told the CFPB that tech companies mishandle their money. Some have sought federal help after they struggled to resolve unauthorized charges on Venmo, for example; others have asked the bureau for aid when they couldn’t get the attention of Cash App about fraud or other issues affecting their balances.

Some of the accusations have sparked CFPB probes: The agency opened an investigation in 2022 into Block over its “handling of customer complaints and disputes,” the company later told investors. In February, the parent company of Cash App said regulators are now “considering recommending that the CFPB take legal action.” A spokesperson declined to comment for this article.

“We’ve seen a lot of problems,” said Lauren Saunders, an associate director at the National Consumer Law Center, which has advocated for agency action. “We’ve seen [consumers facing] a lot of fraud in payments, a lot of trouble reaching customer service, a lot of trouble getting their accounts unfrozen.”

Consumer groups largely have heralded the CFPB’s approach, as have state officials, who encouraged the agency this year to adopt rules that might aid their own investigations. Matthew Platkin, the attorney general of New Jersey, said in an interview that he led a coalition of 19 states in asking the CFPB to intervene, after seeing “a significant increase in risk our residents face when using a whole host of apps, especially when it comes to mobile transactions.”

Even before the CFPB finalizes its rules, however, the agency can begin supervising the most high-risk companies under its founding law. Chopra first announced that the CFPB would revise this “dormant authority” in 2022, citing the “rapid growth of consumer offerings by nonbanks” and the need to ensure they are held to the “same standards” as their financial counterparts.

Much of this work tends to occur in secret, unless companies reveal they are under supervision or the CFPB places an uncooperative firm under a legal order. It has implemented such reviews for at least one fintech company, Affirm, which offers a “buy now, pay later” service that helps people obtain short-term loans for large purchases. The company disclosed the scrutiny last year in filings with investors.

“We have always viewed the CFPB as one of our regulators, which is why we have continuously engaged with them as well as all of our other regulatory stakeholders,” Affirm spokesman Matt Gross said in a statement.

Other technology companies have been more averse to greater federal oversight, choosing to take their complaints to Congress, where Republicans have long sided with industry in seeking to rein in — or eliminate entirely — the CFPB. The political dynamic was on display last month, as House GOP leaders convened a hearing to explore the agency’s “latest action to restrict competition in payments,” primarily calling tech lobbyists, lawyers and allies to testify.

Republicans thrashed the CFPB for pursuing what they called unnecessary regulation: Rep. French Hill (R-Ark.), the top lawmaker on the House’s leading fintech-focused committee, said the CFPB’s rules would give it “carte blanche to knock down the door of companies large and small with their fleet of examiners.”

“The CFPB is trying to cast as wide of a net as possible and become a technology regulator,” he said.

Many of the GOP attacks mimicked complaints levied by technology companies, which have donated to Hill and other panel lawmakers, according to federal records reviewed by OpenSecrets, a money-in-politics watchdog.

“We have to protect consumers and safeguard them,” TechNet’s Holshouser told lawmakers during the hearing, “but onerous regulations like this will have a chilling effect on innovation.”