what is a start up summary in business plan

Start Up Summary Business Plan: Everything You Need to Know

A start up summary business plan includes the description of your products and services, your business structure and licensing requirements, among others. 3 min read

A start up summary business plan includes the description of your products and services, the structure of your business, your target market, marketing strategy, funding requirements, financial projections, and licensing requirements, among others. It serves as a roadmap for your business.

A business plan helps you take a realistic view of your idea and double check whether it's really worth pursuing. It tells you what issues you may face down the line and how to tackle them.

Tips for Writing a Business Plan

1. Find Out What Makes You Different

Analyze what sets you apart from your competition. How do you plan to differentiate your product? It could be the use of recycled material that promotes sustainable living, the contribution of a certain percentage of your revenue to charity, or some other factor that may help you build your brand. Think broadly about such differentiating factors before you get into the nitty-gritty of your research.

2. Keep It Short

Including lots of details only creates confusion and distraction. Keep your business plan short and concise by focusing only on important details - you can store the ancillary data elsewhere. For instance, while it may be helpful to include the major results of your market research, it's not necessary to include every detail of what your website would look like. While your business plan should not be written in a hurry, you should exclude from it everything that's not essential to the core plan.

3. Stay Flexible

Treat your business plan as a living document that will evolve with time. Always keep it updated with the latest changes . For example, if your business plan is already two years old and you are applying for a new funding, you should consider updating your business plan.

Steps to Writing a Business Plan

1. Answer Important Questions Regarding Your Business

Think of questions that may come to the minds of your customers and stakeholders about your business. Answer each question honestly in a sentence or two. You should be able to substantiate your beliefs with proper arguments.

Some of the important questions to answer may include the following:

• What are the different types of products and services that you provide?
• How do you source or provide your product or service?
• How are customers expected to use your products and services?
• What will be your source of immediate revenue?
• What types of clients will you target immediately?
• How will you market your business with your current resources?
• What makes you different from your competitors?
• Who are your secondary and tertiary clients that you plan to target after achieving success with your primary clients?

2. Prepare Checklists

Create checklists to measure the efficacy of your business plan. It will help you revise your plan as you continue to learn from your successes and failures. Break each part of your start up plan into actionable steps and add deadlines, wherever possible. List all the steps chronologically in the form of a checklist or task reminders.

3. Execute Your Plan

Start executing the action steps. Take down notes whenever there is something new to learn. On completion of each task, evaluate the results by answering the following questions:

• What action steps worked as expected and what didn't?
• What was the end result of each action step?
• What was the overall experience? Was it positive or negative and why?
• What new things did you learn?
• Which action steps should be improved and how?
• Which steps should be completely deleted?

You will make new discoveries while executing the action steps. Fine tune your plan accordingly for better results.

4. Revise the Draft

Based on the experience gathered during the execution of your checklist, determine what assumptions you made earlier are true and which of them are false or incomplete. Identify the loopholes in the existing steps and address them.

5. Update Your Plan

Do away with the steps that were a complete failure and improve on minor successes. Modify flawed assumptions to transform them into true statements. Use your learning to make your checklists more in-depth and effective. Keep doing this on a regular basis.

Getting all of your original assumptions right doesn't mean that success will be easy. Remember, it's just the beginning. Keep improving your checklist and prepare well-defined blueprints for different parts of your business - it will help you stay on top of the game.

If you need help with your start up summary business plan, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

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How to Write the Company Summary in a Business Plan

Company Overviews Show How the Pieces of a Business Work

What to Include in Your Company Summary

Getting started on your company summary, examples of a company summary, tips for writing a company summary, frequently asked questions (faqs).

Image by Theresa Chiechi © The Balance 2019

The company summary in a business plan—also known as the company description or overview—is a high-level look at what you are as a company and how all the elements of the business fit together.

An effective company summary should give readers, such as potential investors, a quick and easy way to understand your business, its products and services, its mission and goals, how it meets the needs of its target market, and how it stands out from competitors.

Remember to stick to the big picture before you begin writing your company summary. Other sections of your business plan will provide the specific details of your business. The summary synthesizes all of that information into one page.

Key Takeaways

• The company summary in a business plan provides an overview with a high-level description of your company.
• A company summary might include your mission statement, goals, target market, products, and services, as well as how it stands out from competitors.
• The company summary can also be customized for a specific objective or audience, such as to secure financing from investors or banks.

The company summary section of a business plan should include:

• Business name
• Legal structure (i.e., sole proprietorship ,  LLC ,  S Corporation , or  partnership )
• Management team
• Mission statement
• Company history (when it started and important milestones)
• Description of products and services and how they meet the needs of the marketplace
• Target market (who will buy your product or services)
• Competitive advantage (what sets you apart in the marketplace to allow you to succeed)
• Objectives and goals (plans for growth)

The U.S. Small Business Administration (SBA) website has a lot of information available if you've never written a business plan before. The SBA provides examples of business plans for different types of companies.

Before you begin, you should decide whether you want to go with a traditional business plan format or a lean startup format. The traditional format is appropriate if you want to have a comprehensive, detail-oriented plan or if you are requesting financing. The lean startup format is best for those who have a relatively simple business and want to start it quickly or as a starting point for those who plan to refine and change the plan regularly.

No matter which type of business plan you choose, you'll need to include a company summary.

Although there are many blueprints for writing a company summary, below are a couple of examples to get you started.

Consulting Firm

You can opt for a concise opening paragraph such as this one:

XYZ Consulting is a new company that provides expertise in search marketing solutions for businesses worldwide, including website promotion, online advertising, and search engine optimization techniques to improve its clients' positioning in search engines. We cater to the higher education market, including colleges, universities, and professional educational institutions.

Several elements of the company summary are covered here, including the name (XYZ Consulting), history (new company), description of services (web promotion, SEO, advertising) and why it's needed (improve positioning in search engines), and the target market (higher education).

Starbucks Coffee Company Overview

Starbucks breaks down the company overview on its website into the following sections:

"Our Heritage"

Here the company describes how long the company has been in business, citing its roots, the founder, Howard Schultz, and how he was inspired to open the first Starbucks in Seattle after visiting Italy. It briefly mentions the growth of millions of customers and how the company's heritage remains important to its long-term success.

"Coffee & Craft"

The overview describes the high-quality products and services being offered and why they stand out from the competition by describing the detailed process of choosing and growing coffee beans. You'll notice they don't suggest their product is a low-cost product but instead provide a high level of "experiences to savor."

"Our Partners"

Starbucks describes its employees as partners that work together in an inclusive manner to achieve success. It highlights how they are at the center of the experience.

"Pursuit of Doing Good"

The company describes its values and how it gives back to the community.

Tesla Inc. Business Overview

Below are excerpts of the business overview pages from the annual 10-K filing for Tesla Inc.

"We design, develop, manufacture, sell and lease high-performance fully electric vehicles and energy generation and storage systems, and offer services related to our products. We generally sell our products directly to customers, including through our website and retail locations.

We also continue to grow our customer-facing infrastructure through a global network of vehicle service centers, mobile service technicians, body shops, supercharger stations and destination chargers to accelerate the widespread adoption of our products.

We emphasize performance, attractive styling and the safety of our users and workforce in the design and manufacture of our products and are continuing to develop full self-driving technology for improved safety.

Our mission to accelerate the world’s transition to sustainable energy, engineering expertise, vertically integrated business model and focus on user experience differentiate us from other companies."

Competition

Tesla highlights the competitive automotive market and how the company differentiates itself from the larger, more established competitors.

"The worldwide automotive market is highly competitive and we expect it will become even more competitive in the future as we introduce additional vehicles in a broader cross-section of the passenger and commercial vehicle market and expand our vehicles’ capabilities. We believe that our vehicles compete in the market both based on their traditional segment classification as well as based on their propulsion technology.

Competing products typically include internal combustion vehicles from more established automobile manufacturers; however, many established and new automobile manufacturers have entered or have announced plans to enter the market for electric and other alternative fuel vehicles."

Intellectual Property

The company highlights its intellectual property, including trademarks and patents.

"We place a strong emphasis on our innovative approach and proprietary designs which bring intrinsic value and uniqueness to our product portfolio. As part of our business, we seek to protect the underlying intellectual property rights of these innovations and designs such as with respect to patents, trademarks, copyrights, trade secrets and other measures, including through employee and third-party nondisclosure agreements and other contractual arrangements."

Mission Statement

The company highlights its mission statement and its sustainability goals using environmental, social, and governance (ESG) and human capital resources.

"The very purpose of Tesla's existence is to accelerate the world's transition to sustainable energy. We believe the world cannot reduce carbon emissions without addressing both energy generation and consumption, and we are designing and manufacturing a complete energy and transportation ecosystem to achieve this goal. As we expand, we are building each new factory to be more efficient and sustainably designed than the previous one, including with respect to waste reduction and water usage, and we are focused on reducing the carbon footprint of our supply chain."

There are other items you can include in your company summary to expand on the areas that you'd like people to focus on, depending on your objective.

You might provide more information about the company's location, legal structure, and management team. You can also include more information about the:

• Company's history, such as a family business that's been in operation for multiple generations
• Business objectives, including short-term and long-term goals
• Business strengths, highlighting anything that might give your company a competitive advantage in the field

You can also customize the summary if you have a specific objective or a targeted audience. For example, if the goal of your business plan is to secure funding, you might focus on areas that appeal to investors and lending institutions, including:

• Why you're the best person to manage the business
• Your experience in your field, as well as the total years of experience of your management team
• Expertise or special talents of your team, including training, licenses, certifications
• How you plan to make the business a success
• Financial information, such as a high-level discussion of your track record of revenue growth and the financial opportunities that can be realized as a result of securing financing

You may also want to address any areas of perceived weakness by explaining how you'll overcome them or compensate.

How do you write a company overview?

You might describe the company, its location, legal structure, and management team. You can also highlight the company's business objectives, goals, and strengths. You can also customize the summary to a specific audience, such as a bank or lender, focusing on your competitive advantages and highlights of recent financial success.

What should an organizational overview include?

Some of the discussion points to include in a company overview might be:

• Company name and location
• Legal structure such as a sole proprietorship, LLC, or partnership
• Mission statement and management team
• Description of your products and services and how they are needed
• Target market or who are your customers
• Competitive advantage or what makes your company different

The Clute Institute. " Using Business Plans for Teaching Entrepreneurship ," Page 734.

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

Starbucks Coffee Company. " Our Company ."

United States Securities and Exchange Commission. " Form 10-K, Annual Report Pursuant to Section 13 or 15(D) of the Securities Exchange Act of 1934 for the Fiscal Year Ended December 31, 2021, Tesla, Inc., " Pages 3-12.

How To Write A Business Plan (2024 Guide)

Updated: Apr 17, 2024, 11:59am

Table of Contents

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

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

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Drafting the Summary

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

Ask for Help

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

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

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

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

Numbers-based Goals

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

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

Intangible Goals

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

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

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

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

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

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

Business Operations Costs

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

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

Other Costs

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

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

How do I write a simple business plan?

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

What are some common mistakes in a business plan?

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

What basic items should be included in a business plan?

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

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Table of Contents

How to make a business plan

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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• Write Your Business Plan | Part 1 Overview Video
• The Basics of Writing a Business Plan
• How to Use Your Business Plan Most Effectively
• 12 Reasons You Need a Business Plan
• The Main Objectives of a Business Plan
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• The Top 4 Types of Business Plans
• A Step-by-Step Guide to Presenting Your Business Plan in 10 Slides
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• How to Fund Your Business With an SBA Loan
• How to Fund Your Business With Bonds and Indirect Funding Sources
• How to Fund Your Business With Venture Capital
• How to Fund Your Business With Angel Investors
• How to Use Your Business Plan to Track Performance
• How to Make Your Business Plan Attractive to Prospective Partners
• Is This Idea Going to Work? How to Assess the Potential of Your Business.
• When to Update Your Business Plan
• Write Your Business Plan | Part 3 Overview Video
• How to Write the Management Team Section to Your Business Plan
• How to Create a Strategic Hiring Plan
• How to Write a Business Plan Executive Summary That Sells Your Idea
• How to Build a Team of Outside Experts for Your Business
• Use This Worksheet to Write a Product Description That Sells
• What Is Your Unique Selling Proposition? Use This Worksheet to Find Your Greatest Strength.
• How to Raise Money With Your Business Plan
• Customers and Investors Don't Want Products. They Want Solutions.
• Write Your Business Plan | Part 4 Overview Video
• 5 Essential Elements of Your Industry Trends Plan
• How to Identify and Research Your Competition
• Who Is Your Ideal Customer? 4 Questions to Ask Yourself.
• How to Identify Market Trends in Your Business Plan
• How to Define Your Product and Set Your Prices
• How to Determine the Barriers to Entry for Your Business
• How to Get Customers in Your Store and Drive Traffic to Your Website
• How to Effectively Promote Your Business to Customers and Investors
• Write Your Business Plan | Part 5 Overview Video
• What Equipment and Facilities to Include in Your Business Plan
• How to Write an Income Statement for Your Business Plan
• How to Make a Balance Sheet
• How to Make a Cash Flow Statement
• How to Use Financial Ratios to Understand the Health of Your Business
• How to Write an Operations Plan for Retail and Sales Businesses
• How to Make Realistic Financial Forecasts
• How to Write an Operations Plan for Manufacturers
• What Technology Needs to Include In Your Business Plan
• How to List Personnel and Materials in Your Business Plan
• The Role of Franchising
• The Best Ways to Follow Up on a Buisiness Plan
• The Best Books, Sites, Trade Associations and Resources to Get Your Business Funded and Running
• How to Hire the Right Business Plan Consultant
• Business Plan Lingo and Resources All Entrepreneurs Should Know
• How to Write a Letter of Introduction
• What To Put on the Cover Page of a Business Plan
• How to Format Your Business Plan
• 6 Steps to Getting Your Business Plan In Front of Investors

How to Write a Business Plan Executive Summary That Sells Your Idea Here's an easy-to-follow outline to create an impactful business plan executive summary.

By Eric Butow Oct 27, 2023

Key Takeaways

• The purpose of an executive summary
• Common mistakes to avoid

Opinions expressed by Entrepreneur contributors are their own.

This is part 4 / 9 of Write Your Business Plan: Section 3: Selling Your Product and Team series.

The first part of your plan that anybody will see, after the title page and table of contents, is the executive summary. This could be considered an expanded table of contents (in prose form) because it's more than an introduction to the rest of the plan. It's supposed to be a brief look at the key elements of the whole plan—and it's critical.

Executive Summaries Sell Ideas

The actual executive summary should be only a page or two. In it you may include your mission and vision statements, a brief sketch of your plans and goals, a quick look at your company and its organization, an outline of your strategy, and highlights of your financial status and needs. If you've ever read a CliffsNotes version of a classic novel, you get the idea. Your executive summary is the CliffsNotes of your business plan.

Related: Executive Summary

Labor over your summary. Polish it. Refine it. Ask friends and colleagues to take a look at it, and then take their suggestions to heart. If your plan isn't getting the response that you want when you put it to work, suspect a flaw in the summary. If you get a chance to look at another plan that was used to raise a pile of cash, give special scrutiny to the executive summary.

The summary is the most important part of your whole plan. Even if a plan is relatively short, it's difficult for most people to keep that much information in their minds at once. It's much easier to get your arms around the amount of information—just one or two pages—in an executive summary. Your plan is going to be judged on what you include in the summary and on how well you present it.

A good rule of thumb for writing an effective and efficient business plan is to avoid repeating information. Brief is better and clearer, and needless repetition may annoy some readers and confuse others. Take extra care when writing your summary. You'll be glad you did.

Related: How to Craft a Business Plan That Will Turn Investors' Heads

Ultimately, you want the executive summary to be as strong as possible because it is also the first thing people read in your plan, and we all know the power of a strong first impression. This is where you want to wow people and make them think. This is like the coming attractions, or trailers, at the movie theater. You want that trailer to be enticing and bring the audience members back to see the film. Likewise, you want your readers to want to read your plan.

Your Business Plan's Elevator Pitch

As Tim Berry writes in his article How to Write an Executive Summary : "The executive summary is like an elevator pitch. You're selling someone on reading your full plan while quickly summarizing the key points. Readers will expect it to cover certain areas of your business—such as the product, market, and financial highlights, at the very least. While you need to include what's necessary, you should also highlight areas that you believe will spark the reader's interest. Remember, you're telling the brief but convincing story of your business with this summary. Just be sure that you're able to back it up with the right details with the rest of your business plan."

Related: How to Write a Business Plan

When Should You Write Your Executive Summary?

Because the executive summary comes first in your plan, you may think you should write it first as well. Actually, you should write it last, after you've spent considerable time mulling over every other part of your plan. Only then will you truly be able to produce a summary of all that is there. Returning to the CliffsNotes analogy, it's impossible to summarize a book until the book is written.

Purposes of the Executive Summary

The executive summary has to perform a host of jobs. First and foremost, it should grab the reader's attention. It has to briefly hit the high points of your plan. It should point readers to questions requiring detailed responses to the full-length sections of your plan where they can get answers. It should ease the task of anybody whose job it is to read it, and it should make that task enjoyable by presenting an interesting and compelling account of your company.

The first question any investor has is, "How much?" followed closely by, "When will I recoup my investment?" Perceived risk and exit strategies are supportive information, and these in turn are supported by the quality of the management team and the proposed strategies.

Related: Why You Shouldn't Send Your Business Plan to Investors

It doesn't much matter whether you are presenting the plan to a family member, friend, banker, or sophisticated investors such as investment bankers or venture capitalists. They all need the same information. Concealing the amount and terms will only lessen your chances of successful financing.

How Long Should an Executive Summary Be?

Five minutes. This is how long an average reader will spend with your plan. If you can't convey the basics of your business in that time, your plan is in trouble. So make sure your summary, at least, can be read in that time and that it's as comprehensive as possible within that constraint. If you are using a deck, limit yourself to one slide and one minute of comments.

Related: How to Create a Business Plan Investors Will Love

Points to Include in an Executive Summary

A suggested format for an executive summary:

The business idea and why it is necessary. What problem does it solve?

• How much will it cost, and how much financing are you seeking?
• What will the return be to the investor? Over what length of time?
• What is the perceived risk level?
• Where does your idea fit into the marketplace?
• What is the management team?
• What are the product and competitive strategies?
• What is your marketing plan?
• What is your exit strategy?

If you can address each of these in two or three sentences, you will have a twenty to twenty-seven-sentence executive summary.

Company Description

If your company is complex, you'll need a separate section inside the plan with a heading like "Company Description" to describe its many product lines, locations, services, or whatever else it is that makes it a little too complicated to deal with quickly. In any event, you provide a brief description, no longer than a few sentences, of your company in the executive summary. And for many firms, this is an adequate basic description of their company. Here are some one- or two-sentence (mock) company descriptions:

John's Handball Hut is the Hamish Valley's leading purveyor of handball equipment and clothing.

Boxes Boxes Boxes Inc. will provide the people of the metropolitan area with a comprehensive source for packing materials, containers, and other supplies for the do-it-yourself move.

Salem Segway Witch Tours offers tourists the only Segway tours of the infamous home of the seventeenth-century witch trials.

Related: Turn Your Business Plan Into Money!

Optional Information

The following items are not a necessity in your business plan: mission statement and corporate vision. If you have honed either down to a clear and concise sentence, by all means, use it in your plan.

Mission Statement

A mission statement is a sentence or two describing the company's function, market, competitive advantages, and business goals and philosophies.

Many mission statements communicate what your business is about and should include a description of what makes you different from everybody else in your field. Mission statements have a place in a plan: They help investors and other interested parties get a grip on what makes your company special. A mission statement should be clearly written. Here are some (again, mock) examples:

River City Roadsters buys, restores, and resells classic American cars from the 1950s and 1960s to antique-auto buffs throughout central Missouri.

Captain Curio is the Jersey Shore's leading antique store, catering to high-quality interior decorators and collectors across the tri-state area.

August Appleton, Esq., provides low-cost legal services to personal- injury, workers' compensation, and age-discrimination plaintiffs in Houston's Fifth Ward.

Related: How to Use Your Business Plan Most Effectively

Corporate Vision

A mission statement describes the goals and objectives you could "reasonably" expect to accomplish. A small software company whose mission statement included the goal of "putting Microsoft out of business" would be looked upon as foolishly naive.

In a vision statement, however, just those sorts of grandiose, galactic-scale images are perfectly appropriate. When you "vision"—to borrow the management consultant's trick of turning nouns into verbs—you imagine the loftiest heights you could scale, not the next step or several steps on the ladder.

Does a vision statement even have a place in a business plan? You could argue that it doesn't, especially because many include personal components such as "to love every minute of my work and always feel I'm doing my best." But many investors deeply respect visionary entrepreneurs. So, if you feel you have a compelling vision, there's no reason not to share it in your plan.

Related: 6 Tips for Making a Winning Business Presentation

Extract the Essence

The key to the executive summary is to pick out the best aspects of every part of your plan. In other words, you want to extract the essence. Instead of describing everyone in your company, talk only about your key managers. Instead of talking about all your products, mention only the major ones or discuss only product lines instead of individual products. It's a highlight reel, so to speak.

Article Tools and Summarizing the Summary

Within the overall outline of the business plan, the executive summary will follow the title page. The summary should tell the reader what you are planning to do. All too often, the business owner's desires are buried and lost when the reader scrolls through. Clearly state what you are planning to do (your ideas) and what you are seeking in the summary.

The statement should be kept short and businesslike, ideally no more than half a page. It could be longer, depending on how complicated the use of funds may be, but the summary of a business plan, like the summary of a loan application, is generally no more than one page. Within that space you'll need to provide a synopsis of the entire business plan. Key elements that should be included are:

Financial requirements. Clearly states the capital needed to start or expand the business. Detail how the capital will be used and the equity, if any, that will be provided for funding. If the loan for initial capital will be based on security instead of equity within the company, you should also specify the source of collateral.

Related: The One-Paragraph Start-Up Plan

Business concept. Describes the business, its product(s), and the market it will serve. It should point out just exactly what will be sold, to whom, and why the business will hold a competitive advantage.

Financial features. Highlights the important financial points of the business including sales, profits, cash flows, and return on investment. Current business position. Furnishes relevant information about the company, its legal form of operation, when it was formed, the principal owners, and key personnel.

Major achievements. Details any developments within the company that are essential to the success of the business. Major achievements include items like patents, prototypes, location of a facility, any crucial contracts that need to be in place for product development, or results from any test marketing that has been conducted.

When writing your statement of purpose, don't waste words. If the executive summary is eight pages, nobody's going to read it because it will be very clear that the business, no matter what its merits, won't be a good investment because the principals are indecisive and don't really know what they want. Make it easy for the reader to realize at first glance both your needs and capabilities.

Related: The Main Objectives of a Business Plan

More in Write Your Business Plan

Section 1: the foundation of a business plan, section 2: putting your business plan to work, section 3: selling your product and team, section 4: marketing your business plan, section 5: organizing operations and finances, section 6: getting your business plan to investors.

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How to Write a Business Plan for a Small Business

Noah Parsons

24 min. read

Updated September 2, 2024

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

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

• The basics of writing a business plan

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

You understand that writing a business plan helps you: 

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

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

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

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

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

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

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

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

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

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

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• What to include in your business plan

Executive summary

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

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

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

Your executive summary should include:

• A summary of the problem you are solving
• A description of your product or service
• An overview of your target market
• A brief description of your team
• A summary of your financials
• Your funding requirements (if you are raising money)

Dig Deeper: How to write an effective executive summary

Products and services description

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

This is usually called a problem and solution statement .

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

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

Market analysis

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

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

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

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

Related: Target market examples

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

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

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

Dig Deeper: Learn how to write a market analysis

Competitive analysis

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

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

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

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

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

Marketing and sales plan

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

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

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

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

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

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

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

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

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

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

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

Business operations

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

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

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

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

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

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

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

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

Key milestones and metrics

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

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

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

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

Possible milestones might be:

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

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

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

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

Dig Deeper: How to use milestones in your business plan

Organization and management team

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

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

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

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

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

• Sole proprietor
• Partnership

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

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

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

Financial plan

The last section of your business plan is your financial plan and forecasts. 

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

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

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

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

Dig Deeper: How to create financial forecasts and budgets

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

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

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

Dig Deeper : What to include in your business plan appendix

Optional: Business plan cover page

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

Your cover page should be simple and include:

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

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

Dig Deeper: How to create a business plan cover page

How to use AI to help write your business plan

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

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

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

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

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

• Writing tips and strategies

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

Determine why you are writing a business plan

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

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

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

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

Keep things concise

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

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

Have someone review your business plan

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

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

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

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

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

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

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

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

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

Common pitfalls and how to avoid them

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

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

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

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

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

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

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

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

Use your business plan to manage your business

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

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

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

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

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

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

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

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

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

Learn More: How to run a regular plan review

How to write a business plan FAQ

What is a business plan?

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

What are the benefits of writing a business plan?

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

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

What are the 7 steps of writing a business plan?

The seven steps to writing a business plan include:

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

What are the 5 most common business plan mistakes?

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

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

What questions should be answered in a business plan?

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

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

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

How long should a business plan be?

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

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

What are the different types of business plans?

While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. Here are a few common business plan types worth considering.

Traditional business plan: The tried-and-true traditional business plan is a formal document meant to be used when applying for funding or pitching to investors. This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix.

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

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

Lean Plan: The Lean Plan is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance. It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.

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

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

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

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

Table of Contents

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

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What Is a Business Plan?

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

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

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A business plan is a document that outlines a company's goals and the strategies to achieve them. It's valuable for both startups and established companies. For startups, a well-crafted business plan is crucial for attracting potential lenders and investors. Established businesses use business plans to stay on track and aligned with their growth objectives. This article will explain the key components of an effective business plan and guidance on how to write one.

Key Takeaways

• A business plan is a document detailing a company's business activities and strategies for achieving its goals.
• Startup companies use business plans to launch their venture and to attract outside investors.
• For established companies, a business plan helps keep the executive team focused on short- and long-term objectives.
• There's no single required format for a business plan, but certain key elements are essential for most companies.

Investopedia / Ryan Oakley

Any new business should have a business plan in place before beginning operations. Banks and venture capital firms often want to see a business plan before considering making a loan or providing capital to new businesses.

Even if a company doesn't need additional funding, having a business plan helps it stay focused on its goals. Research from the University of Oregon shows that businesses with a plan are significantly more likely to secure funding than those without one. Moreover, companies with a business plan grow 30% faster than those that don't plan. According to a Harvard Business Review article, entrepreneurs who write formal plans are 16% more likely to achieve viability than those who don't.

A business plan should ideally be reviewed and updated periodically to reflect achieved goals or changes in direction. An established business moving in a new direction might even create an entirely new plan.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. It allows for careful consideration of ideas before significant investment, highlights potential obstacles to success, and provides a tool for seeking objective feedback from trusted outsiders. A business plan may also help ensure that a company’s executive team remains aligned on strategic action items and priorities.

While business plans vary widely, even among competitors in the same industry, they often share basic elements detailed below.

A well-crafted business plan is essential for attracting investors and guiding a company's strategic growth. It should address market needs and investor requirements and provide clear financial projections.

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

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

The length of a business plan can vary greatly from business to business. Regardless, gathering the basic information into a 15- to 25-page document is best. Any additional crucial elements, such as patent applications, can be referenced in the main document and included as appendices.

Common elements in many business plans include:

• Executive summary : This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services : Describe the products and services the company offers or plans to introduce. Include details on pricing, product lifespan, and unique consumer benefits. Mention production and manufacturing processes, relevant patents , proprietary technology , and research and development (R&D) information.
• Market analysis : Explain the current state of the industry and the competition. Detail where the company fits in, the types of customers it plans to target, and how it plans to capture market share from competitors.
• Marketing strategy : Outline the company's plans to attract and retain customers, including anticipated advertising and marketing campaigns. Describe the distribution channels that will be used to deliver products or services to consumers.
• Financial plans and projections : Established businesses should include financial statements, balance sheets, and other relevant financial information. New businesses should provide financial targets and estimates for the first few years. This section may also include any funding requests.

Investors want to see a clear exit strategy, expected returns, and a timeline for cashing out. It's likely a good idea to provide five-year profitability forecasts and realistic financial estimates.

2 Types of Business Plans

Business plans can vary in format, often categorized into traditional and lean startup plans. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These are detailed and lengthy, requiring more effort to create but offering comprehensive information that can be persuasive to potential investors.
• Lean startup business plans : These are concise, sometimes just one page, and focus on key elements. While they save time, companies should be ready to provide additional details if requested by investors or lenders.

Why Do Business Plans Fail?

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

How Often Should a Business Plan Be Updated?

How frequently a business plan needs to be revised will depend on its nature. Updating your business plan is crucial due to changes in external factors (market trends, competition, and regulations) and internal developments (like employee growth and new products). While a well-established business might want to review its plan once a year and make changes if necessary, a new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is ideal for quickly explaining a business, especially for new companies that don't have much information yet. Key sections may include a value proposition , major activities and advantages, resources (staff, intellectual property, and capital), partnerships, customer segments, and revenue sources.

A well-crafted business plan is crucial for any company, whether it's a startup looking for investment or an established business wanting to stay on course. It outlines goals and strategies, boosting a company's chances of securing funding and achieving growth.

As your business and the market change, update your business plan regularly. This keeps it relevant and aligned with your current goals and conditions. Think of your business plan as a living document that evolves with your company, not something carved in stone.

University of Oregon Department of Economics. " Evaluation of the Effectiveness of Business Planning Using Palo Alto's Business Plan Pro ." Eason Ding & Tim Hursey.

Bplans. " Do You Need a Business Plan? Scientific Research Says Yes ."

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

Harvard Business Review. " How to Write a Winning Business Plan ."

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

SCORE. " When and Why Should You Review Your Business Plan? "

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

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

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

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

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

Let’s get started.

What Do You Need A Business Plan For?

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

1. Secure Funds

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

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

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

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

2. Monitor Business Growth

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

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

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

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

3. Measure Business Success

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

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

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

4. Document Your Marketing Strategies

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

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

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

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

How to Write a Business Plan Step-by-Step

1. create your executive summary.

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

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

A good executive summary should do the following:

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

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

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

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

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

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

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

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

2. Add Your Company Overview

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

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

Your company overview should contain the following:

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

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

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

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

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

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

• Mission Statement

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

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

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

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

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

Business Objectives

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

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

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

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

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

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

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

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

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

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

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

Market Analysis

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

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

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

• Market Research

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

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

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

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

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

How to Quantify Your Target Market

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

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

What Does a Good Market Analysis Entail?

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

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

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

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

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

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

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

Competitive Analysis

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

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

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

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

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

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

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

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

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

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

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

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

Direct vs Indirect Competition

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

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

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

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

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

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

Factors that Differentiate Your Business from the Competition

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

1. Cost Leadership

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

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

2. Product Differentiation

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

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

3. Market Segmentation

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

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

4. Define Your Business and Management Structure

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

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

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

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

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

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

Management Team

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

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

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

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

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

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

Key Questions to Answer When Structuring Your Management Team

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

Additional Tips for Writing the Management Structure Section

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

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

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

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

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

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

Organizational Chart

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

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

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

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

5. Describe Your Product and Service Offering

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1. Avoid Technical Descriptions and Industry Buzzwords

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

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

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

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

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

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

3. Long or Short Products or Services Section

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

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

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

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

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

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

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

4. Describe Your Relationships with Vendors or Suppliers

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

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

5. Your Primary Goal Is to Convince Your Readers

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

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

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

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

Key Questions to Answer When Writing your Products and Services Section

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

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

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

6. Show and Explain Your Marketing and Sales Plan

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

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

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

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

Outline Your Business’ Unique Selling Proposition (USP)

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

Target Market and Target Audience

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

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

Creating a Smart Marketing and Sales Plan

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

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

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

Your Positioning Statement

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Basic Rules to Follow When Pricing Your Offering

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

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

Pricing Strategy

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

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

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

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

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

Advertising

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

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

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

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

Public Relations

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

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

Content Marketing

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

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

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

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

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

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

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

Social Media

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

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

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

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

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

Strategic Alliances

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

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

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

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

Steps Involved in Creating a Marketing and Sales Plan

1. Focus on Your Target Market

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

2. Evaluate Your Competition

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

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

These questions can help you know your competition.

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

3. Consider Your Brand

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

4. Focus on Benefits

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

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

5. Focus on Differentiation

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

Key Questions to Answer When Writing Your Marketing and Sales Plan

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

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

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

7. Clearly Show Your Funding Request

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

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

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

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

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

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

Funding Request: Debt or Equity?

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

Case for Equity

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

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

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

Case for Debt

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

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

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

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

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

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

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

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

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

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

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

8. Detail Your Financial Plan, Metrics, and Projections

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

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

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

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

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

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

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

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

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

Use Graphs and Charts

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

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

Address the Risk Factors and Show Realistic Financial Projections

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

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

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

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

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

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

1. Sales Forecast

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

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

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

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

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

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

2. Personnel Plan

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

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

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

3. Income Statement

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

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

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

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

4. Cash Flow Statement

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

5. Balance Sheet

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

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

6. Exit Strategy

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

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

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

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

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

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

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

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

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

9. Add an Appendix to Your Business Plan

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

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

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

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

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

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

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

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

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

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

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

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

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

Tips and Strategies for Writing a Convincing Business Plan

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

1. Know Your Audience

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

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

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

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

2. Get Inspiration from People

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

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

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

3. Avoid Being Over Optimistic

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

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

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

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

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

4. Keep it Simple and Short

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

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

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

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

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

5. Make an Outline and Follow Through

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

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

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

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

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

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

6. Ask a Professional to Proofread

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

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

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

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

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

1. hubspot's one-page business plan.

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

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

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

2. Bplan’s Free Business Plan Template

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

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

3. HubSpot's Downloadable Business Plan Template

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

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

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

4. Business Plan by My Own Business Institute

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

The comprehensive template consists of a whopping 15 sections.

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

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

5. Score's Business Plan Template for Startups

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

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

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

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

6. Minimalist Architecture Business Plan Template by Venngage

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

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

7. Small Business Administration Free Business Plan Template

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

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

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

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

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

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

9. PandaDoc’s Free Business Plan Template

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

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

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

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

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

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

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

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

Alternatives to the Traditional Business Plan

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

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

Business Model Canvas (BMC)

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

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

Segments of the Business Model Canvas

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

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

Lean Canvas

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

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

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

Startup Pitch Deck

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

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

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

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

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

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

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

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

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

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

Business Plan FAQ

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

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

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

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

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

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

Exlore Further

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

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Martin luenendonk.

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

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

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How to Write a Startup Business Plan

May 28, 2022 - 10 min read

A startup business plan is an outline of your ideas and strategies for what you’ll need to do to start, manage, and even complete your startup’s mission. Creating one might sound simple enough, but because it’s a startup’s roadmap for success, it can be a complex document to create. 

Writing a business plan can make a world of difference for entrepreneurs who desire external funding. It involves determining your target customers, understanding what makes them tick, and figuring out how to reach them through marketing campaigns. 

In this blog post, we’ve explained why you should have a startup business plan, different types of startup business plans, and we’ve included 12 of the most effective tips for writing a startup business plan. If you’re ready to start with now, we have a product launch template to get you started quickly. 

What is a startup business plan?

A startup business plan is a written document that outlines your ideas and strategies for launching, managing, and eventually exiting your new venture. 

A well-constructed business plan can be crucial to the success of any entrepreneurial endeavor . As you prepare your proposal, keep in mind that it will evolve as you learn more about your market.

To start, create an outline of the most important items you'd like feedback on before writing anything down officially.

Then ask yourself these questions:

• What do I want?
• Why does my company exist?
• How will I make money?
• What are my long-term goals?

A detailed business plan helps you set milestones for measuring success. You can share the plan with investors who may want some reassurance on the viability of their investment in your company.

The best way to create a successful startup business plan is by including everything in an organized and easy-to-read document — marketing strategies, financial projections, team bios, timelines, and more.

What is a lean startup business plan?

A lean startup business plan is a method for developing products that relies on iterative experimentation to reduce uncertainty. 

It has been used by companies such as Google , Amazon, and Facebook in the early stages of their development, and involves testing your idea with real customers early in development.

Lean startups are less likely to fail because they have tested their product or service with live feedback from consumers. Doing this allows them to make changes quickly without wasting resources on something no one wants.

The goal is not to build an extensive business plan but rather a "lean" one that can be changed based on customer feedback and then re-evaluated in regular intervals until it reaches market potential — or fails.

A lean startup business plan is a strategy that focuses on getting a product in front of customers as quickly and cheaply as possible. Use the lean startup business plan to validate your ideas before wasting time and resources.

Why do you need a small startup business plan?

A small startup business plan is one of the most important steps in building a company. Apart from helping you to focus on company goals, it aids in obtaining feedback from potential partners and keeps the team on the same page.

The best thing about starting small? You can change course at any time! If you need help developing or tweaking your small startup business plan, use this guide for entrepreneurs to get started.

You've built a product and you're ready to take the next step, but what's your plan? First, you need a strategy in place. Do you know how much money it will cost, or where exactly that funding should come from? What about marketing strategies for getting customers in the door? 

You’ll also need to find ways to retain them afterwards so they keep coming back again and again (and spending more).

Obtain external funding

If you want to get funding from lenders or investors, you need a startup business plan. Lenders want to make sure they're investing in a company that will last and grow.

A well-organized idea shows passion for its purpose and outlines clear goals for helping customers. At the same time, having an exit strategy is also important.

Making a plan for when things don’t pan out as desired lets investors understand how much value there can be while giving customers (and yourself) peace of mind.

Understand your target market

One key piece of your business plan is knowing how to conduct a market analysis. To do this, consider the industry, target market, and competitors. 

Are there any market trends or competitor factors that can affect your business? Review them closely and get ready to make required changes to your business plan.

Prioritize high ROI strategies

In business, ROI is important. Any business that doesn’t generate as much cash as it burns is likely to fail.

With a startup business plan in place, the strategies with the highest ROI become crystal clear. You'll know exactly what to tackle first and how to prioritize the rest of your tasks.

Accelerate financial health

Business plans are not crystal balls, but they can help forecast your financial health. Planning for expenses is vital to keep operations steady and identify problems as soon as possible. 

Cash flow projections can help you see if goals are achievable or highlight upcoming issues that need correction before it's too late.

How to write a small startup business plan

Use this guide for entrepreneurs to develop or tweak a startup business plan. By following this easy six-step process, you'll soon have a clear path to startup success.

1. Clarify the startup vision, mission, and values

The first step to writing a startup business plan is understanding the startup itself.

Once you know what your startup does, ask yourself why. What is the startup's mission? What problem will it help customers solve? The startup's mission statement helps define its reason for existing.

It’s usually expressed in a simple sentence, but can also be written as a short paragraph.

Try to answer these questions: What does your startup do? How will it make money? How quickly do you hope it will grow? Are there any significant milestones or deadlines that need to be met?

2. Outline the executive summary

Now that you have an idea for your startup, its mission, and a vision in mind, it's time to write your startup business plan executive summary.

Keep it simple and precise. Begin by writing a one-sentence startup business plan introduction that showcases the core customer need/pain point and how you propose to solve it.

3. Develop startup goals and milestones

Next, write down the milestones and goals for your startup business plan. This is a crucial step that many entrepreneurs forget when they're starting out.

Do you want to focus on getting new customers? Or attaining a specific revenue number?  Without clear short-term goals, it can be hard to know how to prioritize startup tasks.

4. Write a company description

Answer the two fundamental questions — who are you and what will you do? Then, give an introduction to why you're in business.

Provide a summary of introspective goals, clarifying intangible aspects such as values or cultural philosophies. Make sure to mention:

• Proposed business structure (limited partnership, sole proprietorship, incorporated company, or a general partnership)
• Business model
• Business vision and mission statement
• Background information of your team members

5. Conduct market analysis

Choosing the right market is crucial to your organization’s success. There are different kinds of products and services that a business can offer and each has particular requirements for a successful market fit.

If you choose one that doesn't have a large enough customer base or is not profitable enough, your company may end up struggling for every sale.

Ensure that there is a clear market niche — an ideal audience of customers with a need or a pain point that your business can help solve.

6. Develop startup partnerships and resources

When you're launching a small startup, one of the most important things that your business needs is capital. There are several ways to get going on this front.

When thinking about sources of funding for startups , consider startup grants, startup loans, startup investors, and startup accelerators.

7. Write a startup marketing plan and startup budget

Your startup business plan is almost complete! All that's left is to create a startup marketing plan and budget. Your startup marketing plan will help you define your company’s target audience and brand image.

The startup budget is an integral part of any startup that helps you take the guesswork out of writing expenses.

Examples of startup business plans

Business plans differ based on the nature of the business, target market, competitive advantage, delivery of product/service, scope, and size.

Though the core business plan template remains the same, the content and flow change. Here is an example of an accounting firm's business plan:

Vision statement

At our company, ABC Accounting Services LLC, we work hard to provide the best service and build a strong team. Our vision is for this brand to be recognized as #1 throughout NYC by both smaller businesses and larger corporations.

Our values are reflected in all that we do: integrity (ethical behavior), service (giving top priority to clients' needs), excellence ("doing it right"), teamwork (working together).

Executive summary

ABC Accounting Services LLC is the premier accounting firm in New York City and will handle various financial services. We specialize in audits, bookkeeping, tax preparation/compliance work, and budgeting assistance with high-quality consulting.

Business structure

ABC Accounting Services LLC will be structured as an LLC — a Limited Liability Company in the state of New York. It will provide accounting, bookkeeping, taxation, auditing, and compliance-related services to small, medium, and large enterprises situated in New York City.

Marketing strategy and competitive advantages

Despite the fact that there are many established accounting services firms in our industry, we have a great chance of becoming successful because of the high demand for financial consulting. 

Often, small businesses don't need full-time employees but would rather hire an accounting service provider like us to handle their bookkeeping and tax returns on time every year.

It is best to find a unique niche or carve out your own market in the financial consulting services industry. If you're able to create an identifiable brand identity for your accounting business, then you will likely see less competition from other firms.

Startup milestones

ABC Accounting Services LLC will focus on delivering an exceptional client experience to grow the business and expand market share.

Startup business plan template

Here's a template you can follow when creating your startup business plan:

Top tips for writing a startup business plan

The following tips will help you create a compelling startup business plan without getting overwhelmed.

Know your audience

To write an effective business plan, tailor your language and level of detail to match the audience reading it. 

Have a simple and clear goal

If you have a goal of securing funding for your business, it will be an uphill task with lots of work and research.

Simplifying and breaking down bigger goals into smaller, actionable tasks will assist you in getting through them faster.

Spend time researching

Avoid assuming anything about your target audience, product/service, or the market need.

Spending adequate time and effort on research from primary and secondary sources will help you develop an accurate business plan.

Build a startup toolkit

The process of creation becomes easier if you have the right startup tools and software by your side. Pick the right ones that will help you in your journey.

Keep it precise

Short and easy-to-read business plans are best kept within 20 pages. If you have additional documents, consider adding them as appendices or provide a link if available online.

Ensure tonal consistency

Keep the tone consistent by having just one author write your startup business plan. Otherwise, be sure to edit it thoroughly before you finalize it.

Add reference points

All information regarding the market, your competitors, and your customers should reference authoritative data points.

Be ready to pivot

A business plan should be fluid and flexible. Think of it as an evolving document that will continue to change over time.

How to create a business plan with Wrike

A good business plan is a powerful tool and can be a key predictor of future progress, but simply filling in a startup business plan won’t help you achieve success. You need to create action steps with accountability that will help you reach your goals. 

Wrike’s project management software can help your organization deliver successful projects and maximize individual and team productivity, and our product launch template can help you turn your startup business plan goals into actionable steps. 

Start a free trial of Wrike today to see how it can help to simplify work, showcase progress to stakeholders, and achieve startup success.

Yuvika Iyer

Yuvika is a freelance writer who specializes in recruitment and resume writing.

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How to Write a Business Case (With Example & Template)

A business plan is a straightforward document. In it, you’ll include market research, your overall goals for the business, and your strategies for achieving those goals.  But what is a business case and why do you need one if a business plan outlines everything else? A business case takes a closer look at a specific problem and how you can solve it. Think of a business case as the reason you create a project you’re going to manage in the first place.  The article provides a step-by-step guide on how to write a successful business case, including a checklist for identifying problems, researching solutions, and presenting to stakeholders. As a bonus, we’ll show you how to use Wrike to manage your product business cases with a requirements management template or implement them with a project scheduling template. What is a business case? A business case is a project you’ll assemble for identifying, addressing, and solving a specific business problem.  The key to a business case is the change it creates in your business. Developing a business case starts with identifying a problem that needs a permanent solution. Without that lasting change, a business case is only an observation about what’s going wrong. A complete business case addresses how a company can alter its strategy to fix that problem. Front-to-back, a business case is a complete story. It has a beginning, a middle, and an end. It typically looks like this: Beginning: Someone identifies a problem within the business and presents the business case to the key decision-makers. Middle: With the project go-ahead, the company launches an internal team to address the business case and deliver results. End: The team delivers a presentation on the changes made and their long-term effects. In short, a business case is the story of a problem that needs solving.   Examples of business cases The problem for many companies is that they can turn a blind eye to challenges that are right in front of their faces. This is even the case when the company has a compelling product to sell. Consider the example of Febreze. In the mid-1990s, a researcher at Procter & Gamble was working with hydroxypropyl beta-cyclodextrin. His wife noticed that his clothes no longer smelled like cigarettes, which was a frequent complaint. P&G had something of a miracle product on its hands. However, their approach was wrong. They initially marketed Febreze as a way to eliminate embarrassing smells. Predictably, the product flopped.  But P&G stuck at it. They had a potential business case on their hands: a highly marketable product proved difficult to market. What was going wrong? Working on the business case from beginning to end provided the answer. After some focus group testing, P&G found out that few consumers recognized the nasty odors they were used to. Instead, they learned to use a different business case for Febreze: it was a cleaning product now, a way to make the house smell nice when the floors are vacuumed and the counters are wiped clean. They gave it its own pleasant smell and fashioned it into a cleaning product. And because it worked so well, so did the campaign.  That’s an example of a business case overall. But let’s get specific: developing a business case is easier when you have a template to look at. Let’s build an example using a made-up company, ABC Widgets, and a hypothetical business case. Let’s call our business case example “Operation Super Widgets”: Business Case: ABC Widgets Section 1: Summary Briefly describe the problem and the opportunities.  ABC Widgets’ latest widget, the Super Widget, is suffering from supply issues, requiring higher shipping costs to procure the necessary resources, and eating into profits. We need to switch to a new supplier to restore the viability of the Super Widget. Section 2: Project Scope This section should include the following: Financial appraisal of the situation. Super Widgets are now 20% more expensive to produce than in the year prior, resulting in -1% profits with each Super Widget sold. Business objectives. To get revenues back up, we need to restore profit margins on Cost Per Unit Sold for every Super Widget back to 2020 levels. Benefits/limitations. Restoring Cost Per Unit Sold will restore 5% of sagging revenues. However, we are limited to three choices for new Super Widget suppliers. Scope and impact. We will need to involve supply chain managers and Super Widget project management teams, which may temporarily reduce the number of widgets we’re able to produce, potentially resulting in $25,000 in lost revenue. Plan. Project Management Teams A and B will take the next two weeks to get quotes from suppliers and select one while integrating an immediate plan to bring in new Super Widget parts for manufacturing within four weeks. Organization. Team Member Sarah will take the lead on Operation Super Widget Profit. Both teams will report to Sarah. This is a bare-bones example of what a business case might look like, but it does hit on the key points: what’s the problem, how can you fix it, what’s the plan to fix it, and what will happen if you succeed? How do you write and develop a business case? When writing your own business case, the above example is a good guide to follow as you get started with the basics.  But, once you’re more familiar with the nuts and bolts, it’s also worth being prepared for some potential roadblocks you could face along the way.  Challenges of writing a good business case Why don’t more companies create a business case? It might come down to a lack of good communication. Many people don’t even know how to write a business case, let alone present one. “The idea may be great, but if it’s not communicated well, it won’t get any traction,” said Nancy Duarte, communication and author who wrote The HBR Guide to Persuasive Presentations. The key challenge, notes Duarte, is taking abstract business concepts (like lagging numbers) and turning them into an immediately recognizable problem. After all, if a company already had perfect awareness that it was making a mistake, it likely would find a way to stop the error in its tracks.  A business case is challenging because it usually means you’ll have to persuade someone that change is needed. And change can be difficult. In a thriving business, it’s especially problematic because it’s easy to point to the bottom line and say that whatever the company is doing is already working. How do you present a business case? The tips and examples above give you some nice remedies for creating a business case without the typical problems. But you’ll still want to present a business case with the straightforward proposals and numbers you’d associate with any new project.  Essentially, it all comes down to how well your business case can persuade the decision-makers. That’s why you shouldn’t just build a case off of raw numbers. The bottom line might be a compelling argument, but it’s not always what “clicks.”  If you’re presenting a business case, you’re a salesperson. And not every sale is a matter of precise logic. It’s also about emotion—the story of why something’s gone wrong and what needs doing if you’re going to overcome it.  The art of a good business case is the art of persuasion. Keep these specific points in mind as you craft one of your own: Point to an example of a bad business case and liken it to the present case. No one likes the idea of watching themselves walk into a mistake. Presenting an example of a business that made the same mistake your company is making and then translating it into the present moment is a compelling way to craft a business case that makes ears perk up. Build a narrative. Nancy Duarte pointed out that in one business case, a client convinced a CEO to follow through with a project by using simple illustrations. It’s not that the idea of adding illustrations to the business case was so great. It’s that the illustrations were able to tell a compelling story about why the case needed to go through. Distill the idea into an elevator pitch. Try this exercise: get your business case down to one sentence. If you can’t explain it any more simply than that, your business case might not be as memorable as it needs to be to sway decision-makers. Use analogies to drive the point home. Let’s say you discovered a problem in a growing business. Overall, revenues are good — but you’ve noticed an associated cost that has the potential to explode in the future and tank the business. But it’s not compelling to use dollars and cents when the business is doing so well. Instead, consider introducing the business case with a simple analogy: “Without repair, every leaky boat eventually sinks.” You now have their attention. Use the numbers to drive the point home, but not to make the point. If you’re presenting a business case to decision-makers, remember that it’s not only the logic of your argument that will convince people — it’s how persuasive you can be. Business case checklist Before you can check “learn how to write a business case” off your list, you have to know the essentials. Make sure you include the following elements in your business case checklist (and, of course, your business case itself): Reasons. This should be the most compelling part of your business case. You can tell a story here. And the most compelling stories start with a loss or a complication of some sort. What is the threat to the business that needs remedy? What are the reasons for moving forward? Potential courses of action. It’s not a complete story until we know the next chapter. A business case isn’t just about the problem — it’s about rectifying a problem through the solution. Recommend a few specific courses of action to help spur discussion about what to do next. Risks and benefits. Not every solution is going to be perfectly clean. There are going to be solutions with downsides. There are going to be costs along with the benefits. Make sure to include each of these to give a clear and complete picture. This is the time to manage expectations — but also the time to inspire action. Cost. What’s it going to cost to complete the project? The people making the decisions need to know the bottom line figure to assess which business cases to prioritize. Timeline. A good project isn’t only measured in dollars but in days, weeks, and months. What is the expected timeline for the business case? How quickly can the problem meet its solution?  With every business case, specificity is key. A vague timeline won’t help — a timeline with specific weekly milestones looks more achievable. To make your business case more compelling, always look for the specific details that tie your story together. Business case template A business case template is a document that outlines the key elements of a business case in a structured format. By using a standardized template, companies can ensure that all relevant information is captured and shared in a clear and consistent manner. Depending on the size of your business and the scope of your project, your business case template can be as detailed or as simple as you like. For a smaller project, you can use a one-pager to get started, detailing the main points of your project, which include: Executive summary: An overview of your project, its goals, and the benefits of completing it for your business Team and stakeholders: A list of the relevant people involved in your project, and their contact information SWOT analysis: An analysis of how your strengths, weaknesses, opportunities, and threats weigh up against your competitors Risk analysis: An overview of the kind of risks that are involved with your project and how you may avoid them Budget and financial plan: Details of your budget and where you may secure financing for your project Project plan: A schedule of how you plan to implement your project and what tasks are involved Let's see what that might look like. Executive summary   Team and stakeholders   SWOT analysis   Risk analysis   Budget   Project plan   How to write a business case with Wrike Wrike’s project management software can step in and turn a business case from the seedling of an idea to a full-fledged initiative.  The requirements management pre-built template can help you document and track project requirements in a structured manner. The template includes sections for capturing stakeholder requirements and business cases, as well as any constraints that may affect the project’s success. By using this template, you can ensure that all necessary requirements are identified and that potential issues are addressed early in the project planning process. If you want to move from the business case description to the actual implementation faster, consider using the project scheduling template. This template can help you create a detailed project timeline with milestones, identify task dependencies, and assign resources. By utilizing this template, you can ensure that the project is realistically achievable and meets all business needs, giving stakeholders confidence in the project’s success.

Operational Planning: How to Make an Operational Plan

Learn how to create an operational plan that will help your business succeed. Check out our guide to everything you need to know about operational planning.

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13 Key Business Plan Components

The Startups Team

As is the case with most big projects, crafting a business plan is one of those things that takes an incredible amount of diligence and no shortage of courage. After all, your business idea is probably more than just some passionless money-making ploy — it’s your dream that you’re getting ready to lay bare for the world to scrutinize!

Never fear!

We have 4 sample business plans here to make it all less scary.

If you approach this with a firm understanding of what key information to include in each section of your business plan and know how each section works together to form a cohesive, compelling, and — above all — persuasive whole, it will make the writing process a whole lot less daunting.

We’re about to help you do exactly that by deconstructing each of the core components of your business plan one at a time and showing you exactly what information you should present to your readers so when all is said you done, you can walk away confidently knowing you’ve penned the most effective business plan possible.

As we learned in the “ What is a Business Plan? ” article, a business plan generally consists of the following sections:

Executive Summary

Company Synopsis

Market Analysis / Overview

Product (How it Works)

Revenue Model

Operating Model

Competitive Analysis

Customer Definition

Management Team

Financial Statements

Let’s dive in, shall we?

1. Executive Summary

In the same way that a great movie trailer gives you a basic understanding of what the film is about while also enticing you to go check out the full-length feature, your Executive Summary serves as an overview of the main aspects of your company and business plan that you will discuss in greater length in the rest of your plan.

In other words, your Executive Summary is the highlight reel of your business plan.

Remember, you’re not giving away every last little detail about your company and business opportunity right up front. Just enough of the “good parts” to both inform and intrigue your reader to dig in further.

You do this by presenting a concise, 1-sentence outline of the following information:

Mission Statement

A “big idea” statement that introduces why your company exists, what it does for your customers, and why it matters.

Product/Service Summary

A brief description of your company’s products or services, with a special emphasis on what makes them unique.

Market Opportunity Summary

A quick explanation of the one or two key problems and/or trends your product/service addresses, and how it translates to a big opportunity for your company (and investors ).

Traction Summary

Highlight a few of the biggest accomplishments that you have achieved and describe how those accomplishments lay the groundwork for what’s to come.

Outline the next objectives or milestones that you hope to meet and what it means for the growth of your company.

Vision Statement

What is the scope or “big picture vision” of the business you are trying to build? If you’re in tech, are you trying to build the next Nest? If you’re in food and beverage, are you aiming to be the next Chipotle? In other words, how big is this company going to get, and why should an investor/partner/hire be excited to be a part of it?

A word of advice:

While your Executive Summary is the first piece of content people will read in your business plan, it’s usually a good idea to write this section last so you can take a step back after you’ve written everything and have a better sense of which high-level information you want to pull from the rest of your plan to focus on here.

First impressions are everything!

2. Company Synopsis

The Company Synopsis section is where you provide readers with a more in-depth look at your company and what you have to offer.

Before your readers will ever bother caring about things like your marketing strategy or your financial assumptions, they’ll want to know two absolutely fundamental details that will set up the rest of the plan that follows:

What painful PROBLEM are you solving for your customers?

What is your elegant SOLUTION to that problem?

You might have the most revolutionary product the world has ever seen, but if you don’t take the time to carefully articulate why your product exists in the first place and how it helps your customers solve a pain point better than anything else out there, nothing else in your business plan really matters from the reader’s perspective.

If you spend the majority of your time on any one part of your business plan, take the time to really nail this part. If you can build an engaging story around the problem that your audience can relate to, it makes the payoff of your solution statement all the more powerful.

When considering how to position your problem in the context of your business plan, think to yourself: what is the single greatest problem my customers face? How do other solutions in the market fail to alleviate that problem, thus creating a major need for my product?

Once you’ve thoroughly explained the problem you’re setting out to solve, it’s time to tell investors how your product/service solves that problem beautifully.

The goal here is less about describing how your product or service actually works (you’ll get to that in the “How It Works” section later) than it is about communicating how your solution connects back directly to the problem that you just described.

Key questions to consider:

What is the product/service you’re offering?

In what way does it solve my customers’ most painful problem?

What impact does my solution have on my customers’ lives?

How does my product/service effectively address the biggest shortcomings of other solutions currently in the market?

3. Market Overview

While your problem and solution statements help set the stage and provide readers with insight into why you’re starting this company in the first place, clearly defining your market will allow you to call attention to the trends and industry conditions that demonstrate why now is the time for your company to succeed.

You’re going to want to supplement your own expertise with plenty of evidence in the form of market statistics and research to show readers that you’re not only an expert when it comes to your product, but your industry as well. Your goal here is to help illustrate:

The SIZE of the market opportunity your company is positioned to address

The amount of GROWTH occurring in your market

The TRENDS driving the demand for your solution

The SUCCESS STORIES happening with similar companies in your industry

Market Size & Growth

Indicating to your readers that your problem addresses a big enough market will play a huge role in how excited they’ll be about getting involved in helping your company. This is where you’ll want to put your research cap on and start uncovering some numbers that help your reader better understand:

How big the market is (locally/nationally/internationally)

Approximately how much revenue it generates every year

If it’s growing

How much it’s expected to grow over the next 5-10 years

What recent emerging trends have you developed your product/service in response to?

Are there any new technologies that have emerged recently that make your product/solution possible? Are there any specific brands or products you can point to that illustrate the demand for products/services like (but not too like) yours?

Examples of Trends

An increasing number of consumers are “cutting the cord,” replacing traditional cable subscriptions with subscriptions to services like Netflix, Amazon Prime and HBO NOW.

As the Baby Boomer generation continues to age, there is a growing demand for products that empower them to stay safe and maintain their independence for longer.

Consumers are increasingly seeking food options that feature locally-sourced ingredients.

The emergence of image recognition technology for smartphones.

Industry Success Stories

Are there any examples of similar companies that investors have supported that you could point to? Are there any recent acquisitions (examples of larger companies buying up companies similar to yours) that could bolster the case for your own exit strategy ? Are there any similar companies that have recently IPO’d (gone public)?

4. Product (How it Works)

You used your Company Synopsis section to cover why your new product delivers crazy value to your customers by breaking down the ways that it benefits your customers and meets a highly specific need for them.

Now it’s time to use your Product or How it Works section to get into the finer details around the mechanics of how it does so.

This might sound like they’re one and the same. Not exactly. And here’s a good way to distinguish this.

Let’s say you were building a subscription box service for pet flea treatment. In your Company Synopsis section, you’d probably spend your time talking about how your solution conveniently spares pet owners the hassle of remembering to make a vet appointment, traveling to the clinic, and waiting to talk with the vet just to pick up Scrambles’ medication.

In your How it Works section, on the other hand, you’d shift your focus to describing how your customers have the ability to choose from a variety of brand name medications, set their own delivery schedule, enjoy 2-day delivery, and gain real-time support 24/7 from a team of industry experts.

What are some of your product’s key features ?

How will customers actually use your product or service?

Is there any technology underlying your solution you will need to explain in order for readers to fully understand what your company does and how it works?

If your product or service has some sort of proprietary element or patent at the core of what makes it work, you might be a bit hesitant to show your hand for fear that someone might run off with your idea. While this is a completely understandable concern, know that this pretty much never happens.

That being said, you can still give your readers a clear idea of how your product or service works by explaining it through the lens of how it relates to the problems that your customers face without giving up your secret sauce.

Put another way, you don’t have to explicitly tell your readers the precise source code to your new app, but you will want to call attention to all of the great things it makes possible for your customers.

5. Revenue Model

It’s the age-old question that every business owner has had to answer: how will your company make money?

If you’re just starting out , clearly defining your framework for generating revenue might seem like somewhat of a shot in the dark. But showing investors you have even a cursory idea of how you will convert your product or service into sales is absolutely fundamental in lending credibility to your business plan.

You’ll want to determine the following:

Revenue Channels

Are you leveraging transaction-based revenue by collecting one-time payments from your customers? Are you generating service revenue based on the time spent providing service to your customers? Are you following a recurring revenue model selling advertising and monthly subscriptions for your mobile app?

What are your price points and why have you set them that way? How does your pricing compare with similar products or services in the market?

Cost of goods sold, otherwise known as COGS, refers to the business expenses associated with selling your product or service, including any materials and labor costs that went into producing your product.

Your margin refers to the profit percentage you end up with after you subtract out the costs for the goods or services being sold. If you purchase your inventory for $8 per item from a supplier and sell them for $10, for example, your margin on sales is 20%.

Why is this revenue model the right fit for this product/market/stage of development?

Are there any additional revenue sources that you expect to add down the line?

Have you generated any revenue to date? If so, how much?

What have you learned from your early revenue efforts?

If you haven’t started generating revenue, when will you “flip the switch”?

6. Operating Model

Where your Revenue Model refers to how you’re going to make money, your Operating Model is about how you’re going to manage the costs and efficiencies to earn it.

Basically, it’s how your business will actually run. For this component, you’ll want to focus on the following:

Critical Costs

Your Critical Costs are the costs that make or break your business if you can’t manage them appropriately. These essentially determine your ability to grow the business or achieve profitability.

Cost Maturation & Milestones

Often your Critical Costs mature over time, growing or shrinking. For example, it might only cost you $10 to acquire your first 1,000 users, but $20 to acquire the next 10,000. It’s important to show investors exactly where costs might improve or worsen over time.

Investment Costs

Investment costs are strategic uses of capital that will have a big Return on Investment (ROI) later. The first step is to isolate what those investment costs are.  The second step is to explain how you expect those investments to pay off.

Operating Efficiencies

What can you do from an efficiency standpoint that no one else can? It could be the way you recruit new talent, how you manage customer support costs, or the increasing value your product provides as more users sign up.

7. Competitive Analysis

Now that you’ve introduced readers to your industry and your product, it’s time to give them a glimpse into the other companies that are working in your same space and how your company stacks up.

It’s important to research both your direct competitors (businesses that offer products or services that are virtually the same as yours) and your indirect competitors (businesses that offer slightly different products or services but that could satisfy the same consumer need).

A skimpy Competitor Analysis section doesn’t tell investors that your solution is unrivaled. It tells them that you’re not looking hard enough.

Pro tip: avoid saying that you have “no competitors” at all costs.

Why? Because while there may not be anyone exactly like you out there, if you say this, the investor is more than likely thinking one of two things: Either, “They don’t know what they’re talking about,” or, “If there’s truly no competition, is there even a market worth pursuing here at all?”

When you set out to identify your fiercest competitors, ask yourself this:

What products/services are my target customers using to solve this problem now?

What products/services could they potentially use to solve this problem now?

Identify at least three sources of competition and answer the following questions about each one:

Basic Information

Where is your competitor based? When was the company founded? What stage of growth is your competitor in? Are they a startup? A more established company?

How much revenue does your competitor generate each year? Approximately how many users/customers do they have? Have they received venture funding? How much? From whom?

Similarities & Differences

What are the points of similarity between your competitor and you in terms of the offering, price point, branding, etc?  What are the points of difference, both for the better and for the worse?

Strengths & Weaknesses

What are your competitors’ biggest strengths? What do you plan to do to neutralize those strengths? What are your competitors’ biggest weaknesses? How do they translate into an advantage for your company?

8. Customer Definition

The name of the game here is to know your audience !

This is where you show readers that you know who your audience is (who’s most likely to buy and use your product), where they are, and what’s most important to them. Are they price-conscious? Do they value convenience? Are they concerned about environmental impact? Do they tend to be early adopters of new technologies?

Once you have a good idea of your customer personas and demographics, you’ll want to explain how you’re designing your products/services, branding, customer service, etc. to appeal to your target audience and meet their needs.

Who are the people that your product/service is designed to appeal to?

What do you know about customers in this demographic?

Does your target audience skew more male or more female?

What age range do your target customers fall in?

Around how many people are there in this target demographic?

Where do your target customers live? Are they mostly city dwellers? Suburbanites?

How much money do they make?

Do they have any particular priorities or concerns when it comes to the products/services they buy?

9. Customer Acquisition

Now that we know who your customers are, the next question is — how do you plan on getting them ? This essentially refers to your marketing plan where you’ll go into detail about how you intend on raising awareness for your brand to expand your customer base .

Which channels will you use to acquire your customers? Direct sales? Online acquisition (paid ads, organic SEO, social, email)? Offline acquisition (newspaper, TV, radio, direct mail)? Channel partners (retailers, resellers)? Word-of-mouth? Affiliates?

Channel Cost Assumptions

There are hard costs associated with every customer acquisition channel. Yes, even social media. It’s your job here to forecast and compile all of the associated costs with a particular channel so that you can arrive at a preliminary budget for what it would cost to use this channel.

Are there specific subcategories of customers that you plan to target first?

Will you introduce your product in certain key geographic locations?

Are there specific components of your product offering that you will introduce to the market first?

Are there any existing brands that you are planning to partner with to increase brand awareness / expedite market penetration?

10. Traction

Many investors see hundreds of deals every year.

If you want to stand a chance of making any sort of meaningful impression, it’s important to show them that your business is more than just an idea and that you’ve already got some irons in the fire.

Traction is a huge part of making that case.

When investors see that Founders are already making things happen, they think to themselves, “Wow, look at everything they’ve already accomplished! If they can do that much by themselves, just think what they can do with my money behind them!”

Here are some common categories of traction that can help emphasize your business is gaining momentum:

Product Development

Where are you in the product development process? Do you have a working prototype? Is your product already in the market and gaining customers?

Manufacturing/Distribution

Do you already have an established partner for production/manufacturing? How about distribution? Tell us about your relationships and what they can handle.

Early Customers & Revenue

Do you have any existing customers? If so, how many, and how fast is your customer base growing? Have you started generating revenue? If so, how much?

Testimonials & Social Proof

Do you have any client reviews or comments that can illustrate positive customer responses to your product/service? Has your product/service been reviewed/endorsed by any industry experts? Do you have any high-profile customers (celebrities or industry experts if it’s a B2C product, well-known brands if it’s a B2B product)

Partnerships

Have you secured partnerships with any established or notable companies or brands?

Intellectual Property

Do you have any patents for the technology or ideas behind your company?

Is your company name trademarked?

Press Mentions

Has your company been featured by any media outlets? Which ones?

11. Management Team

Your Management Team section is where you introduce your team and, if possible, explain how each team member’s background is highly relevant to the success of your company.

You may have gotten a Ph.D. in Chemical Engineering from Carnegie Mellon, but if you’re building the next hot dating app, that doesn’t really lend much credence to why you’re uniquely qualified for this particular product.

An ideal Management Team section shows investors that your team’s combination of skills, experience, relationships, and expertise make you the best group of people on the planet to drive the success of your company.

Each team bio should cover:

The team member’s name

Their title and position at the company

Their professional background

Any special skills they’ve developed as a result of their past experience

Their role and responsibilities at your company

It’s important to keep team bios focused and to the point: readers don’t need to know where you were born or what your favorite hobbies were growing up. They don’t even necessarily need to know what you studied in undergrad (unless what you studied in undergrad is super-relevant to what they’re doing at your company.)

Aim for around 3-5 sentences of good information on each team member.

12. Funding

Chances are you’re shopping your business plan around to secure capital for your project. If that’s the case , don’t forget to actually ask for the one thing you set out to achieve!

In fact, you’ll want to devote an entire section to your request for funding. This is your opportunity to tell investors:

What your funding goals are

How they can help you achieve those goals

What they have to gain from getting involved in your company

Funding Goal

How much funding do you need to move forward with your goals? How did you arrive at this figure?

What will investors get in exchange for their investment in your company?

Use of Funds

How will you use the funding that you secure from investors? Provide a very basic breakdown, either by amounts or by percentages, of how you plan to allocate the funds you receive. For example:

25%: R&D

25%: Marketing

25%: Product Development

25%: Key Hires

What key milestones will you and your company be able to achieve with the help of this funding?

Why Invest? / Conclusion

Wrap up your Funding section with by driving home why investors should get involved with your company. Is it the experience of your team? The originality of your product? The size of the market? Identify a few key factors that make your company a great opportunity from an investment perspective.

13. Financials

At last, we’ve arrived at everybody’s least favorite section of the business plan: Financials !

Your Financials section comes last after what we’ll call the more “narrative”-driven content that makes up the vast majority of your business plan.

It’s here where you’ll present your various spreadsheets, charts, tables, and graphs that communicate to investors your projections for the company in dollars and cents over the next few years. And while this is a numbers-dominant section, you’ll still want to back-up all of your figures with either a quick intro or summary explaining how you got there.

Because despite the fact that some people underplay financials as merely a guessing game, it’s crucial to remember that investors are looking for estimates, not guesses.

Simply put, you want to build your financial forecasts on a series of assumptions that incorporate as many known parameters as possible. Indicate how you arrived at these assumptions (maybe you compared them against similar products in the market, for example).

Some common elements included in your Financials section are:

Income Statement

A financial statement that showcases your revenues, expenses, and profit for a particular period and whether or not your business is profitable at that point in time.

Balance Sheet

A summary of your business’s net worth at a particular point, breaking it into assets, liabilities, and capital.

Cash Flow Projection

An estimate of the amount of cash that is expected to flow in and out of your business. Your cash flow projection will give you a good idea of how much capital investment you need to secure.

Break-Even Analysis

Just like it sounds, your break-even analysis helps you determine when your total revenue equals your total expenses. In other words, your break-even point. The total profit here equals 0.

If this sounds intimidating, it’s because it kind of is. On the plus side, there are some great online tools available designed to help you create super sleek financials and still maintain your sanity.

We’ve spent time picking apart each core component of a business plan, and as it has probably become abundantly clear, each section is essentially its own in-depth presentation within the overarching plan itself.

While no two business plans will ever be exactly the same, the key takeaway here is that every great plan incorporates the same basic elements that give investors the information they need when determining whether your business idea has legs or not.

Now that you’re ready to roll up your sleeves and finally launch into the writing process , you can refer back to this as you start tailoring these elements to your specific business. If you find yourself getting hung up along the way, check out one of our many other resources on business planning to help you tackle this project head-on!

Karlina Popwell

This article was immensely helpful. Thank you for writing in such a thorough manner. Very grateful!!

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How to Write a Business Plan in 2023: The Ultimate Guide for Every Entrepreneur

Are you starting a new business or trying to get a loan for your existing venture? If so, you’re going to need to know how to write a business plan. Business plans give entrepreneurs the opportunity to formally analyze and define every aspect of their business idea .

In this post, you’ll learn how to put together a business plan and find the best resources to help you along the way.

What is a Business Plan? 

A business plan is a formal document that outlines your business’s goals and how you will achieve those goals. Entrepreneurs who start out with business plans are 16 percent more likely to build successful companies , according to the Harvard Business Review.  Developing a business plan ensures sustainable success, guiding you as you grow your business, legitimizing your venture, and helping you secure funding (among countless other benefits). 

What Are the Main Purposes of a Business Plan?

Most financial institutions and service providers require you to submit a detailed business plan to obtain funding for your business. Online businesses will likely have a low overhead to start, so they may not need funding and therefore may not feel the need to write a business plan. That said, writing a business plan is still a good idea as it can help you secure a drastic increase limit on your credit card as your business grows or open a business account. This varies per bank.

If you’re growing your business, use it to help you raise expansion capital, create a growth strategy, find opportunities, and mitigate risks.Palo Alto software found that companies who make business plans are twice as likely to secure funding . .

If you’re just starting your business, making a business plan can help you  identify your strengths and weaknesses, communicate your vision to others, and develop accurate forecasts.

How to Make a Business Plan: The Prerequisites 

Here are the prerequisites to creating a solid business plan:

• Establish goals
• Understand your audience
• Determine your business plan format
• Get to writing! 

Establish Goals

There are two key questions to ask here: 

• What are you hoping to accomplish with your business?
• What are you hoping to accomplish with your business plan?

Approaching your business plan through that lens will help you focus on the end goal throughout the writing process. These also provide metrics to measure success against. 

Before writing your business plan, gather the content and data needed to inform what goes in it. This includes researching your market and industry – spanning everything from customer research to legalities you’ll need to consider. It’s a lot easier to start with the information already in front of you instead of researching each section individually as you go. 

Turn to guides, samples, and small business plan templates to help. Many countries have an official administration or service dedicated to providing information, resources, and tools to help entrepreneurs and store owners plan, launch, manage, and grow their businesses. 

The following will take you to online business plan guides and templates for specific countries.

• United States Small Business Administration (SBA) – The “write your business plan page” includes traditional and lean startup business plan formats, three downloadable sample business plans, a template, and a step-by-step build a business plan tool.
• Australian Government – The “business plan template” page includes a downloadable template, guide, and business plan creation app.
• UK Government Business and Self-Employed – The “write a business plan” page includes links to a downloadable business plan template and resources from trusted UK businesses. .
• Canada Business Network – The “writing your business plan” page includes a detailed guide to writing your business plan and links to business plan templates from Canadian business development organizations and banks.

These business resource sites also offer a wealth of valuable information for entrepreneurs including local and regional regulations, structuring, tax obligations, funding programs, market research data, and much more. Visit the sites above or do the following Google searches to find official local business resources in your area:

• your country government business services
• your state/province government business services
• your city government business services

Some Chamber of Commerce websites offer resources for business owners, including business plan guides and templates. Check your local chapter to see if they have any.

Banks that offer business funding also often have a resource section for entrepreneurs. Do a Google search to find banks that offer business funding as well as business plan advice to see the business plans that get funding. If your bank doesn’t offer any advice, search for the largest banks in your area:

• business plan guide bank name
• business plan samples bank name
• business plan template bank name

If you’re looking for more sample business plans, Bplans has over 500 free business plan samples organized by business type as well as a business plan template. Their collection includes 116 business plans for retail and online stores. Shopify also offers business plan templates intended to help small business owners and aspiring entrepreneurs identify functional areas of a business they may not have considered.

Understand Your Audience

Because business plans serve different purposes, you’re not always presenting it to the same audience. It’s important to understand who’s going to be reading your business plan, what you’re trying to convince them to do, and what hesitations they might have. 

That way, you can adapt your business plan accordingly. As such, your audience also determines which type of business plan format you use. Which brings us to our next point…

Which Business Plan Format Should You Use? 

The United States Small Business Administration (SBA) presents two business plan formats: 

• The traditional business plan format is for entrepreneurs who want to create a detailed plan for themselves or for business funding. 
• The lean startup business plan format, on the other hand, is for business owners that want to create a condensed, single-page business plan.

If the business plan is just for you and internal folks, draft a lean startup business plan or a customized version of the traditional business plan with only the sections you need. If you need it for business funding or other official purposes, choose the formal business plan and thoroughly complete the required sections while paying extra attention to financial projections.

If your business operates outside the U.S., clarify the preferred format with your bank.

How to Create a Business Plan: Questions to Ask Yourself

As you write a business plan, take time to not only analyze your business idea, but yourself as well. Ask the following questions to help you analyze your business idea along the way:

• Why do I want to start or expand my business?
• Do my goals (personal and professional) and values align with my business idea?
• What income do I need to generate for myself?
• What education, experience, and skills do I bring to my business?

How to Write a Business Plan Step by Step

According to the business plan template created by SCORE, Deluxe, and the SBA , a traditional business plan encompasses the following sections. 

• Executive summary
• Company description
• Products & services
• Market analysis
• Marketing & sales
• Management & organization
• Funding request
• Financial projections
• SWOT analysis

Since not everyone is aware of the key details to include in each section, we’ve listed information you can copy to fill in your business plan outline. Here’s how to build a business plan step by step.  

Executive Summary

The Executive Summary is the first part of your business plan, so this is where you need to hook readers in. Every business plan starts this way — even a simple business plan template should kick off with the Executive Summary. Summarize your entire business plan in a single page, highlighting details about your business that will excite potential investors and lenders. 

Explain what your business has to offer, your target market , what separates you from the competition, a little bit about yourself and the core people behind your business, and realistic projections about your business’ success.

While this is the first section of your business plan, write it after you’ve completed the rest of your business plan. It’s a lot easier because you can pull from the sections you’ve already written, and it’s easier to identify the best parts of your business plan to include on the first page.

Company Description

In the Company Description, share 411 about your business. Include basic details like: 

• Legal structure (sole proprietor, partnership, corporation, etc.)
• Business and tax ID numbers
• When the business started
• Ownership information
• Number of employees

Your mission statement , philosophy and values, vision, short- and long-term goals, and milestones along with a brief overview of your industry, market, outlook, and competitors should also be in the Company Description.

Pro tip: These are the details you’ll use each time you create a business profile, whether that's on social media, business directories, or other networks. Keep your information consistent to reduce confusion and instill more confidence in potential customers. 

Products & Services

The Products & Services section details what you plan to sell to customers. For a dropshipping business , this section should explain which trending products you’re going to sell, the pain points your products solve for customers, how you’ll price your products compared to your competitors, expected profit margin, and production and delivery details.

Remember to include any unique selling points for specific products or product groupings, such as low overhead, exclusive agreements with vendors, the ability to obtain products that are in short supply / high demand based on your connections, personalized customer service, or other advantages.

For dropshipping businesses selling hundreds or even thousands of products, detail the main categories of products and the number of products you plan to offer within each category. By doing this, it’s easier to visualize your business offerings as a whole to determine if you need more products in one category to fully flesh out your online store.

Market Analysis

The Market Analysis section of your business plan allows you to share the research you have done to learn about your target audience — the potential buyers of your products. People requesting a business plan will want to know that you have a solid understanding of your industry, the competitive landscape, who’s most likely to become your customers. It’s important to demonstrate that  there’s a large enough market for your product to make it profitable and/or to make a strong return on investment .

To complete the Market Analysis component of your business plan, check out the following resources for industry, market, and local economic research:

• U.S. Embassy websites in most countries have a business section with information for people who want to sell abroad. Business sections include a basic “getting started” guide, links to economic and data reports, trade events, and additional useful business links for a particular region.
• IBISWorld is a provider of free and paid industry research and procurement research reports for the United States , United Kingdom , Australia , and New Zealand .  
• Statista offers free and paid statistics and studies from over 18,000 sources including industry reports, country reports, market studies, outlook reports, and consumer market reports.   

Use these websites and others to learn about the projected growth of your industry and your potential profitability. You can also use social media tools like Facebook Audience Insights to estimate the size of your target market on the largest social network

Another way to research your market and products is through Google Trends . This free tool will allow you to see how often people search for the products your business offers over time. Be sure to explain how your business plans to capitalize on increasing and decreasing search trends accordingly.

Marketing & Sales

Knowing your target market is half the battle. In the Marketing & Sales section, share how you plan to reach and sell products to your target market. Outline the marketing and advertising strategies you intend to use to market your product to potential customers – search marketing , social media marketing , email marketing , and influencer marketing methods .

If you’re unsure how to market your business’ products, analyze your competitors for some inspiration. Discovering your competition’s marketing tactics will help you customize your own strategy for building a customer base and ultimately taking your business to the next level. 

Do a Google search for your competitor’s business name to find the websites, social accounts, and content they’ve created to market their products. Look at the ways your competitor uses each online entity to drive new customers to their website and product pages.

Then come up with a plan to convert a similar audience with your marketing and advertising messages. For dropshipping businesses, conversions will typically take place on your website as people purchase your products and/or by phone if you take orders over the phone. 

Management & Organization

In the Management & Organization piece of your business plan, describe the structure of your business. In terms of legal structure and incorporation, most businesses are classified as sole proprietorships (one owner), partnerships (two or more owners), corporations, or S corporations.

Draft a condensed resume for each of the key members of your business. If you’re a solopreneur , include how your past education and work experience will help you run each aspect of your business. If you have one or more partner(s) and employee(s), include their relevant education and experience as well.

Think of this as a great way to evaluate the strengths of each individual running your business. When self-evaluating, you’ll be able to identify the aspects of your business that’ll be easier to manage and which ones to delegate to freelancers, contractors, employees, and third-party services. This also makes it easier to find the best way to utilize their strengths for business growth.

Funding Request

Chances are, you don’t have a funding request for a startup dropshipping business since the appeal to dropshipping is the low upfront investment . If you’re looking for a loan, however, this would be the section where you outline the dollar amount you need, what you plan to invest in, and how you see the return on your investment.

Another way to use this section is to analyze the investment you have or plan to make when starting or growing your business. This should include everything from the computer you use to run your website to the monthly fee for business services.

Financial Projections

In Financial Projections, share your projected revenue and expenses for the first or next five years of your business. The idea here is to demonstrate that the revenue you’re anticipating will easily lead to a return on any investment, whether from your personal finances or a capital lending service.

If you’re looking for funding, you’ll need to go into detail with projected income statements, balance sheets, cash flow statements, and capital expenditure budgets. If you aren’t looking for funding, it won’t hurt to create these types of financial projections so you can realistically plan for the future of your business.

The Appendix of your business plan includes any supplemental documents needed throughout the sections of your business plan. These may include, but are not limited to: 

• Credit histories
• Product brochures
• Legal forms
• Supplier contracts

If you’re submitting your business plan for funding, contact the lender to see what documentation they want included with your funding request.

SWOT Analysis

In addition to the above sections, some business plans also include a SWOT Analysis. This is a one-page summary of your business’s strengths, weaknesses, opportunities, and threats. The strengths and weaknesses you include will be internal, whereas opportunities and threats you include will be external. 

Depending on the revelations of this section, you may or may not want to make a SWOT analysis when submitting your business plan formally unless it is requested.

Summary: How to Create a Business Plan

As you can see, creating a business plan for your dropshipping business is a great way to validate your business idea , discover your business’s strengths and weaknesses, and make a blueprint for your business's future.

In summary, here are the sections you will need to write for your business plan, step by step:

• SWOT analysis (Optional)

If you haven’t already, take the time to create a business plan to launch or grow your business in 2023!

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How to Write a Business Plan for a Startup

Last Updated: December 22, 2023 Fact Checked

This article was co-authored by Jack Herrick . Jack Herrick is an American entrepreneur and wiki enthusiast. His entrepreneurial projects include wikiHow, eHow, Luminescent Technologies, and BigTray. In January 2005, Herrick started wikiHow with the goal of creating "the how-to guide for everything." He has a Master of Business Administration (MBA) from Dartmouth College. There are 13 references cited in this article, which can be found at the bottom of the page. This article has been fact-checked, ensuring the accuracy of any cited facts and confirming the authority of its sources. This article has been viewed 118,764 times.

As a startup, you will need a business plan. For example, you will need to show your plan to a bank if you are seeking a loan. You also need to show the plan to any investor. Business plans are helpful because they force you to step back and analyze your business critically. You should consider your target market, the products or services you will offer, and your projected finances. Writing a business plan isn’t difficult, though it will require considerable research and planning.

Explaining Your Marketing Plan

• Your mission. What is your driving goal every day? Don’t simply write, “Make money.” Identify how you will make money. For example, you can write: “Our mission is to offer residents of the Lakeview neighborhood the best day spa experience in the Near North Side of Chicago. We are committed to providing value and quality in a fun atmosphere that is never predictable.”
• Your goals. For example, a day spay might have the following goal: “To attract a minimum of 35 customers each day in the first year of operations.” Make your goals as concrete as possible.
• Description of the industry. Explain whether the industry is growing or poised for growth in the short and long term.
• The factors that will drive your success. How will you set yourself apart? For example, “You All Day will separate itself from the pack based on the owner’s deep experience running a day spa in Seattle for ten years. This experience includes familiarity with successful marketing techniques and trends analysis.”
• Your legal form. Are you a sole proprietorship, partnership, limited liability company (LLC), or corporation? Also explain why you selected this form.

Jack Herrick

Don’t skimp on how much energy and time you put into your mission. When asked about creating wikiHow’s mission, Jack Herrick, founder of wikiHow, responded: “We had the whole management team — alongside members of the wikiHow community — reviewing it, discussing it, and going back and forth on the wording. Those two sentences were many hours of work.”

• You can search for industry information in other places. For example, talk to people in your industry at trade shows. Also search online. Many industries have trade associations, which have websites with information.
• For example, when analyzing the day spa industry, you might want to talk about how it is growing because more upper-income men in urban areas are visiting. (If that’s true).
• By analyzing the industry, you gain insight as to your likely target market and how you can reach them.

• Age. What is the average age of your likely customer? If you don’t know, then visit similar businesses and note the ages of the clientele.
• Gender. Will men or women—or both—primarily use your products or services?
• Location. Generally, your market will be located near your business. However, if you have a web-based business, your target audience could have no geographic boundaries.
• Income level.
• Occupation. For example, a day spa might target stressed-out white collar professionals.
• Education level. There is often a link between education, income, and occupation—though not always. For example, a discount bookstore might target an educated audience that nevertheless has a lower income.

• To find competitors, look in the phone book and do a general Google search. Make sure to read their website and stop into the business.
• If you’re opening a restaurant, you’ll want to see a sample menu, as well as the hours of operation.
• Also identify indirect competitors. For example, a day spa is competing with more than other spas. You also compete with any business that offers relaxation, such as massage parlors or meditation centers.
• Name of your competitor.
• What you offer that they don’t. Think about products and services, but also location, ease of ordering, etc. What will make the consumer experience different at your business?
• What they offer that you don’t. Identify why you don’t offer their products or services. For example, they may be serving multiple niches while you are focused on only one. Alternately, they may have a favorable location.

• Whether you will sell pizza by the slice, as whole pies, or both
• How big your pizzas will be
• What toppings your customers can offer
• If you will have take-out and delivery options
• What other food items will be sold

• What type of advertising or promotion will you use? How often will you use paid promotion?
• What other promotion other than paid advertising will you use? For example, you might use social media, professional networks, etc.
• Will you create a logo and use it on cards, letterhead, websites, etc.?
• How large will your promotional budget be?

Discussing Your Business Organization

• State how much you expect to pay each employee in your first three years of business.
• Also name your professional support, such as your business lawyer, accountant, and insurance agent. Professionals are independent contractors you use but don’t employ. Calculate how much you expect to spend on each professional.

• You might write: “Lisa Jones is the sole proprietor of You All Day and will run day-to-day operations. As a certified massage therapist, she ran the Relax! chain of day spas in the Greater Seattle area for ten years. A former accountant, Lisa has an MS in accounting from the University of New Hampshire and worked as a CPA briefly before going into the spa business.”
• If you are asking for a loan, then include resumes for each owner. You can put them in the appendix at the end of the document.

• You should create professional-looking financial statements using a spreadsheet.
• You’ll have to gather quite a bit of information to make the financial statement. For example, you will need information on your assets, investments, and personal debts.
• You might also want to get a free copy of your credit report and review it as you draft your business plan.

Analyzing Business Finances

• Common startup costs include insurance, licenses, equipment, advertising, and employee expenses. [9] X Trustworthy Source U.S. Small Business Administration U.S. government agency focused on supporting small businesses Go to source
• Also identify the source of the startup capital. For example, if your startup has three initial owners, state how much each is contributing to the business and their ownership percentage.
• If you need financing, state how much. Include the terms of any proposed loan.

• You’ll need to make some assumptions in order to come up with a forecast of sales. You should explain these assumptions in your business plan.
• For example, you can write, “We assume continued interest in day spas in the Chicago area.”
• Another assumption is the overall health of the economy. “Although the Chicagoland economy has grown more slowly than other regions of the country, we assume that the Chicago economy will grow on par with other large metropolitan areas in the coming decade.”
• You can also include a four-year projection, though this is optional.

• Also talk about how you will build up your cash reserves. For example: “In addition to normal cash flow, we will focus on obtaining sufficient cash reserves for emergencies. These reserves include a line of credit with a bank, which we can use when business is slow. We will also invest excess cash in certificates of deposits at our bank.”

• Fixed costs: these don’t vary depending on your sales volume. For example, your rent, employee salaries, and insurance are fixed costs.
• Variable costs: these fluctuate depending on your sales and include shipping, inventory, and manufacturing costs.

Finishing Your Business Plan

• Add a cover page to your document. You can title it “[Company Name]’s Business Plan” or “Business Plan for [Your Name].” If you have a logo, include that too.

• For example, you can write, “You All Day is a start-up dedicated to providing men and women in Chicago a high-quality day spa experience at an affordable price. We specialize in pedicures, manicures, massage, and herbal aromatherapy. The Near North Side of Chicago has grown substantially over the past 20 years, with young, educated millennials settling in to start families. This area is currently under served, and we hope You All Day can meet the demand of the local market.”

• Executive Summary
• Company Description
• Industry Analysis
• Market and Competition
• Products and Services
• Marketing and Sales Plan
• Operations and Management
• Financial Forecasts
• Exhibits/Appendix

• Review for typos and other errors. An accountant should check your numbers to make sure they are accurate.
• Analyze the overall presentation. Is the information crammed in so that the document is tiring to read? If so, spread out the information so that there is a lot of white space on each page.
• You can also show the plan to a business adviser. If you live in the U.S., you can show it to someone at your nearest Small Business Development Center, which provides help drafting business plans. You can find your nearest SBDC by visiting this website: https://www.sba.gov/tools/local-assistance/sbdc .

• You might want to include tabbed partitions between each section of your business plan. This will make it easier for someone to flip through it and find what they are looking for.

Expert Q&A

• Don’t be afraid to change your business plans as you research and draft the document. That’s one of the reasons for writing the plan in the first place. For example, you might have intended to target women as consumers only to realize that there are growth opportunities with men. You can adjust your plans accordingly. Thanks Helpful 1 Not Helpful 0

You Might Also Like

• ↑ https://business.vic.gov.au/business-information/marketing-and-sales/increasing-sales-through-marketing/do-market-research
• ↑ https://openstax.org/books/entrepreneurship/pages/7-5-reality-check-contests-and-competitions
• ↑ https://www.sba.gov/business-guide/plan-your-business/market-research-competitive-analysis
• ↑ https://www.indeed.com/career-advice/career-development/business-plan-product-description
• ↑ https://business.gov.au/planning/business-plans/develop-your-marketing-plan
• ↑ https://openstax.org/books/entrepreneurship/pages/11-4-the-business-plan
• ↑ https://www.sba.gov/business-guide/plan-your-business/calculate-your-startup-costs
• ↑ https://www.alberta.ca/preparing-financial-projections-and-monitoring-results.aspx
• ↑ https://www.pwc.com/gx/en/services/entrepreneurial-private-business/small-business-solutions/blogs/preparing-a-cash-flow-forecast-simple-steps-for-vital-insight.html
• ↑ https://www.sba.gov/business-guide/plan-your-business/write-your-business-plan
• ↑ https://smallbusinessbc.ca/article/5-reasons-business-plan-review/

About This Article

To write a business plan for a startup, break your plan up into several sections, including an executive summary, a description of your company, an industry analysis, market and competition information, your products and services, your marketing and sales plan, operations and management information, your financial forecasts, and finally, an appendix. To format your business plan, use a professional font, like Times New Roman, and include a cover page with your company's name and logo on it. To learn how to write each section of your business plan, read on! Did this summary help you? Yes No

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How to Write a Summary Business Plan

A business plan doesn't have to be all encompassing, especially when you're trying to generate buzz. here are the elements you really need..

When writing a business plan, it's easy to get lost in the details. You want to demonstrate how you've studied the ins and outs of the marketplace and have crunched every conceivable number. But, really, writing a 100+ page business plan is not the best use of your energy.

'I vividly remember years of lengthy business planning cycles that literally produced books - encased in three-ring binders,' says Denise Barnwell, president of Transformation Marketing in West Orange, New Jersey. 'The ritual of producing these big-company business plan ‘bibles' was mostly endured by all. But small business owners don't have time or patience to produce lengthy business plans – they need action plans.'

Fleshing out your business in such detail can be a worthwhile exercise for an entrepreneur, but the truth is that it's not likely anyone else will ever spend the time to read it – whether you're competing in a business plan competition or trying to raise money from investors. That's why you also should be thinking about how to put together a summary or short-form business plan that ranges anywhere from two pages to 15.

The shorter you can make your summary business plan, the better. You want to focus on just a few key elements of your business that will generate the most excitement among those reading it -- without requiring them to invest a weekend in doing so. You can always pass along a more detailed plan to those interested later. 'One of the most common mistakes is for people to get bogged down in details,' says Mark Herschberg, a veteran entrepreneur and instructor at MIT. 'You don't need to describe every feature, or have detailed product designs. If your investors have detailed questions, they'll ask for more information.'

Dig Deeper: How to Write a Great Business Plan

How to Write a Summary Business Plan: A Few Don'ts

With that in mind, here are some suggestions for things to leave OUT of your summary business plan, according to Malla Haridat, founder and CEO of New York City-based New Designs for Life, an organization that teaches children about entrepreneurship:

• Excessive market research: 'You need to do a tight analysis of your product or service and the competitors. But you should be able to summarize it into one page max.'
• An overwritten product description: 'You need to spend no more than a paragraph on this.'
• Detailed finances: 'Bottom line - How much money do you have?  How much does it take to run the business?  How much will you earn (hopefully)?'

Dig Deeper: 10 Mistakes to Avoid When Writing a Business Plan

How to Write a Summary Business Plan: The Essential Pieces

Turning to what you DO want to focus on, consider the following tips offered by Ken Halkin , a business consultant in Amesbury, Massachusetts:

1. Description: Kick off your plan with a one-page description of your business. Give a brief history of the business and its ownership structure by focusing on:  

• Who you are
• What you do
• Where you are

2. Vision Statement: Write a concise one- or two-paragraph vision statement, which gives your answer to the question: 'What do we want this company to become over the next five to 10 years?'  

3. Mission Statement: Lay the groundwork for your 'brand promise' in a one or two paragraph description of what your company will be to its customers.  

4. Values: Provide a list of three to five core principles upon which you will build the business and stick to no matter what.  

5. Goals: Make a list of three to five long-term goals that translate your company's vision into specific, measurable, attainable, relevant and time-specific objectives.  

6. Market research: Take the next two to three pages to briefly answer the following questions:  

• What do you know about your industry?
• What do you know about your competition?
• Who is your target customer and what do you know about them (i.e. demographics, buying patterns)?

6(a). Market differentiation: Take the next page to detail what makes your product or service unique in the market by answering questions like:

• What makes you different from your competition that actually matters to your target customer?
• What is your unique value proposition?
• What is your big bold brand promise?

6(b). Marketing message: Based on the answers you outline above, take the next half page to explain the message you plan to communicate to your target market.

6(c). Marketing mix: Use the next page or so to detail the methods you will use to deliver that message.

6(d). Measurement: Follow the previous two sections with another half-page describing how you will measure the effectiveness of each of those delivery methods and, based on the results, adjust your plan accordingly.

7. Sales: Take the next full page to summarize your sales plan by answering these questions:

• What is your overall sales process?
• What are the specific steps in your process?

               - How are leads generated?                - How are they researched/qualified?                - How do you get in front of your customer?                - How do you close the sale?

• How will you achieve the optimal sales cycle?

8. Operations plan: Now, take one to two pages to answer the following questions:

• How will you produce the product and/or deliver the service?
• What are the logistics?
• What business process will you employ?
• What facility, equipment, and other resource needs are involved?
• How will you assure and measure quality and customer satisfaction?
• Who are the key players?
• What are their backgrounds and qualifications?
• What are their specific roles?
• How will the business be organized (org. chart)?

9. Personnel Plan: Use one page to describe your 'people' plan by answering questions like:

• What personnel are needed now to accomplish current goals?
• How will the number of people needed change with the growth of the business?

10. Financial Plan: As noted earlier, keep the details about your financials brief, using the same narrative style you have been using throughout the plan. Then, use a footnote to alert readers that more detailed financial schedules and assumptions will exist in a separate document. To keep focused, consider telling your story by providing the following information:

• Start-up costs, if applicable
• Revenue projections with detailed assumptions
• Three- to five-year cash-flow projections
• Three- to five-year balance sheet projections
• Sources and uses of funds if you are raising capital

11. Executive Summary: Save the beginning for the end by taking one to two pages to write a concise synopsis of the entire plan. 

If you have followed these guidelines, the narrative portion of your plan should be 10 to 15 pages, with perhaps another eight to 15 pages of attachments and schedules related to the additional details of the marketing and financial sections. Halkin also recommends that you put together a detailed strategic plan that establishes the strategies, steps, accountability and timelines for achieving the one-year goals of the business.

For additional help, look to resources such as the ' The One-Page Business Plan ' or entrepreneurial coach Verne Harnish's book, Mastering The Rockefeller Habits , that espouse summarizing your business with a single page of text.

Dig Deeper: Tools for Creating a Business Plan

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5 Steps for Writing an Executive Summary

Learn what to include in your executive summary and how to go about writing one.

Table of Contents

Anyone starting a new business must create a business plan that clearly outlines the organization’s details and goals. The executive summary is a crucial element of that business plan.

We’ll explore five steps to writing your business plan’s executive summary, including what to include and avoid. We’ll also point you toward executive summary templates to help you get started. 

What is an executive summary?

New entrepreneurs or business owners typically use a business plan to present their great business idea to potential stakeholders like angel investors . The purpose of the business plan is to attract financing from investors or convince banking executives to get a bank loan for their business . An executive summary is a business plan overview that succinctly highlights its most essential elements. 

It’s not just a general outline; the executive summary might be the only part of your business plan that busy executives and potential investors read. 

“The executive summary of a business plan is designed to capture the reader’s attention and briefly explain your business, the problem you are solving, the target audience, and key financial information,” Ross Kimbarovsky, CEO and founder of Crowdspring, told Business News Daily. “If the executive summary lacks specific information or does not capture the attention of the reader, the rest of the plan might not be read.”

While your executive summary should be engaging and comprehensive, it must also be quick and easy to read. These documents average one to four pages – ideally, under two pages – and should comprise less than 10% of your entire business plan.

How do you write an executive summary?

Your executive summary will be unique to your organization and business plan. However, most entrepreneurs and business owners take the following five steps when creating their executive summary.

• Write your business plan first. The executive summary will briefly cover the most essential topics your business plan covers. For this reason, you should write the entire business plan first, and then create your executive summary. The executive summary should only cover facts and details included in the business plan.
• Write an engaging introduction. What constitutes “engaging” depends on your audience. For example, if you’re in the tech industry, your introduction may include a surprising tech trend or brief story. The introduction must be relevant to your business and capture your audience’s attention. It is also crucial to identify your business plan’s objective and what the reader can expect to find in the document.
• Write the executive summary. Go through your business plan and identify critical points to include in your executive summary. Touch on each business plan key point concisely but comprehensively. You may mention your marketing plan , target audience, company description, management team, and more. Readers should be able to understand your business plan without reading the rest of the document. Ideally, the summary will be engaging enough to convince them to finish the document, but they should be able to understand your basic plan from your summary. (We’ll detail what to include in the executive summary in the next section.)
• Edit and organize your document. Organize your executive summary to flow with your business plan’s contents, placing the most critical components at the beginning. A bulleted list is helpful for drawing attention to your main points. Double-check the document for accuracy and clarity. Remove buzzwords, repetitive information, qualifying words, jargon, passive language and unsupported claims. Verify that your executive summary can act as a standalone document if needed.
• Seek outside assistance. Since most entrepreneurs aren’t writing experts, have a professional writer or editor look over your document to ensure it flows smoothly and covers the points you’re trying to convey.

What should you include in an executive summary?

Your executive summary is based on your business plan and should include details relevant to your reader. For example, if your business plan’s goal is pitching a business idea to potential investors , you should emphasize your financial requirements and how you will use the funding. 

The type of language you use depends on whether your audience consists of generalists or industry experts.

While executive summary specifics will vary by company, Marius Thauland, business strategist at OMD EMEA, says all executive summaries should include a few critical elements:

• Target audience
• Products and services
• Marketing and sales strategies
• Competitive analysis
• Funding and budget allocation for the processes and operations
• Number of employees to be hired and involved
• How you’ll implement the business plan 

When synthesizing each section, highlight the details most relevant to your reader. Include any facts and statistics they must know. In your introduction, present pertinent company information and clearly state the business plan’s objective. To pinpoint key messages for your executive summary, ask yourself the following questions: 

• What do you want the reader to take away from the document? 
• What do you want to happen after they read it? 

“Put yourself in the business plan reader’s shoes, and think about what you would like to know in the report,” Thauland advised. “Get their attention by making it simple and brief yet still professional. It should also attract them to read the entire document to understand even the minute details.”

What should you avoid in an executive summary?

When writing your executive summary, be aware of the following common mistakes: 

• Making your executive summary too long. An executive summary longer than two pages will deter some readers. You’re likely dealing with busy executives, and an overlong stretch of text can overwhelm them.
• Copying and pasting from other executive summary sections. Reusing phrases from other sections and stringing them together without context can seem confusing and sloppy. It’s also off-putting to read the same exact phrase twice within the same document. Instead, summarize your business plan’s central points in new, descriptive language.
• Too many lists and subheadings in your executive summary. After one – and only one – introductory set of bullets, recap your business plan’s main points in paragraph form without subheadings. Concision and clarity are more important for an executive summary than formatting tricks.
• Passive or unclear language in your executive summary. You’re taking the reins of your business, and your executive summary should show that. Use active voice in your writing so everyone knows you’re running the show. Be as clear as possible in your language, leaving no questions about what your business will do and how it will get there.
• Avoid general descriptions in your executive summary. Kimbarovsky said it’s best to avoid generalities in your executive summary. For example, there’s no need to include a line about “your team’s passion for hard work.” This information is a given and will take attention away from your executive summary’s critical details.
• Don’t use comparisons in your executive summary. Kimbarovsky also advises staying away from comparisons to other businesses in your executive summary. “Don’t say you will be the next Facebook, Uber or Amazon,” said Kimbarovsky. “Amateurs make this comparison to try and show how valuable their company could be. Instead, focus on providing the actual facts that you believe prove you have a strong company. It’s better if the investor gives you this accolade because they see the opportunity.”

Executive summary templates and resources

If you’re writing an executive summary for the first time, online templates can help you outline your document. However, your business is unique, and your executive summary should reflect that. An online template probably won’t cover every detail you’ll need in your executive summary. Experts recommend using templates as general guidelines and tailoring them to fit your business plan and executive summary.

To get you started, here are some popular executive summary template resources:

• FormSwift. The FormSwift website lets you create and edit documents and gives you access to over 500 templates. It details what an effective executive summary includes and provides a form builder to help you create your executive summary. Fill out a step-by-step questionnaire and export your finished document via PDF or Word.
• Smartsheet. The Smartsheet cloud-based platform makes planning, managing and reporting on projects easier for teams and organizations. It offers several free downloadable executive summary templates for business plans, startups, proposals, research reports and construction projects.
• Template.net. The Template.net website provides several free business templates, including nine free executive summary templates that vary by project (e.g., business plan, startup, housing program development, proposal or marketing plan). Print out the templates and fill in your relevant details.
• TemplateLab. The TemplateLab website is a one-stop shop for new business owners seeking various downloadable templates for analytics, finance, HR, marketing, operations, project management, and time management. You’ll find over 30 free executive summary templates and examples.
• Vertex42. The Vertex42 website offers Excel templates for executive summaries on budgets, invoices, project management and timesheets, as well as Word templates for legal forms, resumes and letters. This site also provides extensive information on executive summaries and a free executive summary template you can download into Word or Google Docs.

Summing it all up

Your executive summary should preview your business plan in, at most, two pages. Wait until your business plan is complete to write your executive summary, and seek outside help as necessary. A thorough, engaging business plan and executive summary are well worth the time and money you put into them. 

Max Freedman contributed to the reporting and writing in this article. Some source interviews were conducted for a previous version of this article.

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How to Write an Executive Summary (+ Examples)

• March 21, 2024
• Business Plan , How to Write

The executive summary is the cornerstone of any business plan, serving as a gateway for readers to understand the essence of your proposal.

It summarizes the plan’s key points into a digestible format, making it crucial for capturing the interest of investors, partners, and stakeholders.

In this comprehensive guide, we’ll explore what the executive summary is, why we use it, and also how you can create one for your business plan. Let’s dive in!

What is an Executive Summary?

An executive summary is a concise and compelling overview of a business plan (or simply a report), designed to provide readers, such as investors, partners, or upper management, with a quick and clear understanding of the document’s most critical aspects.

For a business plan, it summarizes the key points including the business overview , market analysis , strategy plan timeline and financial projections.

Typically, the executive summary is the first section of a business plan, but it should be written last to ensure it accurately reflects the content of the entire document.

The primary goal of an executive summary is to engage the reader’s interest and encourage them to read the full document.

It should be succinct, typically no more than one to two pages, and articulate enough to stand on its own, presenting the essence of the business proposal or report without requiring the reader to go through the entire document for basic understanding.

Why Do We Use It?

The executive summary plays a crucial role in whether a business plan opens doors to funding, partnerships, or other opportunities . It’s often the first (and sometimes the only) part of the plan that stakeholders read, making it essential for making a strong, positive first impression. As such, we use it in order to:

• Capture Attention: Given the volume of business plans investors, partners, and lenders might receive, an executive summary’s primary function is to grab the reader’s attention quickly. It highlights the most compelling aspects of the business to encourage further reading.
• Save Time: It provides a succinct overview of the business plan, allowing readers to understand the key points without going through the entire document. This is particularly beneficial for busy stakeholders who need to make informed decisions efficiently.
• Facilitate Understanding: An executive summary distills complex business concepts and strategies into a concise format. Therefore, it makes it easier for readers to grasp the business’s core mission, strategic direction, and potential for success.
• Driving Action: By summarizing the financial projections and funding requirements, an executive summary can effectively communicate the investment opportunity. Indeed the investment opportunity, whether to raise money from investors or a loan from a bank, is the most common reason why we prepare business plans.
• Setting the Tone: The executive summary sets the tone for the entire business plan. A well-written summary indicates a well-thought-out business plan, reflecting the professionalism and competence of the management team.

How to Write an Executive Summary in 4 Simple Steps

Here’s a streamlined approach to crafting an impactful executive summary:

1. Start with Your Business Overview

• Company Name: Begin with the name of your business.
• Location: Provide the location of your business operations.
• Business model: Briefly describe how you make money, the producfs and/or services your business offers.

2. Highlight the Market Opportunity

• Target Market : Identify your target market and its size.
• Market Trends : Highlight the key market trends that justify the need for your product or service.
• Competitive Landscape : Describe how your business is positioned to meet this need effectively.

3. Present Your Management Team

• Team Overview: Introduce the key members of your management team and their roles.
• Experience: Highlight relevant experience and skills that contribute to the business’s success.

4. Include Financial Projections

• Financial Summary: Provide a snapshot of key financial projections, including revenue, profits, and cash flow over the next three to five years.
• Funding Requirements: If seeking investment, specify the amount needed and how it will be used.

2 Executive Summary Examples

Here are 2 examples you can use as an inspiration to create yours. These are taken from our coffee shop and hair salon business plan templates.

Coffee Shop Executive Summary

Hair Salon Executive Summary

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Kamala harris's small business plan: a tenfold expansion of a key tax credit.

Kamala Harris will announce a new policy proposal Wednesday for a $50,000 tax credit for small businesses looking to get off the ground.

At the center of her new plan is the small business tax deduction currently in the tax code that allows would-be entrepreneurs to deduct up to $5,000 for things like business start-up costs.

The proposal from Harris would increase that tenfold — and will be formally announced on Wednesday with the vice president set to further outline her economic ideas during a stop in Portsmouth, N.H.

She will also unveil an overall goal of triggering 25 million new small business applications over the next four years.

Harris is also set to propose additional measures Wednesday around things like reducing red tape for small businesses. Tomorrow's rollout also comes ahead of next week's highly anticipated debate with former President Donald Trump where economic worries are likely to be top of mind.

"One of my singular priorities is to invest and grow our small businesses," Harris said at a campaign stop last week.

The latest rollout from the Harris campaign is a clear effort to appeal to business-minded voters. She is attempting to ally herself with smaller businesses while sometimes assailing bigger ones.

"We will continue to build what I call an opportunity economy so that every American has an opportunity to buy a home or start a business or build intergenerational wealth and have a future that matches their dreams and ambitions and aspirations," Harris added Monday during a Labor Day stop in Pittsburgh.

A potential for widespread appeal

For his part, Donald Trump often points to his own business record as president as a reason for voters to choose him. He also charges that a potential Harris administration would be cataclysmic for small businesses and has even taken to calling her "Comrade Kamala" in recent weeks.

But the Harris/Walz campaign has sought to combat the charges with what is now a second economic policy plan that follows last month's release of a cost of living plan aimed at housing and grocery store prices as well as an expansion of the child tax credit.

But this week's focus on small businesses and entrepreneurs could have appeal for millions of potential voters.

Small business entrepreneurship has been on the rise in recent years, according to the Global Entrepreneurship Monitor . It found that in 2022 almost 20% of US adults were in the process of founding a business or had done so in the past 3.5 years. It was the highest reading since the survey began back in 1999.

The Biden White House has often touted increasing small business activity since the pandemic ended, pointing to some 19 million new small business applications during his term so far.

Harris is aiming to take it further, but other measures of entrepreneurship are coming in more mixed. The NFIB Small Business Optimism Index recently rose in July to 93.7 but remains below the 50-year average of 98.

This week's Harris/Walz proposal, meanwhile, is also set to include new rules they say will make it easier to start a business. The ideas to be unveiled include ways to claim this new deduction to maximize the tax impact. Also in the works are plans for reducing some of the paperwork needed for things like small business licenses.

A focus on small over big businesses

This week's Harris plan could also be a selling point among crucial donors, especially parts of Silicon Valley focused on "little tech" startups as opposed to giant companies like Meta ( META ) and Alphabet ( GOOG ), which have gradually lost public support in recent years amid increasing scrutiny from antitrust regulators in Washington.

Likewise, Harris has sought in recent weeks to position herself as a friend of small businesses and a foe, of sorts, to those bigger corporations.

Last month's prices plan focused on Democratic charges that grocery store owners and corporate landlords are "price gouging" their customers. Harris has detailed plans to crack down on their practices.

Also this week, the Harris campaign released a new campaign ad focused on economic issues and drawing a contrast between the Harris and Trump economic plans. A keen focus for Harris is Trump's friendly relationship with corporations and his focus, as the ad's narrator said, "on giving them tax cuts."

Trump has often discussed lowering the federal corporate tax rate from its current level of 21% to 15%-20%. Harris is behind a plan to raise that rate to 28%.

Meanwhile, there is at least one large corporation that Harris is trying to be friendly with: McDonald's ( MCD ). Harris often notes that she worked at the chain during a summer in college. Both she and Trump are looking to be associated with the brand, which the company says is patronized by nearly 9 in 10 Americans at least once a year.

Also potentially in the offing in the weeks ahead is a Kamala Harris plan for the "care economy" around issues like childcare and paid family leave. These have long been priorities for the vice president, with her campaign signaling that plans there could also be in the offing soon.

Ben Werschkul is Washington correspondent for Yahoo Finance.

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24 Steps to Launch a Start-Up

If you’re an aspiring entrepreneur or intrapreneur, this episode is for you.

• Apple Podcasts

Many people aspire to entrepreneurship. But Bill Aulet , who has advised founders for decades, warns that it remains a high-risk endeavor.

In this episode, he outlines concrete steps anyone can take to get a new venture off the ground — including intrapreneurs within large organizations. He also breaks down some of the important trends he’s seeing in entrepreneurship, like the increasing commoditization of products and lower barriers to entry, due to technology.

Aulet is a professor of entrepreneurship at the Sloan School of Management at MIT. He’s also the author of the book Disciplined Entrepreneurship: 24 Steps to a Successful Startup

Key episode topics include: strategy, entrepreneurship, entrepreneurs and founders, entrepreneurial business strategy, innovation, start-ups.

HBR On Strategy curates the best case studies and conversations with the world’s top business and management experts, to help you unlock new ways of doing business. New episodes every week.

• Listen to the full HBR IdeaCast episode: A Roadmap for Today’s Entrepreneurs (2024)
• Find more episodes of HBR IdeaCast
• Discover 100 years of Harvard Business Review articles, case studies, podcasts, and more at HBR.org

HANNAH BATES: Welcome to HBR On Strategy , case studies and conversations with the world’s top business and management experts, hand-selected to help you unlock new ways of doing business.

Many people aspire to entrepreneurship. But Bill Aulet, who has advised founders for decades, warns that it is a high-risk endeavor and not for the faint of heart.

Aulet is a professor of entrepreneurship at the Sloan School of Management at MIT. In this episode, he outlines concrete steps anyone can take to get a new venture off the ground — including Intrapreneurs within large organizations. He also breaks down important trends he’s seeing in entrepreneurship—like the increasing commoditization of products…and lower barriers to entry, due to technology.

If you’re an aspiring entrepreneur or intrapreneur, this episode is for you. It originally aired on HBR IdeaCast in April 2024. Here it is.

ALISON BEARD: Welcome to the HBR IdeaCast from Harvard Business Review. I’m Alison Beard.

So, many people in business today aspire to entrepreneurship. Whether you have an idea for a start-up or want to launch something new within a larger organization, it’s seen as a path to a more fulfilling career – and financial gains. At the same time, we know that entrepreneurship is really hard. We’ve all heard the stats on how many new ventures fail, and we’ve seen entrepreneurial efforts quashed by the corporate machine.

But our guest today says that we can de-risk the process and create companies that don’t just make a lot of money, but also have a positive impact on the world. He’s helped thousands of students and executives map out paths to successful businesses, and we wanted to speak with him about where he sees entrepreneurship today.

Bill Aulet is the Ethernet Inventors Professor of Entrepreneurship at the MIT Sloan School of Management. He’s managing director of the Martin Trust Center for MIT Entrepreneurship, and he’s the author of Disciplined Entrepreneurship: 24 Steps to A Successful Startup , newly updated and expanded. Bill, thanks for being on the show.

BILL AULET: Thank you very much. It’s an honor to be here.

ALISON BEARD: So, you’ve been focused on innovation-based entrepreneurship for decades. What feels new or different right now compared to previous eras?

BILL AULET: I think if you look at the highest level, entrepreneurship is now accepted in society at a level that it was not nearly when I first started. When I graduated from college, which was back in 1980, they had just invented electricity. But no one thought of entrepreneurship as a serious field of study or a career.

I – God rest my mother’s soul, she was fantastic, but she never understood the difference between entrepreneurship and unemployment. She thought I was unemployed. But today people understand entrepreneurship. It’s accepted by society. And not only is it accepted by society, it is one thing that unites us. No matter whether you’re on the far right, far left, everybody loves entrepreneurship. One of the big differences that’s often overlooked is just the acceptance of entrepreneurship as a serious career path and a positive thing from all perspectives.

When we look at the more micro level, the numbers start to show you the people who want to come out of college, 20% or more of at almost every university, see entrepreneurship as a career path that they want to pursue. Some of them want to do it for money, but what we see is most of them want to do it because they feel like it’s a way to have impact. It’s a way to control their own destiny.

And then even at a more micro level, when you look at what’s going on now, not just the acceptance of entrepreneurship, the barriers to become an entrepreneur have really gone down. Let me give you one example. Just when I wrote the initial version of this book 10 years ago, it took you millions of dollars and at least six months, if not a year, to put an e-commerce company up, to get an e-commerce website going today. You can literally do that in two hours or possibly even one hour or less using Shopify. And that’s just one example of what’s going on with AWS.

All the technology that’s come out has made it much easier to create new products to start companies, which has actually shifted the game from, “You need to make a product to be an entrepreneur,” to “How do we go to market with a product?” Because products are becoming more and more, I don’t want to say commoditized, but it’s easier to produce products. And so, of course you have to have a product at the end of the day, you have to get product market fit. That’s table stakes. But the actual game has shifted to be more of a, how do you come up with a go-to-market fit that is a channel market fit? How do you sell the product?

ALISON BEARD: MIT is obviously a hub for science and tech-based startups. So, is the path from high-tech research lab to business getting easier also?

BILL AULET: This is a really interesting question because I just presented to the MIT board on this, and they were very interested in how do we accelerate that pipeline of lab to market? And there’s two approaches to that. The first approach is why don’t we make our technical people, our academics… Or researchers, they don’t have to be academics, researchers, more entrepreneurial. How do we teach them the entrepreneurial process? And we do that. We have a program called the Faculty Founders Program where we teach them how to do that. That’s one way to do it.

The other way to do it is to basically flood the zone with high-quality entrepreneurs who aren’t necessarily the inventors. Because entrepreneurship has many misperceptions about it and one of them is it’s an individual sport. It is definitively not by research. Entrepreneurship is not an individual sport, it’s a team sport. And the question is, how do you build a team that can take a technology, a new invention to market? And to do that, you have to have someone who knows how to commercialize it. Those people aren’t necessarily the same as the inventor. And so, if you have great inventors and they understand the process to some degree, what we want to do is produce more high-quality entrepreneurs to kind of be around them. And then they will take that technology and that new invention and bring it to market.

I mean, people believe MIT is this faunt of entrepreneurship because of the tremendous research we have here, and we do. We have enormous research, but so does Caltech, so do other places. What really makes a difference is how much of that research can you commercialize? And that’s where the entrepreneurial process comes into play. And even if you look at MIT, less than 6% of the patents that we create are actually commercialized. Let me repeat that. Of all the patents we get, less than 6% of them actually get to the market, and that includes licensing to other companies. So, if we could just increase that number somewhat, the pipeline of the billions of dollars that are spent on research here at MIT to get that to market would create a lot more impact.

ALISON BEARD: You note that entrepreneurship is not limited to startups. It can come from within large organizations too, especially ones with deep pockets like an Amazon or Alphabet or Meta. Have you seen any shift in where students and executives think that they’re best positioned to be entrepreneurial?

BILL AULET: I wish I could tell you that there’s more of that, but entrepreneurship is such a complicated thing. You mentioned this at the front. It’s really hard. And still, the best way to teach entrepreneurship is to go to the blank canvas of a startup. And that’s what we do in our programs for the most part. We start off with a blank canvas and then we teach people how to come up with ideas and then how to take those ideas and then figure out what’s a product to get product market fit, channel market fit, and then come up with a scalable business model that’s profitable – economically sustaining.

But if we stay at that level of just seeing entrepreneurship in startups, we as a society are going to be really underperforming against some of the big challenges we have like climate, because startups can only get you so far. They don’t have the strong balance sheets that can think for long periods of time. They don’t have the infrastructure. And when you think about challenges like climate and energy, we need to have big companies involved. And so, we really do focus a lot on how do you take those skills. We teach you in startups and apply them in large companies.

We really encourage people to not just be entrepreneurs and startups, but to do it in government, in academic institutions and large organizations and medium-sized organizations and faith-based organizations or nonprofits and even in their personal lives. And I would like to see more of that. But it’s a hard sell because you got to build up the skills first before you go into that. But we’ve had huge successes.

I’ll give one example. Andrea Ippolito went through us – she’s a Cornell undergraduate, came here and was getting her graduate degree and then going for a PhD, and she went through our entrepreneurship programs. She was doing a company called Smart Scheduling to help healthcare organizations do kind of digital innovation to make them more effective, which is huge opportunity there. Well, she decided not to continue on that startup, but learned all the lessons. She then goes back to get her PhD. She’s recruited to go into the Obama White House, and she becomes the chief innovation officer overseeing the Veterans Administration. And she starts setting policies to improve innovation and entrepreneurship in the government for our veterans out there. She didn’t start a company at that point, and she’s literally making the lives of millions of our veterans better.

So I think that’s the journey. She was an entrepreneur the whole time. And the mindset, skillset and way of operating that we taught her, benefited her in all dimensions, not just in being a startup. I sometimes am frustrated, although if we get into it, I’ll talk about metrics of measuring success. And it’s too often measured and how many startups, how much revenue do they do, how much money did they raise – whereas how do you measure the impact that Andrea Ippolito had in those various jobs?

ALISON BEARD: Yeah. I mean the criticism of entrepreneurs in general and particularly tech startups for a while has been that they’re more focused on sort of easing these small pain points for pretty well-off customers. Like I’m thinking Uber, DoorDash, Tinder even, then tackling more difficult and important and challenging problems. Is that changing?

BILL AULET: Well, I can’t say for universal, but if you look in my new book, we very much believe, and this is something I work with Tom Byers of Stanford and Jon Fjeld on is entrepreneurship as an ethical activity. If you’re in it for profit-making, you’re not going to last.

And so, the first thing that we start with, excuse me, is you must have a raison d’etre. That’s French for reason for existence. And if you say that it’s to make money, we reject that because no company is just all about profits and going to last.

And then just to go to the data here, we did a 10-year longitudinal study of our students coming out of our Delta V program, our capstone program. There’s this perception that people are doing dating apps and silly things. Well, our data showed, and this was an independent study by Daniela Ruiz Massieu of ITAM University, a tenured year professor, head of their entrepreneurship down there. And she came in and looked at it. And in the 10-year study looking at almost 200 entrepreneurs, she found that 89% of the businesses they were starting 89, 8-9, were directly aligned with the UN Sustainable Development Goals.

That makes me very, very proud. And that goes directly to what you’re talking about. We believe entrepreneurship is an incredible force for good in society. And if you understand that and you build your companies based on mission, mission-driven as opposed to money-driven, they will be more successful. And going to the data on how successful they are, her study shows 69% of them are still in business five years later.

ALISON BEARD: Those statistics definitely give me hope. But I would say that still the primary successful examples of entrepreneurs and companies might cloak their businesses in laudable goals like connecting the world for Facebook or giving us information like Google, when in practice what they seem to be doing is collecting and selling our data, addicting us to their platforms, and they’re still making piles of money. So, how do you reconcile that with your vision of successful entrepreneurship always being ethical?

BILL AULET: That’s a really good point. I think I’m a system dynamics person which says the incentives of the system will dictate how people behave in it, and I find those very troubling. I find by the way, the examples of using social network or the Steve Jobs movies as that’s entrepreneurship, I find those to be very unhelpful. They’re misleading. They don’t get into what the real data shows you.

So how do I reconcile those? All I can tell you is that our companies are like Biobot Analytics. Biobot Analytics is started by two of our students here. One was Mariana Matus who was a PhD here at MIT from Mexico, and she wanted to start a company to make the world a better place and make cities more livable. And she partnered with Newsha Ghaeli who was Persian, that’s Iranian by way – out of Canada. They were very into how do we create safer cities.

They looked at this and built a dashboard that looked at wastewater, epidemiology wastewater, that is what we flush out the toilet and see what diseases do we have, what other things are going on in the city. So, basically we could set it up in Boston and we could know. In Jamaica Plain, everything seems healthy, but if you look at West Cambridge, there seems to be some fentanyl use there or there seems to be a Zika virus outbreak. When they were going through our program, we actually had a discussion about what they were doing, and they were very into this. And then they met with one of the top venture capitalists in the world. And the top venture, this person said, enormously successful, sat down and said, “You’re not going to make a lot of money doing this. You should pivot to help pharmaceutical companies.”

And we walked out of the meeting. I said, well, “He’s very accomplished. What do you want to do? If that’s not what you want to do, we fully support you.” They said, “That’s not what we want to do. We want to make cities safer.” They stuck to there what they were doing. And Biobot Analytics has become extremely successful. They became the gold standard during Covid for measuring whether Covid is in a place weeks before you could with testing. And they’re doing tens of millions of dollars. They’re on a path to IPO.

ALISON BEARD: Well, that’s a fabulous example. What about the criticism that startup founders are often so laser-focused on bringing their idea, maybe one that will have good social impact to fruition, that they don’t think about the potential risks or negative externalities or broader consequences I’m thinking about the concerns that people have about OpenAI, for example. I think Sam Altman is sort of heralded as a new kind of entrepreneur, a new generation of entrepreneurs, but people are now also worried that he’s sort of stepping away from his initial altruistic vision for the company.

BILL AULET: Yeah, I mean, I think that’s a real leadership question that you’re going to have. At the end of the day, all these companies come down to the talent that they can draw. I think if you have unethical activities, people today are cognizant of that. They’re not just going to work for companies they feel are unethical. And that’s my hope. I don’t have data to back that up to the level that I would like, but that’s my sincere belief, Alison.

ALISON BEARD: Yeah. And perhaps having gone through the era of social media in particular, Facebook, Instagram, X, et cetera, and all the sort of unexpected problems, whether it’s teenage girl eating disorders to election interference, there’s perhaps more scrutiny now on startups to make sure, “Are you thinking about all the potential things that could go wrong as you’re building your business plan?”

BILL AULET: I would hope so. But again, we have a capitalist system that rewards you for making money and getting customers and the like. I think there’s definitely a role for government and regulation in that regard. I differ from some of my entrepreneurial libertarian colleagues in that regard. I think we do need that. I’m not here to tell you everything, sunshine, rainbows and unicorns jumping around, that is a challenge going forward. And that’s why unfettered capitalism I just don’t think is the right answer.

ALISON BEARD: Okay, so let’s dig into the updated book, which as I said, sets out 24 steps to getting a startup off the ground, from market segmentation to developing a product plan. And we obviously can’t get to all of the steps, but what, if anything, did you change from the 1st edition to this one?

BILL AULET: Oh my God, the 1st edition, just to put a little quick historical perspective on this, when I started teaching, I think it was 17 years ago, I started looking for that book that captured what I had learned being an entrepreneur for decades, we’re going from three startups and failing in my first one and getting better at the second one to having success in the third one to say, “Who’s captured that knowledge?” And all I found were books that were point things. You’d find Lean Startup, you’d find a Blue Ocean Strategy, you’d find Crossing the Chasm, these are all great books, but they were all individual tools.

And so, for my class, I built a reader and I tried not to invent new stuff. I tried to take what I know already worked and just kind of stitch it together. And that was the genesis of this reader, which then it became quite popular- and people said, “Hey, this is really great. How can I get a copy of it?” And Wiley said, “Hey, we’d like to publish this.” And so, the first version was minimum viable product.

And then once it got out there, I’ll never forget a colleague of mine here at MIT, Professor Charlie Fine, said, “Now you’re really going to learn about entrepreneurship.” And I said, “What do you mean? I put everything I know into that book.” He said, “Oh no, now you’re really going to learn because everyone’s going to come and tell you everything they know and they’re going to ask you questions and you’re going to become kind of the focal point of entrepreneurship discussion.” And dang it, Charlie was right. That’s what happened. Everybody started talking to me about that.

We literally got thousands of more examples as to how to do that. And over the past 10 years, we’ve learned so much. I’ve taken that minimum viable product and updated it to a new dramatically expanded and updated version with some of the new things we were talking about. And my first rewrite of it was 700 pages, which was completely unacceptable because the key to the book is, A, that it’s open source. We try to build a and take everything that works so that Simon Sinek, Jeffrey Moore, Stefan Thomke, Michael Porter – whoever it is, we’re pulling it in and we’re saying, “This is your toolbox that you need to do.” But that toolbox has to be small enough and accessible enough to be able to be used by an entrepreneur who has finite time and resources. In the end, we got it down to 400 pages. But it’s also expanded to be able to talk about how do you use AI, the change in the past 10 years between products becoming commoditized and the emphasis now is on go-to market, how do you develop go to market.

ALISON BEARD: Yeah. And I think that efficiency and practicality point is key, particularly for people who are considering becoming intrapreneurs. So, it’s not like they’re trying to find a start-up and devoting all their time to it. It’s their full time job. But people who might want to start something new within an organization, how do you think about doing that in a way that is relatively easy, still takes thought and time, but you can work through a process before you present it to the higher ups?

BILL AULET: That’s exactly right., we’ve got to say, “Here’s the simplification of it and here’s where you get started and here are the steps you go through. While we’re giving you a sequential one, you have to understand it’s not linear. You’re going to have to do a lot of cycling, but at least you know what you’re supposed to be going.” Gives you some GPS, some templates and things to help you. But it’s a never-ending process.

The day you think that you’re done with entrepreneurship… I think Bob Dylan said it best, “He who is not being born is busy dying.” You have to continually be running the entrepreneurial process and understanding who your customer is, what you can do for your customer, how they acquire the product, how you make money, how do you scale the business. All these things are a never-ending cycle.

ALISON BEARD: How are your students and executives using new technology, like I’m thinking social media and gen AI, to make this process easier or faster?

BILL AULET: Well, we actually have a terrifically interesting tool right now. We’re internally calling it Tim the Beaver, your friendly AI entrepreneurship assistant. What it does is it’s a modified version of ChatGPT-4 Plus, which you could also use Gemini or whatever we want, but it takes the structure that we have in disciplined entrepreneurship and it trains that to ask the questions and fill in templates to say, “What’s your idea? Here’s your potential customers, which ones do you like? Which ones do you not like? What would be a beachhead market?” And then it will step you through, “Here’s your potential customers. Oh, by the way, here’s how you can reduce your cost to customer acquisition.”

And so, using things, as you mentioned, like… I mean at the end of the day, it comes down to getting customers, getting customers to profit. As we say, the first commandment of entrepreneurship is the single necessary and sufficient condition for a business is a paying customer. So, you have to focus on getting paying customers that are in a less expensive way, in a more profitable way, and keeping them and making them happy, and then scaling the business.

So, all the things you mentioned fit into this framework, like, do you use social media to acquire customers? Then that’s reducing cost of customer acquisition. Or do you use them to increase your lifetime value? That’s a different part of the equation. But do you use it to interface with them to find out their needs and wants and opportunities? this tool, we see and we’re already using it, it can dramatically shrink the entrepreneurial process of creating a new venture by as much as 90% in parts of it.

You still have to do primary market research, but a lot of the secondary market research you have to do, we can just do that in 15 minutes.

The best knowledge is not going to come from one institution, from one zip code. If we’re getting serious about pushing the field of entrepreneurship and raising the bar for it, we need to build a collaborative knowledge base that’s shared amongst all people. You’ve got to have a common body of knowledge and things that are agreed on, and those things should be agreed on based on evidence, not storytelling or who debates the best.

ALISON BEARD: Yeah. And how are you making sure that your style of disciplined entrepreneurship is spreading throughout the world, not just in Cambridge, not just in the United States?

BILL AULET: We’re not a for-profit. We have a terrible business model, Alison. It’s called, we create knowledge and give it away to the rest of the world to create positive impact. And so, everything we do is open-sourced. And we need to take the long view here. And we have that, if you call it business model, to think long-term. And that’s what we should do. That is our role in society, and we should not back down from that at all.

ALISON BEARD: Once would-be startup founders have gone through all of your steps, there is still the problem of financing and finding investors. So, how do you advise your students and executives you work with to go about that right now?

BILL AULET: Well, the first thing is there’s lack of confidence and knowledge about finance. I have a free book now called Finance for Entrepreneurs. We just have to break down that and demystify finance in a lot of ways first.

And then secondly, and I tell my students this all the time, and some listen and some don’t, is, “You want to get funding? Listen to what I have to say. The best way to get funding is to build a great company. The slowest way to get funding is to go try to play a game where you’re convincing the VCs you have what they want. Just go out and build a great business and they will find you. And by the way, there’s a great way to get funding. It’s called build a product that customers want and get them to pay you for it. And then guess what? You have money. And by the way, once you get that money, that’s validation that will help you raise it from other people.”

ALISON BEARD: Terrific, Bill. Well, thank you so much for joining me and definitely giving me hope that there are entrepreneurs out there who are going to make the world a better place.

BILL AULET: Thank you very much for having me on IdeaCast , and I look forward to any feedback.

HANNAH BATES: That was MIT Sloan School of Management professor Bill Aulet in conversation with Alison Beard on HBR IdeaCast . He’s the author of Disciplined Entrepreneurship: 24 Steps to A Successful Startup .

We’ll be back next Wednesday with another hand-picked conversation about business strategy from Harvard Business Review. If you found this episode helpful, share it with your friends and colleagues, and follow our show on Apple Podcasts, Spotify, or wherever you get your podcasts. While you’re there, be sure to leave us a review.

When you’re ready for more podcasts, articles, case studies, books, and videos with the world’s top business and management experts, you’ll find it all at HBR.org.

This episode was produced by Mary Dooe, Anne Saini, and me, Hannah Bates. Ian Fox is our editor. Special thanks to Rob Eckhardt, Maureen Hoch, Erica Truxler, Ramsey Khabbaz, Nicole Smith, Anne Bartholomew, and you – our listener. See you next week.

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WATCH: Harris debuts small business tax incentive plan at New Hampshire campaign stop

WASHINGTON (AP) — Vice President Kamala Harris used a New Hampshire campaign stop on Wednesday to propose an expansion of tax incentives for small businesses, a pro-entrepreneur plan that may soften her previous calls for wealthy Americans and large corporations to pay higher taxes.

Watch Harris’ remarks in our player above.

Describing small businesses as “an essential foundation to our entire economy,” Harris said she wants to expand from $5,000 to $50,000 tax incentives for startup expenses, with the goal of eventually spurring 25 million new small business applications over four years.

The speech is part of Harris’ effort to strengthen her economic credentials with only two months until the end of the election.

READ MORE: Trump and Harris say they’ll kill taxes on tips. How would that work?

“You’re not only leaders in business. You’re civic leaders,” Harris said. She added, “You are part of the glue and the fabric that holds communities together.”

Harris spoke at the Throwback Brewery in North Hampton, outside Portsmouth, and meet with co-founders Annette Lee and Nicole Carrier. Their brewery got support to open its current location through a small business credit and installed solar panels using federal programs championed by the Biden administration, according to the Harris campaign.

The campaign of Donald Trump, the former president and current Republican nominee, dismissed Harris’ small business plan, noting that the vice president has promised to eliminate a package of tax cuts approved during his administration that are set to expire next year. Trump’s campaign said those cuts “allowed business owners to deduct up to 20 percent of qualified business income,” reduced taxes on new equipment purchases and took steps to bolster small businesses as compared to larger ones.

Before talking about small businesses, Harris addressed Wednesday’s school shooting in Georgia.

“It’s just outrageous that every day, in our country, in the United States of American, that parents have to send their parents to school worried about whether or not their child will come home alive.”

She added, “We’ve got to stop it. It doesn’t have to be this way.”

Harris’ New Hampshire trip is a rare deviation for a candidate who is spending most of her time in Midwest and Sun Belt states with pivotal roles in November’s election.

Since President Joe Biden dropped his reelection bid and endorsed Harris, the vice president has focused on Michigan, Wisconsin and Pennsylvania, which have been the centerpiece of successful Democratic campaigns. She also has frequently visited Arizona, Nevada and Georgia, all of which Biden narrowly won in 2020, and North Carolina, which she hopes to flip from Trump.

Wednesday’s stop comes after Harris marked Labor Day with Monday rallies in Detroit and Pittsburgh and before she heads back to Pittsburgh on Thursday — marking her 10th visit to Pennsylvania in 2024.

Trump has called for lowering the corporate tax rate to 15 percent — a break with Biden who in his budget proposal in March suggested setting the corporate tax rate at 28 percent. Harris has released relatively few major policy proposals in the roughly six weeks since taking over the top of the Democratic ticket, but has not suggested she’s planning to deviate greatly from his administration on tax policy.

The small business plan Harris is presenting has lots that the business community would like. But that contrasts another proposal Harris unveiled last month, where she promised to help fight inflation by working to combat “price gouging” from food producers that she suggests have driven grocery store prices up unnecessarily.

Harris has built her campaign around calls to grow and strengthen the nation’s middle class — and suggested that rich Americans and large corporations should “pay their fair share” in higher taxes.

Both nominees are using the week before their debate to sharpen their economic messages about who could do more for the middle class. Trump will address the Economic Club of New York on Thursday.

Biden, who built his campaign around promoting the middle class, won New Hampshire by 7 percentage points in 2020, but Trump came much closer to winning it against Hillary Clinton in 2016. The Harris campaign says it has 17 field offices operating in coordination with the state Democratic party across New Hampshire, compared to one for Trump’s campaign.

Some of the state’s Democrats were angry that Biden directed the Democratic National Committee to make South Carolina the first state to vote in the party’s presidential primary this year — displacing Iowa’s caucus and a first-in-the-nation primary New Hampshire held for more than a century.

Despite that, New Hampshire pressed ahead with an unsanctioned primary. Though Biden didn’t campaign in it, or appear on the ballot, he still easily won via a write-in drive.

Trump has seized on the primary calendar change, posting on his social media account that Harris “sees there are problems for her campaign in New Hampshire because of the fact that they disrespected it in their primary and never showed up.”

“Additionally, the cost of living in New Hampshire is through the roof, their energy bills are some of highest in the country, and their housing market is the most unaffordable in history,” the former president wrote. “I protected New Hampshire’s First-In-The-Nation Primary and ALWAYS will.”

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Harris to propose tenfold startup tax incentive increase she says will spur small business creation

Vice President Kamala Harris is about to propose a tenfold increase in federal tax incentives for small business startup expenses, from $5,000 to $50,000, hoping it will help spur a record 25 million new small business applications over her four-year t...

WASHINGTON -- Vice President Kamala Harris plans to propose on Wednesday a tenfold increase in federal tax incentives for small business startup expenses, from $5,000 to $50,000, hoping to help spur a record 25 million new small business applications over her four-year term should she win the presidency in November .

She's set to unveil the plan during a campaign stop in the Portsmouth area of New Hampshire — marking a rare deviation from the Midwestern and Sunbelt battlegrounds the Democrat has focused on in her race against former Republican President Donald Trump .

A Harris campaign official, who spoke on the condition of anonymity to discuss a policy plan that hadn't been released publicly, said Tuesday the change would cover the $40,000 it costs on average to start a business. The proposal would let new businesses wait to claim that deduction until they first turn a profit, to better maximize its impact lowering their taxes.

Such changes would likely require congressional approval. But a series of tax cuts approved during the Trump administration are set to expire at the end of next year, setting up a scenario where lawmakers may be ready to consider new tax policies. The proposal can help Harris show her support for entrepreneurs even as she's called for higher corporate tax rates.

Since President Joe Biden dropped his reelection bid and endorsed Harris in July, the vice president has focused on campaigning in the “ blue wall ” states of Michigan, Wisconsin and Pennsylvania that have been the centerpiece of Democratic campaigns that have won the White House in recent decades.

She’s also frequently visited Arizona, Nevada and Georgia, all of which Biden narrowly won in 2020, and North Carolina, which last voted Democratic in a presidential race in 2008 but which she’s still hoping to flip from Trump. Biden won New Hampshire by 7 percentage points in 2020, though Trump came far closer to winning it against Hillary Clinton in 2016.

"The cost of living in New Hampshire is through the roof, their energy bills are some of highest in the country, and their housing market is the most unaffordable in history,” Trump posted last week on his social media platform.

Harris' team says securing 25 million new business applications in four years if she wins the White House would exceed the roughly 19 million such applications filed since Biden took office. And those were millions more than the previous four years under Trump. The vice president's goal would be a record for new small business applications — but records only go back about 20 years.

Applications to start a business don't always translate to small businesses actually being formed. Still, Harris' plan could keep new small businesses that do come to fruition from otherwise incurring more debt which, at a time of high interest rates, might help them better succeed.

In the weeks since Harris took over the top of the Democratic ticket, she has offered relatively few major policy proposals — attempting to strike a political balance between injecting new energy into the race and continuing to support many of the Biden administration proposals she helped champion as vice president.

Harris’ small business plan follows her announcing last month proposed steps to fight inflation by working to lower grocery prices , and to use tax cuts and other incentives to encourage homeownership. The vice president has also proposed ending federal taxes on tips to service industry workers, an idea Trump proposed first.

The plan she's introducing Wednesday further calls for developing a standard deduction for small businesses meant to save their owners time when doing their taxes, and making it easier to get occupational licenses — letting people work across state lines and businesses expand into new states. Harris also wants to offer federal incentives so state and local government will ease their regulations.

In an effort to spur business investment outside urban and suburban hubs, Harris is pledging to launch a small business expansion fund to enable community banks and federal entities to cover interest costs while small businesses are expanding or otherwise creating jobs. Her team says those efforts will focus especially on areas that traditionally receive less investment.

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Harris to propose tenfold startup tax incentive increase she says will spur small business creation

Democratic presidential nominee Vice President Kamala Harris campaigns with President Joe Biden at the IBEW Local Union #5 union hall in Pittsburgh on Labor Day, Monday, Sept. 2, 2024. (AP Photo/Susan Walsh)

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WASHINGTON (AP) — Vice President Kamala Harris plans to propose on Wednesday a tenfold increase in federal tax incentives for small business startup expenses, from $5,000 to $50,000, hoping to help spur a record 25 million new small business applications over her four-year term should she win the presidency in November .

She’s set to unveil the plan during a campaign stop in the Portsmouth area of New Hampshire — marking a rare deviation from the Midwestern and Sunbelt battlegrounds the Democrat has focused on in her race against former Republican President Donald Trump .

A Harris campaign official, who spoke on the condition of anonymity to discuss a policy plan that hadn’t been released publicly, said Tuesday the change would cover the $40,000 it costs on average to start a business. The proposal would let new businesses wait to claim that deduction until they first turn a profit, to better maximize its impact lowering their taxes.

Such changes would likely require congressional approval. But a series of tax cuts approved during the Trump administration are set to expire at the end of next year, setting up a scenario where lawmakers may be ready to consider new tax policies. The proposal can help Harris show her support for entrepreneurs even as she’s called for higher corporate tax rates.

Since President Joe Biden dropped his reelection bid and endorsed Harris in July, the vice president has focused on campaigning in the “ blue wall ” states of Michigan, Wisconsin and Pennsylvania that have been the centerpiece of Democratic campaigns that have won the White House in recent decades.

She’s also frequently visited Arizona, Nevada and Georgia, all of which Biden narrowly won in 2020, and North Carolina, which last voted Democratic in a presidential race in 2008 but which she’s still hoping to flip from Trump. Biden won New Hampshire by 7 percentage points in 2020, though Trump came far closer to winning it against Hillary Clinton in 2016.

“The cost of living in New Hampshire is through the roof, their energy bills are some of highest in the country, and their housing market is the most unaffordable in history,” Trump posted last week on his social media platform.

Harris’ team says securing 25 million new business applications in four years if she wins the White House would exceed the roughly 19 million such applications filed since Biden took office. And those were millions more than the previous four years under Trump. The vice president’s goal would be a record for new small business applications — but records only go back about 20 years.

Applications to start a business don’t always translate to small businesses actually being formed. Still, Harris’ plan could keep new small businesses that do come to fruition from otherwise incurring more debt which, at a time of high interest rates, might help them better succeed.

In the weeks since Harris took over the top of the Democratic ticket, she has offered relatively few major policy proposals — attempting to strike a political balance between injecting new energy into the race and continuing to support many of the Biden administration proposals she helped champion as vice president.

Harris’ small business plan follows her announcing last month proposed steps to fight inflation by working to lower grocery prices , and to use tax cuts and other incentives to encourage homeownership. The vice president has also proposed ending federal taxes on tips to service industry workers, an idea Trump proposed first.

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The plan she’s introducing Wednesday further calls for developing a standard deduction for small businesses meant to save their owners time when doing their taxes, and making it easier to get occupational licenses — letting people work across state lines and businesses expand into new states. Harris also wants to offer federal incentives so state and local government will ease their regulations.

In an effort to spur business investment outside urban and suburban hubs, Harris is pledging to launch a small business expansion fund to enable community banks and federal entities to cover interest costs while small businesses are expanding or otherwise creating jobs. Her team says those efforts will focus especially on areas that traditionally receive less investment.

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Democratic presidential nominee Vice President Kamala Harris campaigns with President Joe Biden at the IBEW Local Union #5 union hall in Pittsburgh on Labor Day, Monday, Sept. 2, 2024. (AP Photo/Susan Walsh)

The proposal can help Harris show her support for entrepreneurs even as she’s called for higher corporate tax rates.

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Harris to propose tenfold startup tax incentive increase she says will spur small business creation

WASHINGTON (AP) — Vice President Kamala Harris plans to propose on Wednesday a tenfold increase in federal tax incentives for small business startup expenses, from $5,000 to $50,000, hoping to help spur a record 25 million new small business applications over her four-year term should she win the presidency in November.

She’s set to unveil the plan during a campaign stop in the Portsmouth area of New Hampshire — marking a rare deviation from the Midwestern and Sunbelt battlegrounds the Democrat has focused on in her race against former Republican President Donald Trump.

A Harris campaign official, who spoke on the condition of anonymity to discuss a policy plan that hadn’t been released publicly, said Tuesday the change would cover the $40,000 it costs on average to start a business. The proposal would let new businesses wait to claim that deduction until they first turn a profit, to better maximize its impact lowering their taxes.

Such changes would likely require congressional approval. But a series of tax cuts approved during the Trump administration are set to expire at the end of next year, setting up a scenario where lawmakers may be ready to consider new tax policies. The proposal can help Harris show her support for entrepreneurs even as she’s called for higher corporate tax rates.

Since President Joe Biden dropped his reelection bid and endorsed Harris in July, the vice president has focused on campaigning in the “ blue wall “ states of Michigan, Wisconsin and Pennsylvania that have been the centerpiece of Democratic campaigns that have won the White House in recent decades.

She’s also frequently visited Arizona, Nevada and Georgia, all of which Biden narrowly won in 2020, and North Carolina, which last voted Democratic in a presidential race in 2008 but which she’s still hoping to flip from Trump. Biden won New Hampshire by 7 percentage points in 2020, though Trump came far closer to winning it against Hillary Clinton in 2016.

“The cost of living in New Hampshire is through the roof, their energy bills are some of highest in the country, and their housing market is the most unaffordable in history,” Trump posted last week on his social media platform.

Harris’ team says securing 25 million new business applications in four years if she wins the White House would exceed the roughly 19 million such applications filed since Biden took office. And those were millions more than the previous four years under Trump. The vice president’s goal would be a record for new small business applications — but records only go back about 20 years.

Applications to start a business don’t always translate to small businesses actually being formed. Still, Harris’ plan could keep new small businesses that do come to fruition from otherwise incurring more debt which, at a time of high interest rates, might help them better succeed.

In the weeks since Harris took over the top of the Democratic ticket, she has offered relatively few major policy proposals — attempting to strike a political balance between injecting new energy into the race and continuing to support many of the Biden administration proposals she helped champion as vice president.

Harris’ small business plan follows her announcing last month proposed steps to fight inflation by working to lower grocery prices, and to use tax cuts and other incentives to encourage homeownership. The vice president has also proposed ending federal taxes on tips to service industry workers, an idea Trump proposed first.

The plan she’s introducing Wednesday further calls for developing a standard deduction for small businesses meant to save their owners time when doing their taxes, and making it easier to get occupational licenses — letting people work across state lines and businesses expand into new states. Harris also wants to offer federal incentives so state and local government will ease their regulations.

In an effort to spur business investment outside urban and suburban hubs, Harris is pledging to launch a small business expansion fund to enable community banks and federal entities to cover interest costs while small businesses are expanding or otherwise creating jobs. Her team says those efforts will focus especially on areas that traditionally receive less investment.

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